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News

FEI (Financial Executives International) (lt green) Image

FEI top 10 financial reporting issues for 2005

06 Jan 2005

Financial Executives International has compiled a list of the Top 10 Financial Reporting Challenges for 2005.

While the list is written primarily in a US reporting context, nearly all of the challenges on the list relate to IASB projects as well:
  • Stock Options (SFAS 123 and IFRS 2).
  • Internal Controls.
  • Revenue recognition (a joint IASB-FASB project).
  • Uncertain tax positions (FASB and IASB are working to converge their income tax standards).
  • Unremitted foreign earnings (FASB and IASB are working to converge their income tax standards).
  • Business Combinations (a joint IASB-FASB project).
  • Inventory costs (FASB has issued Statement 151 in late 2004 to converge with IAS 2).
  • Off-balance-sheet arrangements disclosures.
  • XBRL (an IFRS Taxonomy has been developed).
  • MD&A; guidance (an IASB research project).
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EU publishes endorsed IFRSs

05 Jan 2005

The European Union has published Commission Regulations in the Official Journal of the European Union on 31 December 2004, thereby formally making certain improved IASs and new IFRSs part of European law.

The regulations are:

 

  • Commission Regulation (EC) No 2238/2004 of 29 December 2004 amending Regulation (EC) No 1725/2003 adopting certain IFRSs (the ones revised in the IASB's Improvements Project) in accordance with Regulation (EC) No 1606/2002 of the European Parliament and of the Council, as regards IASs IFRS 1, IASs Nos 1 to 10, 12 to 17, 19 to 24, 27 to 38, 40 and 41 and SIC Nos 1 to 7, 11 to 14, 18 to 27, and 30 to 33. The regulation includes the Full Text of the Following Standards (PDF 1,410k): IASs 1, 2, 8, 10, 16, 17, 21, 24, 27, 28, 31, 33, and 40.
  • Commission Regulation (EC) No 2237/2004 of 29 December 2004 amending Regulation (EC) No 1725/2003 adopting certain IFRSs in accordance with Regulation (EC) No 1606/2002 of the European Parliament and of the Council, as regards IAS No 32 and IFRIC 1. The regulation includes the Full Text of the Following Standard and Interpretation (PDF 323k): IAS 32 and IFRIC 1.
  • Commission Regulation (EC) No 2236/2004 of 29 December 2004 amending Regulation (EC) No 1725/2003 adopting certain IFRSs in accordance with Regulation (EC) No 1606/2002 of the European Parliament and of the Council as regards International Financial Reporting Standards (IFRSs) Nos 1, 3 to 5, International Accounting Standards (IASs) Nos 1, 10, 12, 14, 16 to 19, 22, 27, 28, 31 to 41 and the SIC Nos 9, 22, 28 and 32. The regulation includes the Full Text of the following Standards and Interpretations (PDF 1,028k): IFRSs 3, 4, and 5 and IASs 36 and 38.

Please note that 'full text' means the body of the standard and does not include the introduction, implementation guidance, or basis for conclusions.

Here is the Link to Standards and Interpretations Previously Adopted by the EC. All of the standards and interpretations are available in all of the official EU languages in the Official Journal.

 

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ASBJ comments on CESR 'equivalence' assessment

05 Jan 2005

The Accounting Standards Board of Japan has submitted its (PDF 205k) to the Committee of European Securities Regulators' October 2004 Concept Paper on Equivalence of Certain Third Country GAAP and on Description of Certain Third Countries' Mechanisms for Enforcement of Financial Information.

CESR had developed the paper in response to a request from the European Commission for advice on equivalence of Canadian, Japanese, and United States GAAPs with IFRSs. The ASBJ's response suggests that:

The global assessment of the equivalence of third country GAAP should not be conducted on a basis of whether third country GAAP is identical to IAS/IFRS or not. Rather than that, the rationality underlying the differences should be considered.

You will find EFRAG's response in our news story of 4 January 2005.
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Deloitte member-firm revenue is US$16.4 billion in 2004

04 Jan 2005

Composite revenue results of the member firms of Deloitte Touche Tohmatsu for fiscal 2004 show an 8.6 percent increase over 2003. After excluding divested practices, revenue growth for the continuing businesses was 11.1 percent.

Composite revenue reported was US$16.4 billion compared with US$15.1 billion in FY03. For the first time ever, member firms from Europe/Middle East/Africa and Asia-Pacific/Japan contributed half of this, and member firm tax practices led the way with 60 percent growth in the last two years. Click for Press Release.
EFRAG (European Financial Reporting Advisory Group) (dk green) Image

EFRAG comments on CESR 'equivalence' assessment

04 Jan 2005

The European Financial Reporting Advisory Group (EFRAG) has submitted its letter to the Committee of European Securities Regulators (CESR) in response to CESR's October 2004 Concept Paper on Equivalence of Certain Third Country GAAP and on Description of Certain Third Countries' Mechanisms for Enforcement of Financial Information.

