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31 May 2002: IASB issues 'Asset Ceiling' amendment to IAS 19
The IASB has published a limited amendment to IAS 19, Employee Benefits. The amendment fixes a perceived problem caused by the interaction of two aspects of IAS 19 - the option to defer actuarial gains and losses and the limit on the amount that can be recognised as an asset (the 'asset ceiling'). The Board concluded that IAS 19 was giving rise to counter-intuitive results because an actuarial loss in the pension plan could give rise to a reported gain in the entity's financial statements and an actuarial gain in the pension plan could give rise to a reported loss. The amendment prohibits gain or loss recognition in these circumstances. Click for IASB Press Release (PDF 12k). Click here for Project Info.
31 May 2002: Free real-time access to all SEC filings
The US Securities and Exchange Commission's website has begun providing free, real-time access to its EDGAR Database of Corporate Filings. Previously, EDGAR filings did not appear on the SEC's website for at least 24 hours. The SEC requires all public companies (except those with less than $10 million in assets and fewer than 500 shareholders) to file registration statements, quarterly and annual reports, and other forms electronically through the EDGAR (Electronic Data Gathering, Analysis and Retrieval) system. Press Release (PDF 35k).
30 May 2002: Summary of Preface to IFRS
We have posted a Summary of the Preface to International Financial Reporting Standards, published by IASB earlier this month.
29 May 2002: IOSCO cites progress toward global accounting standards
In the Final Communiqué of the XXVIIth Annual Conference (18-24 May 2002) of the International Organization of Securities Commissions, IOSCO noted considerable progress toward acceptance of IAS by its members:
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Following up on its Resolution Concerning the Use of IASC Standards for the Purpose of Facilitating Multinational Securities Offerings and Cross Border Listings adopted by the Presidents' Committee in May 2000, IOSCO conducted a survey of the acceptance of International Accounting Standards by IOSCO members. The results indicate that many jurisdictions permit incoming issuers to use IAS, and others are actively working towards this end. Moreover, since May 2000, there have been a number of developments promoting the use of IAS. These include: (i) the decision of the EU Council of Ministers (ECOFIN Council) requiring the use of IAS by 2005; (ii) the completion of the reconstitution of the IASB into a full-time independent standard setter, and (iii) the formation of the Committee of European Securities Regulators with a special sub-group devoted to these issues. Looking ahead, to further these efforts, IOSCO encourages the IASB and national standard setters to work cooperatively and expeditiously to achieve convergence in order to facilitate cross-border offerings and listings and encourages regulators to address the broader issues of consistent interpretation, application and enforcement.
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29 May 2002: Newsletter summarising IASB Improvements ED is available
We have posted a Special Edition of our IAS Plus Newsletter (12 pages, bullet points) summarising the main proposals in the 400-page IASB Exposure Draft, Improvements to International Accounting Standards.
29 May 2002: Project pages updated for May 2002 Board decisions
We have updated the following project pages for Board decisions at the May 2002 meeting:
27 May 2002: Project page updated for 'Improvements' ED
We have updated the agenda project page for Improvements to IAS to reflect the proposals in the IASB's recent Exposure Draft. Comment deadline on this 400-page document is 16 September 2002.
26 May 2002: USA Accounting Roundup newsletters
We have begun posting issues of Accounting Roundup, a newsletter published by Deloitte & Touche (United States) summarising recent accounting and financial reporting developments in the United States of America. Accounting Roundup is published periodically as developments warrant – generally at least monthly.
25 May 2002: SEC Chairman Pitt comments on accounting standard setting reforms
Speaking before the Investment Company Institute on 24 May, SEC Chairman Harvey L. Pitt said [Full Text of Speech (PDF 76k)]:
In addition, accounting standard setting itself must be improved. For over 60 years we have looked to the private sector to assume the initiative in establishing accounting principles. We continue to support private sector standard setting but, the SEC has, in the past, abdicated far too much of its obligation to ensure that accounting standards meet the objectives of the federal securities laws. We will take a more active role to ensure that standards are implemented that benefit markets and investors. Going forward, we plan to
- broaden funding sources and make funding involuntary;
- meaningfully participate in setting the agenda of the Financial Accounting Standards Board;
- exercise our authority to review adopted standards; and
- ensure that FASB promulgates principle-based standards, which adapt faster to changing business environments and emphasize overall accuracy and completeness.
