Mr. Gelard

Mr. Leisenring

Following a recommendation of their nominating committee, the Trustees of the International Accounting Standards Committee Foundation, under which the IASB operates, voted unanimously to reappoint three members of the International Accounting Standards Board to five-year terms beginning 1 July 2005 and ending 30 June 2010. The three Board members are Robert Garnett, Gilbert Gelard, and James Leisenring. Click for Press Release (PDF 124k).

Commissioner McCreevy speaks about IFRS issues

06 Apr 2005

In a speech to the Institute of Chartered Accountants in England and Wales in Brussels yesterday, Charlie McCreevy, the EU Commissioner for Internal Market and Services, discussed a range of issues relating to IFRSs, including: .

In a speech to the Institute of Chartered Accountants in England and Wales in Brussels yesterday, Charlie McCreevy, the EU Commissioner for Internal Market and Services, discussed a range of issues relating to IFRSs, including:

  • Convergence of US GAAP and IFRSs
  • Convergence of Japanese GAAP and IFRSs
  • EC consideration of the equivalence of US, Canadian, and Japanese GAAPs to IFRSs
  • The EC 'carve-out' of two sections of IAS 39
  • Independence of the IASB
  • The need for interpretations
  • Enforcement of IFRSs
  • Auditor oversight
  • The need for international regulatory cooperation in a globalised world
With regard to interpretations, Commissioner McCreevy commented:

Standards must not be undermined by a myriad of interpretations leading to a rules-based system. I very clearly see that the important players, such as the European Financial Reporting Advisory Group (EFRAG), CESR, and the national standard setters, have to ensure that this does not happen. And we need to consider how the links between a strengthened EFRAG and the IASB can be better defined.

Click to (PDF 77k). See also our news story of 5 April 2005 about a related speech by the Commissioner.

Enforcement of accounting standards in UK

06 Apr 2005

The United Kingdom Financial Reporting Review Panel (FRRP) has reached agreements with both the UK Financial Services Authority and Inland Revenue, and also has adopted new operating procedures, all aimed at enhancing the enforcement of financial reporting standards in the UK.

Those steps coincide with changes to the Companies Act to give the FRRP statutory power to require companies, directors, and auditors to provide documents, information, and explanations relevant to a question about whether accounts comply with reporting requirements. Link to the FRRP Press Release.

Spotlighting Deloitte's IFRS experts on IAS Plus

06 Apr 2005

At Deloitte our success is due to the expertise of our people.

Recognising this, we have added a section at the bottom of the left-hand column of this home page to Spotlight a Deloitte IFRS Expert. We plan to focus on a different person every few weeks. Our first expert is Ken Wild, Deloitte's Global Leader for IFRSs. We also have placed a permanent link under 'Resources' near the top of the left-hand column.

New Global Offerings Services newsletter

05 Apr 2005

We have posted the (PDF 249k).

Global Offerings Services is a global team of Deloitte practitioners assisting non-US companies and non-US practice office engagement teams in applying US and International accounting standards (that is, US GAAP and IFRSs) and in complying with the SEC's financial reporting rules. Past GOs Newsletters are Here.

EU Commissioner urges US recognition of IFRSs

05 Apr 2005

In a speech in Madrid on Competitiveness and Growth in the EU on 1 April 2005, Charlie McCreevy, the European Commissioner for Internal Market and Services, urged US recognition of IFRS financial statements submitted to the SEC without the need for reconciliation to US GAAP.

He noted that with respect to auditing standards "the US authorities have broadly accepted the equivalence of the approach of EU Member States' audit requirements." He said he would raise the issue of mutual recognition of accounting standards with the SEC during a trip to Washington later this time, including insistence on agreement on a framework and a timetable. Click to (PDF 76k). Here is an excerpt:

Since the beginning of this year, two major sets of standards are being applied globally: US GAAP and International Financial Reporting Standards, which are being applied by listed European companies since the beginning of this year. We have to find a way to free businesses which are active on both sides of the Atlantic from the costly requirement to publish their accounts according to both sets of rules and then having to square them up.

