|
29 April 2006: Notes from second day of IASB-FASB joint meeting
The International Accounting Standards Board and the US Financial Accounting Standards Board held a joint meeting at
in London on Thursday and Friday 27 and 28 April 2006. Click here for the preliminary and unofficial Notes Taken by Deloitte Observers at the Joint IASB-FASB Meeting.
29 April 2006: Update on the use of IFRSs in Sri Lanka
The South Asian Federation of Accountants sponsored the First South Asian Accounting Summit on 18-19 April 2006 in Karachi, Pakistan. Representatives of the Institute of Chartered Accountants of Sri Lanka (ICASL) presented an update on the adoption of IFRSs in Sri Lanka. Sri Lanka has adopted many of the IASs/IFRSs and has kept most of them current including the IASB improvements. Our Sri Lanka Page has a table listing the status of adoption of each IAS and IFRS in Sri Lanka. A summary of the differences is as follows:
- Sri Lanka has not yet adopted IAS 29, IAS 32, IAS 39, or IAS 41.
- Nor has Sri Lanka adopted IFRS 1, IFRS 2, IFRS 4, IFRS 6, or IFRS 7.
- The Sri Lankan adopted versions of IAS 1, IAS 19, and IAS 38 do not reflect the latest IASB versions.
- Sri Lanka has retained its version of IAS 25 Accounting for Investments, which was replaced by IAS 39.
- Sri Lanka has issued standards on Plantations and on Revenue Recognition and Disclosures in the Financial Statements of Finance Companies, which have no IFRS equivalent.
Sri Lanka has a separate Sri Lankan Accounting Standard for Smaller Enterprises (SLASSE).
28 April 2006: Notes from day 1 of IASB-FASB joint meeting
The International Accounting Standards Board and the US Financial Accounting Standards Board held a joint meeting at
in London on Thursday and Friday 27 and 28 April 2006. Click here for the preliminary and unofficial Notes Taken by Deloitte Observers at the Joint IASB-FASB Meeting.
28 April 2006: Two publications from the PCAOB
 |
The United States Public Company Accounting Oversight Board (PCAOB) has issued the following two publications: |
27 April 2006: Notes from third day of the IASB April 2006 meeting
The International Accounting Standards Board held its April 2006 Board meeting at its offices in London on Monday 24 April 2006 (afternoon only), Tuesday 25 April 2006 (afternoon only), and Wednesday 26 April 2006. Click here for the preliminary and unofficial Notes Taken by Deloitte Observers at the Meeting. The IASB will also meet with the US Financial Accounting Standards Board at the Crowne Plaza St. James Hotel in London on Thursday and Friday 27 and 28 April 2006.
27 April 2006: ARC recommends deferral of convergence decision
At its meeting on 24 April 2006, the European Commission's Accounting Regulatory Committee (ARC) recommended that the Commission defer a decision on whether Canadian, Japanese, and/or US GAAP are equivalent to IFRSs for the purpose of financial statements prepared by non-EU companies listed on EU regulated securities markets. This would mean that non-EU issuers using one of those three countries' GAAPs may continue to use that GAAP, without having to restate to IFRSs, in prospectuses filed through 31 December 2008. However, from 1 January 2007, non-EU issuers using a national GAAP other than Canadian, Japanese, or US GAAP will be required to restate their financial statements using IFRSs – unless their national GAAP is equivalent to IFRSs. A national GAAP from a jurisdiction other than one of those three will be deemed equivalent to IFRSs only if the notes to financial statements drawn up in accordance with those national standards contain an explicit and unreserved statement that they comply with International Financial Reporting Standards. The foregoing recommendations must be approved by the European Commission. Click for:
27 April 2006: Nominees sought for EFRAG TEG
The Supervisory Board of the European Financial Reporting Advisory Group has invited nominations for appointment to EFRAGs Technical Expert Group. The appointment would be to replace one member whose term expires 14 July 2006. Nominations are sought by 1 June 2006. Click for Announcement (PDF 29k).
27 April 2006: Deadline – World Congress of Accounting Educators papers
27 April 2006: New Auditing Directive adopted in the EU
On 25 April 2006, the Council of the European Union adopted a new directive on the audit of company accounts. The directive broadens the scope of application of existing EU legislation (directive 84/253/EEC) by specifying the duties of statutory auditors, their independence, and ethics. It introduces requirements for external quality assurance and public oversight of the auditing profession. The new law also amends directives 78/660/EEC and 83/349/EEC on accounting. The directive's main provisions are as follows. Click for EU Council Press Release (PDF 123k):
- Statutory auditor and audit firm. Clear definition of 'audit firm'. Many of the new provisions deal specifically with audit firms.
- Public reports of audit firms. Firms that audit public interest entities must provide a detailed public report that gives an insight into the audit firm and the network to which it belongs, including information about
quality assurance reviews, policies on continuing education, and a fee break-down.
- Independent audit committees. Required. They must monitor the financial reporting process and the statutory audit.
- Registration of auditors and audit firms. Member states must ensure that each statutory auditor and audit firm is identified in an electronic public register and that the registration information is kept updated. For audit firms, the register must show size of the firm and owners and members of the management of the audit firm.
- Independence. Clearly defined. Auditor/firm can not be involved in any way in decision-making of the audited entity.
- Quality assurance and auditing standards. All statutory auditors and audit firms are subject to a system of quality assurance and subject to public oversight.
- Audit standards. Statutory audits must be carried out in accordance with international standards on auditing.
- Investigations and sanctions. Member states must organise effective systems of investigation and sanctions, which may be civil, administrative, or criminal.
- Competent authorities. Member states must designate competent authorities responsible for approval, registration, quality assurance, inspection, and discipline for the purposes stipulated by the directive. They must cooperate with each other.