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25 May 2002: Comparison of IAS and GAAP in 14 Central Europe countries
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We have posted the report of a survey conducted by Deloitte & Touche (Central Europe) that presents a detailed comparison of International Accounting Standards with generally accepted accounting practice in Albania, Bulgaria, Belarus, Croatia, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Republic of Macedonia, Romania, Slovakia, and Slovenia. The comparison is based on the accounting legislation effective in these 14 countries as of December 31, 2000. In certain countries, changes to the accounting legislation have occurred since that date, generally in the direction of greater conformity with IAS. Click to go to Deloitte Touche Tohmatsu Publications Page where the study may be downloaded [Note: Subsequently removed from the publications page because the comparison became out of date]. |
25 May 2002: Notes from IASB meeting May 2002
We have combined all of the notes taken by Deloitte observers at the 22-24 May 2002 IASB Meeting on a single page.
24 May 2002: Latest Americas edition of IASPlus newsletter
We have posted the May 2002 Americas Edition of our  newsletter. The Asia-Pacific and Europe-Africa editions were posted previously.
23 May 2002: IASB publishes Preface to IFRS
IASB has published its final Preface to IFRS. Click here for Information About the Preface. IASB subscribers may download copies from IASB's website. Click here for IASB Press Release (PDF 29k).
22 May 2002: Notes from IASB meeting 21 May 2002
Notes taken by Deloitte observers at the IASB meeting with national standard setters on Monday, 21 May 2002, have been moved to a Separate Summary Page.
22 May 2002: Notes from IASB meeting 20 May 2002
Notes taken by Deloitte observers at the IASB meeting with national standard setters on Monday, 20 May 2002, have been moved to a Separate Summary Page.
16 May 2002: SEC is investigating revenue recognition abuses
Although there is not yet any information on the website of the US SEC, today's Wall Street Journal is reporting that "Securities and Exchange Commission officials, concerned about an explosion of transactions that falsely created the impression of booming business across a range of industries, are conducting a sweeping investigation into a host of practices that pump up revenue." In some cases, profit is recognised as well. Examples include swaps of energy and fibre optic capacity, barter transactions, channel stuffing, and vendor financing, allowances, and rebates.
16 May 2002: ED on 'First-Time Application of IFRS' moved to 3rd quarter
IASB's press release on its Improvements exposure draft also indicated that the ED on First-Time Application of IFRS is now planned for third quarter 2002, rather than second quarter. The ED on Business Combinations is also planned for third quarter 2002. The ED on proposed Revisions to IAS 32 and IAS 39 is expected in the second quarter.
15 May 2002: IASB publishes 'Improvements' exposure draft
The IASB has invited public comment on an exposure draft (ED) proposing to revise 12 of the 34 International Accounting Standards currently in force. Comments on the ED are due by 16 September 2002. The ED will be available for free download from IASB's website starting 25 May (subscribers may download it now). Specific proposed improvements to IAS noted by IASB in the Press Release about the ED are:
Convergence:
- The definition of related parties will be extended to cover further parties (for example, joint
ventures and pension plans) and further information (for example, amounts of transactions
and balances, terms and conditions, details of guarantees).
- It will no longer be permitted to label items of income or expense as extraordinary
items either in the income statement or in the notes.
- The guidance on the calculation of earnings per share will be expanded and
conformed to practice in a number of countries.
Removal of options:
- LIFO (last in, first out - an inventory valuation method sometimes used in the US
and elsewhere) will be prohibited.
- Corrections of errors will now have to be accounted for retrospectively and not
either through current income or retrospectively.
