August

IVSC (International Valuation Standards Council) (lt green) Image

2007 volume of International Valuation Standards

20 Aug 2007

The International Valuation Standards Committee (IVSC) has published the 8th edition of International Valuation Standards – IVS 2007.

This edition includes several new components and has also undergone extensive revision and updating:

  • International Valuation Standard 2, Bases Other Than Market Value, and International Valuation Application 2, Valuation for Secured Lending Purposes, have been rewritten.
  • The revision of Guidance Note 3, Valuation of Plant and Equipment, which was approved in 2005 after publication of the previous edition, has been reincorporated into the text.
  • New: International Valuation Application, Valuation of Public Sector Assets for Financial Reporting.
  • New: Guidance Note, Valuation of Historic Property.
  • Other new features include a chart diagramming the hierarchy of property rights and a useful addendum to GN 8 (Profitability Test When Reporting DRC).

IVS 2007 may be purchased for US$75 inclusive of all postage and handling charges. To order go to the IVSC Website.

Contents of the eighth edition, IVS 2007:

  • Introduction
    • Background to the International Valuation Standards Committee and the Standards
    • Concepts Fundamental to Generally Accepted Valuation Principles (GAVP)
    • Code of Conduct
    • Property Types
  • International Valuation Standards
    • IVS 1 Market Value Basis of Valuation
    • IVS 2 Bases Other Than Market Value
    • IVS 3 Valuation Reporting
  • International Valuation Applications
    • IVA 1 Valuation for Financial Reporting
    • IVA 2 Valuation for Secured Lending Purposes
    • IVA 3 Valuation of Public Sector Assets for Financial Reporting
  • Guidance Notes
    • GN 1 Valuation of Real Property
    • GN 2 Valuation of Lease Interests
    • GN 3 Valuation of Plant and Equipment
    • GN 4 Valuation of Intangible Assets
    • GN 5 Valuation of Personal Property
    • GN 6 Business Valuation
    • GN 7 Consideration of Hazardous and Toxic Substances in Valuation
    • GN 8 The Cost Approach for Financial Reporting-(DRC)
    • GN 9 Discounted Cash Flow (DCF) Analysis for Market Valuations and Investment Analyses
    • GN 10 Valuation of Agricultural Properties
    • GN 11 Reviewing Valuations
    • GN 12 Valuation of Specialised Trading Property
    • GN 13 Mass Appraisal for Property Taxation
    • GN 14 Valuation of Properties in the Extractive Industries
    • GN 15 Valuation of Historic Property
  • Glossary
  • Index

There is more information in August 2007 IVSC eNews Issue 18 (PDF 132k) - IVSC releases 2007 edition of International Valuation Standards.

Heads Up Image

Heads Up newsletter on SEC IFRS concept release

18 Aug 2007

We have posted the 17 August 2007 Edition of the Heads Up Newsletter published by Deloitte & Touche LLP (United States).

This issue of Heads Up, titled The Shift Toward IFRSs and Its Impact on US Companies, summarises the SEC's new concept release soliciting input on whether US issuers should be permitted to prepare their financial statements using International Financial Reporting Standards (IFRSs). It also discusses some items companies should consider in determining whether they should use IFRSs. An excerpt from the newsletter:

The movement toward IFRSs offers US companies, particularly those that operate globally, several potential opportunities, including the following:

  • Standardisation of Accounting and Financial Reporting Policies – A consistent set of accounting policies and financial statements in each country where local reporting is required improves the comparability of financial information and tax planning.
  • Centralisation of Processes – By moving toward company-wide IFRS use, a company could reduce reliance on local accounting resources for statutory reporting purposes, develop standardised training programs, and eliminate divergent accounting systems.
  • Improved Controls – Standardisation of the reporting would allow companies to assign one worldwide owner for statutory reporting, giving them better control over the quality and issuance of financial statements in other locations.
  • Better Cash Management – Dividends that can be paid from subsidiaries may be based on local financial statements. Allowing use of a consistent standard across countries can help improve cash flow planning.

Click to view the 17 August 2007 Edition of the Heads Up Newsletter (PDF 127k).

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Statistics database on cross-border securities updated

17 Aug 2007

We have updated our Database of Statistics that, we believe, provide clear evidence of the globalisation of the world's capital markets and of the need for global financial reporting standards.

The latest updates reflect July 2007 data on the number of non-US companies listed on member exchange of the World Federation of Exchanges and details of cross-border listings on the New York Stock Exchange, NASDAQ, and the London Stock Exchange. There is also some data on cross-border lending and on accounting standards used by companies listed on the Deutsche Börse, as well as foreign companies registered with the US SEC.
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SME guidance and basis now available in German

15 Aug 2007

The IASB has posted On Its Website the German language translation of the Implementation Guidance (model financial statements and disclosure checklist) and basis for conclusions for the Exposure Draft of an International Financial Reporting Standard for Small and Medium-sized Entities.

The German translation of the ED itself was previously posted in June.
SEC (old) Image

SEC concept release on use of IFRSs by US companies

12 Aug 2007

The US Securities and Exchange Commission has published a Concept Release to obtain information about the extent and nature of the public's interest in allowing US issuers, including investment companies subject to the Investment Company Act of 1940, to prepare financial statements in accordance with International Financial Reporting Standards as published by the International Accounting Standards Board for purposes of complying with the rules and regulations of the Commission.

US issuers presently prepare their financial statements in accordance with generally accepted accounting principles as used in the United States, referred to as US GAAP. The release includes 35 specific questions to which the SEC seeks responses. The SEC requests comments by 13 November 2007. Click for Concept Release (PDF 571k).