Up to now, US companies listed in Europe were able to publish their accounts in US GAAP. Under our new Prospectus and Transparency Directives, we must come to a decision about the equivalence of US GAAP to allow them to continue to publish their accounts in US GAAP. The Commission will base its decision on a technical report by the Committee of European Securities Regulators due in the summer.

But this is not a one-way street – it is only reasonable for European companies to expect that US regulators will make similar efforts to judge the equivalence of our international standards with US GAAP, and once this is done, to release companies from the costly burdens of converting standards. We intend to work closely with the SEC and standard setters to find a mutually acceptable road map through this problem.

Update on extended use of IFRSs in Italy

04 Apr 2005

On 25 February 2005, the Italian Council of Ministers approved a Legislative Decree regarding the options provided by Article 5 of Regulation 1606/2002 of the European Parliament (the EU Accounting Regulation) to permit or require the adoption of the International Financial Reporting Standards (which includes IASs and Interpretations) in respect of annual accounts and of non-publicly-traded companies.

As a result, IFRSs will be applied in Italy as follows:

Listed companies, issuers of financial instruments widely distributed among the public, banks, stock broking companies, fund management companies, regulated financial institutions
  • Consolidated financial statements: IFRSs compulsory from 2005
  • Separate financial statements: IFRSs optional from 2005. IFRSs compulsory from 2006.
Insurance companies
  • Consolidated financial statements: IFRSs compulsory from 2005
  • Separate financial statements: IFRSs not permitted in 2005. IFRSs compulsory from 2006 only for listed companies that do not prepare consolidated financial statements
Subsidiary and associated companies of the above companies, and other companies that prepare consolidated financial statements
  • Consolidated financial statements: IFRSs optional from 2005
  • Separate financial statements: IFRSs optional from 2005
Companies other than the above Individual financial statements: IFRSs optional from a year to be determined by the Ministry for the Economy and Justice
Small companies preparing financial statements in abbreviated form Individual financial statements: IFRSs not permitted

Summary of ARC meeting 25 February 2005 is available

04 Apr 2005

The European Commission has released the summary record (notes) from the meeting of the Accounting Regulatory Committee on 25 February 2005. At that meeting, among other things, the ARC endorsed IFRIC 2 for use in Europe; received a report from IASC Foundation Chairman Paul Volcker on the IASCF's current constitution review and discussed the Commission's draft comment letter; discussed the date of application of new and revised IFRSs and interpretations in Europe; and heard reports about IFRIC 3, the fair value option, and interest rate margin hedging.

Click to (PDF 53k).

IASCF loses right to Russian translations of IFRSs

04 Apr 2005

The IASC Foundation has lost a legal battle over who owned the copyright to the 1997, 1998, and 1999 Russian translations of IASs – the IASC Foundation or a company that had paid the IASCF a £25,000 fee for the right to prepare and publish the translation.

The High Court of Justice in London has ruled that the copyright belongs with the translation company ZAO Askeri-ACCA. The IASCF has also been ordered to pay the translation company's legal costs. Click to Download the High Court Judgement (PDF 63k). Subsequent to the judgement, the IASCF was denied the right to appeal, and the Russian company has sued the IASCF for damages.

Australian Accounting Alert on tax consolidation

04 Apr 2005

Deloitte (Australia) has published an Australian Accounting Alert covering a new Australian interpretation, (PDF 49k).

The effect of the interpretation is as follows:
  • each entity in the tax-consolidated group recognises its own deferred tax balances and income tax expense;
  • the head entity recognises the group's aggregate current tax liability and the benefit of any tax losses arising in the tax-consolidated group; and
  • where amounts payable under any tax-funding agreement that is in place do not mirror these requirements, the net difference is treated as an equity transaction.
The Deloitte Alert notes that this approach is "radically different" from that currently required by a previous interpretation. The AASB is expected to consider the interpretation for ratification at its meeting on 4-5 May 2005. Links to all past Alerts are Here.

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