|
31 August 2003: Tax impact of adopting IFRS: UK Alert
Deloitte & Touche (United Kingdom) has published the first in a series of Alerts describing tax implications of adopting International Financial Reporting Standards. The Alert notes: "The Inland Revenue position is that they do not believe IAS requires wholesale tax changes but there are circumstances where it is, or would be, 'good policy' to depart from following the accounts for tax purposes. " Click to Download (PDF 421k). Future Alerts will focus on transfer pricing and financial instruments, among other issues.
26 August 2003: Calendar of important dates
IASB watchers returning from their summer holidays may find the following recap of upcoming dates helpful:
- 17-19 September: IASB Board meeting, London
- 22 September: Meeting of the IASB and World Standard Setters, London
- 23 September: Meeting of the IASB and its partner national standard setters, London
- 30 September-1 October: Meeting of the IFRIC, London
- 22-24 October, IASB Board meeting, Toronto
- 24 October: Comment deadline on ED 4, Disposal of Non-Current Assets and Reporting of Discontinued Operations
- 31 October: Comment deadline on ED 5, Insurance Contracts
- 14 November: Comment deadline on ED, Hedge Accounting for a Portfolio Hedge of Interest Rate Risk
|
21 August 2003: IASB publishes "macro hedging" exposure draft
The IASB has issued an exposure draft on Fair Value Hedge Accounting for a Portfolio Hedge of Interest Rate Risk, proposing a "macro hedging" amendment to IAS 39. The ED would permit an entity to use fair value hedge accounting for a net portfolio hedge of interest rate risk if specified conditions are met. This amendment was not among the Amendments to IAS 39 that the Board had proposed in July 2002. The Board has determined that this change is of a magnitude that warrants the solicitation of public comment. Comment deadline is 14 November 2003. The Board will issue an amended IAS 39 without the macro hedging proposal by the end of 2003. A second version of IAS 39 revised, reflecting the final macro hedging decision, is planned for March 2004. We have prepared a Special Global Edition of our IASPlus Newsletter (PDF 31k) summarising the proposals in the exposure draft. Click for IASB Press Release (PDF 42k). You can download the ED directly from the IASB's Website (PDF 258k).
19 August 2003: Stay up to date on China with our new newsletter
We have begun posting China Today on our China Page. China Today is a newsletter published periodically by the Chinese Services Group of Deloitte & Touche (USA) to provide updated information on business, finance, and tax issues in Greater China.
16 August 2003: Donald Nicolaisen Named SEC Chief Accountant
The US Securities and Exchange Commission has named Donald T. Nicolaisen as the Commission's Chief Accountant. Mr. Nicolaisen is currently a senior partner at PricewaterhouseCoopers LLP. The SEC's Announcement said: "Mr. Nicolaisen will oversee the Commission's accounting policy initiatives and lead the SEC's efforts with national and international standard-setters on critical accounting and auditing issues, including international convergence and efforts to adopt principles-based accounting standards."
15 August 2003: Progress toward convergence in Australia
We have posted the following two new Australian Accounting Alerts
from Deloitte & Touche (Australia):
14 August 2003: IASB and FASB converging on purchased in-process R&D
In its project on purchase method procedures, the US FASB has tentatively decided to eliminate the requirement in FASB Interpretation No. 4, Applicability of FASB Statement No. 2 to Business Combinations Accounted for by the Purchase Method, to charge to expense certain in-process research and development assets acquired in a business combination. The IASB's proposed amendments to IAS 38 clarify that, in a business combination, an acquirer must recognise separately from goodwill "any of the acquiree's in-process research and development projects that meet the definition of an intangible asset".
14 August 2003: IASB will host a world accounting standard setters meeting
The IASB will host a meeting with representatives of world accounting standard setters on Monday,
22 September 2003, from 09:00 to 18:00 at the Renaissance Chancery Court Hotel in London. The meeting is open to public observation. The agenda for that meeting includes:
- Financial reporting by small and medium-sized entities. A technical discussion of the IASB project and the proposed approach to SME reporting. Short plenary session introducing the topic, followed by breakout sessions.
- Convergence, harmonisation, and first-time adoption of IFRSs. Specific issues likely to be encountered in moving to IFRSs, including business combinations, hedge accounting, and tangible and intangible assets. Includes a discussion of the role of national standard-setting bodies and how they can be involved in the IASB process.
- Reporting comprehensive income. A technical discussion of the proposed reporting format developed by the IASB. Short plenary session introducing the topic and case study, followed by breakout sessions.
