31 October 2003: PCAOB's plans for overseeing non-US auditing firms
The US Public Company Accounting Oversight Board has published a briefing paper that describes the PCAOB's approach to oversight of non-US accounting firms. The approach envisions cooperation with appropriate non-US auditor oversight authorities. The plans described in the briefing paper include:

30 October 2003: FASB agrees to propose expensing stock options
At its meeting yesterday, the US Financial Accounting Standards Board agreed to expose, for public comment, a standard that would require companies to expense the fair value of stock options granted to employees. The proposal would likely be issued in February 2004 and, if adopted, would take effect in 2005. The IASB published a similar proposal last year (Exposure Draft ED 2) and is expected to issue a final standard during the first quarter of 2004, also effective in 2005. Currently, companies in the United States are permitted, but not required, to recognise stock options as part of employee compensation cost. Several hundred listed companies (out of about 15,000) recognise the expense. Even if they elect not to charge the cost to expense, companies must disclose the fair values of options granted. Current IFRS require neither expensing nor disclosure of the fair values of share-based compensation. Both the FASB and IASB proposals would apply to all companies, not just publicly traded ones.

30 October 2003: Asia-Pacific pages updated
We have updated the following national pages to reflect recent accounting standards setting activity in each jurisdiction:

• Australia,
• Japan,
• New Zealand,
• Philippines,
• Singapore, and
• Thailand.

30 October 2003: Thoughts of FASB chairman on international convergence
FASB Board members also responded to the 2003 annual FASAC survey (see news story below). Following are the comments of FASB Chairman Rohert H. Herz on international convergence:

30 October 2003: International convergence high on FASAC's "to-do list"
Most members of FASB's Financial Accounting Standards Advisory Council (FASAC) feel that international convergence should be high among FASB's priorities. That is one of the findings of the 2003 annual survey of FASAC members. Typical of the FASAC members' comments is this one:

29 October 2003: Deloitte and IASB will hold an IFRS conference in December
Deloitte and the IASB will jointly sponsor a conference titled Europe and IFRS Beyond 2005 in Paris on 3 and 4 December 2003. The conference will focus not only on IFRSs that will be applicable in 2005 but also on the challenges beyond 2005. Speakers will include Sir David Tweedie, Chairman of the IASB; Rene Ricol, Chairman of the International Federation of Accountants (IFAC); James Leisenring and Gilbert Gelard, IASB Board members; Bertrand Collomb, Chairman of Lafarge and Chairman of the Association Francaise des Enterprises Privees; Michel Pebereau, Chairman of BNP; and many senior executives from industry, banking, insurance, the European Commission, and national standard-setters and regulators. Click for:

• Conference Brochure (PDF 148k)
• Registration Form (PDF 50k)

28 October 2003: Comment deadlines approaching

We are reminding you that the comment deadline dates on the following IASB and IFRIC proposals are fast approaching: IASB Exposure Draft: ED 5, Insurance Contracts – 31 October 2003 IFRIC Draft Interpretation D2, Changes in Decommissioning, Restoration and Similar Liabilities – 3 November 2003 IASB Exposure Draft: Fair Value Hedge Accounting for a Portfolio Hedge of Interest Rate Risk – 14 November 2003

28 October 2003: Six new International Education Standards from IFAC
The International Federation of Accountants (IFAC) has released six International Education Standards (IESs) that establish the global benchmarks for education and development for professional accountants. Developed by IFAC's Education Committee, the standards prescribe the essential elements of education to become a professional accountant and the ongoing education requirements necessary to remain competent. All IFAC member bodies are expected to comply with the standards effective 1 January 2005. The six standards may be downloaded from IFAC's Website. Their titles are:

• IES 1, Entry Requirements to a Program of Professional Accounting Education
• IES 2, Content of Professional Accounting Education Programs
• IES 3, Professional Skills
• IES 4, Professional Values, Ethics and Attitudes
• IES 5, Practical Experience Requirements
• IES 6, Assessment of Professional Capabilities and Competence

27 October 2003: Notes from the IASB meeting on 24 October 2003
The IASB held the final day of its October 2003 meeting on Friday, 24 October 2003 in Toronto. We have combined all of our notes from the IASB's October 2003 meeting onto a Separate Page.

