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30 November 2001: Notes from the second day 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.
29 November 2001: Financial analysts worldwide strongly favour expense recognition for stock options
More than 80% of 1,944 investment analysts and portfolio managers surveyed by the Association for Investment Management and Research believe that all stock options granted to employees are compensation whose cost should be recognised as an expense in measuring net income. A quarter of the respondents were from Europe and Asia-Pacific, the rest from North America. AIMR surveyed its members "to gauge their response to a proposed agenda topic of the International Accounting Standards Board (IASB) that could require companies to report the fair value of stock options granted – including those to employees – as an expense on the income statement, reducing earnings". 81% of respondents use information about stock options when evaluating a firm's performance and determining its value. Click for AIMR Press Release. Click here for Information about IASB's Project.
28 November 2001: Notes from the first day 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.
27 November 2001: New SEC Chairman speaks about IAS
In his first public remarks about International Accounting Standards, new SEC Chairman Harvey L. Pitt said (click for Full Text PDF 55k:
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We are inspired and encouraged by all of the cooperative efforts aimed at crafting high quality international accounting standards. While work remains to be done, we are certainly well on the road toward creating the type of standards in which investors can have confidence. Looking into the future, we also must appreciate that compatible core accounting standards will lose some of their value unless we work together toward consistency among nations in interpretation and application of these standards.
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27 November 2001: IFAC changes its structure for setting auditing standards
The Council of the International Federation of Accountants (IFAC) has revised significantly the structure and operation of the International Auditing Practices Committee (IAPC), which sets International Standards on Auditing (ISAs). Among the changes:
- New name: International Auditing and Assurance Standards Board (IAASB).
- Revised objectives: To more clearly reflect that IAASB's goals are to develop auditing standards of high quality in the public interest.
- Expanded membership: From 14 to 18 members, including 10 from IFAC member bodies, five from international audit firms (to be proposed by the Forum of Firms), and three non-auditor representatives.
- IAASB meetings: Open to the public.
- IAASB agendas and minutes: Available to the public.
- Relationships with national auditing standard setters: A mandate to work closely, including undertaking joint coordinated projects, with the goal of convergence of standards for global acceptance.
- IAASB technical resources: Increased.
Many of these changes are similar to those adopted when IASB replaced IASC earlier this year. The changes result from a study by a special task force: Final Task Force Report (PDF 87k).
24 November 2001: Comparisons of UK GAAP with French and German GAAP
Deloitte & Touche has published comparisons of UK GAAP with GAAP in France and in Germany. Click to download UK-French GAAP Comparison (PDF 499k) and UK-German GAAP Comparison (PDF 398k).
24 November 2001: IASB meeting 27-30 November
IASB will meet this coming Tuesday-Friday at its offices in London to discuss the following agenda projects:
21 November 2001: Batch 6 of IAS 39 guidance is published
IASB has published its sixth batch of IAS 39 Guidance developed by the Board's IAS 39 Implementation Guidance Committee (IGC). This batch includes 17 Q&A and two examples. One of the examples addresses the particularly difficult issue of applying hedge accounting when a bank or other financial institution manages its interest rate risk on an enterprise-wide basis. Another example focuses on internal derivatives. IASB has indicated that IGC has not scheduled further meetings. IASB is developing some amendments to IAS 39.
19 November 2001: IFAD's "GAAP 2000" report is being updated
The International Forum for Accountancy Development is updating and expanding its GAAP 2000 survey of national accounting rules. The study highlights instances where a country's rules either do not allow or do not require the IAS accounting treatment. Approximately 60 countries will be included in the report for 2001, compared to 53 in the 2000 report. Also, the revised report will cover approximately 80 accounting and disclosure requirements, compared to 60 in the 2000 report. The new report is expected to be released in December 2001. Here is More Information about IFAD including the complete GAAP 2000 Report in PDF format.