- IASB update and concluding remarks.
|
14 August 2003: IASB announces September meeting agenda
The following projects are on the Agenda for discussion at the IASB's meeting at its offices in London on 17-19 September 2003:
13 August 2003: US GAO report on consolidation in the accounting profession
A new report by the US General Accounting Office on Public Accounting Firms: Mandated Study on Consolidation and Competition (PDF 1,992k) includes a survey of independent auditors of SEC-registered companies. Based on responses from 47 firms, the GAO found:
- 49% of the accounting firms said that changes in and growing complexity of accounting and auditing standards had a "great upward influence" on their costs in the past decade, and 51% said those factors had a "moderate upward influence".
- 28% of the accounting firms said that changes in and growing complexity of accounting and auditing standards had a "great upward influence" on their fees in the past decade; 64% said those factors had a "moderate upward influence"; and 7% said they had "little or no influence".
- 37% of the accounting firms said that changes in and growing complexity of accounting and auditing standards had a made it "much harder" to maintain audit quality in the past decade; 57% said those factors made it "somewhat harder" to maintain quality; and 7% said they had "little or no effect" on audit quality.
|
13 August 2003: New United Kingdom edition of IASPlus newsletter
 |
The London IFRS Centre of Excellence of Deloitte & Touche (UK) has begun publishing a United Kingdom edition of our quarterly IASPlus newsletter. As with our other editions of IASPlus, you can download the UK edition on our IASPlus Page. You can also download them directly here:
|
12 August 2003: ED 5 is now available without charge
The IASB has now lifted the restriction on public downloading of exposure draft ED 5, Insurance Contracts. You can download it Here. Comment deadline is 31 October 2003. You can also get ED 4, Disposal of Non-current Assets and Presentation of Discontinued Operations, for which the comment deadline is 24 October 2003.
11 August 2003: IFAC study on rebuilding confidence in financial reporting
A task force commissioned by the International Federation of Accountants to address, from an international perspective, the loss of credibility in financial reporting and to suggest approaches to resolving the problem has issued its report. The report makes a number of comments with respect to accounting standards, including these:
- "It is inevitable when standards are established at the national level, even where those standards are purporting to implement an international standard, that differences will arise among countries. These issues would be of less consequence if countries adopted international standards, rather than adapted their standards to comply with them. With the exception of the E.U., this does not appear to be the approach being adopted by most of the developed countries."
- "We support IFRSs becoming the worldwide standards for accounting. We believe that, as soon as possible, international standards should replace national standards."
- "We support the general approach of IASB in setting principles-based standards, rather than establishing lengthy lists of detailed rules. A rules-based approach encourages a legalistic approach and the finding of loopholes, rather than attention being given to the objectives and principles of the standard. The principles-based approach requires the use of more judgment by management and by the auditor."
- "We recommend that the convergence process for international accounting standards be given a greater sense of urgency; this will require extensive cooperation between IASB and national standard setters."
|
You can download the report from IFAC's Website (PDF 231k).
11 August 2003: Public sector standards to be updated for harmonisation with IFRS
We have posted the August 2003 edition of the IFAC Public Sector Committee Newsletter (PDF 35k). The PSC develops accounting standards for national, regional, and local governments and their agencies based (to the extent appropriate in the public sector) on IFRS. At its July 2003 meeting, the PSC considered staff papers that outlined likely differences between existing International Public Sector Accounting Standards (IPSASs) and their equivalent IFRSs expected to be in place as at March 2004, and identified key IFRSs for which equivalent IPSASs had not yet been
developed. The PSC directed its staff to prepare, for consideration at the next PSC meeting, a paper that would outline alternative ways of updating IPSASs to ensure they remain harmonised with IFRSs where appropriate for the public sector.
Copies of PSC standards and proposals are available free of charge at PSC's Website. Click for More Information about the PSC.
11 August 2003: US bank regulators jointly adopt rules on bank audits
The United States Comptroller of the Currency, Federal Reserve Board, Federal Deposit Insurance Corporation, and Treasury Department Office of Thrift Supervision have jointly adopted rules and procedures for the removal, suspension, or debarment of independent public accountants and their accounting firms from performing independent audit and attestation services to banks operating in the United States. The rules apply to branches and agencies of foreign banks. Click for Press Release (PDF 16k) and Full Text of Rules (PDF 265k).
