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European Union (old) Image

Impact of IFRSs on European bank regulatory capital

10 Mar 2006

A study by the Committee of European Banking Supervisors (CEBS) has found that the guidelines that it published in December 2004 for adjustments to IFRS financial data reported by European banks for the purpose of determining banks' 'own funds' (equity capital for regulatory purposes) have satisfactorily addressed concerns of bank supervisors.

Supervisors were concerned that the introduction of IFRSs might:
  • "Jeopardise the criteria that regulatory own funds have to fulfil, namely that they be (i) permanent, (ii) readily available for absorbing losses, and (iii) reliable as to their amounts."
  • "Introduce volatility into institutions' financial statements and, more particularly, into regulatory own funds, in ways which might not reflect the economic substance of institutions' financial positions."
The CEBS compared the 31 December 2004 national-GAAP balance sheets of banks in 18 European countries with their IFRS balance sheets at 1 January 2005. CEBS found that "the overall effect of transition to IAS/IFRS and of the application of the prudential filters results in a moderate decrease in 'Total Eligible Own Funds': 2% in the aggregate sample." CEBS concludes that:

  • The analysis of the aggregate sample data confirms that the Guidelines neutralise the negative impact on credit institutions' regulatory own funds that IAS/IFRS were observed to have at transition.
  • The results of this analysis – together with the conclusions of a survey that CEBS conducted in 2005 on the implementation of the Guidelines, which indicated that participating CEBS members complied satisfactorily with the Guidelines' recommendations – should help to mitigate supervisors' concerns.
Click for (PDF 165k).
Accounting education (old) Image

World Congress of Accounting Educators 2006

10 Mar 2006

The 10th World Congress of Accounting Educators will be held on 9-11 November 2006 in Istanbul, Turkey, immediately preceding the 17th World Congress of Accountants in the same city.

The theme of the educators' Congress is Challenges and Developments in International Accounting Education and Research. Congress organisers have invited submissions of papers in the following areas:

Financial Accounting

Information Systems and Computer Auditing

Auditing and Internal Auditing

Ethics in Accounting Education

Financial Management

Corporate Governance


Accounting History

Performance Measurement

Public Sector and Nonprofit Accounting

Accounting Education and Training

Social and Environmental Accounting

International Accounting

Management Accounting

Click to download the Call for Papers (PDF 171k). Submission deadline is 30 April 2006. Go: Website.
SEC (US Securities and Exchange Commission) (dark gray) Image

SEC round-tables on financial reporting on the Internet

10 Mar 2006

The US Securities and Exchange Commission will hold a series of round-tables focused on speeding the implementation of new Internet tools to help provide investors and analysts with better financial information about companies and funds.

The SEC notes that "today, even computer-based financial information is generally presented in the form of entire pages of data that can't easily be separated." Representatives from investors, issuers, auditors, analysts, technology professionals, regulators, and others will be invited to the roundtable discussions. Topics to be addressed will include:
  • what investors and analysts are looking for in the new world of interactive data;
  • how to accelerate the use of new software that permits the dissemination of interactive financial data; and
  • how to best design the SEC's requirements for company disclosures to take maximum advantage of the potential of interactive data.
Click for (PDF 37k).
IOSCO (International Organization of Securities Commissions) (dark gray) Image

IOSCO seeks views on hedge funds

09 Mar 2006

The Technical Committee of the International Organization of Securities Commissions (IOSCO) has released a Consultation Report on The Regulatory Environment for Hedge Funds (PDF 383k).

The report presents the results of a survey of 20 IOSCO member jurisdictions on various aspects of hedge funds, including prevalence and size, investment strategies, definitions, registration, disclosure, advertising, reporting, examination, and disciplinary actions. In the areas of disclosure and reporting, the questionnaire asked about:
  • Disclosure: Whether an offering memorandum and minimum disclosure must be provided to retail investors; whether hedge funds must disclose investment limits, leverage, etc.; and whether warnings are required.
  • Reporting Requirements: Periodic and annual reporting and disclosure requirements regarding investment performance and underlying investments; and valuation issues.
IOSCO seeks comments by 31 May 2006 on the accuracy and implications of the hedge fund trends as reported in the survey. The IASB has a project on Investment Entities on its research agenda.
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Now available – 2006 Bound Volume of IFRSs

09 Mar 2006

The 2006 Bound Volume of International Financial Reporting Standards as approved at 1 January 2006 has been published.

BV2006 includes all IFRSs, IASs, Interpretations, and the supporting documents published by the IASB – Bases for Conclusions, Implementation Guidance, and Illustrative Examples. Among the new material in this 2,400-page edition are:
  • The revised Constitution, approved by the Trustees in June 2005
  • IFRS 7 Financial Instruments: Disclosures
  • Three new Interpretations – IFRICs 6 to 8
  • Amendments to IFRS 1, IFRS 4, IFRS 6, IAS 1, IAS 21, and IAS 39, as well as consequential amendments to other IFRSs resulting from those pronouncements
  • Editorial corrections.
Copies of BV2006 are available at £60 each from the IASB's Website (then click on IASCF Shop). Bulk discounts are available. Here is the Press Release.
Accounting Roundup Image

February 2006 Accounting Roundup is available

08 Mar 2006

We have posted the (PDF 259k) published by Deloitte & Touche LLP (USA).

