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28 March 2002: Table shows growing use of IAS for domestic reporting purposes
We have posted a Table Summarising the Global Use of IAS as the primary GAAP by listed domestic companies in their consolidated financial statements for investor reporting purposes.
27 March 2002: Comparison of South African GAAP and IAS
We have updated our Comparison of South African GAAP and IAS as of 15 March 2002. Click for further information about South African GAAP.
27 March 2002: Our views on IASB's 'asset ceiling' exposure draft
We have posted the Deloitte Touche Tohmatsu Letter of Comment (PDF 15k) on IASB's exposure draft, Proposed Amendment to IAS 19, Employee Benefits: The Asset Ceiling. Click here for Project Description.
27 March 2002: Greenspan calls for expensing stock options
In a Speech (PDF 47k) yesterday, US Federal Reserve Board Chairman Alan Greenspan urged that companies recognise the fair value of stock options as compensation expense. IASB is addressing this issue in its project on Share-Based Payment. Mr. Greenspan said:
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The current accounting for options has created some perverse effects on the quality of corporate disclosures that, arguably, is further complicating the evaluation of earnings and hence diminishing the effectiveness of published income statements in supporting good corporate governance. The failure to include the value of most stock-option grants as employee compensation and, hence, to subtract them from pretax profits, has increased reported earnings and presumably stock prices....
The Federal Reserve staff estimates that the substitution of unexpensed option grants for cash compensation added about 2-1/2 percentage points to reported annual growth in earnings of our larger corporations between 1995 and 2000. Many argue that this distortion to reported earnings growth contributed to a misallocation of capital investment, especially in high-tech firms.
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27 March 2002: IAS: A Practical Guide to Financial Reporting
 We are making available the electronic version of International Accounting Standards: A Practical Guide to Financial Reporting, by Deloitte Touche Tohmatsu, second edition, published December 2001. This 224 page book includes:
summaries of all current standards, model financial statements, and a presentation and disclosure checklist.
27 March 2002: IVSC Alert on valuation issues in transition to IAS
The International Valuation Standards Committee has issued an Alert (PDF 29k) on valuation issues that will arise in Europe in transition from national GAAP to IAS. Click here for Information about IVSC.
27 March 2002: IASB Bound Volume 2002 can be ordered now
IASB will print its 2002 Bound Volume of Standards and Interpretations in mid-April. They are taking advance orders by email now. Their priority will be to despatch copies to subscribers and some others first, then to process advance orders received. Given the volume of orders to be despatched it will take several weeks for shipping, plus delivery time. There will be a single price for the 2002 Bound Volume: £47 or US$73 (shipping included). You can place an advance order only by sending an email with shipping details and credit card information to publications@iasb.org.uk. Advance orders cannot be done via IASB's website.
27 March 2002: IASB meeting dates announced
IASB will hold its September meeting at the FASB offices in Norwalk, Connecticut, USA. Upcoming IASB meeting dates:
- 17-19 April 2002, London, UK [subsequently extended to 16 April also]
- 20-24 May 2002, London, UK (20-21 May with chairs of National Standard Setters)
- 17-21 June 2002, Berlin, Germany (20-21 June with the Standards Advisory Council)
- 17-19 July 2002, London, UK
- 18-20 September 2002, Norwalk, CT, USA
You can always find information about Upcoming Meetings and Past Meetings on  .
26 March 2002: IASB will not issue printed copies of IFRIC drafts and Interpretations
When it issued SIC 32, IASB announced that, in the future, it will no longer distribute printed copies of IFRIC Interpretations and Draft Interpretations as they are approved and issued. Instead, subscribers to IASB's Comprehensive Subscription Service will have access only to electronic versions of IFRIC documents, which can be downloaded immediately after their approval and issue from the IASB Website.
26 March 2002: IASB publishes SIC 32 on website costs
IASB has published SIC 32, Intangible Assets - Website Costs. SIC 32 addresses the appropriate accounting treatment for internal expenditure for the following phases of website development: planning, application and infrastructure development, content development, and operating. Click for IASB Press Release on SIC 32 (PDF 31k).
25 March 2002: Format of IFRSs
During the discussion of several projects at the IASB meeting last week, the Board indicated that guidance in IFRSs will be of two types:
- IFRSs will include one or more "application supplements" in appendixes that will form part of the Standard.
- IFRSs will include illustrative examples "at the back of the Standard" that are not appendixes to the Standard and do not form part of the Standard.
