October

Revised agenda for IASC Foundation trustees meeting

20 Oct 2007

Two items have been added to the agenda for the 31 October 2007 public portion of the meeting of the Trustees of the International Accounting Standards Committee Foundation, which we had originally reported in our news story of 15 October 2007.

The two new items are:

  • IFRIC Constitutional Change (proposal to increase the size of IFRIC from 12 to 14 members)
  • Report of the SAC Chairman
The meeting will be held at the offices of Morgan Stanley, 1585 Broadway, New York, NY 10036. The revised public agenda is as follows:

iascfagenda.gif

New York City, Public Portion, Afternoon of 31 October 2007 (13:15-17:00pm)


  • Approval of July Minutes
  • Report of the Procedures Committee
    • Feedback from September meeting with IASB
    • IFRIC Constitutional change
    • Discussion of IASB consultation initiatives (feedback statements and cost benefit analyses)
    • New Committee name
  • Report of the IASB Chairman
    • Review of convergence activities (United States, Japan, China, and India)
    • 2008 goals
    • Discussion of Proposed Agenda Items
    • Discussion of any implications of sub-prime and liquidity crisis for IFRSs
  • Report of the SAC Chairman
    • Update on SAC Effectiveness Survey
    • Plans for Upcoming SAC Meeting
  • Update on long-term funding

Click for our IFRS Foundation page.

Update on IFRS reporting in Kazakhstan

20 Oct 2007

We have updated our Table of Jurisdictional Use of IFRSs to reflect the following information for Kazakhstan:

  • Companies other than banks. Starting 2006, IFRSs have been required for all joint stock companies (which includes all listed companies plus some others) and for other companies with significant public interest (including extractive industry companies and companies with Governmental ownership).
  • Banks. Most banks were required to use IFRSs beginning in 2003 and the others starting in 2004.

Click to view our Table of Jurisdictional Use of IFRSs.

Japan plans oversight of foreign audit firms

20 Oct 2007

The Japanese Financial Services Agency (FSA) has invited comments on proposed regulations (known as Proposed Cabinet Orders and Cabinet Office Ordinances) that would implement revised Certified Public Accountants Laws that were passed by the Diet (Japanese parliament) in June 2007. The laws take effect in April 2008.

The revised laws include measures (a) to enhance the quality control and governance of, and disclosures by, audit firms; (b) to reinforce the independence of auditors; and (c) to strengthen oversight on auditors.
The revisions also include measures to introduce FSA oversight of foreign audit firms. Because the regulations affect foreign firms, the FSA has prepared an  English Translation of the Proposed Notification Requirement for Foreign Audit Firms (PDF 265k) and asks firms to comment by 29 October 2007. The entire proposed regulation is now on public consultation and available in Japanese on the FSA's Website.

 

Report on first year implementation of IFRSs in EU

19 Oct 2007

The Institute of Chartered Accountants in England and Wales (ICAEW) has published a report for the European Commission on the first year of implementation across the EU of International Financial Reporting Standards and the Fair Value Directive.

The study includes a detailed review of the 2005 financial statements of 200 companies from 25 EU member states.

Principal Components of the ICAEW Study of IFRS Implementaiton in the EU

  • analysis of the legal implementation of the IAS Regulation and the Fair Value Directive based on questionnaires sent to interested parties in all member states and subsequent work to try to resolve conflicting responses;
  • review of surveys and other literature on EU implementation of IFRS;
  • roundtables, principally involving preparers and auditors of IFRS financial statements, held in Dusseldorf, London, Madrid, Paris, Rome and Warsaw and used to test and explore the preliminary findings from our other work;
  • an on-line survey which generated usable responses from statistically valid samples of 51 investors, 162 preparers and 141 auditors across 23 member states covering understanding and use of IFRS financial statements, their preparation and audit, and the incremental costs to companies of applying IFRS;
  • a review of regulators' statements on EU implementation of IFRS and selected published correspondence between the SEC and EU companies;
  • an academic research paper on the relevance of IFRS information in explaining market prices and stock returns of French, Italian, Spanish and UK publicly traded companies;
  • the application of the EU Common Methodology to assess the costs of the IAS Regulation;
  • detailed technical analysis of the IFRS consolidated financial statements of a sample of 200 EU publicly traded companies;
  • high level technical analysis of IFRS consolidated financial statements of 18 EU non-publicly traded companies; and
  • high level technical analysis of IFRS legal entity financial statements of 50 companies.

