August 2008

Special Edition Exposure Draft on Earnings per Share

August 2008

Special Edition – IASB Releases Omnibus Exposure Draft of Annual Improvements for 2008

July 2008

Special Edition – Exposure Draft on Conceptual Framework Objective and Qualitative Characteristics

July 2008

Special Edition – Discussion Paper on Reporting Entity

July 2008

Special Edition – IAS 39: Eligible Hedged Items

July 2008

Special Edition – IFRIC 16: IFRIC Issues Interpretation on Net Investment Hedging

July 2008

Special Edition – IFRIC 15: Accounting for Agreements for the Construction of Real Estate

May 2008

Special Edition – Amendments to IFRS 1 and IAS 27 on Cost of Investments in Subsidiaries, Associates, and Jointly Controlled Entities

May 2008

Special Edition – Improvements to IFRSs 2008

January 2008

Special Edition – Business Combinations: IASB revises IFRS 3 and IAS 27

September 2007

Special Edition on IAS 1 (Rev) – Revised Standard on Presentation of Financial Statements

June 2007

Special Edition – IFRIC 13 Customer Loyalty Programmes

December 2006

Special Edition – IFRS 8 Operating Segments

December 2006

Special Edition – IFRIC 12 Service Concession Arrangements

Tonight I want to touch on the implications of this new reality with special attention to the impact on the Public Company Accounting Oversight Board. The current state of play involves two sets of accounting standards: GAAP and IFRS (with its numerous local variations), and three sets of auditing standards, each of which is in a state of flux: the ISAs toward which many non-US jurisdictions seem to be moving, the ASB standards which apply to non-issuers in the United States (and are conceptually 'ISAs plus'), and the PCAOB standards for issuers....

Nor are regulators untouched by these challenges. Currently 873 non-US firms are registered with the PCAOB and about 250 firms in 51 countries are subject currently to periodic inspections, which is to say they audit issuers. Now that foreign private issuers no longer need to reconcile their financial statements to GAAP, PCAOB inspectors will be reviewing audits based on IFRS alone. As a result, PCAOB is developing a robust training program which eventually will involve most of its divisions. But initially we will focus on making sure that our international inspectors are conversant with IFRS.

1. Do you think that the revised control definition could be applied to traditional control arrangements and those entities set up with a narrow and well-defined purpose? If not, where do you think the definition falls down?
2. Is the general control principle likely to lead to the right entities being consolidated?
3. Do you agree that the continuous assessment of control should not lead to entities 'flipping in and out' of consolidation?
4. Do you agree with the presumption that the greater the variability of returns that a party exposes themselves to the greater the expected ability of that party to affect the performance of the assets of that entity? if not, why not?
5. We envisage that there will be some circumstances when an entity is not controlled by any party. Do you agree? If not, why not?
6. Do you agree that a party can have control over an entity even if they hold less than half the voting rights? If not, why not?
7. Are the indicators provided in the draft ED sufficient to capture the entities that should be consolidated and to ensure consistent application?
8. Do you agree that the existence of an option on its own is not enough to give a party control over an entity? If not, why not?
9. Do you agree that the definition of significant involvement will capture the right entities about which you want further information or do you think it is casting too wide a net? What entities are being captured that you believe should not be, and vice versa?
10. Do you support a requirement to disclose additional information in those circumstances in which the consolidation decision was not straight-forward?
11. Do you support the proposal to require the disclosure of more information about the claims of non-controlling interests?
12. Do you support the suggested disclosures in relation to significant involvement?
13. Would you, as a preparer of financial statements, be able to produce the additional information required to be disclosed under the draft ED?
14. Do you agree that where a fund manager has dual role – it acts in a fiduciary capacity and hold a direct investment in the investee – the fund manager should consider the two positions collectively when determining whether it has control? If not, why not? Please provide examples for which you believe that in spite of the dual role performed by the fund manager you believe it is appropriate for the fund manager not to consolidate the entity.
15. Do you agree that investment companies should be required to consolidate any entities it controls? If not, why no

Two excerpts from the draft report:

Measurement: In inactive markets, entities measure the fair value of financial instruments by considering all relevant market information that is available. A thorough understanding of the instrument subject to valuation is necessary in order to identify relevant available information. Information to be considered includes prices from recent transactions in the same or similar instruments, quotes from brokers and pricing services, indices and other inputs to model-based valuation techniques. Entities use this information to measure fair value by assessing the available information and applying it as appropriate.

Disclosure: It is important that entities help users of financial statements understand the techniques used and the judgements made in measuring fair value (although it is not the purpose of the disclosure to allow recalculation of fair values). Providing enhanced and detailed disclosures about the fair value of instruments that are of particular interest to users helps entities meet that objective. The instruments of particular interest will change over time as market conditions change and are likely to include those that are the focus of internal management reporting and are receiving external market interest.