- Public oversight. Member states must handle this with integrity and independence.
- Appointment, dismissal, and communication. Various principles established, including one whereby the statutory auditor or audit firm can only be dismissed if there is a significant reason why the statutory auditor cannot finalise the audit. The reasons for dismissal or resignation must be disclosed.
- Registration of non-EU audit firms. Auditors and/or audit firms from non-EU countries that issue audit reports in relation to securities traded in the EU must be registered in the EU and be subject to member state systems of oversight, quality assurance, and investigations and sanctions. Only auditors or audit firms that meet quality criteria equivalent to the directive can be registered. The directive allows for exemption from registration, oversight, quality assurance, and investigations and sanctions only if audit firms from non-EU countries are subject to equivalent systems of registration and oversight.
- Fees. Audited companies must disclose total fees paid to the statutory auditor or audit firm, broken down by fees for audit services, other assurance services, tax services and other non-audit services.
- Local adoption. Member states are required to adopt provisions to comply with the new directive within two years of its entry into force. The directive comes into force 20 days after its publication in the Official Journal of the EU.
|
27 April 2006: EC cites Luxembourg non-compliance with IAS Regulation
The European Commission has brought infringement actions against 19 Member States for failure to implement in national law one or more of eight different Internal Market Directives. Among those actions, the Commission has decided to refer Luxembourg to the European Court of Justice over its "non-implementation of Directive 2003/51/EC on accounting rules". The Commission's Announcement (PDF 108k) said:
|
Directive 2003/51/EC amends Directives 78/660/EEC, 83/349/EEC, 86/635/EEC and 91/674/EEC on the annual and consolidated accounts of certain types of companies, banks and other financial institutions and insurance undertakings. These Directives define which types of companies have to produce accounts, establish which format should be used for the profit and loss account and the balance sheet and lay down which valuation principles should be applied. The Directives also impose disclosure requirements.
The IAS Regulation, adopted in June 2002, requires all EU companies listed on a regulated market - or those with listed debt instruments - to use IAS from 2005 onwards and allows Member States to extend this requirement to all companies. Where IAS are not applied, the 4th and 7th Company Law Directives (78/660/EEC and 83/349/EEC), also known as the Accounting Directives, will continue be the basis of EU accounting requirements and may therefore remain applicable to up to five million companies in Europe. They needed to be modernised.
Directive 2003/51/EC brought EU accounting requirements into line with modern accounting theory and practice. It allows Member States which do not apply IAS to all companies to move towards similar, high-quality financial reporting. In doing so, all inconsistencies with International Accounting Standards (IAS) have been eliminated.
|
26 April 2006: Notes from day two of the IASB April 2006 meeting
The International Accounting Standards Board held its April 2006 Board meeting at its offices in London on Monday 24 April 2006 (afternoon only), Tuesday 25 April 2006 (afternoon only), and Wednesday 26 April 2006. Click here for the preliminary and unofficial Notes Taken by Deloitte Observers at the Meeting. The IASB will also meet with the US Financial Accounting Standards Board at the Crowne Plaza St. James Hotel in London on Thursday and Friday 27 and 28 April 2006.
26 April 2006: ARC recommends endorsement of IFRICs 8 and 9
At its meeting on 24 April 2006, the European Commission's Accounting Regulatory Committee recommended that the Commission endorse IFRIC 8 Scope of IFRS 2 and IFRIC 9 Reassessment of Embedded Derivatives for use in Europe. The Commission is expected to consider those two Interpretations during the summer of 2006. The two other pronouncements awaiting Commission action are IFRIC 7 Applying the Restatement Approach under IAS 29 Financial Reporting in Hyperinflationary Economies and the December 2005 Amendments to IAS 21. The Commission is expected to act on those in May or June. The European Financial Reporting Advisory Group has updated its Endorsement Status Report (PDF 38k) to reflect the foregoing.
26 April 2006: Update on the use of IFRSs in Bangladesh
The South Asian Federation of Accountants sponsored the First South Asian Accounting Summit on 18-19 April 2006 in Karachi, Pakistan. Representatives of the Institute of Chartered Accountants of Bangladesh (ICAB) presented an update on the adoption of IFRSs in Bangladesh. The Companies Act of 1994 provides basic requirements for financial reporting by all companies in Bangladesh. It does not refer to which specific accounting standards should be used. Bangladesh Accounting Standards (BASs) are developed by the ICAB and are based on older IASs – generally those developed in the 1980s and 1990s by the IASC rather than the improved IASs and new IFRSs developed by the IASB. The ICAB has not yet adopted IASs 29, 32, 39, or 41, nor IFRSs 1-7. Adopted BASs are legally enforceable for listed companies under the SEC Rules. They are not mandatory or enforceable through the ICAB by-laws. The auditor's report and basis of presentation note refer to conformity with international accounting standards applicable in Bangladesh. There are no separate standards for small and medium-sized entities (SMEs). Our new Bangladesh Page has a table listing the status of adoption of each IAS and IFRS in Bangladesh.
25 April 2006: IFAC 2006 audit and ethics handbook is published
The International Federation of Accountants (IFAC) has published its 2006 Handbook of International Auditing, Assurance, and Ethics Pronouncements in print and in two electronic formats. The Handbook includes all pronouncements issued by the International Auditing and Assurance Standards Board (IAASB) and the International Ethics Standards Board for Accountants through 31 December 2005. One of the electronic formats is a free PDF version (1,098 pages, 5.3mb) downloadable from IFAC's Website. The other is eComPress version, usable on-line and off-line, that has features designed to make accessing the pronouncements more user-friendly.