Sections of the ICAEW Report on Implementation of IFRSs in the EU

  1. Objectives, terms and approach
  2. Implementation of the Fair Value Directive
  3. Implementation of the IAS Regulation
  4. Views of preparers, users and auditors
  5. The role of regulators
  6. The reaction of securities markets
  7. Costs of implementing IFRS
  8. IFRS consolidated financial statements of EU publicly traded companies
  9. IFRS consolidated financial statements of EU non-publicly traded companies
  10. IFRS legal entity financial statements
  11. First-time adoption of IFRS
  12. Fair presentation and accounting policies
  13. Financial statements presentation
  14. Fair value accounting
  15. The use of other options in IFRS
  16. Consolidated financial statements
  17. Banks
  18. Insurance companies
  19. Extractive industries
  20. Service concessions
  21. Intangible assets
  22. Defined benefit pension plan disclosures
  23. Share-based payments
  24. Financial instruments
Click to download:

 

Priorities of the PCAOB for 2008

19 Oct 2007

At yesterday's meeting of the Standing Advisory Group of the US Public Company Accounting Oversight Board, PCAOB Chief Auditor Thomas Ray outlined the PCAOB's Standard-setting Priorities for 2008.

Those priorities include:
  • Effective implementation of the internal control provisions of the Sarbanes-Oxley Act
  • Finalise proposed rules on auditor independence and prohibited services
  • Finalise proposed rules on evaluating consistency of financial statements
  • Auditing standard on engagement quality review
  • Auditing standard on risk assessment, including fraud risk assessment
  • Issues relating to auditing fair value estimates
  • Potential standards projects on auditor use of specialists, related parties, and confirmations
  • Action plan for review of 'Interim Standards' (old AICPA standards that were initially adopted by the PCAOB)

Click for PCAOB's Standard-setting Priorities for 2008.

 

Notes from IASB October 2007 Board meeting day 2

18 Oct 2007

The International Accounting Standards Board held its October 2007 meeting at the Board's offices, 30 Cannon Street, London, on Tuesday to Friday, 16-19 October 2007.

Click for the Preliminary and Unofficial Notes Taken by Deloitte Observers at the Meeting.
The IASB and the US Financial Accounting Standards Board will hold a joint meeting at the FASB's offices in Norwalk, Connecticut, USA on Monday 22 October to Tuesday 23 October 2007.

 

No deferral for FAS 157 and 159 fair value standards

18 Oct 2007

The US Financial Accounting Standards Board decided not to do a wholesale deferral of the effective dates of FASB Statement 157 Fair Value Measurements and FASB Statement 159 The Fair Value Option for Financial Assets and Financial Liabilities.

The Statements are effective for fiscal years beginning after 15 November 2007. The FASB had received requests for deferral from a number of constituents as a result of the increasing number of implementation issues identified in practice. The Board instructed the FASB staff to evaluate other deferral alternatives, which could include deferring for certain assets and liabilities or certain entities. These alternatives will be discussed at a future Board meeting. The Board also discussed plans to address implementation issues. Specifically mentioned was whether plan sponsors should be required to provide Statement 157 disclosures for their pension and other postretirement employee benefit plan assets. While the Board did not formally vote on the issue, the Board noted that it does not believe such disclosures should be required by Statement 157 and plans to address this issue (with other implementation issues) at a future Board meeting.

 

Gerrit Zalm named Chairman of IASCF Trustees

18 Oct 2007

Gerrit Zalm, the former Deputy Prime Minister (2003-2007) and Finance Minister (1994-2002, 2003-2007) of the Netherlands, will become the next Chairman of the Trustees of the International Accounting Standards Committee Foundation, which is the oversight body of the International Accounting Standards Board.

Mr Zalm's three-year term will begin on 1 January 2008. The appointment follows an international search in which candidates and nominations were sought from a wide range of interested parties. Mr Zalm's appointment carries the strong support of the Trustee Appointments Advisory Group, a group comprising leaders of major international organisations. Click for Press Release (PDF 124k).

 

IAS Plus quarterly newsletter for October 2007

17 Oct 2007

The October 2007 IAS Plus Quarterly Newsletter has been published.

The newsletter reports on the 3rd quarter 2007 activities of the IASB, the IFRIC, and the IASC Foundation, and also on worldwide issues and events relating to international financial reporting:

 

Could SMEs in the United States use the IFRS for SMEs?

17 Oct 2007

Paul Pacter, webmaster of IAS Plus who also serves as the IASB's Director of Standards for SMEs, has written an Article in Financial Executive Magazine October 2007 that considers whether U.S. private companies might use the IFRS for SMEs.

The article also reviews the background, organisation, and content of the proposed IFRS for SMEs. An excerpt is below. The article is copyright by Financial Executives International and we have posted it here with their permission.

Most American accountants are surprised to learn that millions of SMEs around the world have statutory reporting and audit obligations. That's because the situation in the U.S. is so different. There are roughly 5 million limited-liability corporations and roughly 15 million more partnerships, proprietorships and other forms of ownership.

By law, only a relative handful of those are required by law to publish U.S. GAAP financial statements, audited or unaudited – generally the 15,000 SEC registrants plus a few other regulated entities. Sometimes, lenders or contracts impose such requirements. But for the vast majority of American private companies, there is no requirement to prepare U.S. GAAP statements.

So, could private companies in the U.S. use IFRS for SMEs? There does not appear to be any reason why not – provided that the basis of presentation note clearly explains that the statements conform to IFRS for SMEs. If audited, the auditor would report on conformity with the IFRS for SMEs.

 

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