April

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March 2006 Accounting Roundup posted

07 Apr 2006

We have posted the (PDF 325k) published by Deloitte & Touche LLP (USA).

Topics covered in this issue include:

  • FASB developments including a final Statement on Accounting for Servicing of Financial Assets; a proposed Statement on Employers' Accounting for Defined Benefit Pension and Other Postretirement Plans; a final FSP on accounting for life settlement contracts; and a joint FASB-IASB request for information on financial analysis of companies that report financial instruments at fair value.
  • EITF developments including March 2006 EITF meeting.
  • AICPA developments including a final SOP on attestation engagements on investment management firms; a proposed SAS on an auditor's communication with those charged with governance; guidance on audit reports for non-issuers that are a subsidiary, division, or segment of an SEC registrant; and an audit risk alert.
  • SEC developments including SEC exposure of PCAOB's proposed rules concerning independence, tax services, and contingent fees; the draft report of the SEC Advisory Committee on Smaller Public Companies; and a request for feed back on interactive data.
  • PCAOB developments including releases on addressing quality control criticisms in inspection reports.
  • International developments including a final Interpretation on reassessment of embedded derivatives and proposed amendments presentation of financial statements.
You will find past issues of Accounting Roundup Here.
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IASB statement on relationships with standard setters

07 Apr 2006

The IASB has published a Statement of Best Practice: Working Relationships between the IASB and other Accounting Standard-Setters (PDF 166k).

The Statement identifies a range of activities that the IASB and regional and national accounting standard-setters believe they should undertake in the interests of facilitating the adoption of or convergence with IFRSs issued by the IASB. Those activities include:
  • Communication, both between standard-setters and their constituents and among standard-setters themselves.
  • Project development, including the ways in which other accounting standard-setters can assist the IASB in progressing particular projects.
  • Input on IASB consultative documents.
  • The processes and approaches other accounting standard-setters might employ in adopting or converging with IFRSs.
  • Co-operation in the development of interpretations of IFRSs.
The IASB had Invited Public Comment (PDF 8k) on an Earlier Draft (PDF 43k) of the Statement (at that time referred to as a Memorandum of Understanding, or MOU), and had discussed it with national standard setters at meetings in September 2004 and again September 2005. Here is the link to (PDF 30k).
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IFAC urges focus on needs of SMEs

07 Apr 2006

The International Federation of Accountants (IFAC) has issued a statement expressing support for "appropriate, simplified guidance being developed for small and medium entities....

Recognising that international standards that are right for a large public company may be burdensome for a small enterprise, IFAC, together with its member bodies, is urging standard setters and regulators to consider the unique needs of small and medium enterprises (SMEs) in developing their rules and regulations." Click for IFAC Statement (PDF 79k).
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SEC's proposed 'compensation discussion and analysis'

07 Apr 2006

In January 2006, the US Securities and Exchange Commission published a (PDF 550k).

At the heart of the proposals is a new reporting section called Compensation Discussion and Analysis, which would provide narrative disclosure of a company's policies and decisions regarding its compensation of named executive officers. Required disclosures would include total compensation, the processes for setting compensation, the role of executive officers in setting compensation, and the role and identify of compensation consultants. Comment deadline is 10 April 2006. At an executive compensation conference earlier this week, John W. White, the new Director of the SEC's Division of Corporation Finance, presented some views about the proposed rules in a presentation titled (PDF 68k). Mr. White also comments more generally on disclosure controls and procedures.
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Some statistics about www.iasplus.com files

07 Apr 2006

We have computed a few statistics about the volume of information available on Deloitte's www.iasplus.com website.

Here are the current statistics and comparable figures as of August 2004:

April 2006

August 2004

Number of files

2,990

1,775

Total file size

410mb

226mb

Number of HTML pages

512

392

Downloadable PDF files*

1,930

994

GIF image files

386

293

JPG image files

126

78

Links to other websites*

1,023

933

*We prefer to post downloadable files directly on IAS Plus, where possible, because links to other websites sometimes stop working. We link when we are unable to get permission to post copyrighted files. We test all links periodically.
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New subscriptions page for IAS Plus alerts

06 Apr 2006

We have created a new Subscription Page by which you can add yourself to our -->IAS Plus email alert list -->.