25 April 2006: UK will not apply IAS 39 equivalent to unlisted entities
The United Kingdom Accounting Standards Board (ASB) has decided not to finalise its proposal to extend the scope of Financial Reporting Standard (FRS) 26 Financial Instruments: Measurement to all entities other than SMEs that apply the Financial Reporting Standard for Smaller Entities (FRSSE). FRS 26 is essentially equivalent to IAS 39. Currently, FRS 26 applies to all listed entities still following UK standards and a small group of unlisted entities whose financial statements are prepared in accordance with the fair value accounting rules set out in the Companies Act. In April 2005, the ASB had proposed to extend the applicability of FRS 26. Click for Press Release (PDF 25k).
25 April 2006: Notes from the first day of the IASB April 2006 meeting
The International Accounting Standards Board held its April 2006 Board meeting at its offices in London on Monday 24 April 2006 (afternoon only), Tuesday 25 April 2006 (afternoon only), and Wednesday 26 April 2006. Click here for the preliminary and unofficial Notes Taken by Deloitte Observers at the Meeting. The IASB will also meet with the US Financial Accounting Standards Board at the Crowne Plaza St. James Hotel in London on Thursday and Friday 27 and 28 April 2006.
25 April 2006: Update on the use of IFRSs in Pakistan
The South Asian Federation of Accountants sponsored the First South Asian Accounting Summit on 18-19 April 2006 in Karachi, Pakistan. Speakers included three IASB representatives – IASB Chairman Sir David Tweedie, Board Member Warren McGregor, and Director of Standards for SMEs Paul Pacter. Representatives of the Institute of Chartered Accountants of Pakistan (ICAP) presented an update on the adoption of IFRSs in Pakistan. They noted that the ICAP has identified three tiers of entities with different standards applying to each, as follows:
- Tier 1. Publicly accountable entities, including listed companies and banks and other financial institutions must apply IFRSs as adopted in Pakistan.
- Tier 2. Medium-sized entities apply a separate set of standards developed by ICAP (under development, around 60 pages).
- Tier 3. Small-sized entities apply a separate set of standards developed by ICAP (under development, around 6 pages).
Here is a summary of the adoption of IFRSs for Tier 1 entities:
April 2006 Update on the Use of IFRSs in Pakistan
- The ICAP has adopted all IASs without modification except IAS 29 (hyperinflation). Whilst ICAP has adopted IAS 41, it is awaiting endorsement by the Securities and Exchange Commission of Pakistan (SECP).
- The Pakistani securities and bank regulators have not yet approved IAS 39 (financial instruments) or IAS 40 (investment property) for use by banks and similar financial institutions. Some impediments to their use by banks and similar financial institutions also exist in the tax laws. For all other types of entities, IAS 39 and IAS 40 are required.
- The ICAP has published exposure drafts of IFRS 2 (share-based payment), IFRS 3 (business combinations), IFRS 5 (assets held for disposal), and IFRS 6 (extractive industries), and comments have been received. Those four standards are now before the ICAP Council for adoption. When they are adopted, they will be considered by the SECP for endorsement. Until then, IAS 22 and IAS 35 continue in force in Pakistan.
- Because adoption of IFRS 4 (insurance contracts) would require amendment of the Pakistani insurance ordinance, the ICAP has deferred consideration of it until the IASB issues a final standard on Phase II of its Insurance Project.
- The ICAP will consider IFRS 1 for adoption after the remaining IASs and IFRSs (other than IFRS 4) are adopted in Pakistan.
- For Tier 1 companies, the auditor's report refers to conformity with IFRSs as adopted for use in Pakistan.
|
24 April 2006: India page updated
 |
We have updated our India Page to reflect the adoption of a revised Accounting Standard, AS 15 Employee Benefits. You will find links to all of our jurisdictional accounting standards pages Here. |
24 April 2006: Details of China's new IFRS-based accounting standards
On 15 February 2006, the Ministry of Finance of the People's Republic of China issued a comprehensive set of Accounting Standards for Business Enterprises (ASBEs) that cover nearly all topics in current IFRSs. The ASBEs are mandatory from 1 January 2007 for all listed Chinese enterprises, with adoption by other Chinese enterprises encouraged. We have updated our China Page to provide additional information about the new ASBEs. The ASBEs change the primary basis of accounting in Mainland China. It is not simply an expansion of the disclosure requirements. For example:
Important Changes in China's New Accounting Standards
- Share-based payment transactions for employee services are recognised as expenses in the income statement.
- A business combination not involving entities under common control is accounted for by the acquisition method. Under that method, assets and liabilities of the acquired entity are measured at fair value.
- Goodwill and indefinite life intangible assets are no longer amortised but, instead, must be tested at least annually for impairment.
- Discount on acquisition of a business is credited to income immediately.
- Minority interest is presented within equity.
- Non-monetary asset-related grants are presented as deferred income and recognised as income evenly over the useful life of the asset.
- Development costs are capitalised if certain criteria are met.
- Reversal of all impairment losses is prohibited.
- All derivatives are recognised on the balance sheet, with changes in fair value taken to the income statement, unless they are designated and effective hedging instruments.
- Investment property may be measured at fair value with changes in fair value recognised in the income statement. The cost-depreciation-impairment model is also allowed.
- Non-monetary transactions are measured at fair value if commercial substance can be substantiated.
- Gains on debt restructuring, as well as losses, are recognised in the income statement.
- Finance lease assets are recognised by the lessee at the lower of fair value of the leased asset and the present value of minimum lease payments.
- The tax effect of all temporary differences between the tax basis and the carrying amount of assets and liabilities is recognised, other than differences arising on initial recognition.
