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Notes from IASB meeting with EFRAG representatives

18 Apr 2007

The International Accounting Standards Board is holding its April 2007 Board meeting at its offices, 30 Cannon Street, London, on Tuesday through Thursday 17-19 April 2007. On the morning of 17 April 2007, the Board met with representatives of the European Financial Reporting Advisory Group (EFRAG).

Click here to go to the preliminary and unofficial Notes Taken by Deloitte Observers at the Meeting with EFRAG.

Corporate governance in China – some improvements, but...

18 Apr 2007

The CFA Institute Centre for Financial Market Integrity has published a study on corporate governance in China.

The findings show that while the Chinese government has done much to put in place a sound corporate governance framework, observable changes are still not evident in financial disclosures and transparency, which are viewed by the survey respondents as very important for decision-making. The CFA Institute represents 89,000 professional financial analysts. With regard to accounting standards, the report notes:

In February 2006, the Ministry of Finance released the Basic Accounting Standards for Business Enterprises (ASBE), consisting of 38 standards to be applied to all listed Chinese companies. The aim of this initiative is to facilitate further development of a market-like economy in China, raise the quality of financial information, and boost investor confidence. The new ASBE standards are intended to bring Chinese accounting practices largely in line with the IFRS. Although there are concerns that these new Chinese standards do not completely replicate the IFRS as intended by the international accounting standard setters, they have incorporated many of its key principles....

A significant concern of both foreign and domestic investors in Chinese companies relates to the adequacy and transparency of disclosures. In view of this, the government has moved recently to strengthen disclosure rules. Moving forward, investors will have more information available in quarterly and annual reports.

Click for: Please note that the report is copyright CFA Institute and has been posted on IAS Plus with their kind permission.

Commissioner McCreevy comments on IFRSs

18 Apr 2007

European Commissioner Charlie McCreevy recently addressed a meeting of the Hundred Group of Finance Directors on the subject of International Financial Reporting Standards (IFRSs) and their implementation in the European Union.

Click to download Commissioner McCreevy's Remarks(PDF 102k). Excerpts:

The Commission welcomes the various steps already taken by CESR (Committee of European Securities Regulators) to ensure an EU wide approach [to consistent implementation of IFRSs]. The Commission has also set up an informal 'Roundtable' to assist. This Roundtable is a forum where all interested parties can discuss practical application problems relating to IFRS. Issues of widespread concern can, if necessary, be referred to IFRIC for interpretation. However, it is clear that we do not want an EU body providing interpretations and guidance. This runs counter to the whole philosophy of worldwide principles-based standards....

My firm view is that the principles-based nature of IFRS must be maintained. The convergence agenda must not be used to introduce US rules-based GAAP by the back door. In order to try and ensure a balanced evolution, we are insisting on proper consultation on the convergence programme and projects between the IASB and the FASB. We have made it clear that joint convergence projects must be subject to full due process with all stakeholders.

Extracts of European IFRS enforcement decisions

17 Apr 2007

The Committee of European Securities Regulators (CESR) has published extracts from its database of enforcement decisions taken by EU National Enforcers participating in European Enforcers Co-Ordination Sessions (EECS).

EU National Enforcers of financial information monitor and review financial statements and consider whether they comply with IFRSs and other applicable reporting requirements, including relevant national law. Click for:

Final Communique from IOSCO's annual conference

16 Apr 2007

The International Organization of Securities Commissions (IOSCO) held its 32nd Annual Conference on 9-12 April 2007 in Mumbai.

The Final Communique  (PDF 48k) of the Conference made the following comments about IFRSs:

The need to progress toward internationally recognised financial reporting standards has been a central issue in the global financial services markets for some time. IOSCO has done much in this field and has consistently focused on convergence, implementation and also application, through the building of an IOSCO Database which is administered by the IOSCO General Secretariat that will facilitate the sharing by securities regulators of decisions relating to the enforcement of IFRSs. In January 2007, the IOSCO IFRS Database became fully operational and the indications are that the database will provide a useful reference source for regulators that will further aid coordination and convergence.

Agenda for 3-4 May 2007 IFRIC meeting

16 Apr 2007

The International Financial Reporting Interpretations Committee (IFRIC) will meet at the IASB's offices in London on Thursday and Friday 3-4 May 2007. The meeting is open to the public and will be webcast.

The tentative agenda is shown below.

