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News

Additional information about ARC 1 October meeting

2004-09-20

Our news story of 19 September noted that the Accounting Regulatory Committee will meet on 1 October 2004 to decide on whether to recommend endorsement of IAS 39. Also on the agenda for that meeting will be the questions of whether to endorse: The improvements to 14 IASs that were adopted as revised standards in December 2003 (to date, the EC has endorsed only the pre-2003 versions). IFRS 2 Share-based Payment IFRS 3 Business Combinations and related amendments to IAS 36 and IAS 38 IFRS 4 Insurance Contracts IFRS 5 Non-current Assets Held for Sale and Discontinued Operations The EC has not yet endorsed IAS 32 Financial Instruments: Presentation and Disclosure as revised in December 2003 (only the pre-2003 version has been endorsed) or IFRIC 1 Changes in Existing Decommissioning, Restoration and Similar Liabilities.

These are not on the 1 October 2004 ARC agenda. Endorsement will be considered at a future ARC meeting.

ARC will meet on 1 October to consider IAS 39

2004-09-19

The Accounting Regulatory Committee will meet on 1 October 2004 to decide on whether to recommend that IAS 39 Financial Instruments: Recognition and Measurement should be endorsed for use in Europe it its entirety or with two sections 'carved out'.

The two sections proposed for deletion are (1) the option for an entity to choose to measure any individual financial liability at fair value with value changes through profit and loss and (2) the prohibition against using fair value hedge accounting for core deposits. The opinions of both ARC and EFRAG will then be considered by the 25-member European Commission, who must make the final endorsement decision.

PCAOB adopts amendments to its auditing standards

2004-09-18

The US Public Company Accounting Oversight Board (PCAOB) has amended its interim auditing standards to conform them with PCAOB Auditing Standard No.

2 An Audit of Internal Control over Financial Reporting Performed in Conjunction with an Audit of Financial Statements. The PCAOB had adopted the interim standards in April 2003, based on standards that had been developed by the auditing profession before the PCAOB was established. Since then, the PCAOB has adopted several permanent standards that, in various respects, supersede the interim standards – hence these amendments. The PCAOB's auditing standards apply to audits of all companies registered with the SEC, including foreign registrants. Link to PCAOB Release.

Agenda for the September IASB meeting

2004-09-18

The IASB has announced the agenda for its Board meeting on 21-24 September 2004. The Board will also meet with its partner national standard-setters 27 and 29 September 2004 and with representatives of standard setting bodies from over 30 countries on 27 and 28 September.

The IASB Board meeting will be held at the IASB offices, 30 Cannon Street, London. The meetings with partner national standard setters and world standard setters will be held at three other locations as indicated Here.

AGENDA OF THE IASB MEETING 21-24 SEPTEMBER 2004

Tuesday 21 September 2004

  • IFRIC - Concessions (Educational session)
  • IAS 12 Income Taxes - Backwards tracing (Educational session)
  • IFRS 3: Combinations involving mutual entities
  • Concepts
  • IFRIC update Wednesday 22 September 2004
  • Insurance (Educational session)
  • Business Combinations II
  • Financial instruments: the fair value option Thursday 23 September 2004
  • Financial Reporting by Small and Medium-sized Entities
  • Share-based payment
  • Convergence: employee benefits (IAS 19)
  • Convergence: Income taxes (IAS 12) Friday 24 September 2004
  • IAS 37 Provisions, Contingent Liabilities and Contingent Assets
  • ED 6 Exploration for and evaluation of mineral resources
  • IASB due process Unspecified date
  • Convergence: discontinued operations (IFRS 5) is included in the list of agenda topics but a specific day has not been announced Monday 27 September 2004
  • Morning: Meeting with national standard-setters
    • Update on developments
    • Thoughts on accounting standard setting (Roundtable)
  • Afternoon: Meeting with world standard-setters
    • IASCF education initiatives
    • The role of the national standard-setter in relation to the IASB
    • National standard-setters: challenges to adoption of IFRSs - round-table discussion
    Tuesday 28 September 2004
  • All day: Meeting with world standard-setters
    • Keynote address: Donald T Nicolaisen, Chief Accountant, US Securities and Exchange Commission
    • The IASB's Framework
    • Consolidation and control
    • Leases
    Wednesday 29 September 2004
  • Morning: Meeting with national standard-setters
    • Development of work programme and procedures
    • Disclosure framework
    • Progress reports on research projects
      • Extractive activities
      • Intangible assets
      • Investment companies
      • Joint ventures
      • Leases
      • Management narrative reporting (MD&A;/OFR, etc)
      • Measurement