25 October 2003: Adoption of IFRS-based standards in Australia
The Australian Securities and Investments Commission (ASIC) and the Australian Financial Reporting Council (FRC) have urged company boards and management to prepare early for the adoption of IFRS-based accounting standards in Australia. Companies with financial reporting periods beginning on or after 1 January 2005 will be required to follow Australian accounting standards that will be "equivalent to International Financial Reporting Standards". Click for ASIC Press Release.

25 October 2003: Notes from the IASB meeting on 23 October 2003
On Thursday, 23 October 2003, the IASB held a joint meeting with the US Financial Accounting Standards Board (FASB). We have combined all of our notes from the IASB's October 2003 meeting onto a Separate Page.

24 October 2003: Notes from the IASB meeting on 22 October
On Wednesday, 22 October 2003, the IASB held a joint meeting with the US Financial Accounting Standards Board (FASB) and the Accounting Standards Board of Canada (AcSB). We have combined all of our notes from the IASB's October 2003 meeting onto a Separate Page.

24 October 2003: Deloitte comment letter on ED 4
We have posted the Deloitte Comment Letter on ED 4, Disposal of Non-Current Assets and Reporting of Discontinued Operations (PDF 122k). You will also find earlier Deloitte comment letters Here.

23 October 2003: Regulators will appoint IAASB monitoring board
A group of international regulators will be responsible for appointing a new Public Interest Oversight Board (PIOB) to oversee the International Federation of Accountants' programme for establishing international auditing standards. The PIOB will monitor the work of IFAC's International Auditing and Assurance Standards Board (IAASB), the IFAC committee that develops the International Standards on Auditing. The 10-person PIOB will approve the IAASB's members and terms of reference. The PIOB will also monitor IFAC's proposed Compliance Program and its Ethics and Education Committees. The regulators that will select the PIOB members are the International Organisation of Securities Commissions, the Basel Committee on Banking Supervision, the International Association of Insurance Supervisors, the World Bank, and the European Commission. IFAC's Public Sector Committee will be subject to a separate and independent review process in conjunction with the World Bank and other external parties with an interest in governmental financial reporting. IFAC will seek approval of the proposals by its governing council when the council meets in Singapore next month. Click for IFAC News Release.

22 October 2003: Comparison of 'improved' IFRS and UK GAAP
We have posted a Summary of Differences between the revised International Financial Reporting Standards that will be issued in the next two months as part of the IASB's Improvements Project and United Kingdom Accounting Standards. This summary was published in the UK Accounting Standards Board's Inside Track Newsletter for October 2003.

22 October 2003: Newsletter explaining ED on macro hedging in Danish
Deloitte & Touche (Denmark) has published an IFRS Newsletter (PDF 114k, 6 pages, Danish) about the IASB's exposure draft on Fair Value Hedge Accounting for a Portfolio Hedge of Interest Rate Risk. The newsletter summarises the ED, including its objective, exemptions, and requirements for macro hedging of interest rate risk on a portfolio basis. The newslettefr also summarises briefly the current requirements for hedge accounting under IAS 39 and as proposed in the improvements project for IAS 39.

21 October 2003: Notes from the IASB meeting on 20 October
The IASB is meeting in Toronto this week, in part on its own and in part in joint meetings with the US Financial Accounting Standards Board (FASB) and the Accounting Standards Board of Canada (AcSB):

• Monday, 20 October 2003 - IASB meeting
• Wednesday, 22 October 2003 - Joint IASB/FASB/AcSB Meeting
• Thursday, 23 October 2003 - Joint IASB/FASB Meeting
• Friday, 24 October 2003 - IASB meeting
  

20 October 2003: New issue of our IASPlus newsletter is published

You can download the October 2003 Edition of our IAS Plus quarterly newsletter (it's free). This is the Asia-Pacific edition, which includes 24 pages of general IASB/IFRS news plus 7 pages of country accounting standards activity for that region. Our Europe-Africa and United Kingdom editions will be published soon. As usual, the newsletter includes updates to the IASB's timetable; status reports on the IASB's various agenda projects; a "convergence" update; and summaries of events in Europe, the United States, and the rest of the World.