- When an instrument that has both liability and equity components (such as a convertible bond) is issued, the debt and equity components are accounted for separately.
|
24 April 2006: US, Japanese life insurers propose accounting standard
An international accounting standard for life insurance developed jointly by a group of eleven large life insurance companies in the United States and the four largest life insurance companies in Japan has been submitted for consideration by the International Accounting Standards Board. The proposal, which includes 16 principles and related guidance, is presented in a paper titled An International Accounting Standard for Life Insurance (PDF 92k), accompanied by a Press Release (PDF 54k). The paper focuses on the measurement of life insurance, annuity contracts that qualify as insurance, long-term care insurance, disability insurance, and other types of noncancelable or guaranteed renewable health insurance contracts issued by either a life or nonlife company. The 16 proposed principles are as follows:
Principles Proposed by US and Japanese Insurers
- Principle 1: The Net Insurance Liability (or Liability) should be based on the present value of all future cash flows associated with the portfolio of insurance contracts being valued.
- Principle 2: The Net Insurance Liability at all times must be sufficient to provide for payment of all expected future obligations with adequate provision for risk and uncertainty.
- Principle 3: Profit should be recognized in line with the release from risk.
- Principle 4: On initial issue there should be no accounting gain or loss.
- Principle 5: A policyholder intangible (or Deferred Acquisition Cost) asset should be established when a policy (or block of policies) is issued and amortized over time into earnings in line with the policy's profit profile.
- Principle 6: Insurance liabilities should reflect the inherent risk and uncertainty of future cash flows.
- Principle 7: Assumptions underlying the measurement of insurance liabilities and intangible assets should be periodically reviewed and changed, if appropriate.
- Principle 8: Liabilities should reflect the value of all financial options and guarantees.
- Principle 9: Measurement should be based on a portfolio of exposures.
- Principle 10: Policyholder behavior should be reflected in the measurement of all liabilities.
- Principle 11: Renewal options or provisions that obligate the insurer to continue to provide coverages should be recognized to the extent they are included in the contract or required by law or regulation.
- Principle 12: The credit standing of an entity should not be considered in the valuation of insurance liabilities.
- Principle 13: Entities should have the ability to measure assets and liabilities on a consistent basis to reflect the way companies manage risk.
- Principle 14: Liabilities supported by a separate account, a unit-linked fund or a similar dedicated portfolio should reflect the expected returns on that portfolio.
- Principle 15: Liabilities for participating contracts must include provision for the expected payout of policyholder dividends, additional benefits provided or any other result of the participating mechanism.
- Principle 16: Insurance policies with flexible premiums should only be unbundled in the event that the separation would result in material differences in the overall value of the contract and either
- a. The deposit and insurance components of the contract are separately priced and separately managed by the insurer; or
- b. Separate measurement of a deposit component is necessary to recognize rights and obligations of the insurer and the policyholder.
|
23 April 2006: CGA-Canada concerned about IASB's SME direction
While expressing strong support for a global set of financial reporting standards for small and medium-sized entities (SMEs), Canada's Certified General Accountants has issued a Press Release (PDF 18k) expressing concern that the decisions made to date by the IASB in its Project to Develop Standards for SMEs do not go far enough toward achieving the goal of simplification. CGA-Canada chairman Dany Girard, who serves on the IASB's SME Working Group, said:
|
There has been broad agreement in recent years that a set of stringent standards tailored to the unique needs of SMEs is necessary. Progress has been made by international standard setters toward reaching that goal. But recently, the International Accounting Standards Board (IASB) has wavered in its commitment to address the needs of the SME sector. The IASB's current direction is not acceptable to the users of SME financial statements.
|
22 April 2006: New PCAOB ethics and independence rules
On 19 April 2006, the US Securities and Exchange Commission approved the rules on auditor ethics, independence, and tax services that had been adopted by the Public Company Accounting Oversight Board (PCAOB). The rules establish a general obligation requiring a registered public accounting firm and its associated persons to be independent of the firm's audit clients throughout the audit and professional engagement period. The rules identify circumstances in which the provision of tax services impairs an auditor's independence, including services related to marketing, planning, or opining in favor of the tax treatment of, among other things, transactions that are based on aggressive interpretations of applicable tax laws and regulations.
Click for:
21 April 2006: Public Sector Accounting Standards Board update
We have posted the April 2006 issue of IPSASB Update. The newsletter reports the decisions made at the meeting of the International Public Sector Accounting Standards Board (IPSASB) in late March 2006. The IPSASB develops standards for accounting and financial reporting by national, regional, and local governments and related governmental agencies. Those standards are generally based on IFRSs, and profit-oriented government business enterprises are required to comply directly with IFRSs. The IPSASB's current work programme includes an ongoing project on 'Convergence with International Financial Reporting Standards (IFRSs) issued by the IASB':
20 April 2006: New IASB Due Process Handbook
 |
The Trustees of the International Accounting Standards Committee Foundation have published a new Due Process Handbook for the IASB. The Handbook describes the IASB's consultative procedures. Those procedures require that all decisions are made in public meetings and that proposals receive appropriate public scrutiny. The Due Process Handbook does not mark a significant change in existing IASB practice and is meant to provide interested parties and the general public with a better understanding of the IASB's operations. The Trustees had finalised the handbook at their March 2006 meeting. Click for Press Release (PDF 57k).
