July

IASB funding is on ECOFIN's agenda

11 Jul 2006

At its meeting on 11 July 2006, the Economic and Financial Affairs Council (ECOFIN) of the European Union will discuss changes to the funding of the International Accounting Standards Board – in particular how the IASB might be made less dependent on major accounting firms for funding.

EU Finance Ministers are expected to address how to widen the IASB's base of financial support, and also whether public funding could be used if a broadened voluntary scheme proves unpopular. From the agenda:

Continuation of the current system of funding after 2007, relying on only a small number of voluntary contributions, is not sustainable in the light of increasing global application. This would not enable the international standard setting body to be independent and sufficiently resourced to conduct its work in a timely fashion. Therefore, a new system is needed with a broader base and better allocation between geographical areas.

Click for (PDF 98k). Incidentally, this is the first meeting of ECOFIN that is being Webcast by the EU - available in five languages.

June 2006 Accounting Roundup posted

11 Jul 2006

We have posted the (PDF 301k) published by Deloitte & Touche LLP (USA).

Topics covered in this issue include:

FASB Developments

  • Proposed FSP on Modifications or Exchanges of Share-Based Payment Awards in Connection With an Equity Restructuring or a Business Combination
  • Proposed FSP on the Definition of a Public Entity
  • Proposal to Enhance Standard Setting for Private Companies
EITF Developments
  • EITF June 2006 Meeting
GASB Developments
  • Final Technical Bulletin Clarifies Reporting of Medicare Part D Payments
AICPA Developments
  • TPA on Consolidated Financial Statements
  • Deferral of Guidance on Reporting on a Nonissuer's Internal Control Over Financial Reporting
SEC Developments
  • SEC Adopts Final Rules on Funds That Invest in Funds
  • SEC Seeks Comments on Investment Company Governance
PCAOB Developments
  • PCAOB Issues Q&As; on Adjustments to Prior-Period Financials Audited by a Predecessor Auditor
  • Highlights of the PCAOB's June 2006 Standing Advisory Group Meeting
  • SEC Announces Appointment of New PCAOB Chairman
International Developments
  • Proposed Amendments to Financial Instruments Presentation
You will find past issues of Accounting Roundup Here.

Editorial corrections to 2006 Bound Volume of IFRSs

11 Jul 2006

The IASB has posted to its website a list of Editorial Corrections to the 2006 Bound Volume of IFRSs.

There are 15 minor corrections.

The 2006 Bound Volume of International Financial Reporting Standards includes all IFRSs, IASs, Interpretations, and the supporting documents published by the IASB – Bases for Conclusions, Implementation Guidance, and Illustrative Examples – as approved at 1 January 2006. Copies of BV2006 are available at £60 each from the IASB's Website (then click on IASCF Shop). Bulk discounts are available.

American Accounting Association invites student members globally

11 Jul 2006

The American Accounting Association has opened student membership to full-time students residing anywhere in the world.

Student members pay discounted membership dues, receive their selected Association journals online, and may participate in AAA meetings and activities. Additionally, student members may register to attend the AAA Annual Meeting at a well-discounted registration fee of US$180.

IFRIC agenda topic pages updated

10 Jul 2006

We have updated our web pages for the following individual agenda topics to reflect decisions made at the July 2006 meeting of the International Financial Reporting Interpretations Committee (IFRIC): IAS 18: Customer Loyalty Programmes IAS 18: Guidance on Identifying Agency Arrangements [new web page added] IAS 19: The effect of a minimum funding requirement on the asset ceiling IAS 39 : Securitisations – derecognition of groups of financial assets IAS 39: Identification of a portion of an exposure eligible for hedge accounting [new web page added] IFRIC D17 – IFRS 2: Group and Treasury Share Transactions IFRIC D12-14: Service Concession Arrangements .

Notes from second day of the July 2006 IFRIC meeting

08 Jul 2006

The International Financial Reporting Interpretations Committee (IFRIC) met at the IASB's offices in London on Thursday 6 July and Friday 7 July 2006. Presented below are the preliminary and unofficial notes taken by Deloitte observers at the second and final day of the meeting.Notes from the IFRIC Meeting7 July 2006 Employee Benefit Trusts in the Individual or Separate Financial Statements of the Sponsor At the May 2006 meeting, the IFRIC was asked to interpret an issue on accounting for employee benefit trusts that is established by a sponsoring entity to facilitate the transfer of equity instruments to the sponsoring entity's employees under share-based payment arrangements.