10 August 2003: Changes to IASB's project timetables
The IASB has made the following changes to its project Timetables:
8 August 2003: Inaugural edition of EITF Roundup
Deloitte & Touche (USA) has published the first newsletter in a new series called EITF Roundup. The newsletter will be published after each meeting of FASB's Emerging Issues Task Force to provide an overview of the Issues discussed, consensuses reached, and administrative matters discussed at the EITF meeting. We have posted the August 2003 Edition summarising the 31 July 2003 EITF meeting. EITF Roundup complements our Accounting Roundup Series, which covers current accounting initiatives of the FASB, GASB, AICPA, SEC, and IASB. If you need more in-depth information on accounting standards than these newsletters provide, consider subscribing to our Technical Library: The Deloitte Accounting Research Tool. Technical Library is a comprehensive online library of accounting and financial disclosure literature, including official material and Deloitte & Touche interpretive guidance.
7 August 2003: IVSC proposes guidelines for valuing property under IFRS
 |
The International Valuation Standards Committee (IVSC) has published a Consultation Paper proposing guidance on the valuation of owner-occupied property under IAS 16, Property, Plant and Equipment. The IVSC's goal is consistent measurement of property that is carried at revalued amount under IAS 16. Click for IVSC Press Release (PDF 41k) and IVSC Consultation Paper (PDF 164k). John Edge, Chairman of the IVSC said: |
| Although IAS 16 allows property to be carried at fair value in the accounts, it has no guidance on how to arrive at that fair value. Yet the national accounting and valuation standards in those countries that currently permit revaluation of assets have some significant differences. For example, 'depreciated replacement cost' is defined differently in different countries. Or, in some countries owner-occupied property is valued as if vacant; in others, it is valued on the basis of a capitalised notional lease. This can lead to differing valuation conclusions although all will be reported as 'fair value'.
|
6 August 2003: Companies requiring "subcertifications" of financial information
A survey of 555 corporate treasury and finance officials by the Association of Finance Professionals has found a substantial "trickle-down effect" of the CEO-CFO financial statement certifications required by the Sarbanes-Oxley Act of 2002. Over two-thirds of respondents from both public and private companies are required to certify the information they provide – most commonly account balances and specific disclosures in the notes to financial statements or MD&A. Click to View the Survey Report (PDF 89k) on the AFP website or AFP Press Release. The AFP has 14,000 members worldwide.
6 August 2003: Deloitte & Touche publication on non-GAAP financial measures
In January 2003, the SEC adopted new rules that address public companies' disclosure of financial information calculated and presented on the basis of methodologies other than GAAP (click for SEC Press Release). A new disclosure regulation, Regulation G, requires companies to provide certain disclosure whenever they publicly disclose or release non-GAAP financial measures. In June 2003 the SEC staff released "FAQs" relating to the new rules (see links in our News Story of 14 June 2003). Deloitte & Touche has published a brochure that summarises and clarifies significant provisions of the rules based on the FAQ and discussions with the SEC staff. Several sections of the brochure focus on foreign private issuers. Click here to download our 12-page brochure Conditions For Use of Non-GAAP Financial Measures (PDF 132k).
6 August 2003: Latest Accounting Roundup newsletter is available
We have posted the 5 August 2003 Edition of Accounting Roundup from Deloitte & Touche (USA). Topics covered in this 13-page newsletter include a summary of the 31 July 2003 EITF meeting; FASB Staff Positions recently issued or proposed; summaries of recent FASB meetings; SEC's study on adoption of principles-based accounting standards; recent and proposed PCAOB rules; AICPA SOP 03-1 on Accounting and Reporting by Insurance Enterprises for Certain Nontraditional, Long-Duration Contracts and for Separate Accounts; IASB exposure drafts ED 4 and ED 5; and summaries of the July 2003 IASB and IFRIC meetings.
5 August 2003: Non-listed companies in Germany will be permitted to use IFRS
Non-listed companies in Germany will be permitted to use IFRS, rather than German GAAP, in preparing their consolidated financial statements starting in 2005. For both listed and non-listed companies, statutory (individual company) financial statements would continue to follow German GAAP, though IFRS accounts could be presented in addition. These provisions were set out in a joint announcement by the German Ministries of Justice and Finance in February, updated in May, but not previously reported on IASPlus. Listed companies were already required to switch to IFRSs in their consolidated statements starting in 2005 under the European Accounting Regulation.
5 August 2003: A view on why companies want IFRSs
In an article titled "The FASB and the Capital Markets" in The FASB Report (posted on FASB's Website), former FASB Board member John M. "Neel" Foster discusses the importance of neutral financial reporting to the efficient functioning of capital markets. Regarding IFRS, Mr. Foster states:
|
Another indication of the importance of credible financial information can be found in the recent call for a single set of international accounting standards that could be used by everyone to raise capital in any country without reconciliation to U.S. generally accepted accounting principles (GAAP). Much of the clamor has occurred outside the U.S., and the reason this issue is so important to offshore companies is that they want to raise capital in the U.S., but some do not want to have to file under GAAP and other SEC disclosure requirements.
|
5 August 2003: Europe-Africa edition of July 2003 IASPlus newsletter
We have posted the July 2003 Europe-Africa Edition of our IASPlus Newsletter (PDF 273k). Also, all past editions of our newsletter can be found on This Page.
