January

Notes from the first day of the IASB's January meeting

21 Jan 2004

To allow our home page to load more quickly, we have moved our unofficial notes from the January 2004 IASB meeting to a Separate Page. .

To allow our home page to load more quickly, we have moved our unofficial notes from the January 2004 IASB meeting to a Separate Page.

Progress on accounting standards in Indonesia

20 Jan 2004

We have updated the our page for Indonesia to report recent accounting standards developments.

At 31 December 2003, 57 accounting standards and 4 interpretations were in force. Also, exposure drafts of three standards and exposure drafts of four governmental accounting standards were outstanding at that date.

IFRS on the agenda for today's meeting of EU Finance Ministers

20 Jan 2004

The European Union's Council of Economics and Finance Ministers will meet today in Brussels.

The Preparatory Paper for the meeting, setting out the discussion agenda, states: "The Commission will continue to promote the emergence of an agreement between all stakeholders on International Accounting Standards."

Revised SEC revenue recognition guidance

19 Jan 2004

The SEC staff has recently issued Staff Accounting Bulletin 104, Revenue Recognition (PDF 348k).

SAB 104 updates the revenue recognition guidance in the Codification of Staff Accounting Bulletins that was released in May 2003. The revised guidance applies to calendar 2003 financial reports of all SEC registrants, domestic and foreign.

Webcast of IASB January meeting

18 Jan 2004

The IASB has announced that it will be testing a video Webcast system at its January Board meeting.

The meeting will be broadcast live and will also be archived. You can watch the January meeting without charge. If the tests are successful, the IASB plans to provide the Webcast service for all future London meetings, but a charge will be imposed to cover the IASB's costs.

ACCA opposes using IFRS to measure taxable income

17 Jan 2004

A study commissioned by the Association of Chartered Certified Accountants (ACCA) has concluded that aligning tax and accounting rules during the changeover period to International Financial Reporting Standards (IFRS) will bring unnecessary complications for businesses and government.

ACCA has recommended that the British government not pursue that approach. The ACCA research report, A Conceptual Framework for the Taxable Income of Businesses, and How to Apply it under IFRS, by Professor Christopher Nobes of Reading University, examines the advantages and disadvantages of conforming tax practice with financial reporting practice and concludes that tax and financial reporting should have separate rules and, therefore, be disconnected. The full report may be downloaded from ACCA's Website (PDF 248k). Click for Press Release (PDF 22k).

Asia-Pacific jurisdiction pages updated

16 Jan 2004

We have updated the following Country Pages to report recent accounting standards developments: Australia, China, Hong Kong, India, Japan, Philippines, Singapore, Taiwan. .

We have updated the following Country Pagesto report recent accounting standards developments:

We support strengthening of EFRAG

16 Jan 2004

In our (PDF 83k) on the Proposals for the Enhancement of the Role and Working Process of EFRAG, we strongly supported strengthening the role of EFRAG as compared to that which it has had in the recent years.

We wrote:

In order to strengthen EFRAG, and achieve further recognition of EFRAG by all relevant constituencies, EFRAG should become the European experts group which:

  • participates actively and effectively in the selection of an appropriate agenda for the IASB and IFRIC, working in partnership with those bodies;
  • works closely in partnership with CESR and European enforcement agencies (e.g. review panels), for European expertise and experience relating to the accounting standards.
  • In addition, the Supervisory Board should consider how to address the extensive need for implementation guidance arising as a result of more than 7,000 European companies moving to IAS in 2005. The harmonisation of accounting in Europe will not be achieved if various local standard-setters and regulators were to start issuing their own guidance and interpretations of IAS.
EFRAG (The European Financial Reporting Advisory Group) was formed in 2001 by a broad group of organisations representing the European accounting profession, preparers, users, and national standard-setters with the following goals: — to provide technical expertise to the European Commission concerning the use of IAS within the Europe, — to participate in IASB's standard setting process, and — to coordinate within the EU the development of views concerning international accounting standards.

IFRIC issues two draft interpretations for comment

15 Jan 2004

The International Financial Reporting Interpretations Committee has issued two draft interpretations – IFRIC D3 'Determining Whether an Arrangement Contains a Lease', and IFRIC D4 'Decommissioning, Restoration and Environmental Rehabilitation Funds'.

IFRIC D3

IFRIC D3 would require arrangements that do not take the legal form of leases, but that have the substance of leases, to be accounted for in accordance with IAS 17 Leases.

The types of arrangements addressed include outsourcing arrangements; contracts to supply network capacity in the telecommunications industry; take-or-pay contracts (in which purchasers must make specified payments regardless of whether they take delivery of the contracted products or services; and service concession arrangements in which a supplier (usually a private entity) provides the use of an item of infrastructure to a purchaser (usually a government).

The draft provides guidance on determining whether an arrangement is, or contains, a lease for the purpose of applying IAS 17, but it does not provide guidance on whether such leases should be classified as finance or operating leases.

IFRIC D4

IFRIC D4 would provide guidance where entities contribute to funds established to reimburse their decommissioning, restoration, or rehabilitation obligations when the costs are incurred. Such funds may be established by a single contributor to fund its own decommissioning obligations, or by multiple contributors to fund their joint decommissioning obligations.

IFRIC proposes that the contributor determine whether it has control, joint control, or significant influence over the fund by reference to the standards dealing with subsidiaries, joint ventures, associates and special purpose entities. If it does, the contributor should account for its interest in the fund in accordance with those standards. If this does not apply, and the fund does not relieve the contributor of its obligation to pay decommissioning costs, the contributor should recognise a separate asset (for rights to reimbursement from the fund) and liability (to pay decommissioning costs).

Copies may be downloaded from the IASB's Website. Comments are due by 19 March 2004.

 

IASB issues ED 6 on exploration for mineral resources

15 Jan 2004

The IASB has invited comment on its Exposure Draft ED 6, Exploration for and Evaluation of Mineral Resources.

ED 6 proposes to exempt companies engaged in exploring for and evaluating mineral resources from certain requirements of IFRSs and the IASB Framework. Those companies would be permitted to continue using, under IFRS, the accounting policies for recognising and measuring assets arising from mineral exploration and evaluation activities that were used in their most recent annual financial statements. A company that elects to use its previous accounting policies should then change those policies if, and only if, the change makes the financial statements more relevant and reliable.

In addition, ED 6 proposes indicators to be considered when identifying whether exploration and evaluation assets might be impaired. It also proposes a "cash generating unit for exploration and evaluation assets" under IAS 36 Impairment of Assets.

The proposals would be effective for annual periods beginning on or after 1 January 2005. That is, the final IFRS would be followed by European and other companies that adopt IFRS in 2005. ED 6 may be downloaded from the IASB's Website. Comment deadline is 16 April 2004. Click: Press Release (PDF 32k). Summary of ED 6.

 

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