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Later this week – IAS 32 and IAS 39 modules

28 Sep 2004

The first of the three e-learning modules on IAS 32 Financial Instruments: Presentation and Disclosure and IAS 39 Financial Instruments: Recognition and Measurement will be released later this week.

Watch for the announcement on IASPlus.

EFRAG letter to EC on IAS 39 "carve-outs"

28 Sep 2004

The European Financial Reporting Advisory Group (EFRAG) has responded to the request of the European Commission for technical input on the "carve-outs" proposed by the EC in relation to IAS 39 Financial Instruments: Recognition and Measurement.

The "carve-outs" would:
  • remove the IAS 39 fair value option as it applies to liabilities, and
  • facilitate the use of fair value hedge accounting for the interest rate hedges for core deposits on a portfolio basis.
EFRAG's Letter (PDF 71k) notes, among other things:

Many of the comments received referred to significant side effects of the carve-out, which were also noted by members of EFRAG.

In relation to the carve-out of the fair value option for liabilities the concerns are that the carve-out will create artificial volatility for many entities in Europe and the effect may be serious for those entities and countries affected. We have in the appendix explained these issues more fully, but we can mention the cases of economically or contractually linked or matched financial assets and liabilities where artificial volatility is introduced if assets and related liabilities are not accounted for on the same basis. Examples are unit linked instruments and the Danish mortgage institutions.

In relation to hedge accounting the effect of the carve-outs is not just to allow fair value hedging of core deposits on a portfolio basis but to extend the range of items that can be designated as hedged items and to relax the effectiveness test requirements for all hedges. The effects of their relaxation are significant.

In practice the tightening of the provisions in relation to the fair value option prevents entities from using certain sensible accounting practices that they would be able to use under the full IAS 39. On the other hand the relaxation of the effectiveness test for hedging transactions will allow entities to apply accounting that the full IAS 39 would not.

Web-based technical update on IASs 24 and 38

28 Sep 2004

The Deloitte London IFRS Centre of Excellence is running a monthly series of hour-long Internet-based IFRS technical updates, focusing on the most important international accounting standards and how they will affect UK companies.

The fifth Webcast was run on 23 September 2004 and covered IAS 24 Related Party Disclosures and IAS 38 Intangible Assets. To access the recording Click Here. The recording of each session will be available on this website for a period of at least 3 to 4 weeks from the date of the presentation. Links to past sessions may be found on our United Kingdom Page. The recording is no longer available online.

EFRAG letter of comment on IFRIC D9

27 Sep 2004

The European Financial Reporting Advisory Group has submitted to IFRIC its Letter of Comment (PDF 34k) on IFRIC D9 Employee Benefit Plans with a Promised Return on Contributions or Notional Contributions. .

The European Financial Reporting Advisory Group has submitted to IFRIC its Letter of Comment (PDF 34k) on IFRIC D9 Employee Benefit Plans with a Promised Return on Contributions or Notional Contributions.

Two new IAASB auditing exposure drafts

27 Sep 2004

The International Auditing and Assurance Standards Board (IAASB) has approved two new exposure drafts.

The IAASB Press Release (PDF 85k) has links for downloading the EDs:
  • Proposed Policy Statement on Clarifying Professional Requirements in International Standards. The ED defines two categories of professional requirements – "requirements" and "presumptive requirements". A requirement, to be fulfilled in all cases, would be identified by the word "shall" and a presumptive requirement by the word "should". The IAASB also issued a consultation paper, Improving the Clarity and Structure of IAASB Standards and Related Considerations for Practice Statements, which seeks feedback on whether there is a need to change the way IAASB standards are drafted. Comments on the exposure draft and related consultation paper are requested by 31 December 2004.
  • Revision to International Standard on Auditing (ISA) 230, Audit Documentation. The proposed revisions include clarification on the form, content, and extent of audit documentation, guidance on changes to audit documentation after the date of the auditor's report, and matters to be considered in connection with confidentiality, safe custody, and retention of audit documentation. An appendix to the exposure draft identifies additional specific audit documentation requirements set out in other ISAs. Comments on this exposure draft are requested by 31 January 2005.

Financial Stability Forum reviews IASB progress

27 Sep 2004

At their meeting in Washington earlier this month, the members of the Financial Stability Forum (FSF) reviewed the latest developments in the area of international accounting standards, including future plans of the International Accounting Standards Board (IASB) and discussions on convergence between IASB and the US Financial Accounting Standards Board.

An FSF roundtable in October 2004 will consider challenges associated with the implementation of international accounting and auditing standards. Click for Press Release (PDF 36k). The FSF was convened in April 1999 to promote international financial stability through information exchange and international co-operation in financial supervision and surveillance.


Notes from the final day of the IASB meeting

25 Sep 2004

The IASB met in London on 21-24 September 2004. You will find our Combined Notes from the Four-Day Meeting Here.

The Board also met 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.

IFRS is the lead story in new FEE European Update

25 Sep 2004

The European Federation of Accountants (FEE) has published a new edition of its European Update newsletter.

Several stories relate to IFRSs including the lead story "Call for Global Standards: IFRS". Click to (PDF 219k). Also, FEE is sponsoring a European Congress for SMP/SME Accountants in 7-8 October 2004 in Spain. The IASB's SME Project is on the agenda.

Richard G Humphry of Australia is new IASCF trustee

25 Sep 2004

Richard G Humphry of Australia has been named a Trustee of the IASC Foundation (parent body of the IASB) representing the Asia-Pacific region.

Mr Humphry will fill the vacancy left by the death of Kenneth Spencer and will begin his three-year term on 1 January 2005. Mr Humphry is Managing Director and Chief Executive Officer of the Australian Stock Exchange (ASX) Limited. His nomination carries the support of the International Federation of Accountants and the Financial Reporting Council of Australia. Click for Press Release (PDF 18k).

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.