At that meeting the IFRIC decided to add the issue to its agenda.

The IFRIC was concerned whether boundaries between the sponsor and the employee benefit trust could be identified. The IFRIC discussed the notion of an 'entity' in IFRS, and agreed that there is no clear guidance in current IFRSs on whether an employee benefit trust is an entity or not. However the IFRIC seemed to agree on that if the trust is a legal entity and has ownership of the shares, each transaction should be treated separately in the individual financial statements of the sponsor and the employee benefit trust.

Decision. The IFRIC agreed that without a clear definition of what an entity is, the IFRIC could not issue an interpretation. Therefore the IFRIC decided that the issue should be rejected from the agenda, and that the IFRIC would inform the Board on this decision.

IAS 39 Financial Instruments: Recognition and Measurement – Identification of a portion of an exposure eligible for hedge accounting

The IFRIC continued to deliberate whether a financial asset or financial liability can be designated as a hedged item with respect to only a portion of the risks of changes in its fair value or its cash flows.

The IFRIC had previously asked the staff to explore whether the wording in IAS 39.AG100 could be used to establish a principle for identifying a portion that could be eligible to be used in hedge accounting.

The IFRIC discussed the scope of the word 'portion' in IAS 39. The discussion focussed on different components of financial assets/liabilities and whether those components would be identifiable and reliably measurable.

Some members said that a key issue would be whether the effect of an identified portion is predictable, since this would be required to perform prospective assessment of the hedge effectiveness.

Decision. The IFRIC decided that the staff should prepare a paper exploring the scope of portions in relation to hedging under IAS 39. The staff should try to develop criteria for what could qualify as a portion.

Recommendations from the IFRIC Agenda Committee and the staff

Classification of puts and forwards held by minority interests and puts or forwards received by a minority interest in a business combination contingent consideration

The IFRIC discussed two related questions:

  • 1. How to classify puts and forwards held by minority interests.
  • 2. Are puts or forwards received by minority interests in a business combination contingent consideration?

Two issues related to the first question were:

  • Whether a parent should recognise a liability for the amount payable to the minority interest due to the holding of the puts or when the parent have a forward contract to buy the shares.
  • Should a minority interest continue to be recognised?

The issue in the second question is whether variability in the amount potentially payable to a minority interest under a forward contract or a put held by the minority is contingent/deferred consideration according to IFRS 3.

The issues were initially presented as separate items, but IFRIC members found them related, and discussed both papers during the same session.

On the first issue, IFRIC members were divided as to whether an IFRS 3 approach should be applied for the contracts. Some IFRIC members did not like the approach of applying IFRS 3 to the initial transaction (where, for instance, a company issues puts to the minority interest, and where there are uncertainty whether the business transaction would happen). Hence, business combination accounting would only occur when the minority interest decides to exercise the option.

Decision. The IFRIC decided not to add this topic to its agenda. The rejection statement will address the accounting for the obligation represented by the put or forward. The rejection wording will have no reference to whether a minority interest should continue to be recognised.

Regarding the second topic, the IFRIC agreed that they would not be able to finish an interpretation before the standard on business combinations would be issued. It is expected that the new standard would address this issue.

Decision. It was decided that the second topic should not be added to the agenda, as the IFRIC agreed that they could not issue an Interpretation before the new standard on business combinations is expected to be issued.

SIC 12 Consolidation: Special Purpose Entities - Relinquishment of control

Paragraph 10 in SIC-12 has four indicators for assessing whether an entity controls an SPE. IFRIC has been asked whether any of the indicators carries greater weight than others in determining who has control over an SPE.

Decision. The IFRIC agreed to reject this issue, stating that it is not possible to reach a general conclusion as to whether any of the indicators carries greater weight than others, but rather it depends on facts and circumstances.

Definition of a derivative – Indexation on own EBITDA or own revenue

The IFRIC considered a request to interpret whether a contract that is indexed on an entity's own revenue or own EBITDA meets the definition of a derivative under IAS 39.

The IFRIC first considered whether the exemption in paragraph 9(a) applies to non-financial variables only in insurance contracts. The IFRIC agreed that the exemption is not restricted to insurance contracts.

The IFRIC then considered whether EBITDA or revenue would represent a financial or non-financial variable.

Decision. IFRIC members noted that there is current diversity in practice. Given this diversity, IFRIC members agreed not to add the topic to the agenda, on the basis that it would be unable to reach a consensus on a timely basis.

