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News

US House overwhelmingly approves stock options legislation

21 Jul 2004

The United States House of Representatives has approved HR 3574 Stock Option Accounting Reform Act by a vote of 312 to 111, with 10 nonvoting.

This legislation would restrict the SEC from recognising a FASB standard on expensing stock options to options granted to the top five officers of a company, would exclude volatility from the calculation of fair value for those options, and would delay implementation for at least a year pending completion of a joint study by the Secretaries of Commerce and of Labor of the economic impact of the mandatory expensing of employee stock options. The bill would not prohibit voluntary expensing of stock options by SEC registrants. The Senate must also pass the same legislation before the bill becomes law. The FASB has issued an exposure draft proposing that the fair value of all share-based payment, including stock options, be recognised as an expense. The FASB proposal is very similar to IFRS 2. Before adopting HR 3574, the House considered but rejected a substitute bill that sought to preserve the independence of the FASB. Click for the Full Text of the bill as passed (PDF 104k).

EFRAG posts final and draft comment letters

20 Jul 2004

The European Financial Reporting Advisory Group (EFRAG) has published final and draft comment letters on a number of IASB proposals.

EFRAG has submitted to the IASB its final comments on the IASB's proposals for Strengthening IASB's Deliberative Process (PDF 38k).

Also, EFRAG has submitted its final endorsement advice to the European Commission Recommending Adoption of IFRIC 1 Changes in Existing Decommissioning, Restoration and Similar Liabilities (PDF 35k).

Further, EFRAG has drafted its preliminary views on the following IASB and IFRIC proposals and is seeking comments by the dates indicated:

  • IFRIC D7 Scope of SIC 12 Consolidation - Special Purpose Entities (20 August 2004)
  • IFRIC D8 Members' Shares in Co-operative Entities (20 August 2004)
  • ED Amendments to IAS 39: Cash Flow Hedge Accounting of Forecast Intragroup Transactions (24 September 2004)
  • ED Amendments to IAS 39: Transition and Initial Recognition of Financial Assets and Liabilities (24 September 2004)

The final comment letters and draft preliminary views can all be downloaded from EFRAG's website www.efrag.org.

 

Notes from the first day of the July 2004 IASB meeting

20 Jul 2004

The IASB met at its offices in London on 20 July 2004, the first day of a three-day Board meeting.

We have combined our notes for all three days in a Separate Page.

New Google search engine for IASPlus website

20 Jul 2004

We have replaced our old search engine for IASPlus with the Google search engine.

Three big improvements:
  • The Google search engine will search within PDF files.
  • The results are returned with the search terms highlighted in the context (one or two sentences) in which they appear in the documents that were found.
  • Google is extremely fast.
Click Search at the top of any page or the button at the left on this Home Page.

Agenda for IFRIC 29 July 2004 meeting is announced

20 Jul 2004

The International Financial Reporting Interpretations Committee will hold a one-day meeting on 29 July 2004 at the IASB's offices in London.

The meeting will not continue to 30 July, as had been previously announced. Here is the agenda:

AGENDA OF THE IFRIC MEETING 29 JULY 2004

FASB response on principles-based accounting

19 Jul 2004

The US Financial Accounting Standards Board has submitted a Response to July 2003 SEC Staff Report to Congress on a Principles-Based Accounting System (PDF 97k).

The 2003 SEC Report (PDF 495k) had been prepared pursuant to Section 108(d) of the Sarbanes-Oxley Act of 2002. The FASB response states that "the Board welcomes the SEC's study and agrees with the recommendations." A section of the FASB response (pages 10-11) relates to international convergence. The SEC staff report had made the following recommendations:
  • The FASB should issue objectives-oriented standards.
  • The FASB should address deficiencies in the conceptual framework.
  • The FASB should be the only organization setting authoritative accounting guidance in the United States.
  • The FASB should continue its convergence efforts.
  • The FASB should work to redefine the GAAP hierarchy.
  • The FASB should increase access to authoritative literature.
  • The FASB should perform a comprehensive review of its literature to identify standards that are more rules-based and adopt a transition plan to change those standards.

US House may vote this week on stock options legislation

19 Jul 2004

The United States House of Representative may vote as early as Tuesday 20 July on legislation (known as H.R.

3574, the Stock Option Accounting Reform Act) that would restrict the SEC from recognising a FASB standard on expensing stock options to options granted to the top five officers of a company, would exclude volatility from the calculation of fair value for those options, and would delay implementation for at least a year. The Senate must also pass the same legislation before the bill becomes law. On 8 July 2004, FASB Chairman Robert H. Herz testified on the bill before the Commerce, Trade, and Consumer Protection Subcommittee of the House Committee on Energy and Commerce. Mr. Herz's testimony may be found on FASB's Website.

IAASB proposes to enhance its operating procedures

19 Jul 2004

The International Auditing and Assurance Standards Board (IAASB) has issued an exposure draft proposing certain enhancements to its due process and working procedures.

The enhancements are designed to increase confidence that the activities of the IAASB are properly responsive to the public interest and will lead to high quality international standards. Proposed enhancements include:
  • Public forums or round-tables, or the issue of consultation papers, where wider or further input would be appropriate.
  • Enhanced meeting agenda material and easier access to comment letters to assist in its deliberative process.
  • An expanded description of the process by which the IAASB considers the need to re-expose a draft IAASB international standard or practice statement.
  • The possibility of issuing a separate document explaining its basis for conclusions on final IAASB international standards or practice statements where necessary.
  • A process to address circumstances where issues over due process are raised with the IAASB.
For IAASB's press release, including a link to download the exposure draft, Click Here (PDF 89k). Comment deadline is 15 October 2004.

FASB may adopt IASB's black letter/gray letter style

19 Jul 2004

FASB's Response to July 2003 SEC Staff Report to Congress on a Principles-Based Accounting System (see story below) indicates that FASB " -->is considering using the black letter/gray letter style of the International Accounting Standards Board (IASB) and will use that style in its business combinations Exposure Draft.

The Board intends to request constituent input on that style and will address the advantages and disadvantages of using that style in all FASB standards at a later date."

The evolution of US GAAP

18 Jul 2004

Professor Stephen A.

Zeff, Rice University, presented an all-day seminar on the Evolution of US Generally Accepted Accounting Principles (1932 to today) at an International Symposium on Accounting Standards sponsored by the Ministry of Finance of the People's Republic of China, Beijing, 12 July 2004. We are grateful to Prof. Zeff for permitting us to post a comprehensive Outline of the Presentation (PDF 75k). The outline will remain available on the USA Page.

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.