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EC to study IFRSs and profit distribution

23 Dec 2005

The European Commission's Internal Market Directorate has invited public comment on future priorities for the Action Plan on the Modernisation of Company Law and Corporate Governance.

Comment deadline is 31 March 2006. While the issues addressed in the consultation generally do not relate to accounting, the following point is noted regarding a study on the implications of IFRSs on profit distribution:

On 13 August 2005, the Commission published a call for tender for a feasibility study on alternative to capital maintenance regime as established by the Second Company Law Directive and the examination of the implications of the new EU-accounting regime on profit distribution. The terms of reference of the feasibility study will be re-examined by the members of the Advisory Group on Company Law and Corporate Governance and a further call for tender will be published in early 2006.

Click to download:

Wording for stating compliance with IFRSs in EU

23 Dec 2005

The European Commission has adopted the following wording for use in the notes to the accounts and in the audit reports of companies subject to the EU Regulation 1606/2002/EC (the 'IAS regulation'): "in accordance with International Financial Reporting Standards as adopted by the EU" or "in accordance with IFRSs as adopted by the EU". This wording has been posted to the Commission's website as part of the (PDF 29k). .

The European Commission has adopted the following wording for use in the notes to the accounts and in the audit reports of companies subject to the EU Regulation 1606/2002/EC (the 'IAS regulation'):

  • "in accordance with International Financial Reporting Standards as adopted by the EU" or
  • "in accordance with IFRSs as adopted by the EU".
This wording has been posted to the Commission's website as part of the (PDF 29k).

Board and Trustee appointments

22 Dec 2005

Sir DavidTweedie .

Sir DavidTweedie


The Trustees of the IASC Foundation, under which the IASB operates, have made the following announcements with respect to appointments of members of the International Accounting Standards Board and Foundation trustees: [Click for the IASCF Press Release (PDF 83k).]

International Accounting Standards Board

  • IASB Chairman Sir David Tweedie has been reappointed to a five-year term as Chairman of the Board. His current term expires 30 June 2006.
  • The terms of four other members of the IASB expire on 30 June 2006: Hans-Georg Bruns, Warren McGregor, Geoffrey Whittington, and Tatsumi Yamada. Each of them is eligible for reappointment. However, Professor Whittington has indicated that he is not seeking reappointment.
IASCF Trustees
  • Tommaso Padoa-Schioppa, a founding member of the Executive Board of the European Central Bank, will replace Paul Volcker as Chairman of the Board of Trustees of the IASC Foundation, effective 1 January 2006.
  • In addition to Mr. Padoa-Schioppa, the following new Trustees have been appointed:
    • Marvin Cheung, retired Chairman of KPMG Hong Kong, Hong Kong SAR, People's Republic of China
    • Samuel DiPiazza, CEO, PricewaterhouseCoopers, United States
    • Liu Zhongli, President, Chinese Institute of Certified Public Accountants; former Minister, Ministry of Finance, People's Republic of China
    • William McDonough, former Chairman, US Public Company Accounting Oversight Board, United States; former President, Federal Reserve Bank of New York
    • Sir Bryan Nicholson, outgoing Chairman, Financial Reporting Council, United Kingdom
    • T. V. Mohandas Pai, Member of the Board and Chief Financial Officer, Infosys Technologies Limited; Chairman of the Board, Progeon Limited, India
    • Junichi Ujiie, Chairman, Nomura Holdings Inc, Japan.
  • Max Dietrich Kley, a member of the Supervisory Board of BASF AG and a current IASCF trustee, has been reappointed as an IASCF trustee for a three-year term.
  • After these appointments and reappointment, one of the 22 Trustee positions remains vacant, and the Trustees are now completing arrangements to fill that vacancy. When the final position is filled, there will be eight Trustees from Europe, six from North America (four from the United States), six from the Asia/Oceania region, and one each from Africa and South America.

Special IAS Plus newsletter on IFRIC 7

22 Dec 2005

In November 2005, the International Financial Reporting Interpretations Committee issued Interpretation 7 Applying the Restatement Approach under IAS 29 Financial Reporting in Hyperinflationary Economies.

IFRIC 7 contains guidance on how an entity would restate its financial statements pursuant to IAS 29 in the first year it identifies the existence of hyperinflation in the economy of its functional currency. The Interpretation is effective for annual periods beginning on or after 1 March 2006. Earlier application is encouraged. Deloitte has published a (PDF 51k) explaining IFRIC 7. You will find links to all past IAS Plus newsletters Here.