Click here to download the Due Process Handbook from IASCF Website. |
18 April 2006: Comment deadline on management commentary paper
 |
We remind you that the deadline is 28 April 2006 for commenting on the Management Commentary Discussion Paper that was published by the IASB on 27 October 2005. The paper considers the role the IASB could play in improving the quality of the management commentary that accompanies financial statements. It was prepared for the IASB by staff of its partner standard-setters from Canada, Germany, New Zealand, and the United Kingdom. The paper reviews existing national requirements or principles on management commentary and offers recommendations on how the IASB might promote the wider adoption of best practice in the interests of investors and others who use financial reports. While the IASB has discussed the paper, it has not yet developed tentative views on the authors' recommendations.
|
17 April 2006: Standard setting activity in Asia-Pacific region
 |
We have updated the following pages on this website to reflect recent standard setting activity in the Asia-Pacific region:
|
17 April 2006: Accounting Roundup –first quarter 2006 review
We have posted the Accounting Roundup: First Quarter in Review–2006 (PDF 382k), prepared by the National Office Accounting Standards and Communications Group of Deloitte & Touche LLP (USA). During the first quarter of 2006, accounting standard-setters and accounting regulators issued a number of final and proposed FASB Interpretations, FSPs, EITF consensuses, SEC rules, PCAOB rules, IFRSs, etc. affecting accounting, financial reporting, and corporate governance. Accounting Roundup: 1st Quarter in Review–2006, presents brief descriptions of those pronouncements, as well as certain other regulatory and professional developments in accounting and financial reporting. The articles included derive from issues of the Accounting Roundup newsletters published in the first quarter of 2006, with updates added where appropriate. You will find past issues Here.
16 April 2006: IAS Plus Newsletters for April 2006 are posted
 |
The April 2006 IAS Plus Quarterly Newsletter has been published. The newsletter reports on the 1st quarter 2006 activities of the IASB, the IFRIC, and the IASC Foundation, and also on worldwide issues and events relating to international financial reporting. The Asia-Pacific edition has the same 30-page news content as the Global Edition plus 8 more pages of accounting standards updates for the Asia-Pacific region.
You will find all Past IAS Plus Issues Here. Sign up for Free Subscription by Email. |
13 April 2006: Agenda for IASB-FASB joint meeting
The International Accounting Standards Board and the US Financial Accounting Standards Board will hold a joint meeting in London on Thursday and Friday 27 and 28 April 2006. The meeting, which is open to public observation, will be held at the Crowne Plaza St James Hotel. The agenda for the meeting is below.
Joint Meeting of the IASB and the FASB
28-29 April 2006, London
Thursday 27 April 2006 (from 11:15am)
- Financial Instruments – hedge accounting
- Business Combinations II – three issues:
- Fair value
- Accounting for acquisition related costs
- Disclosures for non-controlling interests associated with business combinations
- Revenue Recognition
Friday 28 April 2006 (morning only)
- Leasing – agenda proposal for a joint leasing project
- Conceptual Framework – definitions of assets and liabilities
|
12 April 2006: World Congress of Accountants 2006 brochure
The organising committee of the 17th World Congress of Accountants (WCOA) has released a conference brochure that provides comprehensive information about the Congress and the technical programme. WCOA 2006 will be held in Istanbul, Turkey, from 13 to 16 November 2006. An estimated 5,000 delegates will attend. Click to Download the Brochure (PDF 11,510k*, 73 pages).
*Please note that the brochure is 11.5mb in size. Downloading using a modem connection may be impractical. Individual sections can be viewed online at the WCOA Website.
12 April 2006: Deloitte 2005 survey of pension assumptions
 |
Deloitte Consulting LLP's Human Capital practice has published its survey of year-end pension and postretirement benefit plan assumptions. The survey provides insights to publicly traded corporations and their chief financial officers about the economic assumptions used in preparing the 2004 year-end pension (Statement of Financial Accounting Standards No. 87) and other postretirement employee benefit plan (SFAS No.106) accruals and disclosures of 291 Fortune 500 companies. Click to Download the Study (PDF 618k). |
11 April 2006: Australia will disband its Urgent Issues Group
The Australian Accounting Standards Board (AASB) has agreed to disband the Urgent Issues Group (UIG) and adopt a new Interpretations model in Australia under which the AASB will have direct responsibility for interpretations, with advisory panels formed on a topic-by-topic basis. It is most likely that the new Interpretations model will have effect from 1 July 2006.
11 April 2006: FEI survey finds Sarbanes-Oxley costs down 16%
A survey conducted by Financial Executives International has found that, for those companies in their second year of compliance with Section 404 of the US Sarbanes-Oxley Act of 2002, year-two compliance costs down 16% from year-one costs. Among the other key findings:
- Auditor guidance from the Public Company Accounting Oversight Board still needs clarification.
- Compliance with Section 404 has raised investor confidence, but has done so at a price.
- Auditor fees for all accelerated filers have declined an average of 13%.
Click for FEI Press Release (PDF 47k).
11 April 2006: IASB April 2006 meeting agenda
The International Accounting Standards Board will hold its April 2006 Board meeting at its offices in London on Monday 24 April 2006 (afternoon only), Tuesday 25 April 2006 (afternoon only), and Wednesday 26 April 2006. Presented below is the preliminary agenda for the meeting. The IASB will also meet with the US Financial Accounting Standards Board in London on Thursday and Friday 27 and 28 April 2006.
24-26 April 2006, London
Monday 24 April 2006 (afternoon only)
Tuesday 25 April 2006 (afternoon only)
Wednesday 26 April 2006
Thursday and Friday 27 and 28 April 2006
- Joint meeting of the IASB and the FASB – agenda not yet announced
|
11 April 2006: Model 2005 IFRS financial statements in Danish
Deloitte (Denmark) has updated the Danish-language translation of the 2005 model IFRS financial statements to reflect disclosures required by Standards/Interpretations recently issued but not yet effective. Click to download IFRS Modelregnskab 2005 (Model Financial Statements 2005) (PDF 539k). There are permanent links on our Denmark Page and our Model Financial Statements Page.
