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Report from the ARC 30 November 2005 meeting

01 Dec 2005

The Accounting Regulatory Committee of the European Commission met on 30 November 2005 in Brussels.

Key agenda items:

  • The Commission noted that a question has arisen regarding what date should be used for the applicability of endorsed IFRS? This is especially relevant where the IASB publishes a standard before the balance sheet date of a company but it is endorsed by the EU and published in the Official Journal only after that date. The Commission informed Member States that Regulations endorsing IFRS published in the Official Journal and entering into force after the balance sheet date but before the date the financial statements are signed can be used in those financial statements if early application is permitted in the Regulation and the related IFRS.
  • The ARC voted unanimously to endorse IFRS 7 Financial Instruments: Disclosures; the 'comparative disclosures' amendments to IFRS 1 and 6; the 'capital disclosures' amendment to IAS 1; the amendments to IAS 39 and IFRS 4 on financial guarantee contracts; and IFRIC 6.
  • The ARC, at its 8 November 2005 meeting, voted unanimously to endorse the amendment to IAS 39 on cash flow hedge accounting of forecast intragroup transactions.
An important consequence of the above is that – assuming IFRS 7 and the various amendments are adopted by the Commission and published in the Official Journal early in 2006 – European IFRS companies can early adopt IFRS 7 and those amendments for calendar 2005 financial statements if they wish. Adoption and publication are expected by March 2006 or earlier. The Commission has posted the foregoing information Here.
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Australian bank regulator makes IFRS proposals

01 Dec 2005

The Australian Prudential Regulation Authority (APRA) has issued a consultation package outlining its proposed prudential response to the adoption of IFRSs in Australia by deposit-taking institutions and general insurers.

APRA's approach addresses a range of issues including fair value measurement, excess of market value over net assets (EMVONA) employer sponsored defined benefit superannuation fund surpluses and deficits, and loan loss provisioning. APRA's Chairman, Dr John Laker, said:

APRA's approach seeks to align its prudential and reporting standards with IFRS-based financial reports to the extent practicable.... Where APRA has chosen to depart from accounting standards, it has done so in the interests of depositors and policyholders and after taking into account the approach of other prudential regulators.

The consultation package includes draft prudential standards, guidance notes, and reporting forms. Comments are due by 16 January 2006. The standards will come into force from 1 July 2006.
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Near-final draft of revised IFRS 4 disclosure guidance

01 Dec 2005

The IASB has posted to the subscriber area of its Website a near-final draft of Revised Guidance on Implementing IFRS 4 Insurance Contracts.

The revised guidance relates to the disclosure sections of IFRS 4. Those disclosures are intended to help the users of an insurer's financial statements evaluate the nature and extent of risks arising from insurance contracts.
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Agenda for the December 2005 IASB meeting

30 Nov 2005

The IASB will hold its monthly Board meeting at its offices, 30 Cannon Street, London, on Tuesday to Friday, 13-16 December 2005. The agenda for the meeting is set out below. .

The IASB will hold its monthly Board meeting at its offices, 30 Cannon Street, London, on Tuesday to Friday, 13-16 December 2005. The agenda for the meeting is set out below.

Board Meeting Agenda

13-16 December 2005, London

Tuesday 13 December 2005 (Afternoon only)

Wednesday 14 December 2005 Thursday 15 December 2005 Friday 16 December 2005 (Morning Only)
  • Technical Plan
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Measurement discussion paper may now be downloaded

30 Nov 2005

Our News Story of 17 November 2005 reported that the IASB has invited comment on a Canadian Discussion Paper Measurement Bases for Financial Reporting - Measurement on Initial Recognition.

The Discussion Paper is now available for download without charge from the IASB Website.
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EFRAG endorsement status reports

29 Nov 2005

The European Financial Reporting Advisory Group (EFRAG) has begun publishing a report showing the status of endorsement, under the EU Accounting Regulation, of each IFRS, including standards, interpretations, and amendments.

We are grateful to EFRAG for giving us permission to post them:

We have made a separate page for EFRAG status reports. We will announce each update as a news item.

You can also find Official EC Information about the Status of Adoption on the European Commission's website.


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Authority of published IFRIC agenda decisions

29 Nov 2005

The German Accounting Standards Board has published its view on the authority of IFRIC agenda decisions that IFRIC has begun publishing recently in IFRIC Update.

We thought that visitors to IAS Plus might find this guidance of interest:

A few months ago the IFRIC started to publish reasons for not taking an item on its agenda. Some of the items are rejected because they cannot be dealt with in an Interpretation, but potentially imply an amendment of the relevant Standards and are therefore referred to the IASB. Other items are not taken on the IFRIC agenda because they are part of an ongoing Board project and therefore should be dealt with in this project. Finally, some items are rejected because the IFRIC does not see the necessity of an Interpretation, i.e. the relevant Standard is clear and there is no significant diversity in practice. It is common that the accounting treatment suggested by constituents in their request for an IFRIC Interpretation is explicitly declined by the IFRIC in the published agenda decision. Examples for such statements that are sometimes (unofficially) referred to as 'Non-Interpretations' are the three agenda decisions published in the September issue of IFRIC Update 2005, pages 5-6.

This raises the question if these 'Non-Interpretations' have any authoritative character. Since the published final agenda decisions (including the 'Non-Interpretations') are preceded by the explicit statement that 'The following explanations are provided for information only, and do not change existing IFRS requirements' (see the August issue of IFRIC Update 2005, page 5), this seems to imply that the 'Non-Interpretations' do not have to be taken into account by preparers of financial statements. However, this does not seem to reflect the intention of the IFRIC properly. In fact, the Chairman of the IFRIC, Mr. Bob Garnett, said at the 4th Official IFRS Congress that took place on the 8 and 9 September 2005 in Berlin, Germany, that the level of authority of the published agenda decisions is comparable to the level of authority of Implementation Guidance that accompanies several Standards. While the Implementation Guidance is not part of the relevant Standard, it shows however, how the principles of IFRS have to be applied in the Standard. This means that 'Non-Interpretations' cannot be neglected by preparers of IFRS financial statements and it further seems to imply that a deviation from the statements in a 'Non-Interpretation' is only justified if a preparer can demonstrate that there are good reasons for doing so. In this way, the 'Non-Interpretations' can be labelled persuasive, but non-authoritative.

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'The Brave New World of IFRS'

29 Nov 2005

We have posted an article titled The Brave New World of IFRS (PDF 71k) by Eva K.

Jermakowicz and Sylwia Gornik-Tomaszewski, published in the November 2005 issue of Financial Executive magazine. This article is copyright 2005 Financial Executives International and is posted here with the kind permission of FEI. FEI is a US-based organisation of 15,000 CFOs, VPs of finance, treasurers, controllers, and other senior financial executives.
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National/regional pages updated

29 Nov 2005

We have updated the following pages on IAS Plus to reflect accounting standards activity during the third quarter of 2005: Australia China Hong Kong Japan Malaysia Singapore Thailand .

We have updated the following pages on IAS Plus to reflect accounting standards activity during the third quarter of 2005:

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IAS Plus Newsletters for third quarter 2005 are posted

29 Nov 2005

The November 2005 IAS Plus newsletter has been published.

The newsletter reports on the 3rd quarter 2005 activities of the IASB, the IFRIC, and the IASC Foundation, and also on worldwide issues and events relating to international financial reporting. The Asia-Pacific edition has the same 24-page news content as the Global Edition plus five pages of accounting standards updates for the Asia-Pacific region. You will find all Past IAS Plus Issues Here.

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