Foreign currency instruments exchangeable into equity instruments of the parent entity of the issuer

The IFRIC considered a submission in connection with exchangeable instruments issued by a subsidiary of a group that provide holders with rights to convert the instruments into a fixed number of equity instruments of the parent entity of the issuer. Two situations were outlined in the submission:

  • in one the exchangeable instruments are denominated in a currency other than the functional currency of the issuer;
  • in the other the exchangeable instruments are denominated in a currency other than the functional currency of the parent entity of the issuer.

The issue is whether the conversion options embedded in the exchangeable instruments should be classified as equity in the consolidated financial statements of the parent.

Decision. The IFRIC decided not to take this topic to the agenda.

IAS 32 Financial instruments: Presentation – Changes in the contractual terms of an existing equity instrument resulting in it being reclassified to financial liability

The IFRIC considered a situation in which an entity makes some substantive amendments to the terms of an existing equity instrument, for example, by inserting a contingent settlement provision. Consequently, the instrument is reclassified from equity to financial liability in accordance with IAS 32. On the date of reclassification, the fair value of the instrument is different from the carrying amount of the previously recognised equity instrument. The submission asked how the liability that arises from the change in the terms of the instrument should be measured at the date of reclassification. Should the liability be measured at:

  • the carrying amount in equity immediately before the reclassification; or
  • at its fair value at the date of reclassification?

Decision. The IFRIC decided not to add the topic to the agenda. The rejection note will explain that the liability should be measured at fair value when reclassified, and that the difference between the carrying amount and the fair value should be recognised in equity.

IAS 1 Presentation of financial statements - Whether the liability component of a convertible instrument should be classified as current or non-current

The IFRIC considered a situation in connection with the presentation of the liability component of a convertible instrument. The submission asked the IFRIC to provide guidance on how the liability component should be presented on the face of the balance sheet.

Decision. IFRIC decided not to endorse any view at the current stage, but rather to refer this issue to the Board for clarification.

Oral Update on Other Agenda Committee Business

IFRIC staff gave a brief update on agenda items that the IFRIC Agenda Committee are reviewing.

An issue on classification of SIM cards as inventory or assets is expected to be presented to the IFRIC in September. The Agenda Committee is also reviewing an issue on accounting for catalogues and TV spots. This issue is also expected to be presented to the IFRIC in September. A issue related to hedge effectiveness and assessment on a cumulative basis was noted, but without an indication as to when the issue would be presented to the IFRIC.

Scroll down for notes from day 1 of the meeting.

This summary is based on notes taken by observers at the IFRIC meeting and should not be regarded as an official or final summary.

New Global Offerings Services newsletter

07 Jul 2006

We have posted the (PDF 114k).

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. The GOs Newsletter is an update on relevant GAAP, regulatory, and other matters, webcasts, and publications. Past GOs Newsletters are Here.

Notes from day 1 of the July 2006 IFRIC meeting

07 Jul 2006

The International Financial Reporting Interpretations Committee (IFRIC) is meeting at the IASB's offices in London on Thursday 6 July and Friday 7 July 2006. Presented below are the preliminary and unofficial notes taken by Deloitte observers at the first day of the meeting.Notes from the IFRIC Meeting6 July 2006 New Members The Chairman noted that the IASC Foundation Trustees had appointed three new IFRIC members on 5 July 2006: Takatsugu Ochi (present at the meeting), Sara York Kenny and Ruth Picker (neither of whom was able to be present because of prior commitments).

He also welcomed Reinhard Biebel as the new representative of the European Commission.

Customer Loyalty Programmes

Review of text of a Draft Interpretation

Rationale for applying paragraph 13 rather than paragraph 19 of IAS 18

The IFRIC concurred with proposed changes to the Draft Interpretation to stress that the basis of the Interpretation was IAS 18 paragraph 13 and its concept of applying the 'revenue recognition criteria to the separately identifiable components of a single transaction.' In addition, the guidance in IAS 18.13 is normative and IAS 18.19 is the exception and applies in those circumstances in which the entity will incur costs in the future as a result of an event outside the control of both it and the customer (e.g., a claim under a warranty).

Estimates of fair values of award credits

The IFRIC agreed that the Draft Interpretation should not provide detailed guidance on measurement and estimation techniques. Rather, it should establish a principle that an entity should determine the fair value of the consideration received and the fair value of the goods or services delivered and recognise revenue based on the relative fair values of the two. The methods used to determine this allocation should be consistent and should also result in some revenue being allocated to the reward credits. Recognising revenue on one basis and deferring revenue on another would be precluded.