3-4 May 2007, London

Thursday 3 May

Friday 4 May 2007 (morning only)

  • IAS 18 – Customer Contributions to Property, Plant and Equipment of a Supplier
  • Review of Tentative Agenda Decisions Published in March IFRIC Update
    • IFRS 3 – Re-assessments on a business combination
    • IAS 1 and IAS 39 – Current or non-current presentation of derivatives classified as 'held for trading' under IAS 39
    • IAS 16 and IAS 18 Revenue – Sale of assets held for rental
    • IAS 19 Employee Benefits – Curtailments and negative past service costs
  • Staff Recommendations for Tentative Agenda Decisions
    • IAS 39 – Gaming transactions
    • IAS 39 – Hedging future cash flows with purchased options
    • IAS 39 – Hedging multiple risks with a single derivative hedging instrument
    • IAS 39 – Scope of IAS 39 paragraph 11A
    • IAS 39 – The meaning of 'commonly used currencies' in AG 33(d)
    • IFRS 5 – Plan to Sell the Controlling Interest in a Subsidiary
    • IFRS 5 – Disclosures
    • IAS 12 – Deferred tax arising from unremitted overseas earnings [this item added 18 April 2007]

Minutes of first SARG meeting posted

16 Apr 2007

The European Commission has posted the minutes of the first meeting of the Standards Advice Review Group (SARG), which was held on 2 March 2007 in Brussels.

The SARG's role is to assess whether the endorsement advice given by the EFRAG is well balanced and objective. The SARG will deliver its advice to the Commission normally within three weeks. The final advice will be published on the Commission's website. Click to download  Minutes of SARG 2 March 2007 Meeting  (PDF 32k). These minutes describe the EC's process for endorsing IFRSs as follows:

Endorsement process starts as soon as COM receives a new IFRS standard or IFRIC interpretation from the IASB. COM then asks EFRAG for its endorsement opinion and notifies members of the Standards Advice Review Group that the endorsement advice has been requested indicating the approximate time of its delivery. Upon delivery of EFRAG's final opinion on endorsement, Standards Advice Review Group has three weeks to give its advice to the Commission. In exceptional circumstances this may be extended to four weeks.

The role of the Group is to assess whether EFRAG's opinion on endorsement is well-balanced and objective.

After COM receives EFRAG's opinion and advice of SARG, it will draft the endorsing Regulation, with standard or interpretation in its Annex. Together with all required documents it will be sent for consultation with other Commission services – so-called Inter-service consultation.

COM will also send this Regulation to members of the Accounting Regulatory Committee and schedule a meeting of the Accounting Regulatory Committee to vote on proposal for endorsement. Accounting Regulatory Committee (ARC) is composed of representatives from Member States and is chaired by the Commission.

The role of ARC is to ensure the formal representation of Member States interests in the endorsement process under so-called Comitology procedure. Accounting Regulatory Committee approves implementing measures by qualified majority.

Draft implementing measures should be also sent to the European Parliament two months before the meeting. After the meeting, the EP has another one month to consider whether the Commission has exceeded its implementing powers.

These comitology rules will be modified in the future. IAS Regulation will be amended to include a new 'regulatory procedure with scrutiny'. Under this new procedure the Commission will, after obtaining Accounting Regulatory Committee's favourable opinion, submit the draft measure for scrutiny by the EP and the Council. The new procedure will extend the time for EP and Council to react to 3 months, unless a fast track procedure will be adopted.

Next SARG meetings are 12 April 2007 (focus on IFRIC 12, minutes not yet published) and 3 July 2007.

Financial Instruments Working Group will meet

14 Apr 2007

The IASB's Financial Instruments Working Group will meet in London on 25 and 26 April 2007.

The Working Group was formed in September 2004 to help the IASB take a fresh look at IAS 39 Financial Instruments: Recognition and Measurement – with a goal of improving, simplifying, and ultimately replacing IAS 39. The agenda of the upcoming meeting includes:

Wednesday 25 April 2007

  • The FASB liability/equity models and the Loss Absorption liability/equity model
  • Financial Statement Presentation project update
  • Overview of the Financial Instruments Due Process Document (FI DPD)

Thursday 26 April 2007

  • Fair Value Measurement
  • IAS 39: Proposed amendment on hedge accounting
  • Insurance Discussion Paper: Overview and comparison with IAS 39
  • FI DPD – fair value model: Scope, unit of account and measurement, measurement of certain contracts and hedge accounting

More information on IASB's Website.

IAS Plus quarterly newsletters for April 2007

14 Apr 2007

The April 2007 IAS Plus Quarterly Newsletter has been published.

The newsletter reports on the 1st quarter 2007 activities of the IASB, the IFRIC, and the IASC Foundation, and also on worldwide issues and events relating to international financial reporting. The Asia-Pacific edition has the same 19-page news content as the Global Edition plus 10 more pages of accounting standards updates for the Asia-Pacific region.

Standard setting activity in Asia-Pacific region

13 Apr 2007

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

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

Correction list for hyphenation

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