Topics covered in this issue:

  • FASB Developments including a final Statement on accounting for hybrid financial instruments; FASB's response to the SEC study on off-balance-sheet arrangements; and the up FASB-IASB memorandum of understanding.
  • GASB Developments including a proposed Technical Bulletin on reporting of Medicare payments.
  • AICPA Developments including an Alert on the SEC's position regarding changes to the statement of cash flows relating to discontinued operations; new auditing standards for non-public companies; a new Conceptual Framework for Independence Standards and a revised Interpretation on Responding to Clients' Requests for Records; and new Financial Reporting and Audit Risk Alerts.
  • SEC Developments including the SEC's extension of its deadline for companies to volunteer for participation in an XBRL initiative.
  • PCAOB Developments including an Auditing Standard on Reporting on the Elimination of a Material Weakness; and a request for feedback on internal control reporting requirements.
  • International Developments including IASB's proposed amendment to IFRS 2 Share-based Payment.
Click here for Past Issues of Accounting Roundup.
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New Hong Kong financial statement guide

08 Mar 2006

Deloitte (China) has published (PDF 3,118k).

The objective of this guide is to provide assistance with the process of drafting 2005 financial statements prepared in conformity with Hong Kong Financial Reporting Standards (HKFRSs). As of 1 January 2005, HKFRSs became fully harmonised with International Financial Reporting Standards (IFRSs), except for a few minor differences. This process resulted in the revision of numerous Standards and Interpretations and the issuance of several brand new Standards and Interpretations. The cumulative effect of these revisions and new Standards is that entities are being required to rewrite substantially their financial statements in 2005. The new guide includes 2005 HKFRS model financial statements, a presentation and disclosure checklist for 2005, and a section summarising the key changes made to the listing rules that affect the disclosure and presentation of information in the 2005 annual report.
IASB (International Accounting Standards Board) (blue) Image

IASB-FASB study fair value for financial instruments

07 Mar 2006

The IASB and the US FASB are jointly requesting input from users of financial statements about the kinds of information about fair values of financial instruments, and changes in those fair values, that is useful to those making investment or credit decisions or advising others on investment or credit decisions.

For this purpose, financial instruments include not only debt securities, equity securities, and derivatives, but also loans and accounts payable or receivable, and almost any other amount payable or receivable. The Boards have issued a questionnaire and related background paper aimed at seeking users' views about whether current standards provide the information that investors and creditors need to analyse companies that report some or all financial instruments at fair value. The Boards cite the following as examples of possible additional information that users may need:
  • Quantitative information about the reasons why the fair values of financial instruments changed.
  • Disclosure of exposures to future changes in the fair values of financial instruments.
The questionnaire has five questions with various sub-questions:
  • Question 1 asks users about how they currently use fair value information about financial instruments and what information they wish they had but do not currently receive
  • Question 2 asks about the kinds of information users of financial statements would like to help them understand the reasons why fair values changed during a period
  • Question 3 asks about reporting interest income and expense for financial instruments measured at fair value and whether such interest should reflect current market cost/return and credit quality
  • Question 4 asks how users assess exposure to future changes in fair values of financial instrument
  • Question 5 asks about the relative importance of different types of information that should be required

Responses are requested by 14 April 2006. Click for:

News default Image

IASB posts updated editorial corrections lists

06 Mar 2006

The IASB has posted on its website an Updated List of Editorial Corrections to its published standards, including: Corrections to the text of the Bound Volume 2006 (which will be released shortly) Corrections to the text of the Bound Volume 2005 (list includes the corrections previously published in August 2005) Corrections to IFRSs issued since 1 January 2005 .

The IASB has posted on its website an Updated List of Editorial Corrections to its published standards, including:

  • Corrections to the text of the Bound Volume 2006 (which will be released shortly)
  • Corrections to the text of the Bound Volume 2005 (list includes the corrections previously published in August 2005)
  • Corrections to IFRSs issued since 1 January 2005
SEC (old) Image

An SEC Commissioner comments on the reconciliation

06 Mar 2006

In remarks before the Tenth Annual Conference on (PDF 37k), US SEC Commissioner Cynthia Glassman spoke about, among other things, convergence of US GAAP and IFRSs and eliminating the SEC's required reconciliation.

An excerpt:

The other significant issue on the international accounting front is reconciliation. As you well know, in their SEC filings, companies that use IFRS or other accounting standards have to reconcile their financial statements to U.S. GAAP. I fully support what has become known as the 'roadmap' to achieving the acceptance of IFRS in the U.S. without reconciliation. Basically, our staff is looking to see the nature and scope of the reconciliations and the consistency of IFRS implementation across countries. While our staff has already begun planning the initial phase of the roadmap, we really cannot get started evaluating the 2005 results of the IFRS/U.S. GAAP reconciliations until mid-year, because IFRS has only been recently implemented in many countries for the first time.

Correction list for hyphenation

These words serve as exceptions. Once entered, they are only hyphenated at the specified hyphenation points. Each word should be on a separate line.