June

Board meeting agenda for 17-19 June is announced

06 Jun 2002

The IASB will discuss the following projects at its Meeting on 17-19 June 2002 in Berlin: Business Combinations (Phase 2) Convergence Issues Insurance Contracts - Renewal Premiums Reporting Performance Share-Based Payment - Measurement .

The IASB will discuss the following projects at its Meeting on 17-19 June 2002 in Berlin:

  • Business Combinations (Phase 2)
  • Convergence Issues
  • Insurance Contracts - Renewal Premiums
  • Reporting Performance
  • Share-Based Payment - Measurement

Business Combinations: Application of the purchase method

06 Jun 2002

At its April 2002 meeting, the Board voted to add to its agenda the 'application of the purchase method' portion of Phase 2 of the Business Combinations project.

We have created a separate Project Page for Phase 2 of the business combinations project. Information about Phase 1 remains on the old page.

Goldman Sachs CEO calls for global standards, fair value accounting

06 Jun 2002

In a presentation to the National Press Club in Washington, Henry M.

Paulson, Jr., CEO of Goldman Sachs, called for major changes in how public companies are run, audited, and regulated, and for convergence of global accounting systems:

  • Reform of the U.S. Rules-Based Accounting System: This is where the most change is needed, Mr. Paulson said. Today, US GAAP accounts for the vast majority of the world's economic activity, and is generally viewed as the best accounting system in the world. The 'European system', which is less rule oriented and more judgment based, is clearly different and successful in its own right. The goal should be convergence of accounting systems, incorporating the best from both models. To do this, we need a new approach to standard setting.
  • A Long Hard Look: Mr. Paulson encouraged the SEC to "take a long, hard look at how accounting standards are set in the US," including governance of FASB, selection of FASB members, the FASB standards-setting process "with all of its time delays", and its resources.
  • Fair Value Accounting: Mr. Paulson urged the FASB to review historical cost accounting which, he said, is "hopelessly antiquated for companies primarily engaged in financial services or for companies heavily involved with financial instruments, such as Enron. Instead of requiring such companies to record the current, fair market value of all financial assets and liabilities, the historic cost model allows them to record certain financial assets and liabilities at their historic cost. And while the value of financial instruments can vary greatly with the fluctuations of the market, institutions that use historic cost methodology -- primarily banks -- are not required to account for those movements in their financial statements. The result is that investors, regulators and the media have no way of quantifying the real economic impact" of these instruments.

IASB will meet with Advisory Council June 20-21

06 Jun 2002

Topics on the agenda for the IASB Meeting with the Standards Advisory Council on 20-21 June are: Business Combinations (Phase 2) Convergence IASB Agenda Proposals IASC Foundation Training Proposal IFRIC Activities Insurance Contracts Reporting Performance Review of the Financial Reporting Environment Share-Based Payment .

Topics on the agenda for the IASB Meeting with the Standards Advisory Council on 20-21 June are:

  • Business Combinations (Phase 2)
  • Convergence
  • IASB Agenda Proposals
  • IASC Foundation Training Proposal
  • IFRIC Activities
  • Insurance Contracts
  • Reporting Performance
  • Review of the Financial Reporting Environment
  • Share-Based Payment

IASB will hold a seminar on share-based payment

05 Jun 2002

IASB will conduct a Seminar on Share-Based Payment (including accounting for stock options) in conjunction with its meeting in Berlin later this month.

The seminar will be held on Tuesday, 18 June 2002 at 15:00 at the Forum der Konrad-Adenauer-Stiftung, Tiergartenstrasse 35, Berlin. Speakers will be IASB Chairman Sir David Tweedie; Timothy Plaut, Head of the Frankfurt Office of Goldman Sachs; and Professor Dr. Eberhard Scheffler, Member of the German Accounting Standards Board. Their presentations will be followed by a panel discussion. Click for:

IOSCO cautions on non-GAAP earnings measures

05 Jun 2002

The IOSCO Technical Committee has issued a "Cautionary Statement" urging issuers, investors, and other users of financial information to use care when presenting and interpreting non-GAAP measures of results.

These measures are often identified by such terms as operating earnings, cash earnings, earnings before one-time charges, EBITDA (earnings before interest, taxes, depreciation, and amortization), adjusted earnings, and pro forma net income. The IOSCO statement "reminds issuers of the responsibility in all instances to ensure that the information they provide to the public is not misleading. Selective editing of financial information may be misleading if it results in the omission of material information. Issuers are cautioned that regulatory actions may be taken if information is disclosed in a manner considered misleading." Click for Full Text of IOSCO Statement (PDF 44k).

EC proposes revised accounting directives

04 Jun 2002

The European Commission has proposed to amend the existing European Union Accounting Directives as part of its plan to create an integrated financial services market in Europe.

The proposal complements the IAS Regulation, due for final adoption by the Council in the next few days, that will require all EU companies listed on a regulated market to use IAS from 2005 onwards and will allow Member States to extend the IAS requirement to all companies. The proposed changes will remove all inconsistencies between the Directives and IAS in existence at 1 May 2002.

Click for:

 

EC adopts auditor independence recommendations

04 Jun 2002

The European Commission has adopted non-binding recommendations regarding auditor independence.Click for: Text of recommendations (PDF 168k) Press Release (PDF 42k) .

The European Commission has adopted non-binding recommendations regarding auditor independence.Click for:

SEC likely to propose rules on completeness of disclosures

03 Jun 2002

In a (PDF 54k) before the Rocky Mountain Securities Conference, Alan L.

Beller, the new head of the US SEC's Division of Corporation Finance, revealed a proposal for increased accountability of individual corporate leaders:

We will be recommending to the Commission in the near future that it propose rules that will require [individual corporate] leaders to certify that everything they know that they believe is important to investors has been disclosed in a company's periodic reports. This is a simple but powerful approach. We believe that it will increase involvement of corporate leaders in disclosure, make them focus on what they themselves consider important and improve the overall quality of a company's reports.

FEE position paper on accounting and auditing in Europe

03 Jun 2002

The European Federation of Accountants (FEE) has published a Position Paper on the Role of Accounting and Auditing in Europe.

The report identifies a series of action items in light of recent high profile international business failures and concerns about the current state of corporate governance and financial reporting in Europe. Click for More Information.

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