19 October 2003: Endorsed IFRS Published in All Official Languages
The complete endorsed IFRS have been published in each of the official languages of the European Community in the Official Journal of the European Communities on October 13, 2003. All existing IAS and SIC, except for the financial instruments standards (IAS 32 and 39) and their related interpretations (SIC 5, 16 and 17) because they are currently being revised by the IASB, are included. Click Here to View the Official Journal of the EU that includes the text of all IASs and SICs adopted in accordance with Regulation (EC) No 1606/2002 of the European Parliament and of the Council in all EU languages.

18 October 2003: Deloitte study of global telecommunications industry
Deloitte has published the first global edition of The Deloitte Telco Index, which provides an overview of the telecommunications industry world wide, the challenges and opportunities the industry faces (including financial reporting challenges), an assessment of the manner in which these have been addressed, and a look at how the industry's major players have fared both globally and by geographical regions. At the heart of this analysis are detailed global and regional telecom indices developed by Deloitte, with each of the regional indices – the Americas, Asia Pacific and Europe – gauging market price to measure the performance of the key listed telecommunications equities for the period beginning 1 January 2000 and ending 31 July 2003. Click to Download (PDF 1,388k).

17 October 2003: Preliminary revised version of IAS 10 is available
The IASB is making available on-line to subscribers the "preliminary final" texts of Standards being revised under the Improvements Project. The preliminary final version of IAS 10, Events after the Balance Sheet Date, is now available on IASB's Website.

15 October 2003: New Accounting Roundup newsletter is available
We have posted the 14 October 2003 Edition of Accounting Roundup from Deloitte & Touche (USA). This issue includes an FASB Update (including pension disclosures, effective date of FIN 46, and summaries of several proposed FASB Staff Positions); a PCAOB Update (final rules on withdrawal from registration and proposals on audits of internal control); an AICPA Update (auditing greenhouse gas emissions information and recent AcSEC activity); and an International Update (IFAC PSC proposals on impairment of assets and summaries of the September IASB and IFRIC meetings).

12 October 2003: IFRS are required in Nicaragua starting in 2005
International Financial Reporting Standards will be required in Nicaragua for financial statements covering periods ending on or after 30 June 2005.

8 October 2003: US PCAOB proposes auditing standard on internal control
The US Public Company Accounting Oversight Board has proposed its first auditing standard, titled An Audit of Internal Control Over Financial Reporting Performed in Conjunction with an Audit of Financial Statements. The proposal would apply to non-US SEC registrants, but with delayed implementation. The proposal essentially requires an integrated audit with two audit opinions: one on the effectiveness of internal control over financial reporting and one on the financial statements. Auditors of US companies with public equity float exceeding $75 million will be required to audit and report on the company's internal controls over financial reporting for fiscal years ending on or after 15 June 2004. Auditors of smaller companies, foreign private issuers, and companies with only registered debt securities have until fiscal years ending on or after 15 April 2005 to comply. Click for:

• PCAOB Press Release (PDF 20k)
• PCAOB Briefing Paper (PDF 197k)

8 October 2003: Disclosing the impact of adopting IFRS in Europe
The Committee of European Securities Regulators has invited comments on a draft recommendation on how companies should communicate the impact of the transition to IFRS in 2005. Comments are requested by 20 November 2003. The draft recommendation includes CESR's proposed responses to the following questions:

• What information should companies publish before 1st January 2005, the most common effective date of transition to IFRS, to explain to investors the potential impact of the new standards?
• Which accounting rules should be adopted by issuers for preparing quarterly (where applicable) and half-year interim financial data that will be released in 2005?
• How can comparability be achieved between interim or annual financial information for 2005 and earlier equivalent periods, to ensure investors can effectively interpret the development of the companies financial position?
  

• CESR Press Release (PDF 114k).
• CESR Consultative Paper (PDF 164k).

8 October 2003: Enforcing IFRS in Europe
The Committee of European Securities Regulators has invited comments on its draft Standard No. 2, Financial Information - Co-ordination of Enforcement Activities. The draft proposes greater co-ordination among supervisors of financial information in Europe. It also proposes a set of standards on enforcement activities to accomplish this, including co-ordination on a pan-European level. CESR will hold an open hearing on the proposal on 12 November 2003 at CESR's office in Paris. Written comments on the proposal are requested by 7 January 2004. Click to download the:

• CESR Press Release (PDF 101k).
• CESR Consultative Paper (Draft Standard No. 2) (PDF 91k).

