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United States & European Union (old) Image

US-EU agreement on international cooperation

07 Dec 2005

In March 2002, the United States (represented by the SEC, the Federal Reserve Board, and the Treasury Department) and the European Union (represented by the European Commission) launched a Financial Markets Regulatory Dialogue with the goal of ongoing mutual cooperation and regulatory convergence in the areas of corporate governance and further integration of the Transatlantic securities markets.

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November 2005 Accounting Roundup posted

07 Dec 2005

We have posted the (PDF 244k) published by Deloitte & Touche LLP (USA).

Topics covered in this issue include:
  • FASB developments, including final FSPs on calculating the APIC pool under FAS 123R, minimum revenue guarantees, a QSPE's ability to hold derivatives, and investment impairment; and a new FASB project on pensions and other postretirement benefits.
  • GASB developments, including Q&A; on post-employment benefits.
  • AICPA developments, including a series of Technical Practice Aids on lease accounting and a request for comment on independence in compilation engagements.
  • SEC developments, including amendments to requirements for asset-backed securities and Q&A; on securities offering reform.
  • PCAOB developments, including ethics and independence rules regarding tax services and a report on implementation of AS2.
  • International developments, including IFRIC 7; discussion paper on measurement bases; User's Guide to Financial Instruments Standards; and summaries of recent IASB and IFRIC meetings.
You will find past issues of Accounting Roundup Here.
IFRIC (International Financial Reporting Interpretations Committee) (blue) Image

Issues not added to IFRIC agenda - new web page

07 Dec 2005

The IFRIC Agenda Committee considers potential projects for the IFRIC agenda and makes recommendations to the IFRIC.

IFRIC's normal procedure is:
  • Agenda Committee makes recommendation that an item not be added to the IFRIC's agenda, and recommends the wording for IFRIC's public explanation.
  • IFRIC discusses the Agenda Committee recommendation and, if it agrees, it publishes the proposed explanation in the IFRIC Update newsletter. The newsletter indicates that if constituents disagree, they should email the IFRIC.
  • At a subsequent meeting, the IFRIC decides not to add the item to its agenda and agrees on the final wording for its explanation. IFRIC's final decision and explanation are published in IFRIC Update.
We have created a new IASPlus web page with a comprehensive Summary of Issues Not Added to IFRIC Agenda - Sequenced by IFRS. That page lists each item not added to IFRIC's agenda (back to 2002), the date the decision not to add was made, and IFRIC's public explanation of the reasons for not adding the item to its agenda. We believe that those who are responsible for preparing IFRS financial statements will find the information on our new web page useful. We will keep the page up to date after each IFRIC meeting.
AICPA (American Institute of CPAs) (lt green) Image

Speeches at AICPA SEC conference

06 Dec 2005

The American Institute of CPAs is holding its 2005 National Conference on Current SEC and PCAOB Developments in Washington on 5-7 December 2005, simulcast in three other cities.

Eleven US SEC representatives, including Chairman Christopher Cox, spoke at the first day of the conference, which is quite popular among SEC registrants and their auditors because the SEC representatives provide insights on important issues for calendar year-end reporting. Here is a list of the broad areas addressed by various SEC speakers, with links to their presentations:

Other speakers at the conference include PCAOB board member Charles D. Niemeier and its Chief Auditor Douglas R. Carmichael; representatives from the FASB including Chairman Robert H. Herz and board member G. Michael Crooch; and James J. Leisenring, IASB board member.
European Union (old) Image

Call for more EU involvement in IFRS process

06 Dec 2005

Pervenche Beres, Chairwoman of the committee on economics and monetary affairs in the European Parliament, spoke about The Need for Better Involvement of the European Union in the IFRS Process at the FEE Seminar on IFRS Convergence and Consistency held in Brussels on 1 December 2005. An excerpt: Debates on the constitutional review of the IASB and on the (future) role of European Financial Reporting Advisory Group (EFRAG) represent an outstanding opportunity to strengthen the voice and the role of Europe, to improve the IASB corporate governance, and to make the decision making process at IASB level more balanced.

We should fully take advantage of this momentum!

One of the European Parliament's very important concerns relates to the manner in which the EU is present and represented in the IASB, namely on the trustees and on the Board side. A greater transparency towards the European Parliament, especially when it comes to Commission's intended steps in this area, would be a clear asset in ensuring that the EU is represented in the IASB structures in an appropriate way.

Click to Download (PDF 21k). We have previously posted speeches made at the same seminar by , the European Commissioner for Internal Market and Services (PDF 74k - see news story of 2 December 2005) and by , Director, Office of International Affairs of the US Securities and Exchange Commission (PDF 71k - see news story of 3 December 2005).
United Kingdom Image

New UK actuarial standards board under FRC

06 Dec 2005

The Financial Reporting Council, under which the United Kingdom Accounting Standards Board operates, has established a new regime to set actuarial standards and oversee the regulation of the actuarial profession.