TABLE OF CONTENTS OF THE SEC'S CONCEPT RELEASE
  • I. Introduction
  • II. The Effect of IFRS on the US Public Capital Market
    • A. Financial Reporting in the United States
    • B. Financial Reporting Outside the United States
    • C. The Possible Use of IFRS by U.S. Issuers
    • D. Convergence of IFRS and U.S. GAAP
  • III. Global Accounting Standards
    • A. The Case for a Single Set of Globally Accepted Accounting Standards
    • B. The International Accounting Standard Setter
    • C. The Commission's Previous Consideration of International Accounting Standards
  • IV. IFRS Implementation Matters for US Issuers
    • A. Education and Training
    • B. Application in Practice
    • C. Auditing
    • D. Regulation
    • E. Integration with the Commission's Existing Requirements
    • F. Transition and Timing
  • V. General Request for Comments
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IAASB seeks comments on two revised auditing standards

11 Aug 2007

The International Auditing and Assurance Standards Board (IAASB) has invited comments by 31 October 2007 on exposure drafts of two proposed International Standards on Auditing (ISA) issued as part of its project to enhance the clarity of its standards:

  • Proposed ISA 510 (Redrafted) Initial Audit Engagements – Opening Balances
  • Proposed ISA 530 (Redrafted) Audit Sampling
Accompanying the two exposure drafts are staff-prepared supplements that explain how the material in extant ISAs 510 and 530 has been reflected in the proposed redrafted ISAs.

 

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IASB convergence agreement with Japan

08 Aug 2007

The Accounting Standards Board of Japan (ASBJ) and the International Accounting Standards Board (IASB) have jointly announced an agreement to accelerate convergence between Japanese GAAP and International Financial Reporting Standards (IFRSs), a process that was started in March 2005.

As part of the agreement the two boards will seek to eliminate by 2008 major differences between Japanese GAAP and IFRSs (as defined by the July 2005 CESR Assessment of Equivalence), with the remaining differences being removed on or before 30 June 2011. Although the target date of 2011 does not apply to any major new IFRSs now being developed that will become effective after 2011, both boards will work closely to ensure the acceptance of the international approach in Japan when new standards become effective.

Click to Download the Press Release and Agreement (PDF 54k).

IVSC (International Valuation Standards Council) (lt green) Image

IVSC discussion paper on valuing intangibles under IFRSs

08 Aug 2007

The International Valuation Standards Committee (IVSC) has released for comment a 58-page discussion paper on the 'Determination of Fair Value of Intangible Assets for IFRS Reporting Purposes'.

In 2006, IVSC established an expert group to consider the guidance that was required for the valuation of intangible assets, specifically for IFRS reporting purposes. The expert group included Ben Moore, Director, Corporate Finance, Deloitte & Touche LLP, London.
The IVSC will consider responses to this Discussion Paper in developing an Exposure Draft of a Guidance Note on the Determination of Fair Value of Intangible Assets for IFRS Reporting Purposes for publication as an integral part of the International Valuation Standards.
The IVSC requests comments by 31 October 2007. Click to Download the Discussion Paper (PDF 916k).

 

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Deloitte will co-sponsor an IFRS conference in London

07 Aug 2007

Deloitte is one of the sponsors of a conference titled IFRS 2007/8: Current Practical Interpretation and Future Direction, to be held in London on 4 October 2007. The opening event is a dialog with IASB Chairman Sir David Tweedie.

Subsequent sessions will focus on IFRSs from an analyst's point of view, a preparer's view, audit and regulatory issues, legal issues, and implementation issues. A concluding forum will consider 'where do we go from here'. Deloitte speakers at the conference are Ken Wild, Deloitte's Global IFRS Leader, and Isobel Sharp, Deloitte UK Partner who currently is President of the Institute of Chartered Accountants of Scotland. Click for Conference Brochure (PDF 145k).
SEC (US Securities and Exchange Commission) (dark gray) Image

SEC financial reporting advisory committee holds first meeting

06 Aug 2007

The US Securities and Exchange Commission's Advisory Committee on Improvements to Financial Reporting held its first meeting on 2 August 2007 in Washington DC.

The committee was formed to study the US financial reporting system with the goals of reducing unnecessary complexity and making information more useful and understandable for investors. The advisory committee will focus on the following areas:
  • the current approach to setting financial accounting and reporting standards;
  • the current process of regulating compliance by registrants and financial professionals with accounting and reporting standards;
  • the current systems for delivering financial information to investors and accessing that information;
  • other environmental factors that drive unnecessary complexity and reduce transparency to investors;
  • whether there are current accounting and reporting standards that impose costs that outweigh the resulting benefits, and
  • whether this cost-benefit analysis is likely to be impacted by the growing use of international accounting standards.
In his Welcoming Remarks to the Advisory Committee (PDF 40k), SEC Chairman Christopher Cox said:

When it comes to giving investors the protection they need, information is the single most powerful tool we have. And surely we can't say we've achieved our investor protection objective if the information is provided in a way that isn't clearly understandable to the men and women for whom it is intended.

The truth is, financial reporting has become overly complex. That means not only are financial statements difficult for investors to understand, but also companies incur excessive costs as a result of complying with voluminous and overly prescriptive accounting and reporting rules.

Your job is to help end this destructive cycle and get our financial reporting system back to first principles. We're asking you to help us reduce complexity and all its costly burdens. When it comes to financial statements, most investors today probably feel the way Mark Twain did when he said, 'The more you explain it, the more I don't understand it.' That is why we've called on leaders from the private sector to advise us on what really helps.

 

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