- Similarly, voluntary changes in accounting policies will also have to be accounted
for retrospectively and not either through current income or retrospectively.
Other improvements:
- Requirements are introduced to ensure that compliance with standards does not
lead to misleading results in jurisdictions where compliance is mandatory
irrespective of circumstance.
- Disclosure is required of the critical judgements made by management in
applying accounting policies.
- Disclosure is required of the key assumptions about uncertainties made by
management that could cause material adjustment of the carrying amounts of
assets and liabilities in financial statements.
- Separate disclosure is required of the amounts by which inventories have been
written down.
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Click here for Our Summary of the Improvements Project.
15 May 2002: IAS are mandatory in Kyrgyzstan
Kyrgyzstan has enacted a law making IAS mandatory for banks and limited companies by 31 December 2003. Other large and medium-sized enterprises must apply IAS by 2005, and small enterprises by 2006. The law came into force on 29 April.
14 May 2002: IASB will hold a public seminar on share-based payment
In conjunction with its Board meeting in Berlin in June, the IASB will conduct a public seminar on share-based payment at the Konrad Adenauer Centre on 18 June at 15:00. At the seminar, statements will be presented by Sir David Tweedie, Chairman of the IASB; Timothy Plaut, Goldman Sachs Frankfurt, and Professor Dr. Eberhard Scheffler, member of the German Accounting Standards Board. Those presentations will be followed by a panel discussion. Click here for information about IASB's Project on Share-Based Payment.
11 May 2002: IASB meeting dates announced
IASB has announced its meeting dates for the remainder of 2002:
- 20-24 May 2002, London, UK (20-21 May with 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
- 23-25 and 28-29 October 2002, London, UK (28-29 October with National Standard Setters)
- 12-16 November 2002, Hong Kong SAR, China (15-16 November with the Standards Advisory Council)
- 18-20 December 2002, London, UK
10 May 2002: EC second consultation on disclosure transparency
The European Commission has invited a second and final round of comments on the information that must be provided by companies whose securities are traded on regulated markets. The Commission intends to submit a proposal for new legislation to the European Parliament and the Council by the end of 2002. Among the proposals on which comment is sought is a differential approach to financial reporting. An equity issuer whose annual turnover exceeds €25 million would have to provide, on a quarterly basis, a condensed set of financial statements and a management report. Smaller equity issuers would also report quarterly, but only on net turnover and profit or loss before and after deduction of tax. Issuers of debt securities whose shares were not publicly traded could be subject only to half-yearly reporting requirements. Click for EC Press Release. Comments on the proposals are due 5 July 2002.
10 May 2002: SEC requires foreign issuers to file electronically via EDGAR
The US SEC has amended Regulation S-T, the Commission's rules governing electronic filing, to eliminate the current exemption of foreign issuers from mandated EDGAR filing. Starting 4 November 2002, foreign companies (including Canadian issuers operating under the Multijurisdictional Disclosure System) and foreign governments must file their Securities Act and Exchange Act documents electronically. Click for SEC News Release (PDF 54k).
10 May 2002: Updated IAS in Your Pocket is available
We have posted a new version of our very popular mini-guide to IAS -- IAS in Your Pocket. This little 80-page booklet includes:
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- Chronology of IASC and IASB
- Details about the IASB structure
- Recent developments in adoption of IAS/IFRS around the world
- Summaries of each IAS and each Interpretation
- For each IAS, key tentative conclusions of the IASB about possible amendments to the IAS
- Background on each of the IASB agenda projects
- Useful contact information
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A PDF version of IAS in Your Pocket can be downloaded at our Publications Page.
9 May 2002: Look for 'Improvements' ED next week
IASB expects to publish its 400-page exposure draft on Improvements to Existing IFRS on 15 May with a comment period of approximately 120 days.
