Proposed FASB hierarchy includes IFRSs

29 Apr 2005

The US Financial Accounting Standards Board has issued an exposure draft of a proposed Statement of Financial Accounting Standards titled The Hierarchy of Generally Accepted Accounting Principles.

The GAAP hierarchy ranks the relative authority of accounting pronouncements issued by the FASB and its predecessors, the AICPA, and (for public companies) the SEC. Currently, in the United States, the GAAP hierarchy is set out in AICPA Statement on Auditing Standards No. 69 The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles. FASB proposes that a company using US GAAP may need to look to IFRSs if an issue is dealt with in IASB standards but not in the US accounting literature. Furthermore, FASB's exposure draft notes that "the IASB accords its conceptual guidance a higher standing in its hierarchy than that which the present GAAP hierarchy accords the guidance in the FASB Concepts Statements. Because the FASB's and the IASB's goal is to converge their concepts and standards, the [FASB] acknowledges that it will need to consider whether and how to converge the hierarchy for its accounting literature with that of the IASB as part of the conceptual framework project that the Board is conducting jointly with the IASB." Comment deadline is 27 June 2005. Click to:

Twelfth UK webcast update on transition to IFRSs

29 Apr 2005

The Deloitte London IFRS Centre of Excellence is running a monthly series of hour-long Internet-based IFRS technical updates, focusing on the most important international accounting standards and how they will affect UK companies.

The twelfth webcast was run on Thursday 28 April 2005 and, as a follow up to the session from 22 July 2004, focused on further issues arising from IAS 39 Financial Instruments: Recognition and Measurement. To access the recording Click Here. The recording of each session will be available on this website for a period of at least 3 to 4 weeks from the date of the presentation. Links to past sessions may be found on our United Kingdom Page. The recording is no longer available online.

McCreevy discusses convergence, equivalence

29 Apr 2005

In a (PDF 92k) on the integration of Europe's financial markets and international cooperation in New York on 20 April 2005, EC Internal Markets Commissioner Charlie McCreevy discussed, among other things, the reconciliation from IFRS to US GAAP, accounting convergence, the internal control provisions of Section 404 of the Sarbanes Oxley Act, and deregistration.

An excerpt:

The goal must be mutual recognition of equivalence. You can also call it the home-country principle. If you agree to accept each other's system as equivalent then duplicative requirements disappear. You can then operate in the other country under the rules of your home country. I think we should find more areas in our transatlantic relation where we can apply this principle. In accounting, in insurance, for securities markets and in all the other financial regulation.

CESR publishes its draft equivalency report

29 Apr 2005

The Committee of European Securities Regulators (CESR) has invited comments on its tentative conclusions that Canadian, Japanese, and US GAAP, taken as a whole, are "equivalent to IFRSs, subject to a number of additional disclosures" for the purpose of listings by non-European companies in European public securities markets.

European companies trading in European securities markets are required to start using IFRSs in 2005. Non-European companies are allowed to continue to use their national GAAPs until 2007. The European Commission is studying whether to allow Canadian, Japanese, and/or US GAAP to continue to be used after 2007 and has asked CESR for its views. The European Commission had also asked CESR to include, in its report on equivalence, a description of the enforcement mechanisms that are in place in each jurisdiction. The European Commission has asked to have CESR's final advice by 30 June 2005. CESR's comment deadline is 27 May 2005. CESR will hold an open hearing at its offices in Paris on the afternoon of 18 May 2005. Click to download:

Comments invited on due process, IFRIC

27 Apr 2005

The Trustees of the International Accounting Standards Committee Foundation (IASCF) have published for public comment two consultation documents: Due Process of IASB: Draft Handbook of Consultative Arrangements. IFRIC - Review of Operations: Consultative Document. The deadline for public comment on both documents is 31 July 2005. You can download the invitations to comment from the IASB Website.

Click for Press Release (PDF 49k).

IASB expands its SME working group

26 Apr 2005

The IASB has expanded its working group on Accounting Standards for Small and Medium-sized Entities (SMEs) to include more preparers and users of SME financial statements as well as others with a particular SME expertise.

SMEs are entities that (a) do not have public accountability and (b) publish general purpose financial statements for external users. Click for:

China Financial Reporting Update

23 Apr 2005

We have posted Deloitte's China Financial Reporting Update 2004 Year-End Review (PDF 112k).

This edition contains a comprehensive review of accounting, auditing, and corporate government standards and guidance issued during 2004 in the People's Republic of China by the Ministry of Finance, the China Securities Regulatory Commission, and the Chinese Institute of Certified Public Accountants. We will post the Chinese translation of this Update shortly. You will find past issues of this Update Here.

Notes from the IASB meeting with FASB

23 Apr 2005

On Thursday and Friday 21-22 April 2005, the IASB held a joint meeting with the US Financial Accounting Standards Board.

Click to go to our preliminary and unofficial Notes from the Joint Meeting on 21-22 April 2005.

Agenda for ARC meeting May 2005

22 Apr 2005

The Accounting Regulatory Committee of the European Commission will meet in Brussels on 20 May 2005.

The Published Agenda (PDF 17k) includes the following IFRS-related items:

  • Formal vote on adoption of amendments to IAS 39 and SIC-12
  • Formal vote on adoption of IFRS 6, Amendment to IAS 19, IFRIC 4, and IFRIC 5
  • Information about the state of play on IFRIC 3 (EFRAG has recommended that the Commission not adopt IFRIC 3 for use in Europe)
  • Acceptance of IFRSs in the US capital markets and the Constitutional review of the IASCF
  • IFRSs and European Official Statistics – presentation by Eurostat
  • IASB's Project to Develop Accounting Standards for SMEs – discussion of the Commission's draft reply to the IASB questionnaire


SEC 'roadmap' to eliminating IFRS reconciliation

22 Apr 2005

William Donaldson, Chairman of the US SEC, and Charles McCreevy, EU Internal Market Commissioner, met yesterday in Washington to discuss a range of topics of mutual interest between the SEC and the European Union, including expanding the use of high-quality global accounting standards and eliminating the reconciliation to US GAAP for IFRS filers.

An SEC press release (PDF 65k) about the meeting states:

Chairman Donaldson reaffirmed his support for the convergence program being undertaken jointly by the International Accounting Standards Board and the US Financial Accounting Standards Board. Chairman Donaldson also discussed with Commissioner McCreevy a 'roadmap' developed by SEC staff that highlights the steps needed to eliminate the US GAAP reconciliation requirement for foreign private issuers that use International Financial Reporting Standards, or IFRSs. The roadmap establishes a goal of eliminating the requirement as early as possible between now and 2009 at the latest.


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