CESR had developed the paper in response to a request from the European Commission for advice on equivalence of Canadian, Japanese, and United States GAAPs with IFRSs. The EC also asked CESR to describe the mechanisms existing in those countries and others for the enforcement of standards for financial information. The concept paper sets out the basis on which CESR will approach its analysis. EFRAG's response expresses support for CESR's objectives but also notes that:

The meaning of 'significant differences' in accounting standards could be clarified by improving the definition in the concept paper. We believe it is important to find and evaluate all existing differences between IAS/IFRS and third country GAAP, to be able to conclude whether these can result in 'significant differences'. Differences may have very different impacts on different entities within one industry and may also have different impacts on entities in different industries. We understand the practical difficulties, but we are concerned that equivalence may be assessed at a too high level and therefore differences that might lead to significant differences may not be assessed at all. We therefore recommend a more thorough analysis of the differences.

Click to Download:
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UK ASB guidance on applying 'carved out' IAS 39

03 Jan 2005

Following the 'carve outs' in the version of IAS 39 adopted by the European Commission in November 2004, the Accounting Standards Board has issued Guidance on the Application of IAS 39 by Entities Preparing their Financial Statements in Accordance with EU-Adopted IFRSs.

The guidance is intended for entities in the UK and the Republic of Ireland, though many of the issues addressed have EU-wide application. The guidance covers hedge accounting, fair valuing financial assets, fair valuing financial liabilities, and transition. Commenting on the guidance Ian Mackintosh, Chairman of the ASB said:

We set out to give simple and straightforward advice on the carved out IAS 39. Unfortunately, we have found the situation to be complicated and sometimes unclear. Consequently our guidance is much more lengthy and inconclusive than we hoped and will need to be studied carefully by preparers.

*Click for:
IFAC (International Federation of Accountants) (lt gray) Image

IAASB revises audit report effective for 2006

03 Jan 2005

The International Auditing and Assurance Standards Board (IAASB) has updated International Standard on Auditing 700 The Independent Auditor's Report on a Complete Set of General Purpose Financial Statements including a new form of the auditor's report.

The revised ISA 700:
  • Provides guidance for an audit conducted in accordance with both ISAs and the auditing standards of a specific jurisdiction, including how the auditor's report should be worded.
  • Adds guidance on the auditor's consideration of whether an accounting framework is acceptable, and on the need for the auditor to consider whether the financial statements are misleading even when they comply in all respects with that framework.
  • Separates audit reporting in connection with an ISA audit from additional supplementary reporting responsibilities required in some jurisdictions.

Under ISA 700 revised, the auditor's report must contain:

  • Title indicating that it is the report of an independent auditor.
  • Addressee.
  • Introductory paragraph that identifies the financial statements covered by the audit and refers to the summary of accounting policies and explanatory notes.
  • Explanation of management's responsibility for the financial statements, including responsibility for internal controls, for selecting and applying accounting policies, and for making reasonable estimates.
  • Explanation of the auditor's responsibilities, including description of what an audit involves.
  • Auditor's opinion, including reference to conformity with IFRSs or International Public Sector Accounting Standards (IPSASs) or with another reporting framework.
  • Other reporting responsibilities as required by individual jurisdictions.
  • Auditor's signature.
  • Date of the auditor's report.
  • Auditor's address.
The revised IAS 700 is effective for auditor's reports dated on or after 31 December 2006. The full text of ISA 700 may be downloaded without charge from IFAC's Website. Click here for Press Release (PDF 134k).
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Another record year for IAS Plus

01 Jan 2005

In 2004 – nearly a 100% increase in visitors over 2003! Thank you for making us the #1 source on the Internet for information about international financial reporting. .

In 2004 – nearly a 100% increase in visitors over 2003! Thank you for making us the #1 source on the Internet for information about international financial reporting.

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Two IASB working groups will meet

29 Dec 2004

The following meetings of IASB working groups will be held in January: 11-12 January 2005 – IASB's Insurance Working Group.

Agenda: The discussion is likely to focus mainly on accounting for life insurance contracts.
  • 13-14 January 2005 – Joint International Group on Performance. Agenda includes required financial statements, comparative periods for financial statements, how is the statement of cash flows used, what does 'performance' mean, and recycling.
  • The locations of both meetings will be Painters' Hall, 9 Little Trinity Lane, London EC4V 2AD, United Kingdom.
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    Agenda project pages updated

    28 Dec 2004

    We have updated the following agenda project pages to reflect the discussions and decisions at the Board's December 2004 meeting: Accounting Standards for Small and Medium-sized Entities Business Combinations: Purchase Method Procedures Financial Instruments: 2004 Amendments Financial Instruments: Disclosures Revenue Recognition Short-term Convergence – IFRSs and US GAAP .

    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.