Programmes that offer a choice of awards

Decision. The IFRIC agreed that the Draft Interpretation should address programmes that offer a choice of awards. There was little discussion and the proposed wording was not available to Observers.

Awards supplied by a third-party provider

Decision. The IFRIC agreed that revenue should be recognised when either the customer redeems award credits or when a third party assumes the obligation to supply the awards. IFRIC members asked that the Draft Interpretation should give an example of this type of award (for example, a hotel grants airline miles/points).

Forfeiture

The IFRIC discussed how entities that operate customer loyalty programmes should account for award credits that are forfeited by customers, that is, never redeemed for awards.

The IFRIC agreed that the Draft Interpretation should be explicit that an entity should make an estimate of the expected forfeitures of awards as part of the initial allocation of the consideration received (between revenue and the future deliverable). That estimate can be revised (as any other estimate) but that revision does not affect the initial allocation. As agreed earlier in the session, the Draft Interpretation will not provide detailed guidance on how this estimation should be done, but the method chosen should be applied consistently.

Exposure

Decision. The Chairman polled IFRIC members as to who would object to the issue of a Draft Interpretation based on the Draft Interpretation as presented, amended and supplemented by the decisions reflected above. No IFRIC members intimated an intention to object to the Draft Interpretation.

Drafting comments will be taken out of session and the normal 'negative clearance' will be sought from the Board in die course. It is hoped to issue the Draft Interpretation for comment presently.

IFRIC D17 – IFRS 2: Group and Treasury Share Transactions

The IFRIC discussed the following situations, previously raised in paragraph 6(c)(i) and 6(c)(ii) of D17 Group and Treasury Share Transactions:

  • The parent (or another entity of the same group) directly grants its equity instruments to the employees of a subsidiary; and
  • A subsidiary grants equity instruments of its parent (or another entity of the same group) to its employees.

Situations in which the Parent grants options on its shares directly to a Subsidiary's employees or to the Subsidiary, which then delivers them to its employees

The IFRIC quickly coalesced around a method (Method 3 in the Observer note) that would result in a 'reasonable allocation of the group charge' being made by the Parent to the Subsidiary. This method ensures that, regardless of the intragroup payment structures that exist, the effects of the transactions are reasonably reflected in profit or loss of the subsidiary that receives services from the employees. Several IFIRC members, while expressing support for the method, also expressed concerns about the possible consequences of this approach on separate financial statements generally. Others noted the concern, but thought that because these schemes were always 'group schemes' and the parent company was actively involved in the scheme, the reasonable allocation approach reflected the substance of the transaction.

A subsidiary grants equity instruments of its parent (or another entity of the same group) to its employees The IFRIC was more troubled with extending Method 3 to the second group of transactions, because some of them thought that the approach contravened IAS 39's definitions of a derivative and the accounting prescribed for them in that Standard.

Decision. After an extended discussion, it was decided to draft an Interpretation to address the first Issue only. The Interpretation would comment that, in some circumstances, share-based payment schemes would be more appropriately treated as cash-settled.

Next steps

The staff will bring a draft Interpretation to the next meeting of the IFRIC.

IFRIC D12-14: Service Concession Arrangements

The staff presented the findings of further research it had conducted to obtain an understanding of how the contractual commitments for operations and maintenance obligations of service concession arrangements work in practice. As a result of this improved understanding, the staff recommended certain changes to the application guidance of the financial asset model set out in D13.

Decision. Although the IFRIC disagreed with some of the staff suggestions, it was agreed that the it was necessary to explain when it would be appropriate to use the 'D13' model to repairs and maintenance obligations and that the final Interpretation should include examples of when IAS 37 would apply to such obligations and when the D 13 model would apply.

Next steps

The IFRIC will next consider proposed illustrations of the bifurcated model and revised examples based on the approaches proposed in D 13 and D 14.

At a subsequent meeting(s), the IFRIC will consider the timing of recognition of any intangible assets; the transition date; and whether re-exposure is necessary. It is hoped that, barring the necessity for re-exposure, a final Interpretation would be issued by December 2006.

IAS 19 Post-employment Benefits – The effect of a minimum funding requirement on the asset ceiling

Review of text of a Draft Interpretation

The IFRIC discussed a revised draft of a Draft Interpretation on this topic. The revised draft included changes approved at the May 2006 IFRIC meeting. The detailed drafting was not available to Observers, although the substance of the changes was included in the Observer note.