7 October 2003: Changes to IASB's project timetable
We have made several changes to our Timetable for IASB Projects based on decisions at recent IASB meetings and changes noted on the IASB's website:

• Extractive Industries: Exploration and Evaluation – Exposure Draft in 4th Quarter 2003; Final IFRS in 2004 after first quarter.
• Comprehensive Income (Performance Reporting) – IASB's website states "timing under review".
• Convergence of IFRS and US GAAP – Exposure Drafts in 4th Quarter 2003; Final IFRS in 2004, some 1st quarter, some later.
• Convergence: Employee Benefits – IASB's website states "timing under review".

6 October 2003: IFRIC issue summaries updated to reflect recent meeting
We have updated the following summaries of IFRIC agenda projects to reflect discussions and decisions at IFRIC's meeting on 30 September and 1 October 2003:

6 October 2003: Agenda for October IASB meeting is announced
The IASB will discuss the following Agenda topics at its upcoming October 2003 Board meeting in Toronto:
 

4 October 2003: IFRS will affect you, ICAEW tells small companies
Many smaller companies may be assuming wrongly that International Financial Reporting Standards will not affect them, the Institute of Chartered Accountants in England & Wales has warned. Although IFRS will be optional, rather than mandatory, for unlisted UK companies, the UK's Accounting Standards Board intends to converge UK GAAP with IFRS. These revised UK standards will apply to all UK companies, whether large or small. Click for ICAEW Press Release (PDF 52k).

4 October 2003: Agenda project pages updated to reflect September IASB meeting
We have updated the following IASB agenda project pages to reflect discussions and decisions at the September 2003 Board meeting:

• Amendments to IAS 32 and IAS 39
• Business Combinations – Phase I
• Business Combinations – Phase II
• Consolidation
• Convergence Issues – IFRS and US GAAP
• Extractive Industries
• Improvements to IFRS
• Reporting by Small and Medium-Sized Entities
• Revenue Recognition, Liabilities, and Equity
• Share-Based Payment

3 October 2003: IASB adds half day to October meeting
The IASB has added a session on the afternoon of Monday, 20 October 2003 to its October meeting agenda. The programme for the week of 20-24 October, to be held in Toronto, Canada, is as follows:

2 October 2003: Philippines proposes to adopt IFRS starting in 2005
The Senate of the Philippines is considering a bill, known as the Philippine Accountancy Act of 2003, that would require that "the Board [Professional Regulatory Board of Accountancy] and the [Professional Regulation] Commission adopt the International Accounting Standards (IAS) and the International Standards on Auditing (ISA) issued or adopted by the International Federation of Accountants (IFAC) as the Philippine accounting and auditing standards with full implementation effective January, 2005. For this purpose, an accounting standard council and auditing standard practices council shall be organized by the Board with the approval of the Commission to determine implementing guidelines and interpretations on the applications of the IAS and ISA subject to the approval of the Board and the Commission." Click to Download (PDF 58k) the proposed law.