New European Group of Auditors' Oversight Bodies

22 Dec 2005

The European Commission has formed a European Group of Auditors' Oversight Bodies (EGAOB).

The goal of EGAOB is to ensure effective coordination of new public oversight systems of statutory auditors and audit firms that each EU Member State is required to establish under the October 2005 amendments to the 8th Company Law Directive. The new Group may also provide technical input to the preparation of possible measures of the Commission implementing the Directive, such as endorsement of the International Standards on Auditing or assessment of third countries' public oversight systems. Click for:

IFRIC staff summary of service concessions project

22 Dec 2005

At the November 2005 IFRIC meeting, IFRIC members directed staff to prepare a summary of decisions made to date on the service concessions project.

The project summary has now been Posted on the IASB's Website. The summary outlines the project objective and background, the IFRIC's deliberations leading to the publication of Draft Interpretations 12, 13, and 14, and the IFRIC's post-exposure deliberations on the draft Interpretations.

Special IAS Plus newsletter on financial guarantees

21 Dec 2005

In August 2005, the IASB amended the scope of IAS 39 Financial Instruments: Recognition and Measurement to include financial guarantee contracts issued by the entity.

If an issuer of financial guarantee contracts has previously asserted explicitly that it regards such contracts as insurance contracts and has used accounting applicable to insurance contracts, the issuer may elect to apply either IAS 39 or IFRS 4 Insurance Contracts to such financial guarantee contracts. Deloitte has published a (PDF 48k) explaining the IASB's amendments to IAS 39 and IFRS 4. You will find links to all past IAS Plus newsletters Here.

Key considerations in preparing 2005 IFRS reports

20 Dec 2005

Deloitte has published a new IAS Plus guide: IFRS Financial Statements 2005: Key Considerations for Preparers.

The objective of this 56-page guide is to provide assistance with the process of drafting those financial statements. It is not a disclosure checklist, nor a comprehensive illustration of a set of financial statements. Those tools are already available on the IAS Plus website and from Deloitte offices globally. Rather, this publication draws on our experience of the presentation and disclosure requirements of the new and revised Standards and, in particular, of the understanding that we have gained by closely monitoring the drafting process. It deals with issues that we have faced, and overcome - in the hope that we can help readers to avoid those pitfalls.

The guide is relevant not only to entities adopting IFRSs for the first time in 2005 but also to entities already applying IFRSs. For continuing IFRS users, 2005 will be the first accounting period for which they will need to comply with the requirements of the Standards revised in the IASB's Improvements Project, as well as major revisions to the Standards on financial instruments, intangibles, and impairment. Also IFRSs 1 to 7 are new for 2005 (1 to 5 required for 2005 year ends, the other two elective). The cumulative effect of these revisions and new Standards is that entities are being required to rewrite substantially their financial statements in 2005. We prepared this guide to help companies in that endeavour.

Click to download (PDF 1,110k).

SEC and CESR chairmen meet

18 Dec 2005

US Securities and Exchange Commission Chairman Christopher Cox met with Chairman Arthur Docters van Leeuwen of the Committee of European Securities Regulators (CESR) to discuss International Financial Reporting Standards and other potential agenda items for collaborative efforts in 2006. The chairmen expressed their support for continued close interaction to maintain and promote investor protection and market integrity in the transatlantic capital markets.

Chairman Cox also informed Chairman Docters van Leeuwen of the SEC's (PDF 56k), which the Commission earlier in the day had voted to publish for public comment. The on the meeting between the two chairmen states (PDF 33k):

In addition to reviewing IFRS reporting in their respective jurisdictions, potential collaborative efforts in 2006 include a review of the practical application of risk-based anti-money laundering procedures by securities firms and engaging relevant parties to consider the development of a common licensing exam for individuals who work in the international capital markets industry. The SEC and CESR staff also will exchange experiences regarding the use of IT systems to facilitate disclosure to investors and will focus on the use of interactive data in meeting disclosure requirements.

Updated EFRAG endorsement status report

17 Dec 2005

The European Financial Reporting Advisory Group has updated its report showing the status of endorsement, under the EU Accounting Regulation, of each IFRS, including standards, interpretations, and amendments.

Click to download the Endorsement Status as of 14 December 2005 (PDF 26k).

Correction list for hyphenation

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