There is no charge. A permanent link to that page can always be found on this home page (left column, Subscribe to Alerts). We will alert you to new issues of our IAS Plus Newsletter, with a download link, and to important IFRS news such as new IASB EDs and Standards and IFRIC draft and final Interpretations.
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'Heads Up' on FASB's pensions proposals

06 Apr 2006

Last week, the US Financial Accounting Standards Board issued its Exposure Draft Employers' Accounting for Defined Benefit Pension and Other Postretirement Plans.

The ED proposes amendments to FASB Statements No. 87, 88, 106, and 132(R) to require, among other things, that a company that sponsors a postretirement benefit plan fully recognise, as an asset or liability, the over-funded or under-funded status of its benefit plan in its balance sheet. The proposal is designed to partially tackle certain important deficiencies the FASB finds in today's pension accounting:
  • Changes in a plan's assets and its benefit obligation are not recognised as they occur.
  • Important information about postretirement plans is relegated to the footnotes rather than being recognised in the financial statements.
Key concepts of this ED are summarised in a new (PDF 128k), published by Deloitte & Touche LLP (USA).
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IASC Foundation Trustees reappoint Ken Wild to IFRIC

05 Apr 2006

The Trustees of the International Accounting Standards Committee Foundation have reappointed Ken Wild as a member of the International Financial Reporting Interpretations Committee (IFRIC) for another three-year term.

Ken is the National Director of Accounting and Audit at Deloitte &Touche LLP (United Kingdom) and is Deloitte Touche Tohmatsu's Global IFRS Leader. The Trustees have also initiated a search to replace three retiring IFRIC members – Shunichi Toyoda, Leo van der Tas, and Patricia Walters. The deadline for applications and nominations is 9 May 2006. Click for Press Release (PDF 48k).
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ICAS report on 'principles versus rules'

04 Apr 2006

The Institute of Chartered Accountants of Scotland (ICAS) has published a report Principles Not Rules: A Question of Judgement.

The report is the culmination of an ICAS working group project to help find a resolution to the 'principles versus rules' debate within international accounting standard setting. The report concludes that:

A principles-based approach to standard setting is not only desirable but essential, to serve the needs of business and the public interest and that the global convergence of accounting standards cannot be achieved by a detailed rules-driven approach. The working group believes that principles-based standard setting will require: a change in the global profession, with preparers and auditors assuming more responsibility for their judgements; the documentation of key judgements in the financial statements; and regulators accepting a range of judgement-based outcomes. The working group believes that rules-based accounting adds unnecessary complexity, encourages financial engineering and does not necessarily lead to a 'true and fair view' or 'fair presentation'.

We have posted the report and two related documents with the kind permission of the copyright holder, The Institute of Chartered Accountants of Scotland. Click to download:
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Analysis of Canadian-US GAAP differences

04 Apr 2006

The Canadian Accounting Standards Board (AcSB) has prepared an analysis of reported Canadian/US GAAP differences based on a survey of 150 public Canadian companies for fiscal years ending in 2004. All the companies have listings on major US stock exchanges or issue debt securities in the US.

In releasing the survey, the AcSB said:

The AcSB has recently adopted a new Strategic Plan that calls for the adoption of International Accounting Standards Board standards for publicly accountable enterprises. This will result in some reorientation of AcSB standard-setting activities. The AcSB will work to eliminate remaining significant differences with US GAAP where their elimination is consistent with the IASB convergence objective. The AcSB intends to avoid creating new differences with US GAAP during the transition period whenever possible. However, some new differences with US GAAP may be unavoidable as a result of the AcSB's new strategy, but such differences should generally be temporary because the US Financial Accounting Standards Board (FASB) and IASB are working together toward convergence of their standards.

An appendix to the report contains a summary analysis of Canadian/US GAAP differences by topic. We have posted the report with the kind permission of the Canadian Institute of Chartered Accountants. Click to download (PDF 191k).

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