February

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Issues not added to IFRIC agenda updated

05 Feb 2006

We have updated our list of Issues Not Added to IFRIC's Agenda to reflect IFRIC's decision in January 2006 not to add to its agenda an issue relating to the Scope of IFRS 6 Extractive Industries. .

We have updated our list of Issues Not Added to IFRIC's Agenda to reflect IFRIC's decision in January 2006 not to add to its agenda an issue relating to the Scope of IFRS 6 Extractive Industries.

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Role of accountants in fostering economic growth

04 Feb 2006

Dr Y V Reddy, Governor of the Reserve Bank of India, spoke about the role of accountants in fostering economic growth at the International Conference on Role of Accountancy Profession in Anchoring Economic Growth, organised by the Institute of Chartered Accountants of India (ICAI) in Mumbai on 19 January 2006. He expressed strong support for ICAI's recent efforts to look to IFRSs in developing Indian accounting standards.

Click to download (PDF 28k). An excerpt:

In this regard, it is heartening to observe that the accounting and auditing standards in India are being increasingly benchmarked against international standards. I am also happy to note that the ICAI is making sustained efforts to align the Indian accounting standards with the international ones. A Review of the recommendations of the Advisory Group by the Reserve Bank in December 2004 shows that the gap between International Accounting Standards and Indian Accounting Standards has been gradually narrowing, reflecting the foresight of the profession in recognising the importance of international comparability.

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Standard setting activity in Asia-Pacific region

04 Feb 2006

We have updated the following pages on this website to reflect recent standard setting activity in the Asia-Pacific region: Australia China Hong Kong SAR Japan Malaysia New Zealand Philippines Singapore .

We have updated the following pages on this website to reflect recent standard setting activity in the Asia-Pacific region:

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Deficiencies in financial reports of small entities

04 Feb 2006

The Canadian Securities Administrators (the consortium of securities regulators in Canada) have recently published a summary of some of the most common deficiencies they find when they review financial reporting by smaller issuers.

Although the review focused on companies with assets under $5 million, the CSA believes the guidance in their report will also be useful to larger issuers. The most common deficiencies found are in the following four areas:

1. Financial Statements

  • Enterprises in the Development Stage
  • Revenue Recognition
  • Interim Financial Statements
  • Related Party Transactions
  • Cash Flow Statements
  • New GAAP Requirements 2. Management's Discussion & Analysis (MD&A;)
  • Frequently, the MD&A; of smaller issuers contains superficial analyses that merely repeat the information in the accompanying financial statements, particularly on the following MD&A; topics:
    • Operational Analysis
    • Liquidity and Capital Resources
    • Projects Under Development
    • Related Party Transactions
    3. Mining and Oil and Gas Industries
  • Deficiencies in non-technical disclosures 4. Other Disclosure Issues
  • Issuer and Insider filing requirements
  • Timely Disclosure: The requirement for issuers to maintain an ongoing communication with the capital markets
  • Audit Committees: The mandatory role of audit committees and their involvement with corporate disclosure
  • Certification: CEO and CFO certifications of their issuer's annual and interim filings
Click to (PDF 325k).
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Accounting for 'heritage assets'

04 Feb 2006

The United Kingdom Accounting Standards Board (ASB) has published a Discussion Paper Heritage Assets: Can Accounting Do Better? setting out proposals to improve the consistency and transparency of the financial reporting of heritage assets.

The proposals will be relevant to entities such as museums holding collections of art, antiques, and books and also to entities that own and manage landscape or buildings for their environmental or historical qualities. The report concludes that the best financial reporting requires heritage assets to be reported as assets at current value, and the paper makes proposals to facilitate that approach. However, it offers an alternative approach for those entities that face genuine difficulties in valuing their heritage assets. Illustrative disclosures are included. Click to download: The ASB requests comments by 31 May 2006.
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IASB February meeting agenda

03 Feb 2006

The International Accounting Standards Board will meet at its offices in London on Tuesday through Friday, 21-24 February 2006. Presented below is the preliminary agenda for the meeting.

The Board will meet with the Standards Advisory Council on Monday and Tuesday 27-28 February 2006 in London. The agenda for the SAC meeting has not yet been announced.

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21-24 February 2006, London

Tuesday 21 February 2006 (afternoon only)

Wednesday 22 February 2006

Thursday 23 February 2006 (afternoon only)

Friday 24 February 2006 (morning only)

  • Insurance Contracts Phase II
    • Continuation, cancellation and renewal options
    • Participating contracts
    • Acquisition costs
    • Gain or loss on initial measurement/liability recognition
    • Measurement attribute: non-life insurance pre-claims liability
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ASBJ statement on progress toward convergence

02 Feb 2006

The Accounting Standards Board of Japan (ASBJ) has released a Statement on Japan's Progress Toward Convergence between Japanese GAAP and IFRSs.

In the statement, the ASBJ describes its recent progress toward convergence on asset retirement obligations, construction contracts, and disclosure of financial instruments at fair value. The ASBJ also describes its plans to address the issues that the Committee of European Securities Regulators (CESR) identified in the technical advice on equivalence of third country GAAP in July 2005. Click for:
  • (PDF 160k)
  • (PDF 52k)
  • (PDF 1,063k)

 

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IASB proposes amendments on share-based payment

02 Feb 2006

The International Accounting Standards Board has issued an Exposure Draft that proposes to amend two aspects of IFRS 2 'Share-based Payment' – what are 'vesting conditions' and what is a 'cancellation'.

Vesting conditions are the conditions that an individual or an organisation must satisfy to receive an entity's shares under a share-based payment arrangement.

IFRS 2 currently states that vesting conditions include service conditions and performance conditions. It is silent on whether other features of a share-based payment are vesting conditions.

The ED proposes that vesting conditions should be restricted to service conditions and performance conditions. Under IFRS 2, features of a share-based payment that are not vesting conditions must be included in the grant date fair value of the share-based payment (the fair value also includes market-related vesting conditions).

Under IFRS 2, a failure to meet a condition, other than a vesting condition, is a cancellation. IFRS 2 specifies the accounting treatment of cancellations by the entity but does not give guidance on the treatment of cancellations by parties other than the entity. This amendment proposes that cancellations by parties other than the entity should be accounted for in the same way as cancellations by the entity.

The proposed amendments would apply for annual periods beginning on or after 1 January 2007, with earlier application encouraged. Click for IASB Press Release (PDF 52k). Comment deadline is 2 June 2006.

 

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New Australian Accounting Alert on related parties

02 Feb 2006

Deloitte (Australia) has published Revised AASB 124 Related Party Disclosures (PDF 49k).

The revised version of AASB 124 incorporates the requirements of now superseded AASB 1046 Director and Executive Disclosures by Disclosing Entities and introduces a number of additional disclosures consistent with those required by Section 300A of the Corporations Act 2001. Links to all past Australian Accounting Alerts are Here.
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US SEC and Japan FSA will discuss accounting

02 Feb 2006

The US Securities and Exchange Commission and the Japan Financial Services Agency have announced terms for increased co-operation and collaboration.

Accounting standards are one of a number of issues to be covered in a planned SEC-JFSA dialogue in 2006. Click for (PDF 35k).

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