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28 September 2001: SEC proposes that foreign issuers must file electronically
Under a new SEC Proposal (PDF 20k), foreign companies and foreign governments that issue securities in the United States would no longer be exempt from filing their SEC documents electronically through the
Commission's Electronic Data Gathering, Analysis and Retrieval (EDGAR) System. Comments are due in 60 days.
27 September 2001: EITF issues guidance on 11 September terrorist attacks
FASB's Emerging Issues Task Force has published EITF issue No. 01-10 on financial reporting of losses stemming from the terrorist attacks of September 11 in the USA. Key issues covered:
- Which losses or costs should be classified as extraordinary items [in a follow-up meeting on 28 September, EITF concluded that none should be classified as extraordinary items]
- When losses stemming from the attacks should be recognised
- Accounting for insurance payments covering those losses
- Note disclosures
More info at FASB Website.
26 September 2001: Four new public sector standards based on IAS
IFAC's Public Sector Committee has published new International Public Sector Accounting Standards based on IAS 10, IAS 17, IAS 32, and IAS 40. Click for More Information.
25 September 2001: Guidance from Deloitte on applying IAS 39
- 164 Questions and Answers
- 151 Examples (many with journal entries)
- 52 US GAAP Comparisons
- Comprehensive summaries of IAS 39 and IAS 32
Coming soon. Here's a Preview! More information next week.
23 September 2001: Financial reporting implications of terrorist attacks in US
At its regularly scheduled meeting on 20 September, FASB's Emerging Issues Task Force discussed the financial reporting implications of the 11 September terrorist acts. In addition to the tragic loss of thousands of lives, businesses are now faced with the challenge of providing meaningful financial information to the public reflecting changes precipitated by recent events. EITF discussions focused on three issues:
- how losses or other costs caused by the incident should be reported in financial statements,
- when those losses or costs should be recognized (on September 11 or some later date), and
- whether other information about the economic effects of the incident should be provided in financial statements.
The SEC has also taken steps (some of which have financial reporting and independence implications) to provide relief to market participants.
23 September 2001: Battle may be looming on stock option accounting
From a press release from Financial Executive International:
| "Requiring expense recognition for employee stock options
could well undermine any chance that we will see harmonization of accounting
standards.... The priority given to this bitter issue, and the manner in which the IASB press release treated expense recognition as a foregone conclusion, has disturbing implications about the fairness of the IASB deliberation process going forward." |
23 September 2001: Upcoming forum on IAS and the insurance industry
Deloitte Touche Tohmatsu and others will sponsor a two-day Forum on the Insurance Industry and IAS: Challenges and Opportunities, in Paris 9-10 October. Other sponosors include Allianz, AXA, CGNU, Munich Re, Swiss Re, and Zurich Financial Services. Among the 26 speakers are IASB Chairman Sir David Tweedie, IASB Insurance Steering Committee Chairman Warren McGregor, and representatives of the IAIS, EU, other regulators, financial analysts, the auditing profession, and the industry. Click for Conference Information.
21 September 2001: IASB seeks comments on share-based payments
IASB has invited additional comments on the July 2000 G4+1 discussion paper, Accounting for Share-based Payment. Comment deadline is 15 December 2001. That paper had proposed that all goods and services acquired by payment of shares or share options be accounted for at fair value, with a charge against earnings when the goods/services are consumed. For employee share options, fair value would be measured at vesting date. IASB's predecessor, IASC, had sought comments on the paper in 2000. Click for:
20 September 2001: Robert K. Herdman named SEC Chief Accountant
Robert K. Herdman, partner at Ernst & Young, has been appointed SEC Chief Accountant effective 8 October 2001. He has been the senior partner responsible for his firm's relationships with the SEC, FASB, and the AICPA. SEC News Release (PDF 33k).
20 September 2001: More information about first-time application of IFRS
We have updated the page on First-Time Application of IFRS to reflect in detail the discussion at the 13 September IASB meeting. IFRS includes IAS.
19 September 2001: IASB announces dates of two additional meetings
IASB will meet in London 21-25 January 2002 (the first two days with national standard setters) and 19-23 February 2002 (the first two days with SAC). The October 2001 Meeting dates are now 16-20 October (the first two days with SAC) in Washington. IASC Foundation Trustees will meet 15 October in Washington; this will be their first public meeting.
14 September 2001: Comprehensive report on IASB meeting 10-13 September 2001
We have combined the separate daily news reports for the four day meeting into one Comprehensive Report on the 10-13 September 2001 Meeting and have moved it to its own page. We have also updated our individual project files for the following projects to reflect discussions at the meeting:
13 September 2001: SIC issues two draft Interpretations
The Standing Interpretations Committee has invited comment on two draft Interpretations. Comment deadline on both is 5 November 2001:
- SIC D33, Consolidation and Equity Method – Potential Voting Rights, proposes that potential voting rights that are presently exercisable or convertible should be considered when assessing whether an enterprise controls or significantly influences another enterprise. All potential voting rights should be considered, including potential voting rights held by
other enterprises.