4 August 2003: IFAC invites comment on seven SMOs including one on IFRS
The International Federation of Accountants is seeking comments on seven proposed Statements of Membership Obligations (SMOs) (PDF 59k), including one that sets out the obligations of IFAC's member bodies with respect to International Financial Reporting Standards. The IFRS SMO is as follows:
Member bodies of IFAC should support the work of the IASB by bringing to the notice of their members every IFRS and by using their best endeavors:
- (i) To persuade governments and standard setting bodies that published private
sector financial statements should comply with IFRSs;
- (ii) To persuade authorities controlling securities markets and the industrial and
business community that published private sector financial statements should
comply with IFRSs and disclose the fact of such compliance;
- (iii) To foster acceptance of IFRSs internationally; and
- (iv) To monitor compliance with IFRS by reviewing financial statements purporting
to comply with IFRS to the extent that such engagements are included in the
scope of the quality assurance review program established by Statement of
Membership Obligation 1 - Quality Assurance.
|
The SMOs will be the foundation of IFAC's new compliance programme. Each of IFAC's 155 member bodies will be required to report on the extent to which they are complying with each of the SMOs. In areas where they are not complying, member bodies will be asked to develop actions plan outlining how and when they plan to meet their compliance responsibilities. The effective dates for the SMOs will vary, with those relating to professional standards having a proposed effective date of March 31, 2004. IFAC will make the results of its compliance programme public. The other six draft SMOs deal with:
- Quality Assurance
- Auditing Standards and other International Auditing and Assurance Standards Board (IAASB) pronouncements
- Ethics Standards
- Education Standards
- Public Sector Accounting Standards
- Investigation and Discipline
4 August 2003: Europe-Africa pages updated
We have updated our pages for the following jurisdictions to reflect recent accounting standards activity:
2 August 2003: Estonia requires IFRS in separate-company accounts
In addition to requiring listed companies to use IFRS in their consolidated financial statements starting in 2005, as mandated by the European accounting regulation, Estonia will require all listed companies apply IFRS in their separate company accounts from 1 January 2005.
2 August 2003: International seminar on financial reporting in Toronto
Speakers at the International Summit on Financial Reporting, to be hosted by the Canadian Institute of Chartered Accountants in Toronto on 21 October 2003, include IASB Chairman Sir David Tweedie and FASB Chairman Robert H. Herz. Deloitte & Touche (Canada) will host the reception. Click to Download (PDF 294k) info and registration form.
1 August 2003: CESR seeks comments on several disclosure issues
The Committee of European Securities Regulators has invited comment on several issues for implementing the single prospectus directive. Comments are due by 30 October 2003. The issues are set out in a Consultation Paper (PDF 155k) and Annexes (PDF 264k):
- Historical financial information that should be included in prospectuses of business enterprises and the extent to which it should be restated to conform to IFRS.
- Disclosures that should be included in the prospectus of a governmental entity (EU Member State, Non-EU State, or their regional or local authorities) that wants to offer securities to the public or admit its securities to trading using a pan-European prospectus (which is not mandatory). Instead of including financial statements, CESR leans toward requiring such issuers to disclose risk factors, a discourse on the economy, a summary of the debt and debt payment record, budgetary issues, political information, legal and arbitration proceedings, and trend information.
- Advertising of securities offerings.
1 August 2003: CESR advice to EC on disclosures by public companies
The Committee of European Securities Regulators has proposed that the European Commission adopt standardised minimum information across the EU that issuing companies must disclose to investors. The disclosures would include key financial information, operating results, specific risk factors, a statement on how the company complies with its national corporate governance code, remuneration of key management, and potential conflicts of interests. The CESR recommendations also deal with adoption of IFRS, disclosure of pro forma information, profit forecasts, and incorporation by reference. Click for CESR Disclosure Recommendations (PDF 211k).
1 August 2003: Only IFRS or US GAAP on Swiss Stock Exchange starting 2005
Starting with annual reports for 2005 and interim reports for 2006, all Swiss companies whose equity shares are listed on the main board of the Swiss Exchange will be required to prepare their financial statements using either IFRS or US GAAP. Swiss GAAP will not be permitted. Foreign listed companies may continue to use a national GAAP that the Exchange deems to be equivalent to IFRS or US GAAP. The main board lists the shares of approximately 290 Swiss and 130 non-Swiss companies.
|