17 November 2001: IASB begins "soft launch" of insurance accounting proposals
IASB has released three sections of a Draft Statement of Principles (DSOP) on Insurance Contracts. The sections deal with the scope of the project, definition of an insurance contract, recognition and derecognition principles, and measurement objectives. The DSOP was developed by a steering committee for consideration by the IASB. While the draft is not a formal IASB discussion document, IASB has invited those who wish to comment to send their views directly to the project manager. You can download the draft on IASB's Website. IASB plans to post further sections of the DSOP as drafting is completed.
16 November 2001: IFAC adopts new auditor independence rules
The IFAC Board has approved new independence rules for accountants performing assurance engagements, effective in 2004. IFAC expects to post the new guidance on its Website at the end of November. IFAC comprises 153 professional accountancy bodies in 113 countries.
16 November 2001: EU Directives amended to allow IAS 39 compliance
The Parliament and Council of the European Union have amended the EU Directives to permit European companies to comply with IAS 39 and the Directives. Click to Download the Amended Directives (PDF 118k). Under the revised directives, originated loans, held-to-maturity investments, and non-derivative/non-trading financial liabilities must be carried at amortised cost. We maintain a comprehensive European Resource Page documenting recent IAS-related events in Europe. We have just added to that page links to the Lists of Members of the new European Securities Committee and European Securities Regulators Committee.
15 November 2001: Preliminary summary of decisions at SIC meeting
At its meeting in London 12-13 November, SIC reached the following decisions:
- D27 (Lease/Leaseback): Agreed to delete paragraph 9 dealing with the classification of fees and resubmit to IASB
- D28 (Business Combination Measurement): Agreed to resubmit to IASB and keep "date of change of control" rather than "exchange date". Staff will discuss individually with board members to try to convince them that IASB should reconsider its tentative decision at its October meeting to measure consideration at "exchange date".
- D29 (Service Concessions): Agreed to some minor editorial changes.
- D30 (Presentation Currency): Agreed to the consensus basically as drafted. There was considerable debate about using end-of-period rates vs. average rates. There was no debate about restatement in the situation of hyperinflation.
- D31 (Barter Transactions): Agreed to the consensus basically as drafted. Agreed to keep "occurs frequently" but confirmed deletion of "expected to continue to occur".
- D32 (Website Costs): Agreed to consensus but reverted back to the original draft instead of applying it based on an incremental, marginal approach.
- D33 (Potential Voting Rights, or PVR): Agreed to consensus as drafted. Agreed to clarify that PVR is one of many considerations in assessing whether control exists. Agreed that unless the PVR is considered in substance a financing transaction (for instance, A sells 20% of its investment in B to C and enters into a forward to buy it back at a fixed price, in which case the amount under the forward is part of A's ownership in consolidation, not minority interest), the forward or option while it is outstanding is a derivative under IAS 39.
- D34 (Puttable Instruments): Confirmed the consensus but agreed to delay for one year the effective date for certain enterprises
15 November 2001: Timetable is emerging for IASB's agenda projects
Based on comments made at the October meetings of the Board, Advisory Council, and Trustees, here is our assessment of the IASB's timetable for its nine agenda projects:
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TIMETABLE FOR IASB'S AGENDA PROJECTS |
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| Preface to IFRS | Exposure Draft issued 8 Nov. 2001; comments due 15 Feb. 2002; IASB aims to publish a final Preface in the second half of 2002. |
| Improvements Projects | IASB aims to issue approximately 12 Exposure Drafts in the first half of 2002 (separate Exposure Drafts for revisions to each IAS). |
| First-Time Application of IFRS | IASB aims to issue an Exposure Draft in the first half of 2002. |
| Business Combinations | IASB aims to issue an Exposure Draft of proposed revisions to IAS 22 in the first half of 2002. |
| Share-Based Payment | IASB will not discuss this project at its next two meetings, suggesting that an Exposure Draft is not likely until the second half of 2002. |
| Disclosure and Presentation of Activities in Financial Institutions | IASB may issue an Exposure Draft some time during 2002. |
| IAS 39 Amendments | IASB may issue an Exposure Draft some time during 2002. |
| Performance Reporting | IASB will discuss a Draft Statement of Principles in 2002 and may issue that document for comment as a pre-Exposure Draft discussion document. |
| Insurance Contracts | IASB will discuss a Draft Statement of Principles in 2002, but whether it will issue that document for comment or publish an Exposure Draft is undecided. |
14 November 2001: Decision expected on SEC Concept Release early in 2002
Speaking in New York on 12 November at the Current Financial Reporting Issues Conference organised by Financial Executives International, John Morrissey, Deputy Chief Accountant of the US SEC, stated that the SEC's review of IAS for filing in the US will be a "hot topic" at the SEC during 2002. In February 2000, the SEC issued a Concept Release regarding the suitability of IAS for financial statements filed with the Commission.