The UK government is supporting this effort. The FRC has created a Board for Actuarial Standards (BAS) whose mission is to set high quality actuarial standards independently of the actuarial profession or other interests. The FRC is also extending the remit of the Professional Oversight Board for Accountancy to oversee the regulation of the actuarial profession; and is extending the remit of the Accountancy Investigation and Discipline Board to cover public interest cases involving actuaries. The FRC has appointed Paul Seymour as Chair of the BAS. Click for . The FRC has added to its website a New Section on Regulation of the Actuarial Profession.
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Three IASB working groups will meet in January

05 Dec 2005

The following meetings of IASB working groups are scheduled for January 2006: 9-10 January 2006 – Working Group on Financial Instruments, London 12-13 January 2006 – Working Group on Insurance, London 30-31 January 2006 – Working Group on Small and Medium-sized Entities, London Meetings of IASB working groups are open to public observation.

For agendas, locations, and observer registration details, please see IASB's Website Meeting Diary.
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Deloitte's Global Economic Outlook 2006

05 Dec 2005

Global Economic Outlook 2006 is a new study from Deloitte Research that examines the various risks to the global economy and offers a point of view as to their future direction.

It suggests possible scenarios about the future direction of interest rates, exchange rates, and commodity prices, all with the aim of offering some useful planning premises for global companies that are exposed to global risks. This report also looks at each of the world's major economies and the issues they face. Of special interest are today's most discussed economies – China and India and the question as to the staying power of their extraordinary growth. Click to download:
IFAC (International Federation of Accountants) (lt gray) Image

IFAC begins part 2 of compliance programme

03 Dec 2005

In July 2003, IFAC began a Member Body Compliance Programme to monitor and assess compliance with IFAC's membership obligations by IFAC's 163 member bodies.

The programme is being conducted in two parts.
  • Part 1 – information gathering. A questionnaire was distributed in March 2004 to identify the regulatory requirements and standard-setting processes in member body countries with respect to standards for auditing, accounting, ethics, public sector, and education. To date, responses to Part 1 from 78 member bodies have been posted on IFAC's Website.
  • Part 2 – member body self assessment. The goal of this step is to provide information on compliance by member bodies with IFAC's Statements of Membership Obligations. Part 2 was launched in December 2005. Each IFAC member and associate has been sent a package of materials including an instruction guide to Part 2 and confidential access to their self-assessment questionnaire. You can view the questionnaire at IFAC's Website.

Statement of Membership Obligation 7 International Financial Reporting Standards, which took effect in 2004 and applies to both full and associate IFAC members, requires the following:

  • 1. Member bodies of IFAC should support the work of the IASB by notifying their members of every IFRS.
  • 2. The IASB exposes proposed IFRSs for public comment. Member bodies are encouraged to notify their members of all exposure drafts issued by the IASB and to encourage them to comment on behalf of those members that have an interest in accounting standards.
  • 3. Member bodies should use their best endeavors:
    • (a) To incorporate the requirements of IFRSs in their national accounting requirements, or where the responsibility for the development of national accounting standards lies with third parties, to persuade those responsible for developing those requirements that general purpose financial statements should comply with IFRSs, or with local accounting standards that are converged with IFRS, and disclose the fact of such compliance; and
    • (b) To assist with the implementation of IFRSs, or national accounting standards that incorporate IFRSs.
  • 4. Interpretation. A member body has used 'best endeavors' if it could not reasonably do more than it has done and is doing to meet the particular membership obligation.
SEC (old) Image

The reconciliation and convergence

03 Dec 2005

Ethiopis Tafara, Director, Office of International Affairs of the US Securities and Exchange Commission, discussed the SEC's 'roadmap' of milestones toward elimination of the US GAAP reconciliation requirement for IFRS filers in remarks at FEE's IFRS seminar in Brussels on 1 December 2005. An excerpt: We do not expect full or even a finite degree of convergence before we are willing to eliminate the reconciliation requirement.

What is important is that investors in the United States be able to understand financial statements prepared under IFRS. While convergence between IFRS and US GAAP will certainly help us all in reaching that goal, it is clearly possible for US investors to understand financial statements prepared using a rigorously applied system of IFRS, even if there remain differences between IFRS and US GAAP.

Accordingly, we do not expect an artificially paced standard-setting work targeted at a specific level of convergence before eliminating the reconciliation requirement. That said, before eliminating the requirement, the Commission likely will be keen to see that a robust process for converging IFRS and US GAAP is in place and active. This will help make sure that, going forward, both sets of accounting standards will converge rather than diverge. Of course, the only way to judge the effectiveness of a process is through the results it generates. This means that, before the reconciliation requirement can be eliminated, the Commission will need to review the progress of the IASB/FASB convergence project and will look for convergence of standards that reflect a sense of priority and a measure of efficiency.

Click to download (PDF 71k)

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