10 April 2006: Comment deadline on fair value questionnaire
We remind you that the deadline is 14 April 2006 for responding to the Joint IASB-FASB Questionnaire on Information about Changes in Fair Values of Financial Instruments. The two Boards issued the questionnaire on 6 March 2006 to obtain input from users of financial statements about the kinds of information about fair values of financial instruments, and changes in those fair values, that is useful to those making investment or credit decisions or advising others on investment or credit decisions. For this purpose, financial instruments include not only debt securities, equity securities, and derivatives, but also loans and accounts payable or receivable, and almost any other amount payable or receivable. Click for:
10 April 2006: EFRAG recommends adoption of IFRIC 9 in Europe
The European Financial Reporting Advisory Group has recommended that the European Commission adopt IFRIC 9 Reassessment of Embedded Derivatives for use in Europe. Click to download EFRAG Letter (PDF 89k).
9 April 2006: Adoption of IFRSs in Azerbaijan
 |
We have created a new Azerbaijan Page to report information about the use of IFRSs in Azerbaijan. |
- Companies listed on the Baku Stock Exchange are required to report under Azerbaijani GAAP. No IFRS reporting is allowed.
- All local and foreign banks operating in Azerbaijan are required to produce IFRS reports. Such reports are annually submitted to the National Bank of Azerbaijan.
- Effective from 2008 all major state owned enterprises (including major utilities and upstream oil and gas companies) are required to report under IFRSs.
- Note however, that many companies in Azerbaijan have already adopted IFRS reporting over the past few years. The major driver behind this process is the desire to borrow from European lenders, including the European Bank for Reconstruction and Development (EBRD) and KfW (the German development bank) who require audited IFRS financial statements.
8 April 2006: Commissioner McCreevy's comments on convergence
- Application of existing IFRS in the EU
- What does 'convergence' mean?
- Beyond convergence
Commission McCreevy's overall conclusion:
|
High quality financial reporting is fundamental for an integrated European capital market which operates effectively, smoothly and efficiently. Europe made a visionary step to require the use of IFRS: now we must see to it that they are consistently applied and interpreted across the EU so that companies can reap maximum benefit. I am a firm believer in truly global accounting standards that serve efficient capital markets around the world and we have an opportunity at the moment to ensure that the momentum towards convergence is maintained so that these benefits can be felt, not just for companies within the EU, but also for companies across the globe.
|
8 April 2006: IAS Plus website in German keeps growing
 |
 |
 | >
Since the German Language IAS Plus Website (www.iasplus.de) went on line in February 2005, it has had over 175,000 visitors. Recently it is averaging between 700 and 1,000 daily visitors. It is the only website in the German-speaking region offering daily, comprehensive news about the IASB and international financial reporting. We have a permanent link from this page to www.iasplus.de in the left-side column of links. |
7 April 2006: IFAC urges focus on needs of SMEs
The International Federation of Accountants (IFAC) has issued a statement expressing support for "appropriate, simplified guidance being developed for small and medium entities.... Recognising that international standards that are right for a large public company may be burdensome for a small enterprise, IFAC, together with its member bodies, is urging standard setters and regulators to consider the unique needs of small and medium enterprises (SMEs) in developing their rules and regulations." Click for IFAC Statement (PDF 79k).
7 April 2006: SEC's proposed 'compensation discussion and analysis'
In January 2006, the US Securities and Exchange Commission published a Proposed Rule on Executive Compensation and Related Party Disclosure (PDF 550k). At the heart of the proposals is a new reporting section called Compensation Discussion and Analysis, which would provide narrative disclosure of a company's policies and decisions regarding its compensation of named executive officers. Required disclosures would include total compensation, the processes for setting compensation, the role of executive officers in setting compensation, and the role and identify of compensation consultants. Comment deadline is 10 April 2006. At an executive compensation conference earlier this week, John W. White, the new Director of the SEC's Division of Corporation Finance, presented some views about the proposed rules in a presentation titled The Need to Know (PDF 68k). Mr. White also comments more generally on disclosure controls and procedures.
7 April 2006: March 2006 Accounting Roundup posted
- FASB developments including a final Statement on Accounting for Servicing of Financial Assets; a proposed Statement on Employers' Accounting for Defined Benefit Pension and Other Postretirement Plans; a final FSP on accounting for life settlement contracts; and a joint FASB-IASB request for information on financial analysis of companies that report financial instruments at fair value.
- EITF developments including March 2006 EITF meeting.
- AICPA developments including a final SOP on attestation engagements on investment management firms; a proposed SAS on an auditor's communication with those charged with governance; guidance on audit reports for non-issuers that are a subsidiary, division, or segment of an SEC registrant; and an audit risk alert.
- SEC developments including SEC exposure of PCAOB's proposed rules concerning independence, tax services, and contingent fees; the draft report of the SEC Advisory Committee on Smaller Public Companies; and a request for feed back on interactive data.
- PCAOB developments including releases on addressing quality control criticisms in inspection reports.
- International developments including a final Interpretation on reassessment of embedded derivatives and proposed amendments presentation of financial statements.
|
You will find past issues of Accounting Roundup Here.
7 April 2006: Some statistics about www.iasplus.com files
 |
We have computed a few statistics about the volume of information available on Deloitte's www.iasplus.com website. Here are the current statistics and comparable figures as of August 2004:
| | April 2006 | August 2004 |
|---|
| Number of files | 2,990 | 1,775 |
| Total file size | 410mb | 226mb |
| Number of HTML pages | 512 | 392 |
| Downloadable PDF files* | 1,930 | 994 |
| GIF image files | 386 | 293 |
| JPG image files | 126 | 78 |
| Links to other websites* | 1,023 | 933 |
*We prefer to post downloadable files directly on IAS Plus, where possible, because links to other websites sometimes stop working. We link when we are unable to get permission to post copyrighted files. We test all links periodically. |
7 April 2006: IASB statement on relationships with standard setters
The IASB has published a Statement of Best Practice: Working Relationships between the IASB and other Accounting Standard-Setters (PDF 166k). The Statement identifies a range of activities that the IASB and regional and national accounting standard-setters believe they should undertake in the interests of facilitating the adoption of or convergence with IFRSs issued by the IASB. Those activities include:
- Communication, both between standard-setters and their constituents and among standard-setters themselves.
