We have updated our pages for the following projects to reflect Board decisions earlier this week:

• Revisions to IAS 39
• Improvements to Existing Standards
• Business Combinations
• Insurance Contracts

Click to go to Summary of IASB's 18-20 December 2001 Meeting. It had originally been presented as several lengthy news items.

Signatories include Wolfgang Grewe, Managing Partner, Deloitte & Touche, Europe and Africa. The Letter, which was published in the Financial Times, said:

A European capital market must be strong if it is to be one of the leading sources of global finance. The application of consistent financial reporting standards is step in the right direction and should be a public interest priority. We wish to record the full support of our respective firms for the Commission's vision for a strong, competitive and efficient capital market for Europe including the application of IAS.

ECOFIN agreed that this requirement should go into effect in 2005 at the latest. However, companies that currently apply US GAAP as their primary financial reporting standards would not have to apply IAS until 2007. The 2007 extended deadline for companies using US GAAP was inserted at the request of the German government. EU Internal Market Commissioner Frits Bolkestein said:

The International Accounting Standards Regulation will introduce a new era of transparency and put an end to the current Tower of Babel in financial reporting. It will help European firms to compete on equal terms when raising capital on world markets and allow investors and other stakeholders to compare companies' performance against a common standard. However, I regret the Ministers' decision to grant some big companies the right to apply US GAAP standards until 2007, two years after the Lisbon deadline for completing the Internal Market in financial services.

The Legal Affairs Committee of the European Parliament met on 18-19 December 2001 to discuss the IAS regulation. The Council can adopt a Common Position on the Regulation once it has received an Opinion from the European Parliament.

The approved Interpretations are as follows:

• SIC-27 Evaluating the Substance of Transactions in the Legal Form of a Lease
• SIC-28 Business Combinations – 'Date of Exchange' and Fair Value of Equity Instruments
• SIC-29 Disclosure – Service Concession Arrangements
• SIC-30 Reporting Currency – Translation from Measurement Currency to Presentation Currency
• SIC-31 Revenue – Barter Transactions Involving Advertising Services
• SIC-33 Consolidation and Equity Method – Potential Voting Rights and Allocation of Ownership Interests
• SIC-34 Financial Instruments - Instruments or Rights Redeemable by the Holder (was approved, but an effective date has not yet been set).

SIC-32 Intangible Assets - Web Site Costs was tentatively approved. However, the Board objected to the lack of convergence of the paragraphs dealing with the graphical design of a website with other similar literature on the topic. For instance under US GAAP, EITF 00-2, Accounting for Website Development Costs, allows for the capitalisation of these costs. The SIC proposed to expense the cost of graphical design as incurred. The SIC was urged to take another look at these specific paragraphs and try to seek further convergence. No objections to the other paragraphs were made.

IFRIC is expected to meet six times a year to develop interpretive guidance on IASB's standards. IFRIC members are:

• Junichi Akiyama, Professor, Tama University, Japan
• Phil Ameen, Vice President and Comptroller, General Electric Company, United States
• Christian Chiarasini, Partner, Andersen, France
• Claudio de Conto, General Manager Administration and Control, Pirelli S.p.A., Italy
• Clement K. M. Kwok, Managing Director and Chief Executive Officer, The Hongkong and Shanghai Hotels, Limited, Hong Kong, China
• Wayne Lonergan, Managing Director, Lonergan Edwards & Associates, Australia
• Domingo Mario Marchese, Partner, Marchese, Grandi, Meson & Asoc., Argentina
• John T. Smith, Partner, Deloitte & Touche, United States
• Mary Tokar, Partner, IAS Advisory Services, KPMG International, United States
• Leo van der Tas, Partner, Ernst & Young, The Netherlands
• Patricia Walters, Senior Vice President, Association for Investment Management and Research, United States
• Ian Wright, Partner, PricewaterhouseCoopers, United Kingdom

Kevin Stevenson, who will become IASB's Director of Technical Activities in February, was appointed the non-voting Chairman of IFRIC.

Agenda projects and issues to be discussed are:

• Business Combinations
• Improvements to Existing IASB Standards:
  • IAS 1, Presentation of Financial Statements
  • IAS 8, Net Profit or Loss for the Period, Fundamental Errors and Changes in Accounting Policies
  • IAS 15, Information Reflecting the Effects of Changing Prices -- Proposed Withdrawal
  • IAS 17, Leases
  • IAS 27, Consolidated Financial Statements and Accounting for Investments in Subsidiaries
  • IAS 28, Accounting for Investments in Associates
• Approval of Final SIC Interpretations
• Amendments to IAS 39, Financial Instruments: Recognition and Measurement
• Venture Capital Investments
• Insurance Contracts

He said that "Asia needs to develop a unified strategy on how we should deal with the IASB". The IASB is "Anglo-Saxon dominated -- 10 Board members are Anglo-Saxon.... The Americans want to change IAS to be like US GAAP". A key focus of the symposium was on how Chinese Accounting Standards should take IAS into account. Addressing how Japan is doing that, Mr. Yamada said that "Japan has adopted some IAS principles in Japanese GAAP, and the Japanese securities commission is considering allowing IAS financial statements for foreign companies." However, Mr. Yamada said, a major concern of the securities commission is whether and how the Japanese government can enforce proper application of IAS on foreign companies and, if there is some failure in the IAS financial statements of a foreign company, what remedies are available in Japan.

The PSC is engaged in a programme of developing International Public Sector Accounting Standards (IPSAS) based, as appropriate, on IAS. An interssting recent development is that PSC is proposing to change the definition of segment from that used in IAS 14 because "segments constructed for internal reporting purposes would not always be appropriate for external reporting purposes and entities should not be able to avoid reporting information about segments in their external reports simply because they do not report internally on a segment basis". Click for More Information about the PSC.

If a Singapore-incorporated company is also listed on a foreign exchange that requires foreign GAAP financial statements, and the Singapore Stock Exchange (SGX) accepts those foreign-GAAP statements, then that company would not be required also to publish or reconcile to FRS(S) statements. The Singapore Registry of Companies and Businesses may permit unlisted companies to use alternative standards that are allowed by the SGX.