Exposure

Decision. The Chairman polled IFRIC members as to who would object to the issue of a Draft Interpretation based on the Draft Interpretation as presented, amended and supplemented by the decisions reflected above. No IFRIC members intimated an intention to object to the Draft Interpretation.

Drafting comments will be taken out of session and the normal 'negative clearance' will be sought from the Board in die course. It is hoped to issue the Draft Interpretation for comment presently.

>Agenda Proposal: Guidance on Identifying Agency Arrangements

The IFRIC, although noting that it did not see evidence that there is currently widespread divergence in this area, agreed to add a project to develop guidance at the level of general principles in IAS 18 on identifying whether an entity is acting as an agent in an agency relationship. At the same time, it noted that, because it was unaware of diversity in practice, the project should not be considered a high priority project.

Review of Published Tentative Agenda Decisions

IFRS 2 Share-based Payment - Fair value measurement of a post-vesting transfer restriction

The IFRIC confirmed its Tentative Agenda Decision with respect to this topic.

There was a discussion as to whether this decision would result in the treatment of any restatements necessary as the correction of an error, noting that the topic was raised as the result of guidance issued by a national standard-setter. The IFRIC noted that it was up to entities to determine whether any changes necessary were changes in estimates or other types of restatements (including errors).

Decision. It was agreed that the Rejection statement would state that there was 'sufficient authoritative guidance' available in IFRS 2 rather than stating that 'the answer is clear'. It was thought that this would avoid any restatements being treated as errors.

IAS 17 Leases - Recognition of contingent rentals

Decision. The IFRIC had received three comment letters on its proposed Rejection statement on this topic. The IFRIC agreed that none of the letters fundamentally changed its view that the topic should not be taken to the Agenda.

However, the IFRIC did agree:

  • To send a recommendation to the IASB that at the next available opportunity IAS 17 should be clarified to state that contingent rentals should not be included in minimum lease payments for the purposes of income and expense recognition.
  • The Rejection statement should be explicit that the topic referred to the IFRIC addressed income and expense recognition ('straight-lining') only and did not address lease classification.

Recommendations from the IFRIC Agenda Committee and the Staff

Valuation of electricity derivatives

Decision. The IFRIC reached a tentative decision not to add to its Agenda a topic to develop an Interpretation of IAS 39 with respect to the valuation of certain electricity derivatives, for example 'contracts for differences'. The IFRIC noted that the original submission was more in the nature of a request for application guidance rather than interpretive guidance.

The Rejection statement would note that IAS 39 already contains a valuation hierarchy (IAS 39.48-.49 and AG69-AG82) and that the guidance in the IASB's forthcoming proposals on fair value measurement would also assist in this area.

IAS 11 Construction Contracts/IAS 18 Revenue Allocation of profit in unsegmented contracts

This issue arose out of the IFRIC's project on service concession arrangements. In April 2005, the IFRIC noted that "The difference related to revenue recognition on construction contracts that involved different activities but did not meet the conditions in IAS 11 for segmentation. The IFRIC had observed that IAS 11 required gross recognition of revenue and costs (the 'gross approach'), while US GAAP required recognition of a percentage of expected contract profit (the 'net approach'). Arguably, the use of the gross approach (unlike the net approach) could result in the recognition of different profit margins on different activities within an unsegmented contract."

The staff was asked to consider whether it was necessary to develop stand-alone interpretive guidance or whether it would be sufficient to include guidance in the service concession Interpretation.

The IFRIC agreed that there was sufficient appropriate guidance already in IAS 18 and IAS 11 to determine the appropriate accounting in such circumstances.

Click to view Diagram of the Existing Guidance as discussed by IFRIC.

They thought the issue too fundamental to place in the service concession arrangement Interpretation. In addition, there were some cross-over issues with customer loyalty programmes.

Decision. The IFRIC tentatively agreed not to add the topic to its Agenda. It will consider proposed rejection wording at its next meeting.

IFRS 2 Share-based Payment-Incremental Fair Value to Employees as a result of unexpected Capital Restructurings

The IFRIC considered a submission addressing a situation in which a sponsoring entity had a capital restructuring (for example, a 1-for-2 share consolidation) subsequent to a grant of share options to its employees. At the time of the grant, the sponsoring entity did not expect to restructure its capital. As a result of the capital restructuring, the fair value of the share options increases significantly. However, the share option plan does not specify whether adjustments should be made to the plan in the event of a capital restructuring.

