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21 December 2001: Project files updated for recent decisions
We have updated our pages for the following projects to reflect Board decisions earlier this week:
21 December 2001: Notes from the 18-20 December IASB meeting
We have moved the summary of discussions at the December 2001 IASB meeting to its own page. Click to go to Summary of IASB's 18-20 December 2001 Meeting. It had originally been presented as several lengthy news items.
20 December 2001: IASB approves seven new Interpretations
At its meeting this week, the IASB Board approved the following final Interpretations:
- SIC-27, Evaluating the Substance of Transactions in the Legal Form of a Lease;
- SIC-28, Business Combinations - 'Date of Exchange' and Fair Value of Equity Instruments;
- SIC-29, Disclosure - Service Concession Agreements;
- SIC-30, Reporting Currency - Translation from Measurement Currency to Presentation Currency (some changes in the wording to a number of paragraphs of the Interpretation are to be made, but the substance of these paragraphs remains unchanged);
- SIC-31, Revenue - Barter Transactions Involving Advertising Services;
- SIC-33, Consolidation and Equity Method - Potential Voting Rights Redeemable by Holder;
- SIC 34, Financial Instruments - Instruments or Rights Redeemable by the Holder (was approved, but an effective date has not yet been set).
SIC-32, Intangible Assets - Website Costs, was tentatively approved. However the Board objected to the lack of convergence of the paragraphs dealing with the graphical design of a website with other similar literature on the topic. For instance under US GAAP, EITF 00-2, Accounting for Website Development Costs, allows for the capitalisation of these costs. The SIC proposed to expense the cost of graphical design as incurred. The SIC was urged to take another look at these specific paragraphs and try to seek further convergence. No objections to the other paragraphs were made.
20 December 2001: ECOFIN, European Parliament discuss the proposed IAS regulation
ECOFIN, the European Council of Finance Ministers, met on 13 December 2001 and agreed a 'general orientation' on a proposed Regulation that would require all EU listed companies, including banks and insurance companies, to prepare their consolidated financial statements using IAS. ECOFIN agreed that this requirement should go into effect in 2005 at the latest. However, companies that currently apply US GAAP as their primary financial reporting standards would not have to apply IAS until 2007. The 2007 extended deadline for companies using US GAAP was inserted at the request of the German government. EU Internal Market Commissioner Frits Bolkestein said:
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The International Accounting Standards Regulation will introduce a new era of transparency and put an end to the current Tower of Babel in financial reporting. It will help European firms to compete on equal terms when raising capital on world markets and allow investors and other stakeholders to compare companies' performance against a common standard. However, I regret the Ministers' decision to grant some big companies the right to apply US GAAP standards until 2007, two years after the Lisbon deadline for completing the Internal Market in financial services.
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The Legal Affairs Committee of the European Parliament met on 18-19 December 2001 to discuss the IAS regulation. The Council can adopt a Common Position on the Regulation once it has received an Opinion from the European Parliament.
20 December 2001: Large accounting firms strongly endorse IAS for Europe
The chief executives of the seven largest public accounting firms in Europe have jointly signed a letter endorsing IAS for Europe. Signatories include Wolfgang Grewe, Managing Partner, Deloitte & Touche, Europe and Africa. The Letter, which was published in the Financial Times, said:
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A European capital market must be strong if it is to be one of the leading sources of global finance. The application of consistent financial reporting standards is step in the right direction and should be a public interest priority. We wish to record the full support of our respective firms for the Commission's vision for a strong, competitive and efficient capital market for Europe including the application of IAS.
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18 December 2001: IASCF Trustees appoint the members, chairman of IFRIC
The Trustees of the IASC Foundation have appointed the 12 members of IASB's new interpretations committee -- proposed to be called the International Financial Reporting Interpretations Committee (IFRIC) -- which will replace the former Standing Interpretations Committee (SIC). IFRIC is expected to meet six times a year to develop interpretive guidance on IASB's standards. IFRIC members are:
- Junichi Akiyama, Professor, Tama University, Japan
- Phil Ameen, Vice President and Comptroller, General Electric Company, United States
- Christian Chiarasini, Partner, Andersen, France
- Claudio de Conto, General Manager Administration and Control, Pirelli S.p.A., Italy
- Clement K. M. Kwok, Managing Director and Chief Executive Officer, The Hongkong and Shanghai Hotels, Limited, Hong Kong, China
- Wayne Lonergan, Managing Director, Lonergan Edwards & Associates, Australia
- Domingo Mario Marchese, Partner, Marchese, Grandi, Meson & Asoc., Argentina
- John T. Smith, Partner, Deloitte & Touche, United States
- Mary Tokar, Partner, IAS Advisory Services, KPMG International, United States
- Leo van der Tas, Partner, Ernst & Young, The Netherlands
- Patricia Walters, Senior Vice President, Association for Investment Management and Research, United States
- Ian Wright, Partner, PricewaterhouseCoopers, United Kingdom
Kevin Stevenson, who will become IASB's Director of Technical Activities in February, was appointed the non-voting Chairman of IFRIC.