- Project development, including the ways in which other accounting standard-setters can assist the IASB in progressing particular projects.
- Input on IASB consultative documents.
- The processes and approaches other accounting standard-setters might employ in adopting or converging with IFRSs.
- Co-operation in the development of interpretations of IFRSs.
The IASB had Invited Public Comment (PDF 8k) on an Earlier Draft (PDF 43k) of the Statement (at that time referred to as a Memorandum of Understanding, or MOU), and had discussed it with national standard setters at meetings in September 2004 and again September 2005. Here is the link to Deloitte's Letter of Comment on the MOU (PDF 30k).
6 April 2006: New subscriptions page for IAS Plus alerts
| We have created a new Subscription Page by which you can add yourself to our IAS Plus email alert list. There is no charge. A permanent link to that page can always be found on this home page (left column, Subscribe to Alerts). We will alert you to new issues of our IAS Plus Newsletter, with a download link, and to important IFRS news such as new IASB EDs and Standards and IFRIC draft and final Interpretations. |
6 April 2006: 'Heads Up' on FASB's pensions proposals
Last week, the US Financial Accounting Standards Board issued its Exposure Draft Employers' Accounting for Defined Benefit Pension and Other Postretirement Plans. The ED proposes amendments to FASB Statements No. 87, 88, 106, and 132(R) to require, among other things, that a company that sponsors a postretirement benefit plan fully recognise, as an asset or liability, the over-funded or under-funded status of its benefit plan in its balance sheet. The proposal is designed to partially tackle certain important deficiencies the FASB finds in today's pension accounting:
- Changes in a plan's assets and its benefit obligation are not recognised as they occur.
- Important information about postretirement plans is relegated to the footnotes rather than being recognised in the financial statements.
Key concepts of this ED are summarised in a new Heads Up Newsletter (PDF 128k), published by Deloitte & Touche LLP (USA).
5 April 2006: IASC Foundation Trustees reappoint Ken Wild to IFRIC
 |
The Trustees of the International Accounting Standards Committee Foundation have reappointed Ken Wild as a member of the International Financial Reporting Interpretations Committee (IFRIC) for another three-year term. Ken is the National Director of Accounting and Audit at Deloitte &Touche LLP (United Kingdom) and is Deloitte Touche Tohmatsu's Global IFRS Leader. The Trustees have also initiated a search to replace three retiring IFRIC members – Shunichi Toyoda, Leo van der Tas, and Patricia Walters. The deadline for applications and nominations is 9 May 2006. Click for Press Release (PDF 48k). |
4 April 2006: IFRS workbook and guide
 |
Abbas Ali Mirza and Magnus Orrell of Deloitte, along with Prof. Graham Holt, have coauthored International Financial Reporting Standards Workbook and Guide, published by John Wiley & Sons. The book is intended as a quick reference guide to IFRSs, including standards outlines, case studies with solutions, illustrations, and multiple-choice questions with solutions. The book may be ordered from the John Wiley & Sons Website. |
4 April 2006: Analysis of Canadian-US GAAP differences
The Canadian Accounting Standards Board (AcSB) has prepared an analysis of reported Canadian/US GAAP differences based on a survey of 150 public Canadian companies for fiscal years ending in 2004. All the companies have listings on major US stock exchanges or issue debt securities in the US. In releasing the survey, the AcSB said:
|
The AcSB has recently adopted a new Strategic Plan that calls for the adoption of International Accounting Standards Board standards for publicly accountable enterprises. This will result in some reorientation of AcSB standard-setting activities. The AcSB will work to eliminate remaining significant differences with US GAAP where their elimination is consistent with the IASB convergence objective. The AcSB intends to avoid creating new differences with US GAAP during the transition period whenever possible. However, some new differences with US GAAP may be unavoidable as a result of the AcSB's new strategy, but such differences should generally be temporary because the US Financial Accounting Standards Board (FASB) and IASB are working together toward convergence of their standards.
|
An appendix to the report contains a summary analysis of Canadian/US GAAP differences by topic. We have posted the report with the kind permission of the Canadian Institute of Chartered Accountants. Click to download Reported Canadian/US GAAP Differences (PDF 191k).
4 April 2006: ICAS report on 'principles versus rules'
The Institute of Chartered Accountants of Scotland (ICAS) has published a report Principles Not Rules: A Question of Judgement. The report is the culmination of an ICAS working group project to help find a resolution to the 'principles versus rules' debate within international accounting standard setting. The report concludes that:
|
A principles-based approach to standard setting is not only desirable but essential, to serve the needs of business and the public interest and that the global convergence of accounting standards cannot be achieved by a detailed rules-driven approach. The working group believes that principles-based standard setting will require: a change in the global profession, with preparers and auditors assuming more responsibility for their judgements; the documentation of key judgements in the financial statements; and regulators accepting a range of judgement-based outcomes. The working group believes that rules-based accounting adds unnecessary complexity, encourages financial engineering and does not necessarily lead to a 'true and fair view' or 'fair presentation'.