Decision. The IFRIC tentatively decided not to take this topic to its Agenda. In doing so, it noted:

  • The Rejection statement should state that the IFRIC would not expect to encounter situations such as that raised in the submission in normal commercial circumstances (that is, the submission fails the criterion in paragraph 27(a) of the IFRIC Preface).
  • It expected it to be rare for share-based payment plans not to make provision for capital restructurings and that, although the fact pattern in the submission probably represented an abuse, the abuse was not an accounting issue but a corporate governance issue.

Economic obligations

The IFRIC Chairman briefed the IFRIC on the results of the Board's discussion of economic obligations ('economic compulsion') at its June 2006 meeting and the statement that it issued subsequently in IASB Update.

Decision. It was agreed that the IFRIC would include the Board's statement in a proposed Rejection statement in the forthcoming issue of IFRIC Update, together with a statement from the IFRIC that it had decided not to take the topic to its Agenda. The usual comment period would apply.

IAS 39 Financial Instruments – Securitisations: Derecognition of Groups of Financial Assets

At the May IFRIC meeting the staff was asked to consider the implications of an Interpretation which would align the wording in IAS 39 paragraph 16 with the 'possible intention' of the Board. That request raised two intriguing questions:

  • What was the intention of the Board at the time of writing IAS 39, and
  • How could that intention be applied to the more recent questions that are on the IFRIC agenda (as well as future issues that may arise)?

The staff concluded that it would not be possible to ascertain what the intention of the Board actually was without asking the Board directly. Consequently, the IFRIC was asked to approve a reference from the IFRIC to the IASB for clarification. The result of this reference might be that the Board decides that it was best placed to assume responsibility for the topic or that it could give the IFRIC general advice on which it could address the topic and any future securitisation/derecognition issues.

The IFRIC agreed with the staff recommendation.

This summary is based on notes taken by observers at the IFRIC meeting and should not be regarded as an official or final summary.

New education standard on auditor competence

07 Jul 2006

The International Accounting Education Standards Board (IAESB), an independent standard-setting board within the International Federation of Accountants (IFAC), has released a new standard outlining the skills, training, professional values, and attitudes necessary for auditors to perform competently.

International Education Standard (IES) 8 Competence Requirements for Audit Professionals applies to all audit professionals, not just the audit engagement partner. It also prescribes specific competence requirements for audit professionals involved in transnational audits.

Effective 1 July 2008, IFAC member bodies will be expected to modify their policies and procedures to ensure that audit professionals meet the requirements of IES 8. These requirements include having advanced level knowledge of audit and financial reporting; relevant information technology knowledge; and the professional skills and professional values, ethics and attitudes expected from audit professionals.

Click for Press Release (PDF 80k).

Discussion paper on Conceptual Framework

06 Jul 2006

As a first step in their joint project on the Conceptual Framework of financial reporting, the US Financial Accounting Standards Board (FASB) and the IASB have each published and invited comment on a discussion paper setting out their preliminary views on: the objective of financial reporting, and the qualitative characteristics of decision-useful financial information. This discussion paper includes drafts of the first two chapters of a new Conceptual Framework that will guide the two Boards in developing accounting standards.

The preliminary views restate the existing frameworks' definition of the objective of general purpose external financial reporting as providing information that is useful to present and potential investors and creditors and others in making investment, credit and similar resource allocation decisions. The document also identifies relevance, faithful representation, comparability (including consistency) and understandability among the characteristics of financial information that make it decision-useful. Some details:

 

  • Press release: Click to Download (PDF 37k).
  • How to obtain: Printed copies of the Discussion Paper can be ordered from the IASB. A PDF version will be available for download from the IASB's Website starting 17 July 2006. FASB has already posted the document on Its Website.
  • Title of the document: Preliminary Views on an improved Conceptual Framework for Financial Reporting: The Objective of Financial Reporting and Qualitative Characteristics of Decision-useful Financial Reporting Information.
  • Comment deadline: 3 November 2006.
  • Next step: Exposure draft of the two chapters some time in 2007.
  • Additional steps: The project is being addressed in phases, as follows:
    • Phase A: Objectives and qualitative characteristics
    • Phase B: Elements: Recognition and measurement attributes
    • Phase C: Initial and subsequent measurement
    • Phase D: Reporting entity
    • Phase E: Presentation and disclosure
    • Phase F: Status of Framework in GAAP hierarchy
    • Phase G: Applicability to not-for-profit
    • Phase H: Reconsideration of entire Framework

 

 

Correction list for hyphenation

These words serve as exceptions. Once entered, they are only hyphenated at the specified hyphenation points. Each word should be on a separate line.