2 October 2003: Notes from the second day of the IFRIC meeting

The International Financial Reporting Interpretations Committee met in London on 30 September and 1 October. Here are our preliminary and unofficial notes from the second day of the meeting. Notes from the IFRIC Meeting 1 October 2003 Rights of Use The IFRIC considered a draft Interpretation, Determining whether an Arrangement Contains a Lease. The staff provided details of editorial changes made as a result of comments from IFRIC members. The IFRIC approved the draft proposal for exposure (9-2). Emission Rights The IFRIC considered the comments received on the exposure draft D1, Emission Rights. The main categories of comments were: 1. Should the IFRIC proceed with the Interpretation at this time Some respondents questioned whether it was appropriate for the IFRIC to issue an Interpretation at this time given that projects on the Board's active agenda (amendments to IASs 20 and 38 and Performance Reporting) affect the proposals. Other respondents considered the scope of the Interpretation to be very narrow and thought that the IFRIC should cover a wider range of emission rights schemes. It was noted that the projects named were unlikely to be completed in the short-term. Some IFRIC members supported the comments that the scope was narrow. The majority however believed that sufficient schemes exist to warrant the interpretation and that it contained sufficient principles to provide guidance in other circumstances. Other specific schemes could however be dealt with separately if necessary. 2. Principal concerns of respondents Many respondents commented on the lack of symmetry in measuring and reporting the changes in the three elements in the scheme (the allowances, the liability for emissions to date, and the government grant). These respondents were concerned that the lack of symmetry resulted in an entity reporting artificial volatility in its income statement. Many respondents commented that reporting under D1's proposals failed to reflect the substance of an emission rights scheme. Some respondents therefore proposed alternative accounting solutions. These included: A net model, under which an entity does not recognise allocated allowances, and accounts for actual emissions only when it holds insufficient allowances to cover those emissions. An amortising model, under which an entity recognises allocated allowances as an asset, but then amortise the allowances as it pollutes. The entity therefore recognises a liability for actual emissions only when it holds insufficient allowances to cover those emissions. Other respondents suggested amendments to the IFRIC's proposals. These included: Measuring the liability that the entity incurs as it emits at the cost of the allowances held by the entity. Accounting for the allowances as financial assets and measuring them at fair value with gains and losses recognised in income. Classifying the allowances as a derivative and accounting for them as a cash flow hedge. Amending IAS 38 so that gains and losses on allowances are recognised in income rather than equity. Measuring the government grant by reference to the market value of the number of allowances it represents. The IFRIC confirmed its belief in the gross approach and rejected the netting of the asset and liability. In addition the IFRIC did not support the amortisation approach. The wording will be clarified regarding the non-amortisation of the intangible asset. The amendments to the proposals suggested by commentators were considered. The IFRIC agreed to continue with the proposals as exposed in these regards but that the Board should be informed that IFRIC believes a better approach would be to require revaluation of the intangible asset through the profit and loss statement and that this would require an amendment to IAS 38. It was agreed to proceed with the interpretation, to draft a proposed amendment to IAS 38 to require fair value for these intangible assets and request the Board to either approve the interpretation as exposed, or expose the proposed amendment and delay the interpretation. 3. Other issues The IFRIC discussed some of the other issues raised by respondents: Is it appropriate for the IFRIC to eliminate an option in a Standard? The IFRIC believed that the Board would only allow the interpretation to be issued if they are comfortable with the restriction and consequently did not need to address this issue further. Are allowances and/or Renewable Energy Certificates inventory? The IFRIC concluded that the emission rights are not inventory. Should the government grant be recognised in income immediately rather than recognised as a deferred credit? The IFRIC did not support the suggestion that the government grant should be treated as immediate income. Should the Interpretation specify disclosure requirements? The IFRIC did not believe disclosure requirements should be specified. Should the Interpretation include guidance for those cases where allowances are not traded in an active market? The IFRIC did not support providing additional guidance in this area. Decommissioning and Environmental Rehabilitation Funds The IFRIC will consider a draft of an interpretation, which incorporates the Board's decision to amend the scope of IAS 39 to exclude rights to reimbursement. This decision would result in all rights to reimbursement falling under the scope of IAS 37 and enable the IFRIC to provide guidance on the measurement of such asset arising from these funds. The IFRIC discussed the requirement to fair value the right to access the assets in the fund. It was noted that this fair value would include the risk of default of other participants in the fund. Additional contributions as a result of there being insufficient funds as a result of default of another party would still be treated as a contingent liability. The IFRIC agreed with this approach. It was noted that this would give rise to an immediate loss on making a contribution to the fund. The IFRIC approved the document for exposure subject to the changes detailed above and a review of those changes. Accounting for Service Concession Arrangements The IFRIC considered the recommendations from standard setters' research group into accounting for service concession arrangements. They requested that IFRIC should clarify how the IASB's existing literature applies to service concessions. The IFRIC commenced discussing the issues identified in the research paper. The initial objective will be to consider the issues to be addressed, the order in which they might be addressed, and the form any output should take. The IFRIC had a discussion on the scope of the project or projects and what approaches could be discussed. The IFRIC decided to include the following issues in the project scope: Is lease accounting the appropriate model to apply in accounting for service concession arrangements and similar arrangements? When considering whether an arrangement involves a lease and when classifying the lease, should: The arrangement be considered as a whole or should each potential transfer of property, and each major component transferred, be accounted for separately, and Is a components approach practical? Do any obligations arise under arrangements like service concession arrangements that are not lease obligations or other obligations that relate to equally unperformed executory contracts? Is guidance needed on how to apply IAS 17's "substantially all the risks and rewards incident to ownership" test to arrangements, such as service concession arrangements, that involve several potential linked transfers. When in practice would it be appropriate to apply percentage of completion accounting for service concession arrangements and which model should be applied? Onerous Contracts This issue was not discussed. This summary is based on notes taken by several observers at the IFRIC meeting and should not be regarded as an official or final summary.

