June

Detailed summary of IFRS 1 on first-time adoption

20 Jun 2003

We have created a new page in our summaries of standards that reflects the History and Details of IFRS 1, First-time Adoption of International Financial Reporting Standards.

We have also posted a four-page (PDF 49k). See the IASB's Website to purchase IFRS 1.

IASB issues IFRS 1 on first-time adoption

19 Jun 2003

The International Accounting Standards Board has issued IFRS 1 'First-time Adoption of International Financial Reporting Standards'.

IFRS 1 sets out the procedures that an entity must follow when it adopts IFRS for the first time as the basis for preparing its general purpose financial statements. IFRS 1 applies if an entity's first IFRS financial statements are for a period beginning on or after 1 January 2004. Earlier application is encouraged.

A brief overview:

 

Brief overview of IFRS 1

For an entity adopting IFRS for the first time in its annual financial statements for the year ended 31 December 2005

  • Select accounting policies based on IFRS in force at 31 December 2005.
  • Prepare at least 2005 and 2004 financial statements and restate the opening balance sheet (beginning of the first period for which full comparative financial statements are presented) by applying the 31 December 2005 IFRS retrospectively, except in the limited circumstances specified in IFRS 1.
    • Since IAS 1 requires that at least one year of comparative prior period financial information be presented, the opening balance sheet will be 1 January 2004 if not earlier.
    • If a 31 December 2005 adopter reports selected financial data (but not full financial statements) on an IFRS basis for periods prior to 2004, in addition to full financial statements for 2004 and 2005, that does not change the fact that its opening IFRS balance sheet is as of 1 January 2004.
  • There are some important exceptions to the general restatement and measurement principles: Individually optional exceptions:
    • Business combinations that occurred before opening balance sheet date
    • Intangible assets, property, plant, and equipment and investment property carried under the cost model
    • Employee benefits - actuarial gains and losses
    • Accumulated translation reserves
    Mandatory exceptions:
    • IAS 39 - Derecognition of financial instruments
    • IAS 39 - Hedge accounting
    • Information to be used in applying IFRS retrospectively
    [We have posted a more detailed summary of IFRS 1. See news story 20 June 2003]

 

Notes from the third day of the IASB's June 2003 meeting

19 Jun 2003

We have combined our notes from the three days of the IASB's June 2003 Board meeting in Rome, Italy into a Single Page. .

We have combined our notes from the three days of the IASB's June 2003 Board meeting in Rome, Italy into a Single Page.

FASB will converge with IASB on EPS calculations

19 Jun 2003

At its 11 June 2003 meeting, the US Financial Accounting Standards Board agreed with the IASB decision to remove the issues of joint ventures, proportionate consolidation, and hyperinflationary economies from the scope of their convergence project.

The FASB also added issues relating to earnings per share to the project scope and decided the following:
  • For annual and year-to-date computation of diluted EPS, the dilutive effect of options and warrants should be reflected by applying the treasury stock method for the year-to-date period independently from any interim computation. Options and warrants will have a dilutive effect under the treasury stock method only when the average market price of the common stock for the year-to-date period exceeds the exercise price of the options and warrants. The IASB has adopted a similar year-to-date approach.
  • When an entity has issued a contract that may be settled either in shares or in cash at the entity's option, the entity should presume that the contract will be settled in shares if the effect is dilutive. That presumption may not be overcome, regardless of past practice or stated policy to the contrary. While the IASB Improvements ED had proposed that the presumption be rebuttable, the IASB decided at its February 2003 meeting that the presumption may not be overcome.

Notes from the second day of the IASB's June 2003 meeting

18 Jun 2003

We have combined our notes from the three days of the IASB's June 2003 Board meeting in Rome, Italy into a Single Page. .

We have combined our notes from the three days of the IASB's June 2003 Board meeting in Rome, Italy into a Single Page.

Notes from the first day of the IASB's June 2003 meeting

17 Jun 2003

We have combined our notes from the three days of the IASB's June 2003 Board meeting in Rome, Italy into a Single Page. .

We have combined our notes from the three days of the IASB's June 2003 Board meeting in Rome, Italy into a Single Page.

Cross-border accounting and auditing issues

17 Jun 2003

US SEC Commissioner Roel C.

Campos spoke in Brussels on Embracing International Business in the Post-Enron Era before the Centre for European Policy Studies on 11 June. He reviewed international accounting- and auditing-related matters such as principles-based standards, accommodations for foreign market participants in implementing the Sarbanes-Oxley Act, accommodations for foreign auditing firms by the Public Company Accounting Oversight Board, the convergence project of the IASB and the FASB, and acceptance of International Accounting Standards in the United States. Link to Full Text of Commissioner Campos's Remarks.

Comparison of IFRS and Canadian GAAP updated

16 Jun 2003

We have updated our Comparison of IFRS and Canadian Accounting Pronouncements to reflect all pronouncements issued as of 30 April 2003. The comparison is taken from Section 1501 of the Handbook of the Canadian Institute of Chartered Accountants and is presented with the CICA's permission (and our thanks).

You will find links to comparisons of IFRS and other national GAAPs Here.

SEC staff guidance non-GAAP financial measures

14 Jun 2003

The SEC staff has responded to 33 questions on the disclosure of (PDF 111k).

Five of the Q&A; are specifically intended for foreign private issuers, addressing issues such as income statement subtotals and earnings per share amounts that are expressly permitted or required by a foreign GAAP but that are not calculated consistently with those permitted or required by US GAAP. The Q&A; are based on a (PDF 304k) that the SEC adopted on 22 January 2003 pursuant to the Sarbanes-Oxley Act of 2002.

IASB June 2003 meeting starts on Monday

14 Jun 2003

The IASB will meet in Rome, Italy, on 16-18 June 2003. The Standards Advisory Council will meet at the same location on 19-20 June.

Click here for Details and Preliminary Agendas for the meetings. We will post unofficial summaries of each day's discussions.

Correction list for hyphenation

These words serve as exceptions. Once entered, they are only hyphenated at the specified hyphenation points. Each word should be on a separate line.