15 December 2001: IASB will meet next week in Paris
The IASB will meet on 18-20 December in Paris. Agenda projects and issues to be discussed are:
- Business Combinations
- Improvements to Existing IASB Standards:
- IAS 1, Presentation of Financial Statements
- IAS 8, Net Profit or Loss for the Period, Fundamental Errors and Changes in Accounting Policies
- IAS 15, Information Reflecting the Effects of Changing Prices -- Proposed Withdrawal
- IAS 17, Leases
- IAS 27, Consolidated Financial Statements and Accounting for Investments in Subsidiaries
- IAS 28, Accounting for Investments in Associates
- Approval of Final SIC Interpretations
- Amendments to IAS 39, Financial Instruments: Recognition and Measurement
- Venture Capital Investments
- Insurance Contracts
15 December 2001: IASB member speaks on Asian IAS issues
IASB member Tatsumi Yamada, who is from Japan, spoke on 13 December in Beijing at an International Symposium on Accounting Standards sponsored by China's Ministry of Finance. He said that "Asia needs to develop a unified strategy on how we should deal with the IASB". The IASB is "Anglo-Saxon dominated -- 10 Board members are Anglo-Saxon.... The Americans want to change IAS to be like US GAAP". A key focus of the symposium was on how Chinese Accounting Standards should take IAS into account. Addressing how Japan is doing that, Mr. Yamada said that "Japan has adopted some IAS principles in Japanese GAAP, and the Japanese securities commission is considering allowing IAS financial statements for foreign companies." However, Mr. Yamada said, a major concern of the securities commission is whether and how the Japanese government can enforce proper application of IAS on foreign companies and, if there is some failure in the IAS financial statements of a foreign company, what remedies are available in Japan.
14 December 2001: Singapore will adopt IAS for listed companies
Early in 2002, the Singapore government will propose amendments to its Companies Act to require nearly all listed companies to use IAS starting 1 January 2003. For this purpose, the Government will establish an independent panel (to be known as the Council on Corporate Disclosure and Governance) to adopt the IAS as Financial Reporting Standards (Singapore), or FRS(S). If a Singapore-incorporated company is also listed on a foreign exchange that requires foreign GAAP financial statements, and the Singapore Stock Exchange (SGX) accepts those foreign-GAAP statements, then that company would not be required also to publish or reconcile to FRS(S) statements. The Singapore Registry of Companies and Businesses may permit unlisted companies to use alternative standards that are allowed by the SGX.
14 December 2001: Update on IFAC Public Sector Committee's work
We have posted the latest IFAC Public Sector Committee Update Newsletter (PDF 72k). The PSC is engaged in a programme of developing International Public Sector Accounting Standards (IPSAS) based, as appropriate, on IAS. An interssting recent development is that PSC is proposing to change the definition of segment from that used in IAS 14 because "segments constructed for internal reporting purposes would not always be appropriate for external reporting purposes and entities should not be able to avoid reporting information about segments in their external reports simply because they do not report internally on a segment basis". Click for More Information about the PSC.
13 December 2001: European valuers will follow IVSC standards
The European Public Real Estate Association (EPRA) has recommended adoption of valuation standards set by the International Valuation Standards Committee (IVSC). In announcing that decision, EPRA noted that accounting standards in Europe are in a state of transition from national to International Accounting Standards (IAS). By adopting IVSC valuation standards, EPRA "has ensured that its recommendations are fully consistent with IAS". Click for IVSC News Release (PDF 22k)
11 December 2001: IFAD publishes GAAP 2001 report
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The International Forum for Accountancy Development had updated and expanded its GAAP 2000 survey of national accounting rules. The GAAP 2001 study highlights instances where a country's rules either do not allow or do not require the IAS accounting treatment. The 2001 report includes 62 countries, compared to 53 in the 2000 report. Also, the revised report covers approximately 80 accounting and disclosure requirements, compared to 60 in the 2000 report. Click for More Information. You may download the GAAP 2001 Report here (PDF 792k). |
10 December 2001: IASB releases three more chapters of insurance DSOP
IASB has released chapters 4, 5, and 6 of its Draft Statement of Principles on Insurance. They address estimating cash flows, adjusting for risk and uncertainty, and discounting.
9 December 2001: New SEC Chief Accountant urges convergence of accounting standards
In a presentation titled Advancing Investors' Interests (PDF 88k), SEC Chief Accountant Robert K. Herdman stressed the importance of convergence of global accounting standards. Speaking before the AICPA's 29th National Conference on Current SEC Developments in Washington on December 6, 2001, the new Chief Accountant said:
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Another issue facing standard-setters is the need for convergence of domestic and international accounting standards. Converging accounting standards is critical to a continued, efficient expansion of our global capital markets. Standard-setters should be cognizant of the effects on international accounting as they carry out their activities in the future, and I hope that convergence becomes a more near-term objective. Time does not permit a full discussion of my views on international accounting today, but it will be a major focus for the Chief Accountant's Office.