25 March 2002: IASCF 2001 annual report is available
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The Trustees of the IASC Foundation, under which the IASB operates, have published the 2001 annual report of the Foundation. Click to Download the 2001 IASCF Annual Report (PDF 2,237k). |
24 March 2002: FEI recommendations for improved financial reporting
A task force of Financial Executives International has made broad recommendations for "Improving Financial Management,
Financial Reporting and Corporate Governance". The report makes recommendations in four areas:
- Strengthening financial management and commitment to ethical conduct
- Rebuilding confidence in financial reporting, the accounting industry, and the effectiveness of the audit process
- Modernising financial reporting and reforming the accounting standards-setting process
- Improving corporate governance and the effectiveness of audit committees
Among other things, FEI recommends a new oversight body for the accounting profession, restrictions on non-audit services provided by the independent auditor, restrictions on hiring senior personnel from the auditor, reform of the FASB (a 'blue ribbon' study panel is proposed), improved MD&As, more web-based reporting, reporting of performance metrics, and enhanced requirements for foreign SEC registrants, including quarterly reporting.
23 March 2002: SEC Chairman testifies on Enron issues
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SEC Chairman Harvey L. Pitt has testified before the US Senate Committee on Banking, Housing, and Urban Affairs re: Accounting and Investor Protection Issues Raised by Enron and Other Public Companies. Click for Mr. Pitt's:
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23 March 2002: Project pages updated for March meeting
We have posted a Combined Summary of the tentative decisions at the Board's March meeting. Also we have updated our pages for the following projects to reflect those decisions:
23 March 2002: Comment deadline on IAS 19 asset ceiling amendment
Reminder: 25 March is the deadline for comments on the Proposed Amendment to IAS 19, Employee Benefits: The Asset Ceiling Test.
23 March 2002: FASB Chairman comments on proposed US legislation
Financial Accounting Standards Board Chairman Edmund L. Jenkins has commented on two bills recently introduced in the United States Congress that include provisions concerning the FASB. Both bills would mandate annual FASB reporting to Congress, and one of them would allow SEC recognition of FASB standards only if FASB's funding is restricted to fees and publications revenue (no contributions). Mr. Jenkins indicated that FASB will support legislation that would provide funding to FASB via a fee collection system run by the government.
22 March 2002: Comments invited on proposed changes to FASB
The Trustees of the US Financial Accounting Foundation have invited comments on proposals designed to streamline FASB operations. They propose:
- 1. Reducing the size of the FASB from 7 to 5 members
- 2. A simple majority voting requirement of 3-2 for the five-member Board
- 3. A recommendation to the FASB that it expose proposed standards for shorter comment periods (60 days is suggested)
22 March 2002: Notes from the March 2002 IASB meeting
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We have combined all of the notes taken by Deloitte observers at the March 2002 Board meeting into a Combined Summary of the tentative decisions at the Board's March meeting. |
15 March 2002: SEC Chairman suggests major changes for FASB
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Speaking at the 30th SEC Speaks conference in Washington on 22 February 2002, SEC Chairman Harvey Pitt forecast important changes regarding the US Financial Accounting Standards Board, among other important changes relating to the accounting profession: Full Text (PDF 28k)
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That is why we are advocating fundamental and far-reaching changes in the Financial Accounting Standards Board. We seek to move toward a principles-based set of accounting standards. The SEC must play an active and aggressive oversight role vis-à-vis FASB. This means the SEC must have greater influence over FASB's agenda, and should be able to require FASB to address critical subjects and promulgate standards in a short time frame, rather than the years it currently takes for principles to be announced. It also means adding disclosure to explain the impact on financial reports of key accounting principles and decisions. |
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13 March 2002: European Parliament overwhelmingly adopts IAS resolution
By a vote of 492 for, 5 against, and 29 abstentions, on 12 March 2002 the European Parliament endorsed the Commission's proposal that all EU listed companies must follow standards issued by the International Accounting Standards Board in their consolidated financial statements starting no later than 2005. Companies preparing for listing would not be required to follow IAS. Member States are permitted to decide whether non-listed companies must also follow IAS. Member States also have the option to exempt certain companies temporarily from the IAS requirement – but only until 2007 – in two cases: (1) companies that are listed both in the EU and on a non-EU exchange and that follow another set of internationally accepted standards as the primary basis of their consolidated financial statements and (2) companies that have only publicly traded debt securities. The first exemption would apply mainly to European companies listed in the US that currently use US GAAP for their primary financial statements. Click for Full Report (PDF 189k).