Comment letters on IFRIC D8 are posted

2004-09-18

The 22 comment letters received on IFRIC Draft Interpretation D8 Scope of SIC-12 Consolidation – Special Purpose Entities have been Posted on IASB's Website.

For a summary of D8, Click Here.

Hong Kong company explains why it switched to IFRSs

2004-09-17

Esprit Holdings Limited, a Hong Kong based clothing and cosmetics wholesaler and retailer, has switched from Hong Kong GAAP to IFRSs for its year ended 30 June 2004, as permitted by the Stock Exchange of Hong Kong.

In its Earnings Announcement, Esprit cited the following reasons for adopting IFRSs:
  • The Group operates internationally in four continents and has diverse international shareholders. The Group believes adoption of internationally recognized accounting standards will allow its financial statements to be better understood by its shareholders, the capital markets and the other users globally;
  • Many of the Group's peers in Europe will be adopting IFRS from 2005 onwards under European Union rules; and
  • Many of the Group's subsidiaries, particularly in Europe which accounts for approximately 80% of the Group's turnover and profits, have historically prepared their financial statements in accordance with IFRS. Consistently using IFRS throughout the Group will lead to efficiencies and is cost effective.
Mr. John Poon, Deputy Chairman and Group CFO, said: "We adopted International Financial Reporting Standards this year for better quality disclosure which is an essential element of good corporate governance. As an international company with operations worldwide and a diverse international shareholder base, we believe adopting an internationally recognized accounting standard will improve transparency and allow our financial statements to be better understood by our shareholders, the capital markets and other users globally."

Draft IVSC guidance note on plant and equipment

2004-09-17

The International Valuation Standards Committee (IVSC) has invited comment on a proposed Valuation Guidance Note 3 Plant and Equipment (PDF 203k).

The draft discusses various approaches to valuing plant and equipment and provides guidance for valuations that meet the requirements of accounting standards, particularly IAS 16 Property, Plant and Equipment. The draft points out that the measurement objective for financial reporting purposes is generally market value, defined as "the estimated amount for which a property should exchange on the date of valuation between a willing buyer and a willing seller in an arm's-length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently, and without compulsion". The draft notes that "although the concept, use, and application of non-market bases of value may be appropriate under certain circumstances, the valuer is responsible to ensure that if such value is to be found and reported, it will not reasonably be construed as a representation of market value". Comments are due 31 October 2004.

Reminder of two comment deadlines next week

2004-09-17

The comment periods on two documents end next week: D9 Employee Benefit Plans with a Promised Return – 21 September 2004 Discussion Paper: SMEs – 24 September 2004 .

The comment periods on two documents end next week:

EFRAG invites comments on their ED 7 draft letter

2004-09-16

The European Financial Reporting Advisory Group (EFRAG) has invited comments by 20 October 2004 on their draft letter to the IASB on ED 7 Financial Instruments: Disclosures.

You can download the letter from EFRAG's Website.

Malaysia may let foreign companies use IFRSs

2004-09-16

The government of Malaysia is considering an amendment to the Financial Reporting Act that would allow foreign companies traded on Bursa Malaysia – the Malaysian stock exchange – to use IFRSs by year-end.

Domestic companies would continue to use the standards set by the Malaysian Accounting Standards Board. Currently, approximately 930 companies are listed on Bursa Malaysia, of which four are foreign.

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