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8 December 2001: New accounting standard setter in Italy
On November 27, 2001, a new accounting standard setter - the Italian Accounting Committee (Organismo Italiano di Contabilità or OIC) - was established in Italy. The OIC's legal form is a foundation governed by a board of 15 directors. The Board of Directors has been appointed by a large representative group of Italian institutions, including the Italian National Council of Accountants, the 'ABI' (National Association of Banks), the 'Confcommercio' (National Confederation of Commerce), the 'Assirevi' (Association of the Italian Auditors), Italian Government Accountants, Confindustria (Italian Confederation of Industry), and the Italian Stock Exchange. The Board of Directors will soon appoint the members of an Executive Committee (7 members and 1 Chairman) which will have responsibility to appoint the Technical-Scientific Committee, whose aim is to draft the national accounting principles to be approved by the Executive Committee. The principal activities of the OIC will be the following:
issue accounting principles, for use in the preparation of financial statements for which the application of the international accounting principles has not been provided, by coordinating activity with the other European standard setters;
issue accounting principles for the preparation of the financial statements of not-for-profit entities and of national and local public administrations;
provide support in connection with the application of the international accounting principles in Italy.
7 December 2001: Global Accounting Standards: Fact or Fiction?
 | A single set of accounting standards, for so long just an ideal, is on the verge of becoming a reality. Sir David Tweedie, chairman of the IASB, debates the issues with Jim Copeland, Global CEO of Deloitte Touche Tohmatsu, on a new CD available from Deloitte Touche Tohmatsu. Please Click for More Information. |
7 December 2001: IASB is proposing to withdraw IAS 15
At its upcoming meeting, IASB will discuss withdrawing IAS 15, Information Reflecting the Effects of Changing Prices. IAS 15 (1981) had required enterprises to present supplementary information on one of two bases: (1) adjusted for changes in the general price level or (2) balance sheet items measured at replacement cost. In 1989, the IASC had made the Standard optional, and companies stopped providing the information. Meanwhile, subsequent Standards, including IAS 16, 39, 40, and 41, have addressed reporting the effects of changing prices for individual classes of assets.
7 December 2001: Fast track urged for EU IAS regulation
The European Commission has published its Fifth Report on Implementing the EU Financial Services Action Plan. "The proposals on pension funds, prospectuses, financial conglomerates and International Accounting Standards, and a new proposal on Takeover Bids following the European Parliament setback in July, are key measures that should be adopted by end 2002 if they are to be implemented by the agreed deadlines." The IAS Regulation is proposed for approval during the EU's Spanish Presidency (first half of 2002).
5 December 2001: Project files updated to reflect November IASB discussions
We have updated the following agenda project pages on our website:
4 December 2001: European capital market integration and IAS
We have posted the text of a presentation by Michel Prada, Member of IOSCO Technical Committee and
President of the Commission des Operations de Bourse (France), titled European Capital Markets Following the Adoption of IAS by the EU (PDF 43k). Mr. Prada made the presentation to the Council if IFAC at the Council's 14-15 November meeting.
4 December 2001: Agenda topics for December IASB meeting announced
IASB will meet in Paris 18-20 December. Agenda topics are:
- Business Combinations
- Improvements to Existing IFRS: IAS 1, IAS 8, IAS 15, IAS 17, IAS 27, and IAS 28
- Insurance Contracts
- IAS 39, Financial Instruments: Recognition and Measurements - proposed amendments
- Standing Interpretations Committee: Interpretations for Approval
3 December 2001: Jamaica adopts IAS and ISAs effective 1 July 2002
The Institute of Chartered Accountants of Jamaica has adopted International Accounting Standards and International Standards on Auditing as Jamaica's national standards effective 1 July 2002. Click for Press Release (PDF 82k).
2 December 2001: IASB Trustees propose revisions to Constitution
The Trustees of the IASC Foundation, which oversees the IASB, have proposed revisions to the IASC Constitution that are necessary to implement certain aspects of the draft Preface to IFRS relating to the Standing Interpretations Committee. The constitutional changes include:
Changing the committee's name to International Financial Reporting Issues Committee (IFRIC).
Broadening the committee's mandate so it can address issues not specifically covered in an existing IFRS.
Creating the position of a non-voting chair of IFRIC, that position to be filled by one of the members of the IASB, the Director of Technical Activities, or a member of the IASB's senior technical staff.
Click here for the Full Constitution. Comments are requested by 15 February 2002. Comments on the draft Preface are also due on this date. [Note: link to 'Full Constitution' now reflects the revisions as of 1 July 2005.]
1 December 2001: Notes from the third and fourth days of the 27-30 November IASB meeting
We have moved the summary of discussions at the November 2001 IASB meeting to its own page. Click to go to Summary of IASB's 27-30 November 2001 Meeting. It had originally been presented as several lengthy news items.
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