12 March 2002: BIS chief executive urges global adoption of IAS
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Andrew Crockett, General Manager of the Bank for International Settlements and Chairman of the Global Stability Forum. has called global financial reporting standards "a critical pillar in the international financial architecture": |
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The prospects of acceptance of international standards look better than ever before, a testimony to the efforts made so far. In particular, the European Commission has supported strongly the concept of international standards. It has proposed that quoted companies in the Union produce consolidated accounts according to international standards by 2005. And it has set up a two-tier mechanism (political and technical) for endorsement. At the same time, uncertainties remain. General support by the US authorities has been tempered by what they see as the potential risk of weakening national standards. It is important that the current momentum be maintained and, if possible, increased.
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Mr. Crockett proposed a three-pronged approach toward implementing global standards:
- Securing acceptance of international standards by national standard setters and securities regulators.
- Reconciling the different perspectives of accounting and prudential authorities.
- Ensuring the monitoring and enforcement of the standards.
Click for Full Text of Mr. Crockett's Remarks (PDF 101k).
10 March 2002: We express serious concern about 30-day comment period
In a Letter [PDF 11k] to IASB Chairman Sir David Tweedie and the IASC Foundation Trustees, Deloitte Touche Tohmatsu has expressed 'serious concern' about the shortness of the comment period on IASB's first exposure draft (ED) on an accounting issue, Amendment to IAS 19, Employee Benefits: The Asset Ceiling. We said:
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In an international environment, translation and solicitation of input at the national level by national accountancy bodies are required in developing replies to EDs. On top of that, the issue raised in the ED is a complex one, and one that has existed since IAS 19 took effect over three years ago. In this particular case, the proposal in the ED has broad implications for some of the fundamental concepts of IAS 19 - implications that respondents to the ED must consider carefully. We certainly do not see this as an issue that in any way justifies a 30-day comment period.
We believe that, as a matter of policy, IASB Exposure Drafts should have at least a 90-day comment period other than in an exceptional situation. Further, we believe that IASB should develop and articulate, as part of the Preface, criteria to identify such an exceptional situation. |
7 March 2002: Setback for IASs in China
The China Securities Regulatory Commission has reversed its decision [see Feb. 2002 News] that, for all initial and secondary public offerings of 'A Shares' (shares that can be purchased by Chinese investors), supplementary IAS financial statements must be published, and they must be audited by an international accounting firm. Under revised rules announced 1 March, supplementary audits will only be required if a company is issuing 300 million or more shares (a rarity). Further, in such cases the supplementary audits would be conducted by licensed Chinese accounting firms, not international firms, and only a reconciliation of net income to IAS would be required, not supplementary IAS financial statements. The Asian Wall Street Journal reported that "CSRC has succumbed to 'great pressure' from both domestic-listed companies and local accounting firms".
7 March 2002: Running order of IASB March meeting
The daily agenda for IASB's March 2002 Meeting has been announced.
5 March 2002: Trustees will vote today on constitutional changes
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The Trustees of the IASC Foundation will consider proposed Changes to the IASC Constitution at their meeting in London today. The constitutional changes include: |
- Changing the committee's name to International Financial Reporting Interpretations 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. (IASB has indicated that it will appoint Kevin Stevenson, Director of Technical Activities, as chair of IFRIC.)
4 March 2002: SIC revises its proposed Interpretation on website costs
At its meeting on 26-27 February 2002, the SIC approved a proposed final Interpretation, SIC-32, Intangible Assets - Website Costs. The principal revision from the draft that was discussed but remanded by the IASB in December 2001 is that initial graphic design costs would be included in the capitalisable costs of developing a website. The revised draft will be resubmitted to the Board for approval. SIC also agreed to consider at its next meeting the following possible agenda projects:
- Classification of Financial Instruments with Distributions at the Discretion of the Issuer
- Employee Benefits - Limit on Recognition of an Asset Under IAS 19.58(b)(ii)
- Employee Benefits - Changes in Employment Benefits and Actuarial Assumptions
- Non-Cash Dividends (measure at fair value or carrying amount)
- Revenue Presentation - Gross vs. Net
- Revenue Recognition - Specified Trade-In Rights and Loyalty Programmes
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