1 October 2003: Our new global brand! One word says it all.

Beginning today, our organisation will be recognised in the marketplace by the single brand name "Deloitte". The legal name of our global organisation will continue to be Deloitte Touche Tohmatsu, and the legal names of our local organisations will largely remain the same. It is the name by which we are most widely known around the world and the name to which we are most often abbreviated. It illustrates the completeness of the Deloitte proposition and our integrated approach to solving clients' problems.

1 October 2003: Notes from first day of the IFRIC meeting

The International Financial Reporting Interpretations Committee is meeting in London on 30 September and 1 October. Here are our preliminary and unofficial notes from the first day of the meeting. Notes from the IFRIC Meeting 30 September 2003 Administrative Matters The role of IFRIC was discussed at the 22 September 2003 meeting of World Standard Setters. The IFRIC Chairman told the group that the IFRIC is the only body that can issue binding interpretations of IFRS. If national regulators or standard-setters issue local interpretations of IFRS, those decisions can be changed by IFRIC at any time. The Board recognises that IFRIC must take on a greater role as Europe adopts IFRS in 2005. IFRIC staff levels will be increased and possibly two more meetings will be added in 2004. Two draft interpretations will be exposed for comment in October: Rights of Use and Decommissioning Funds. IAS 11, Construction Contracts: Combining and Segmenting Contracts The IFRIC discussed a proposed draft interpretation that provides additional guidance on applying the requirements of IAS 11 to combining and segmenting contracts with the intention to converge IAS 11 with US GAAP. IFRIC noted that IAS 18 has a requirement to look to IAS 11 for multi-element contracts. Therefore, any changes to IAS 11 in segmenting or combining contracts would have an effect on the recognition of revenue for multi-element contracts (an issue addressed in EITF 00-21 in the US). The staff will prepare a paper detailing how the proposed changes in this draft interpretation relate to revenue recognition of multi-element contracts. Because this project will require significant changes to IAS 11 but will not likely be finalised until after the first quarter of 2004, IFRIC members suggested a delayed implementation date to ensure a stable platform for adoption of IFRS in Europe. This issue will be discussed at a future meeting. IAS 19, Employee Benefits: Plans that would be defined contribution plans but for existence of a minimum return guarantee The IFRIC concluded that multi-employer plans should be accounted for as defined benefit plans regardless of whether the plan assets exceed the minimum guarantee. The IFRIC concluded that the liability should be the higher of the fair value of the assets in the plan or the minimum guaranteed return on those assets at the balance sheet date. Therefore, the expected return on assets should not be projected forward and then discounted back. In some cases the fair value of plan assets will be nil; however, a liability equal to the guaranteed amount should be recorded. When the liability is measured at the fair value of the plan assets, an extra line item should be presented on the income statement to reflect defined contribution accounting. The balance sheet should be the same regardless of how the liability is measured. The entity should continue to provide disclosures for a defined benefit plan throughout the life of the plan. The IFRIC also clarified that the scope includes only plans with fixed guarantees, including cash balance plans. Therefore a plan that guarantees a return equal to the S&P 500, for example, would not be included in the scope of this interpretation. The IFRIC was aware that the EITF in the US is currently addressing this issue and will follow their deliberations. The staff will prepare a pre-ballot draft for the next meeting. Initial Application of IAS 29, Financial Reporting in Hyperinflationary Economies The IFRIC agreed that a two step approach should be applied for recognising deferred taxes when an economy becomes hyperinflationary for the first time and, therefore, IAS 29 is applied. This method does not differentiate whether the deferred taxed is a non-monetary or monetary item under IAS 29. Under this approach, the entity first recalculates its opening balance for the corresponding period as if the Standard was already applied in the previous year. This amount is recorded in equity. The entity then applies the current year inflation rate to the deferred tax item (with change recognised in income) to arrive at the ending balance. The IFRIC discussed whether there are other issues to which this approach may be applied, for example, asset impairments, revaluations through equity, provisions where repricing is involved, and pension obligations. The staff will prepare a draft interpretation to be discussed at the next meeting. IAS 19: Multi-employer plans The IFRIC discussed a draft