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August

IASB improvements will be adopted in Australia

29 Aug 2002

The Australian Accounting Standards Board has proposed to harmonise Australian accounting requirements with any revised International Financial Reporting Standards (IFRS) resulting from IASB's Improvements ED.

That could result in a diverse range of changes, including the disclosure of forward looking information and the measurement of transactions based on 'functional currencies'. The latest Australian Accounting Alert published by Deloitte Touche Tohmatsu Australia has details.

New project page: Liabilities and revenue recognition

28 Aug 2002

IASB's work programme now includes a project on Liabilities and Revenue Recognition.

The project addresses certain key interrelated conceptual issues that underlie financial reporting:
  • The distinction between liabilities and equity.
  • Liability recognition, including guidance on whether an item meets the definition of a liability and, if so, the criteria for recognising liabilities in the financial statements.
  • General principles for determining when revenue should be recognised in the financial statements. IASB staff are working directly on the revenue recognition component of the project. The IASB is working with the US Financial Accounting Standards Board on the liability definition and recognition components.

SEC requires certifications by non-US CEOs and CFOs

28 Aug 2002

Yesterday, the US Securities and Exchange Commission voted unanimously to require CEOs and CFOs of all registered companies to personally certify that their companies' annual and quarterly financial statements do not contain any untrue statement of a material fact, do not omit a material fact, and fairly present in all material respects the financial condition and results of operations of the issuer.

The new rules, which are effective today, apply to the principal executive and financial officers of any issuer that files quarterly and annual reports with the Commission under either Section 13(a) or 15(d) of the Exchange Act, including foreign private issuers and small business issuers. Click for (PDF 57k).

Deloitte Touche Tohmatsu policy on IFRS terminology

28 Aug 2002

The new Preface to International Financial Reporting Standards (IFRSs), issued in April 2002, states that "when the term IFRSs is used..., it includes standards and interpretations approved by the IASB, and International Accounting Standards (IASs) and SIC interpretations issued under previous Constitutions." Consistent with the Preface, Deloitte Touche Tohmatsu is recommending that its clients' financial statements indicate, in the "basis of preparation" note, that the financial statements are prepared on the basis of IFRS, rather than IAS.

In that case, the Firm's audit report will also refer to IFRS. Because no final IFRS has actually yet been issued by IASB, DTT will not yet insist that its clients refer to IFRS. If a client chooses to continue to refer to IAS, the Firm's audit report will be consistent with the client's terminology. However, as soon as the first new IFRS is issued and effective, both the client's financial statements and the Firm's audit report must adopt the IFRS terminology.

Two new Deloitte & Touche publications

27 Aug 2002

The entire July-August 2002 issue of the Deloitte & Touche newsletter (PDF 232k) addresses Accounting for Revenue in Today's Business Environment.

The newsletter discusses FASB, SEC, and AICPA accounting requirements for revenue recognition, particularly those that apply to arrangements involving multiple elements or up-front or contingent fees.
  • The entire 18 July 2002 issue the Deloitte & Touche newsletter (PDF 61k) summarises and analyses FASB's Exposure Draft of a Proposed Interpretation, Consolidation of Certain Special-Purpose Entities.
  • Valuation standards proposed for real property

    27 Aug 2002

    The International Valuation Standards Committee has issued an exposure draft on Mass Appraisal of Real Property.

    IVSC currently has three other EDs outstanding, covering the valuation of Agricultural Property, of Personal Property, and of Mortgage Portfolios. Comments on all four are requested by end December 2002. The EDs may be downloaded from IVSC's Website. IVSC has also announced that the next edition of its bound volume of International Valuation Standards – due early 2003 – will be made available without charge on its website; printed copies will also be available for purchase.

    Agenda for IASB September meeting

    27 Aug 2002

    IASB has added a fourth day to its meeting next month, now scheduled for 17-20 September at the offices of the US Financial Accounting Standards Board in Norwalk, Connecticut.

    The IASB Board will meet on its own on 17, 19, and 20 September to discuss Share-Based Payment, Business Combinations (Phase I if required, and Phase II), Reporting Performance, Convergence, Revenue and Liability Recognition, IFRIC Matters, and Insurance Contracts. On 18 September, IASB and FASB will hold a joint meeting. Click for Details.

    New Accounting Roundup newsletter posted

    26 Aug 2002

    We have posted the 26 August 2002 edition of the Accounting Roundup newsletter from Deloitte & Touche USA.

    It covers stock options, sworn statements to SEC by CEOs and CFOs, sustainability reporting, IASB exposure drafts, corporate governance reforms at the NYSE, and recent Deloitte & Touche publications on revenue recognition and special purpose entities.

    Agenda for the 28-29 August IFRIC meeting is announced

    18 Aug 2002

    The International Financial Reporting Interpretations Committee will meet on 28 and 29 August at the IASB's offices in London to discuss the following issues: Derivatives on interests in subsidiaries, associates, and joint ventures.

    Such derivatives arise when a parent or investor contracts either to buy some of the shares in the investee that it does not already own or to sell some of its present holding.
  • IAS 19: Employee Benefits – measurement of the pension asset ceiling when the employer expects refunds and reductions in future contributions.
  • Revenue with multiple elements – revenue recognition when the seller agrees to deliver or perform multiple products, services, and/or rights to use assets.
  • Rights of use – when do rights of use constitute a lease transaction that should be accounted for in accordance with IAS 17, Leases.
  • Transactions with owners and common control transactions.
  • Changes to IASB's project timetable

    17 Aug 2002

    IASB has indicated that target dates for publications on several active projects have been postponed: Exposure Draft (ED) on Business Combinations is now expected in 4th quarter 2002, with a final Standard in the second half of 2003. ED on Activities of Financial Institutions is now planned for 1st quarter 2003, with a final Standard by the end of 2003. The Insurance project has been split into two phases.

    The first phase will focus on presentation and disclosure, application of IAS 39 to some insurance contracts, and eliminating a limited number of existing practices that are inconsistent with the IASB Framework, including elimination of catastrophe and equalisation provisions and offsetting of reinsurance. The ED for Phase 1 is now planned for 1st quarter of 2003, with a final Standard in 2004. Phase 2 will develop a comprehensive standard for insurance contracts (timetable not yet established).
  • Final Standards resulting from the Improvements Project and Amendments to IAS 32 and 39 are still on target for 1st quarter 2003.
  • Click for our complete Project Timetable.

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