June

UK survey shows need for more preparation for transition to IFRS

13 Jun 2003

The Institute of Chartered Accountants in England and Wales has released results of a survey of its members (in both public practice and industry) to assess the level of awareness and preparation for the introduction of IFRS in 2005. Although the majority of members surveyed were aware of the move to IFRS, the survey showed that members generally were not aware of the extent of the impact that IFRS would have in the UK: A third of respondents had little or no awareness of the publication of the EU Regulation mandating the adoption of IAS in 2005. Less than half of respondents felt they were aware of the effect IFRS would have on their company or financial statements. Two-thirds of survey participants were either "not very aware" or "not aware at all" of the IASB's timetable for issuing both new and improved standards. Only 70% of respondents who had stated that IFRS was applicable to them felt that they would definitely be prepared in time for 2005. Only one in seven respondents were aware that the British government has issued a consultation paper on whether IFRS should apply to unlisted companies in the United Kingdom. Click for ICAEW Press Release.

The full survey is available on the ICAEW's website.

Guidance on transition to Australian 'equivalents' of IFRS

13 Jun 2003

The Australian Accounting Standards Board has agreed to issue an interpretation to explain the hierarchy of pronouncements in Australian GAAP.

The AASB is planning to adopt Australian 'equivalents' of international standards that will be mandatory effective 1 January 2005. The AASB hopes to issue its revised standards by 31 March 2004. They have already exposed IAS 7, IAS 23, IAS 29, IAS 30 and IAS 41 for comment. Click for AASB Media Release (PDF 114k).

FASB will converge with IASB on debt classification

12 Jun 2003

The US Financial Accounting Standards Board has tentatively decided, as part of its short-term convergence project, to propose adoption of the positions in the IASB's Improvements Exposure Draft that: Long-term debt due within 12 months of the balance sheet date should be classified as a current liability unless an agreement to refinance the liability on a long-term basis is completed on or before the balance sheet date. Long-term debt payable on demand at the balance sheet date because the entity breached a condition of its loan agreement should be classified as current unless the lender has agreed on or before the balance sheet date to provide a grace period for rectifying the breach during which the obligation is not callable and either (a) the entity rectifies the breach within the grace period or (b) at the time that the financial statements are issued, it is probable that the breach will be rectified within the grace period. .

The US Financial Accounting Standards Board has tentatively decided, as part of its short-term convergence project, to propose adoption of the positions in the IASB's Improvements Exposure Draft that:

  • Long-term debt due within 12 months of the balance sheet date should be classified as a current liability unless an agreement to refinance the liability on a long-term basis is completed on or before the balance sheet date.
  • Long-term debt payable on demand at the balance sheet date because the entity breached a condition of its loan agreement should be classified as current unless the lender has agreed on or before the balance sheet date to provide a grace period for rectifying the breach during which the obligation is not callable and either (a) the entity rectifies the breach within the grace period or (b) at the time that the financial statements are issued, it is probable that the breach will be rectified within the grace period.

FASB proposes to restrict derecognition on transfers to QSPEs

11 Jun 2003

The US Financial Accounting Standards Board has issued an Exposure Draft proposing to restrict the circumstances in which a transferor could remove from its balance sheet financial assets that have been transferred to an off-balance sheet structure known as a qualifying special-purpose entity (QSPE).

Under the FASB proposal, an entity would not be a QSPE (and therefore the transferor would not derecognise the transferred assets) if the transferor or its affiliates or agents is obligated to deliver additional cash or other assets to fulfill the SPE's obligations to beneficial interest holders (except certain servicing advances and forward contracts to transfer additional financial assets). The IASB is addressing derecognition of financial assets in its project to Amend IAS 39, although it is not considering a QSPE approach. Also, the IASB has on its agenda a project on Consolidation and Special Purpose Entities. The IASB has not yet established a timetable for that project.

Toronto symposium on global financial reporting set for October

10 Jun 2003

The Canadian Accounting Standards Board (ASB) will sponsor an International Summit on Financial Reporting in Toronto on 21 October 2003, the day before the start of the IASB's three-day Board meeting in that city.

Speakers include the chairmen of the IASB, FASB, and the ASB. Click for More Information (PDF 133k).

New Zealand will continue NZ-GAAP based on IFRS

09 Jun 2003

Rather than replacing national GAAP with IFRS, as is being done for listed companies in Europe, the Financial Reporting Standards Board of New Zealand (FRSB) has begun a programme of adopting IFRS by converting them into NZ Financial Reporting Standards (FRS), with minor amendments generally in the form of additional requirements and guidance.

For each international standard to be adopted in New Zealand, the FRSB will publish an exposure draft containing a summary of the main differences between the international standard and current NZ FRS together with a marked-up version of the international standard showing any modifications, additional requirements, and guidance proposed by the FRSB. It is likely that auditors' reports will refer to conformity with NZ Financial Reporting Standards. Click for More Information.

 

Proposal to let foreign companies use IFRS in Canada

08 Jun 2003

The Canadian Securities Administrators have invited comments on a proposal (NI 52-107 and 52-107CP), Acceptable Accounting Principles, Auditing Standards and Foreign Currency, that would allow foreign issuers and foreign registrants to use either IFRS or US GAAP without reconciliation to Canadian GAAP.

Foreign companies would also be allowed to use their national GAAP if it covers "substantially the same core subject matter as Canadian GAAP", but with a reconciliation to Canadian GAAP. Canadian companies registered with the US SEC would also be permitted to use US GAAP. If an SEC issuer previously used Canadian GAAP and changes to US GAAP, it would be required to reconcile to Canadian GAAP for two years. In all cases, audits in accordance with either US GAAS or ISAs are required. Comments due 14 August 2003. Click to Download Proposal (PDF 167k).

US Congressional committee holds stock option hearings

06 Jun 2003

On 3 June 2003, the Committee on Financial Services of the US House of Representatives held a public hearing on The Accounting Treatment of Employee Stock Options.

Among those testifying were Paul A. Volcker, Chairman of the IASC Foundation Trustees, and Robert H. Herz, Chairman of the US Financial Accounting Standards Board. You can download their (and other) testimony at the Committee's Website. You can also find their testimony on our Resources Page. The committee held the hearing in connection with proposed legislation that has been introduced in the House of Representatives (H.R.1372, the "Broad-Based Stock Option Plan Transparency Act of 2003") that would, in effect, impose a three-year moratorium on SEC recognition of "any new accounting standards related to the treatment of stock options".

Terms of four IFRIC members extended to 30 June 2006

06 Jun 2003

The Trustees of the IASC Foundation have renewed the terms of four members of IFRIC, including Ken Wild, a partner in Deloitte & Touche (United Kingdom) and our firm's IFRS Global Leader.

The 12 IFRIC members serve staggered three-year terms. Click for IASCF Press Release (PDF 16k).

IFRIC agenda projects section of IASPlus reorganised

05 Jun 2003

We have revamped the section of this website that has information about agenda decisions and projects of the International Financial Reporting Interpretations Committee (IFRIC).

Our previous meeting-by-meeting summary of IFRIC deliberations has been replaced by individual pages for each IFRIC agenda project. Within each page is a chronological summary of deliberations on that issue, both by IFRIC and, in some cases, by the IASB. We have created an overall Index Page for IFRIC Issues (with links to individual project summaries).

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.