|
We have posted the report and two related documents with the kind permission of the copyright holder, The Institute of Chartered Accountants of Scotland. Click to download:
3 April 2006: New Deloitte guide to interim financial reporting
 |
IAS 34 Interim Financial Reporting prescribes the minimum content for an interim financial report and the principles for recognition and measurement in financial statements for a financial reporting period shorter than a full financial year. Our new publication Interim Financial Reporting: A Guide to IAS 34 provides an overview of the Standard, application guidance and examples, a model interim financial report, and an IAS 34 compliance checklist. Click to Download the Deloitte Guide to IAS 34 (PDF 484k, March 2006, 60 pages). You can always find this and other Deloitte IFRS publications on our Publications Page. |
3 April 2006: The road to accrual accounting by US governmental units
 |
The International Public Sector Accounting Standards Board (IPSASB) has released an information paper on the experiences of governmental units in the United States in their transition to accrual accounting. The paper, entitled The Road to Accrual Accounting in the United States of America, outlines the development of administrative arrangements for formal standards setting over 70 years at the local, state, and federal Government levels in the US and highlights key factors shaping the standards setting structure. It also provides a detailed overview of the conversion to accrual accounting by state and local governments (there are nearly 88,000 governmental units in the US), examines the standards issued by the Governmental Accounting Standards Board (GASB) to lead and support that conversion, and identifies key milestones in the conversion process. Chapters address: |
- The Environment (includes a history of governmental accounting standards in the United States)
- The Road to Accrual-Basis Standards for State and Local Government
- Implementation Issues Associated with the Adoption of Accrual Accounting in State and Local Government
- US Accrual Standards in an International Context
- The Aftermath of the New Reporting Model
The paper was prepared by David Bean, Director of Research and Technical Activities at the GASB and staff at the GASB. It can be downloaded without charge from the IFAC Website. Click for Press Release (PDF 57k).
3 April 2006: IVSC meets with FASB
Members of the International Valuation Standards Committee (IVSC) and representatives of The Appraisal Foundation and the Toronto Valuation Accord met with members and staff of the US Financial Accounting Standards Board on Friday 10 March 2006. Discussion concentrated on the role of the IVSC and the increased use of fair value measurement in financial reporting worldwide. The discussion is reported in IVSC e-News April 2006 (PDF 130k). Here is an excerpt:
|
Both IVSC and FASB agree that as fair value measurement becomes more prevalent in financial statements, valuations that follow generally accepted valuation practices prepared by qualified valuation professionals will be needed. Accounting and valuation are two separate but complementary knowledge sets. Accounting and valuation professionals need a clear understanding of each others roles and responsibilities to foster increased synergy between the two professions.
At the meeting on 10 March, FASB discussed its preliminary plans to formally solicit input from all interested parties on the need for a single set of valuation standards with particular emphasis on who should develop valuation standards and provide related implementation guidance. In the interim, FASB encouraged the IVSC to provide continuing input on ways to adequately address valuation issues in the future, considering the potentially differing national approaches that exist currently.
|
Commenting after the meeting Joseph Vella, IVSC chairman, said, "The IVSC recognises the need to review its structure to ensure that the most appropriate mechanisms for delivering global valuation standards is in place. In the meantime the IVSC is to launch a project to develop the current international valuation standards to more adequately cover the valuation of intangible assets for financial reporting purposes."
2 April 2006: Deloitte views on IFRIC D18
We have posted the Deloitte Letter of Comment on IFRIC D18 Interim Financial Reporting and Impairment (PDF 99k). The draft Interpretation addresses a conflict between IAS 34 and the impairment reversal provisions of IAS 36 and IAS 39. While Deloitte supports the draft Interpretation as an interim solution, we believe it is "not ideal as a long-term and sustainable solution" because some aspects of IAS 34 conflict more broadly with the comparability provisions of the IASB Framework. We believe that IASB needs to address the broader issues. All past Deloitte letters of comment to the IASC and the IASB are Here.
2 April 2006: FASB issues pensions exposure draft
The United States Financial Accounting Standards Board has proposed that employers recognise the overfunded or underfunded positions of defined benefit postretirement plans, including pension plans, in their balance sheets. The so-called 'corridor approach' that allows deferral of most actuarial gains and losses would be eliminated. IAS 19 currently also allows the 'corridor approach'. The proposal would also require that employers measure plan assets and obligations as of the date of their financial statements. FASB's exposure draft is the first phase of a comprehensive project to reconsider its Statement 87 Employers' Accounting for Pensions and Statement 106 Employers' Accounting for Postretirement Benefits Other Than Pensions. A second, broader phase will comprehensively address remaining issues. The FASB said it expects to collaborate with the International Accounting Standards Board on that phase, though the IASB does not yet have the project on its agenda. Comment period ends 31 May 2006. Click for FASB News Release (PDF 30k).
2 April 2006: Agenda project pages updated
 |
We have updated the following IASB agenda project pages to reflect the discussions and decisions at the Board's March 2006 meeting: |
1 April 2006: IAS Plus newsletter on IAS 1 proposals
|
We have posted a new special edition of our IAS Plus newsletter on Proposals to Revise Presentation of Financial Statements (PDF 74k). On 16 March 2006, the IASB issued an Exposure Draft (ED) of proposed amendments to IAS 1 Presentation of Financial Statements. This newsletter provides details about the ED. The ED results from the first stage (known as 'Segment A') of the IASB's project on performance reporting and, if adopted, would bring IAS 1 largely into line with the equivalent US standard as regards the matters addressed. Under the ED's proposals, an entity would be required to present all income and expenses separately from changes in its equity that arise from transactions with its owners. Entities would have a choice of presenting income and expenses in a single statement or in two statements. An entity would also be required to include in its financial statements a statement showing its financial position (balance sheet) at the beginning of the comparative period. The IASB has requested comments on the ED on or before 17 July 2006. You can find our Past IAS Plus Newsletters Here. |
|
Print
