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Considerations in transition to IFRS 2

04 Jul 2004

We have posted a small (PDF 178k) outlining the key issues that a company must consider in making the transition to IFRS 2 Share-based Payment.

We have previously posted our 76-page book of .

FASB may delay its stock options standard until 2006

02 Jul 2004

Several news reports have indicated that Robert Herz, chairman of the US Financial Accounting Standards Board, has said that FASB is considering delaying the effective date of its proposed standard on share-based payment until 2006, because companies are facing more immediate deadlines on financial reporting changes, including some imposed by the Sarbanes-Oxley Act.

FASB's proposal would require expensing of all stock options and is essentially the same as IFRS 2 Share-based Payment, which goes into effect in 2005. The Chief Accountant of the SEC is reported to favour delaying the FASB standard until 2006.

Agenda project pages updated

01 Jul 2004

We have updated the following IASB and IFRIC agenda project pages to reflect deliberations and decisions at the Board's June 2004 meeting: Accounting Standards for Small and Medium-sized Entities Business Combinations (Phase II) Consolidation Extractive Industries: Exploration and Evaluation Activities Financial Instruments - Amendments to IAS 32 and IAS 39 Leases Liability and Equity Concepts Revenue Recognition Concepts Short-term Convergence - Income Taxes SIC 12: Exemption for Equity Compensation Benefits .

Support for IFRSs at EU-US summit meeting

01 Jul 2004

An EU-US summit meeting, known as the Trans-Atlantic Business Dialogue (TABD), was held on 25 and 26 June 2004 at Dromoland Castle in Ireland.

Participants included the President of the European Commission, Romano Prodi, together with the President-in-office of the European Council, Taoiseach Bertie Ahern, and US President George W. Bush. A number of EU Commissioners also participated as did the US Secretaries of State and Commerce. The goal of the TABD is to promote closer transatlantic ties and eliminate barriers in the transatlantic market. The TABD agreed to make recommendations to governments on four priority areas, one of which involves IFRSs. The priority areas are (1) open trade and security, (2) intellectual property rights and the fight against counterfeiting, (3) capital markets and International Accounting Standards, and (4) the World Trade Organisation and the Doha Development Round.

Deloitte comments on strengthening IASB due process

01 Jul 2004

Our firm has submitted a (PDF 80k) on the IASB's paper Strengthening the IASB's Deliberative Processes dated 24 March 2004. The IASB issued that paper as part of its Internal Review of its procedures for developing standards.

An excerpt from our comments:

We strongly encourage the use and enhancement of the due process mechanisms suggested in the paper, and we have attached our specific comments on each mechanism in the Appendix to this letter. We believe that the due process mechanisms mentioned in the paper should be, and in many cases are, inherent in the operations of the IASB. However, we do believe that these mechanisms have not been used to their fullest potential. We believe it is important that this review of due process is undertaken so as to ensure that the IASB gains the most benefit out of future due process activities; that is they are able to use the inputs gained from constituents to ensure the development of the highest quality standards.

EU and US agree to promote international accounting convergence

30 Jun 2004

Following discussions on 25-26 June 2004, the participants in the US-EU Financial Markets Regulatory Dialogue have agreed to "promote international convergence of accounting standards, including their consistent application, implementation, and enforcement".

Dialogue participants are the European Commission and the United States Treasury, Securities Exchange Commission, and Federal Reserve Board. Click for (PDF 19k).

EC begins study of equivalence of national GAAPs to IFRSs

30 Jun 2004

The Accounting Regulation adopted by the European Union requires that European companies listed in a regulated European securities market must prepare their financial statements in conformity with International Financial Reporting Standards starting in 2005. Subsequent legislation provides that non-European companies whose securities are listed in a regulated European securities market must also follow IFRSs starting in 2007 unless the Commission has agreed, prior to 1 January 2007, to recognise financial statements prepared in accordance with "third country GAAP" (a non-European national GAAP) as being equivalent to those prepared in accordance with IFRSs.

The European Commission has asked the Committee of European Securities Regulators (CESR) to assess the IFRS-equivalence of the following GAAPs by June 2005: US-GAAP, Japanese GAAP, and Canadian GAAP.

Click to download the full EC Formal Mandate to CESR regarding CESR's assessment (PDF 32k). The mandate states that:


In giving its advice, CESR should take full account of the following key objectives:

  • When assessing as to whether financial statements prepared under third country GAAP provide a true and fair view of the issuer's financial position and performance, the priority should lie on assuring the protection of investors;
  • A global and holistic assessment of the quality of the financial information provided by the accounting system in question should be carried out from a technical point of view and independently from any international convergence project aiming at a single set of accounting standards, such as the project currently conducted by the International Accounting Standard Board and the US Financial Accounting Standard Board.
  • The global and holistic assessment should be based on the entirety of the third country GAAP in force as of 1 January 2005. The assessment should focus only on the significant differences between IAS/IFRS as endorsed at EU level and the third country GAAP in question.
  • The assessment should not relate as to whether the third country GAAP in question might be conducive to the European public good. This is a criterion for endorsing IAS/IFRS at European level pursuant to Article 3(2) of the IAS Regulation, but not for assessing equivalence.
  • The assessment should also be carried out independently of whether the third country concerned already recognises IAS/IFRS as equivalent to their domestic GAAP.


EFRAG submits comments on IASCF constitution review

30 Jun 2004

The Supervisory Board and the Technical Expert Group of the European Financial Reporting Advisory Group (EFRAG) have jointly submitted a Letter of Comments about the IASB and IFRIC (PDF 48k) to the IASC Foundation constitution review committee.

Among other things, EFRAG requests formal liaison standard setter status with the IASB, observer membership of the IFRIC, and formal status as a member of the Standards Advisory Council.

New Accounting Roundup newsletter posted

29 Jun 2004

Deloitte (United States) has published the 28 June 2004 edition of (PDF 188k).

This newsletter briefly describes key regulatory and professional developments that have recently occurred and provides links to Internet locations where additional information can be found on each topic. This issue includes updates on activities of FASB, GASB, AICPA, SEC, PCAOB, and IASB. You will find links to all past issues Here.

CESR seeks comments on financial information in prospectuses

28 Jun 2004

The Committee of European Securities Regulators (CESR) has invited comments on its draft recommendations on the content of prospectuses, including both financial and non-financial information.

CESR's proposed recommendations on historical financial information cover selected financial information, operating and financial review, capital resources, profit forecasts or estimates, restatements of historical financial information, pro forma financial information, financial data not extracted from issuer's audited financial statements, interim financial information, working capital statements, and capitalisation and indebtedness. CESR notes that "the purpose of the recommendations is not to provide interpretations of IAS/IFRS or Member States' local GAAP but to clarify certain disclosure requirements included in [EU Prospectus Regulation No. 809/2004] where necessary." Comments are due 18 October 2004. Click for:

Correction list for hyphenation

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