13 November 2001: Agenda project pages updated
We have updated our agenda project pages for the following projects to reflect discussion at the Board's October meeting:
11 November 2001: DTT comments on SIC Draft Interpretations D33 and D34
We are in general agreement with both proposals but have specific concerns on each. Click for link to the Deloitte Touche Tohmatsu Comment Letter on SIC D33 and D34.
9 November 2001: Key provisions of Preface exposure draft
We have posted a summary of the Key Provisions of the Proposed Preface to IFRS.
8 November 2001: IASB invites comments on revised Preface
IASB is seeking comments on an exposure draft of the Preface to International Financial Reporting Standards. The Preface to IFRS will replace the existing Preface to IAS, which was last revised in 1982 and reflects the structure and procedures of the former IASC. IASB has posted the exposure draft on its website. Click for:
Comment deadline is 15 February 2002. IASB is specifically seeking views on:
- the proposed scope of IFRSs, which is limited to profit-oriented entities;
- its proposal to discontinue the the 'black letter' distinction for matters of principle;
- whether the due process described in the Preface is appropriate; and
- whether there are additional matters that should be addressed in the Preface.
This is IASB's first exposure draft. The Board had approved the ED at its July meeting.
8 November 2001: Basel, IOSCO, and IAIS issue two key reports
The Basel Committee on Banking Supervision, IOSCO, and the International Association of Insurance Supervisors have published two joint reports. One covers cross-sectoral comparisons of risk management practices and regulatory capital and the other identifies the core principles developed by the three parent committees for their respective sectors. The reports are available from the websites of IOSCO, BIS, and IAIS.
7 November 2001: SIC will consider seven final Interpretations next week
At its meeting 11-12 November at the IASB offices in London, the Standing Interpretations Committee will consider the following as possible final Interpretations:
- SIC-28, Business Combinations - 'Date of Exchange' and Fair Value of Equity Instruments Quoted in an Active Market
- SIC-29, Disclosure - Service Concession Arrangements
- SIC-30, Reporting Currency - Translation from Measurement Currency to Presentation Currency
- SIC-31, Revenue - Barter Transactions Involving Advertising Services
- SIC-32, Intangible Assets - Website Costs
- SIC-33, Consolidation and Equity Method–Potential Voting Rights
- SIC-34, Financial Instruments–Instruments or Rights Redeemable by the Holder
2 November 2001: Agenda for 27-30 November IASB meeting announced
IASB's November meeting is extended to four days, 27-30 November, in London. Agenda topics include Business Combinations; Financial Institutions; First-Time Application of IFRS; Improvements to IAS 21, IAS 23, and IAS 33; Insurance Contracts; and Amendments to IAS 39. Click for More Information.
1 November 2001: DTT comments on SIC Draft Interpretations 28-32
We have posted the Deloitte Touche Tohmatsu Response to SIC Draft Interpretations 28-32 (PDF 36k). Click here for Information About SIC D28-D32.
1 November 2001: FASB adds performance reporting to its agenda
The US Financial Accounting Standards Board has added to its agenda a project on Reporting Information about the Financial Performance of Business Enterprises. Performance Reporting is one of IASB's nine initial agenda projects. FASB is also studying another possible agenda project, Disclosure of Information about Intangible Assets Not Recognized in Financial Statements. Intangible Assets is one of IASB's 16 second-priority agenda topics. FASB has previously agreed to take the lead in a 'partnerhsip' project with IASB on two major components of the second phase of IASB's Business Combinations project – purchase acquisition accounting procedures and new-basis accounting.
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