interpretation. Several IFRIC members expressed concern over whether defined benefit accounting would be operational for multi-employer plans since IAS 19 requires balance sheet date measurement of the plan assets and liabilities. The final draft interpretation will provide guidance that the 'corridor' should be applied to these plans at the company level, not the group level, because of IAS 19's requirement for consistent policies. The draft interpretation will note that if the information to apply the corridor approach is not available, then all changes should be recorded immediately. Because of the difficulties in predicting future estimated returns reliably. several members expressed doubt about whether an interpretation should be issued – because defined benefit accounting may only be possible in rare situations. The IFRIC members noted that US GAAP requires multi-employer plans be accounted for as defined contribution plans. Current practice in applying IAS 19 is to default to defined contribution accounting and therefore this interpretation, by tightening the rules of IAS 19, would diverge from US GAAP even further. Some members expressed the view that this interpretation merely explains existing IAS 19 requires and does not 'tighten' (change) them. In their view, if this interpretation caused a change in accounting for a multi-employer plan, that change should be accounted for as a correction of an error. The IFRIC asked the staff clarify that the scope of the interpretation will exclude state plans, such as national social security plans. The staff will continue working on the draft interpretation as originally drafted – defined contribution accounting only in rare cases. Three IFRIC members stated that they would object to the draft. Four other IFRIC members abstained from the vote until a final document is presented to them. IAS 41: Measurement Issues IAS 41 requires biological assets and agricultural produce be recognised and measured at their fair value. In some cases, a present value technique is used to estimate fair value because markets do not exist. IAS 41 requires that the cash flows exclude "any increases in value from additional biological transformation". The IFRIC discussed whether a fair value measurement objective can be achieved if these future increases are excluded. The IFRIC noted that the harvest value at the balance sheet date (which could be zero) will generally be less than fair value, which is the objective of IAS 41. On the other hand, the present value of cash flows expected from the harvest will not include the risks associated with the growth over the harvest period, and therefore will generally be greater than fair value. The IFRIC noted (considering these upper and lower barriers) that fair value will generally be a risk adjusted cash flow. These cash flows may or may not reflect the expected growth over the harvest period. The IFRIC also discussed whether an entity that has the legal obligation to replant (for instance, trees) after harvest should recognise a provision when the trees are planted for the first time. The IFRIC concluded that a provision should be raised for the obligation to replant when the tree is cut down for the last time. The IFRIC also noted other areas of concern in IAS 41 that seem to prevent a fair value measurement when estimating cash flows, such as the requirement in IAS 44.22 to exclude taxation issues and costs to replant assets from the estimated cash flows. The staff will prepare a draft interpretation for IFRIC consideration at a future meeting. This summary is based on notes taken by several observers at the IFRIC meeting and should not be regarded as an official or final summary.

1 October 2003: Preliminary revised version of IAS 33 is available to subscribers
The IASB is making available on-line to subscribers the preliminary final texts of Standards being revised under the Improvements Project (IAS 1, 2, 8, 10, 16, 17, 21, 24, 27, 28, 32, 33, 39, and 40). The Preliminary Final version of IAS 33, Earnings per Share, is now available at IASB's Website. You can purchase subscriptions on line (click here for information about the Annual Comprehensive Subscription).

1 October 2003: IFAC will establish a public interest oversight board
The International Federation of Accountants will propose significant reform initiatives at the annual meeting of its governing Council in Singapore in November. The reforms would strengthen IFAC's role in protecting the public interest and enhance its standard-setting processes. IFAC, the global organisation for the accountancy profession, has 155 member organizations in 113 countries. The Council comprises one representative per member body. IFAC promulgates international standards and related guidance in the areas of auditing, assurance, related services and quality control; education; ethics; information technology; professional accountants in business; and public sector accounting. Key among the planned reform initiatives is the establishment of a public interest oversight board to oversee IFAC's public interest activities.