- SIC D34, Financial Instruments - Instruments or Rights Redeemable by the Holder, proposes that the issuer of a puttable instrument should classify the entire instrument as a liability. A puttable instrument is a financial instrument or a right that gives the holder the right to put the instrument or right back to the issuer for cash or another financial asset. The amount payable upon redemption is determined based on an index or other item that has the potential to increase and decrease. The consensus in SIC D34 will affect open-ended mutual funds and certain co-operative organisations by requiring them to present their unitholders' funds as liabilities.
- SIC has also completed its discussions of SIC D27, Transactions in the Legal Form of a Lease and Leaseback, including comments received from the IASB. The SIC reaffirmed its consensus and is redrafting the Interpretation to focus on the principles involved.
11 September 2001: Growing support to adopt IAS 39 in Australia
An Article in the Melbourne Age highlights the issues. There's also a follow-up story.
10 September 2001: Four day IASB meeting begins today
IASB will hold an open meeting today and tomorrow with the chairs of national standard-setters representing Australia, Canada, France, Germany, Japan, New Zealand, United Kingdom, and United States. Issues to be discussed include first-time application of IAS, business combinations, share-based payments, and improvements to IASB Standards. The Board will then meet for three days (12-13 September) to deliberate various Technical Agenda Projects. Check back here each day for brief summaries of the discussions.
10 September 2001: IAS 40 and long-term leases of land
As a result of IAS 40, Investment Property, Hong Kong Land Company, which prepares IAS financial statements, has switched to a cost/depreciation reporting model for investment properties from its prior full fair value model. IAS 40, in combination with IAS 17.11, prohibits the revaluation of leased land. The effect of the change was to eliminate US$4.2 billion (81%) of shareholders' equity at 31 December 2000. In Hong Kong (and elsewhere, including China) nearly all land is leased from the government under long-term leases rather than owned outright. Hong Kong Land says it cannot reliably value the buildings apart from the land. In its first-half 2001 financial report, Hong Kong Land presented, in addition to its primary cost/depreciation model financial statements, supplementary financial information prepared "in accordance with IAS as modified by the revaluation of leasehold properties", with value changes reported in net profit or loss. This method increased net profit for 2000 from US$0.3 billion to US$2.2 billion. Revaluation of long leases of land was an issue considered by the IASC in developing IAS 40, but IASC concluded that it should reconsider IAS 17.11 separately and not as part of the investment property project. Click for Link to Hong Kong Land Website. IASB has indicated that it will be addressing long leases of land as part of its Improvements Project.
6 September 2001: Some facts about our last 15,000 visitors
Which browser do they use?
- 89% use Internet Explorer (nearly 90% of those version 5.x)
- 10% use Netscape (nearly all of those version 4.x. Netscape 6.x is just 0.09%)
Which operating system?
- Windows 98: 50%
- Windows NT: 19%
- Windows 2000: 15%
- Windows 95: 14%
(Total for Windows: 98%)
- Macintosh: 0.3%
- Others: 2%
4 September 2001: FEI conference to highlight international accounting issues
The Current Financial Reporting Issues Conference organised by Financial Executives International is one of the major annual US symposiums on accounting and finance. The programme for this year's conference, to be held 12-13 November in New York, includes:
- Keynote Address: "Global Accounting Standards" by Paul Volcker, Chairman, Trustees, IASC Foundation
- A General Session on "Implications of IAS for US Companies and Capital Markets"
In its response to the SEC Concepts Release on IAS, FEI said [click for full text (PDF 89k)]:
FEI believes that US capital markets are better served by having foreign registrants use an investor-oriented accounting model like IAS in the primary financial statements rather than providing bits and pieces of financial data that reconcile to US GAAP supplementally. We also believe that the expanded use of IAS in world markets, which is much more likely to occur with SEC acceptance in the US, will further improve the comparability of financial results between US and foreign companies. We would therefore support the Commission's acceptance of IAS for use in US capital markets, provided that the following additional steps are taken:
- Limit the choices of GAAP available to foreign registrants to two: US GAAP or IAS.
- Require that foreign registrants comply fully with the same regulations that apply to US public companies, including reporting US or IAS GAAP financial statements for all interim periods.
- Actively support processes that will accelerate the development of a single set of global accounting standards that will be used in all securities markets.
- Ensure that US and foreign registrants are treated equally in all respects under federal securities laws, including the right of all registrants to follow IAS standards.
- Require that these changes be effected over a time frame of no greater than five years and do not 'grandfather' existing foreign registrants.
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3 September 2001: IOSCO to survey members about implementation of IAS
IOSCO intends to survey its members by the end of 2001 regarding their implementation of the Resolutions Adopted by the IOSCO Presidents' Committee in May 2000 relating to the use of international accounting standards for cross-border offerings and listings. Nearly 110 national securities regulatory commissions are members of IOSCO.
3 September 2001: FASB to discuss IASB initial agenda
In an open meeting starting at 9:30 a.m. on Wednesday, 5 September 2001, the US Financial Accounting Standards Board will discuss the initial agenda of the International Accounting
Standards Board and "the possibilities for cooperation between the FASB and the IASB on agenda topics of mutual interest".
2 September 2001: Full fair value accounting for financial instruments
Veronica Poole and Ken Wild of Deloitte & Touche, United Kingdom, have co-authored A Practitioner's Guide to Full Fair Value Accounting of Financial Instruments. Their aim is to explain the Joint Working Group Proposal including practical examples of how it would work. More information may be found at the Publisher's Website.
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