This site uses cookies to provide you with a more responsive and personalised service. By using this site you agree to our use of cookies. Please read our cookie notice for more information on the cookies we use and how to delete or block them.
The full functionality of our site is not supported on your browser version, or you may have 'compatibility mode' selected. Please turn off compatibility mode, upgrade your browser to at least Internet Explorer 9, or try using another browser such as Google Chrome or Mozilla Firefox.


Notes from IASB meeting 16 December 2004


We have combined all of our notes from the IASB meeting on 15-17 December 2004 onto a Separate Page. .

We have combined all of our notes from the IASB meeting on 15-17 December 2004 onto a Separate Page.

IFRIC Interpretation 5 is released


The International Financial Reporting Interpretations Committee (IFRIC) has published IFRIC Interpretation 5 'Rights to Interests Arising from Decommissioning, Restoration and Environmental Rehabilitation Funds'.

IFRIC 5 explains how to treat expected reimbursements from funds set up to meet the costs of decommissioning plant (such as nuclear plant) or equipment (such as cars) or in undertaking environmental restoration or rehabilitation (such as rectifying pollution of water or restoring mined land).

The main requirements of the Interpretation are:

  • If a contributor recognises a decommissioning obligation under IFRSs and contributes to a fund to segregate assets to pay for the obligation, it should apply IAS 27, SIC-12, IAS 31, and IAS 28 to determine whether decommissioning funds should be consolidated, proportionately consolidated, or accounted for under the equity method
  • When a fund is not consolidated, proportionately consolidated, or accounted for under the equity method, the contributor should recognise its obligation to pay decommissioning costs as a liability and recognise its interest in the fund separately unless the contributor is not liable to pay decommissioning costs
  • A right to reimbursement should be measured at the lower of (a) the amount of the decommissioning obligation recognised and (b) the contributor's share of the fair value of the net assets of the fund adjusted for actual or expected factors that affect the entity's ability to access these assets. Changes in the carrying amount of this right (other than contributions to and payments from the funds) should be recognised in profit or loss
  • A residual interest in a fund that extends beyond a right to reimbursement, such as a contractual right to distributions once all the decommissioning has been completed or on winding up the fund may be an equity instrument within the scope of IAS 39.

IFRIC 5 is effective for annual periods beginning on or after 1 January 2006.  Click for IASB Press Release (PDF 65k).


Notes from IASB meeting 15 December 2004


We have combined all of our notes from the IASB meeting on 15-17 December 2004 onto a Separate Page. .

We have combined all of our notes from the IASB meeting on 15-17 December 2004 onto a Separate Page.

IASB amends IAS 19


The IASB has finalised an amendment to IAS 19 'Employee Benefits' to allow the option of recognising actuarial gains and losses in full in the period in which they occur, outside profit or loss, in a statement of recognised income and expense.

This option is similar to the requirements of the UK standard, FRS 17 Retirement Benefits.

The Board concluded that, pending further work on post-employment benefits and on reporting comprehensive income, the approach in FRS 17 should be available as an option to preparers of financial statements using IFRSs.

The amendment also provides guidance on allocating the cost of a group defined benefit plan to the entities in the group. Click for IASB Press Release (PDF 56k).


Deloitte partner is new ISAR chair


Abbas Ali Mirza, a partner in the Dubai office of Deloitte & Touche (Middle East), has been elected as the chair of the United Nations' Intergovernmental Working Group of Experts on International Standards of Accounting and Reporting (ISAR) for a one-year term that continues until November 2005. For more information about ISAR Click Here.

Abbas has also been appointed to the Developing Nations Permanent Task Force (DNPTF) of the International Federation of Accountants (IFAC).

"Heads Up" on SEC/PCAOB conference


Annually, the American Institute of Certified Public Accountants hosts a conference featuring speeches by, and question and answer sessions with, members and staff of the SEC, the Public Company Accounting Oversight Board, and other standard-setters.

Deloitte (USA) has published a 26-page issue of its (PDF 328k) that summarises all of the presentations. Several of them address international issues and convergence of US GAAP and IFRSs. In our news story of 12 December 2004, we have links to two speeches that most directly focus on IFRSs.

Public Sector Accounting Standards Board update


The International Public Sector Accounting Standards Board – formerly known as the Public Sector Committee – has published its PSC Update November 2004 (PDF 237k).

You can find more information about the IPSASB Here.

EFRAG may not support IFRIC 3


At its meeting on 8-10 December 2004, the European Financial Reporting Advisory Group (EFRAG) agreed to recommend that the European Commission endorse a number of pronouncements for use in Europe, but noted "serious concerns" about IFRIC 3 'Emission Rights'.

The following were recommended for endorsement: IFRS 6; the IAS 39 amendment for transition; the amendments to IAS 19 Employee Benefits; and IFRIC Interpretations 2, 4, and 5.

However, with regard to IFRIC 3 Emission Rights, a majority of EFRAG members have "serious concerns about the information resulting from application of this IFRIC".

EFRAG's meeting notes indicate that those concerns "could result in a negative advice" to the Commission. The draft endorsement advice letter will be discussed again at EFRAG's January meeting.


PCAOB proposes ethics and independence rules


The US Public Company Accounting Oversight Board (PCAOB) has proposed certain ethics and independence rules for public comment.

The rules, which relate to tax services provided to audit clients and contingent fees, would apply to audits of all listed companies, including foreign SEC registrants. Click for link to Press Release on PCAOB Website. The PCAOB's proposal is supported by SEC Chief Accountant Donald T. Nicolaisen. The SEC's Announcement said: "Although the Commission historically has adopted its own rules and interpretations regarding auditor independence issues - and will continue to provide companies and audit committees with guidance on independence issues - Nicolaisen stated that he looks forward to the PCAOB fulfilling its role and becoming the primary standard-setter and source of guidance to auditors on these issues."

ARC will consider endorsement of IFRS 2


The Accounting Regulatory Committee of the European Commission will meet on 20 December 2004 in Brussels to consider whether to recommend endorsement of IFRS 2 Share-based Payment for use in Europe.

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.