9 May 2002: IFAC study on transition to accrual accounting
IFAC's Public Sector Committee (PSC) has published a study, Transition to the Accrual Basis of Accounting: Guidance for Governments and Government Entities. The PSC has been developing International Public Sector Accounting Standards (IPSAS) based on IAS. Click for Information about the PSC.
9 May 2002: Agenda for IASB Board meeting 22-24 May
The following projects are on the agenda for discussion at IASB's upcoming meeting on 22-24 May at its offices in London:
9 May 2002: IASB will meet with national standard-setters 20-21 May
IASB will meet with the chairs of its partner national standard-setters in London on 20-21 May. Agenda topics:
- Consolidation and Special Purpose Entities
- Convergence - Possible Topics for Convergence of Standards
- Leases and Related Issues
- Reporting Performance
- Revenue/Liabilities/Elements of Financial Statements
- Discussion of Potential Topics for IASB's Technical Agenda
- Updates on Critical Developments
5 May 2002: FASB Chairman Jenkins comments on convergence
In the 2001 Annual Report (PDF 428k) of the US Financial Accounting Foundation (PDF 428k), FASB Chairman Edmund L. Jenkins addresses how the FASB is supporting convergence of international accounting standards:
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The FASB has jointly agreed with the other standard setters and the International Accounting Standards Board (IASB) to commitments and protocols that mutually support efforts of cooperation and convergence of accounting standards that should create truly efficient global markets.
Central to the FASB's participation in the development of international accounting standards is its commitment to increasing global comparability while maintaining the highest quality accounting standards in the U.S.
In supporting convergence, the FASB's goal is to ensure that international accounting standards are of the
highest quality. To accomplish that goal, the FASB supports the IASB as the focal point for
the development of international accounting standards. The FASB intends to participate as fully as possible in the IASB's process while maintaining the highest quality standards domestically. In September 2001, the FASB and the IASB
agreed to work together on a second phase of the former's business combinations project. The focus of this joint project is on procedures for applying the purchase method of accounting.
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4 May 2002: Will the SEC let foreign companies use IFRS without reconciliation?
In a landmark speech in Germany titled Moving Toward the Globalisation of Accounting Standards, the Chief Accountant of the SEC, Robert K. Herdman, raised the possibility that the SEC will accept financial statements from foreign registrants prepared on the basis of IFRS without reconciliation to US GAAP:
The prospect that 7,000 listed companies in the European Union member states will be satisfying their listing requirements by disseminating financial statements prepared under IAS is one that we at the SEC must give serious consideration to vis à vis our filing requirements. The following matters will influence whether the SEC will arrive at the result you all, I am sure, hope for - that we would accept those filings in the U.S.
- The standards themselves, through the IASB's existing projects on improvements, etc., as well as what I hope can be achieved through cooperative efforts between the IASB and the FASB, achieve sufficient short-term convergence.
- Infrastructure is sufficiently developed so that the standards are interpreted and applied in the manner intended with sufficient consistency across countries and firms. IFRIC alone is not enough, I believe, to accomplish that goal.
- Training of thousands of accountants and auditors who have not previously worked with IAS, keeping in mind the standards will be moving targets.
- Continued progress is made in the areas of regulatory oversight of the auditing profession and in CESR's determination of appropriate regulation of filing and other processes.
Mr. Herdman also offered his thoughts on globalisation of the world's capital markets, 'convergence' of accounting standards, and accounting reforms in the United States. Click for Full Text of Mr. Herdman's Speech.
1 May 2002: SEC proposes disclosures about critical accounting estimates, policies
The US SEC is proposing that registrants disclose, in the Management Discussion and Analysis (MD&A) section of their financial reports, information about the critical accounting estimates that are made by the company in applying its accounting policies. The Commission is also proposing expanded disclosures about the initial adoption of an accounting policy. The disclosures would apply to both domestic and foreign registrants. Click for News Release. As part of its Improvements Project, IASB is expected to propose amending IAS 1 to require disclosure of key assumptions and judgements made by management in applying those accounting policies that have the most significant effect on the amounts of items recognised in the financial statements.
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