As part of the review, the IAESB is conducting a short online survey on the audience, scope, and nature of International Education Statements. The IAESB would like the views of a broad range of parties interested in accounting education. The survey is not expected to require more than 30 minutes to complete. Click for:

• Link to the Survey
• More Information (PDF 16k)

 

In his remarks, Mr Herz posed a series of questions:

• Why the movement towards global financial reporting?
• But what exactly is the end goal?
• What are the key elements of such a system?
• Where are we now?
• So what's needed to achieve a global reporting system?
  • What's needed internationally?
  • What's needed in the US?
• OK, so where should we head?

In response to the last question (where should we head), Mr Herz identified 'three possible endgames':

1. 'Mutual recognition' only
2. 'Mutual recognition' plus 'two-GAAP' system for US registrants
3. A single set of high-quality international standards for registrants (and perhaps others)

Mr Herz stated that:

"FASB and FAF support option 3 (single set of high-quality international standards).... We advocate a well planned 'improve and adopt' approach to transitioning the US to IFRSs – improvement through continued joint projects between IASB and FASB in major areas, and directly adopt other parts of IFRS."

Click to view Chairman Herz speech Towards a Global Reporting System: Where Are We and Where Are We Going? (PDF 70k)

That newsletter summarises all of the new and revised IASB Standards and Interpretations in effect for December 2007 year ends and beyond. We have now posted the Chinese language version of that newsletter (PDF 302k). Our CAS Plus Website has more information in Chinese.

 

• IFRS 8 Operating Segments. Has now been fully endorsed for use in the EU.
• IFRIC 12 Service Concession Arrangements. Commission is conducting an impact assessment, which should be finished by March 2008. An endorsement decision is expected by 'mid-2008'.
• Directive 2006/46/EC and IAS 24 Related Party Transactions. Are they consistent?
• Review of the operation of the IAS Regulation and the Fair Value Directive. The Commission has already published a Report on IAS Implementation Prepared by the ICAEW. A report on implementation of the fair value directive is being prepared.
• Equivalence: IFRSs and Third-country GAAPs. "The Commission Services agreed that EU oversight over IASB needs to be improved as the EU is the main user of the IASB's products.... The Commission Services invited Member States to present ideas in this respect, as regards both the emerging debate on governance of the IASB and the need to strengthen the ability of EU to influence IASB decisions."

 

In Abu Dhabi, all companies listed on the Abu Dhabi Securities Markets (ADSM) are required to publish IFRS financial statements. In Dubai, all companies listed on the Dubai International Financial Exchange (DIFX) are required to publish IFRS financial statements. Throughout the UAE, all banks are required by the Central Bank of the UAE to publish IFRS financial statements.

 

International Education Practice Statement (IEPS) 3 Practical Experience Requirements – Initial Professional Development for Professional Accountants provides guidance on the period of practical experience, content of practical experience requirements, and the roles and responsibilities of IFAC members as well as mentors and employers. In meeting the requirements of International Education Standard (IES) 5 Practical Experience Requirements IEPS 3 suggests that IFAC member bodies should consider adopting a combined approach – requiring a minimum three-year period of practical experience and measuring workplace output to assess competence. IEPS 3 may be downloaded from www.ifac.org/store. Here is the Press Release (PDF 53k).

 

We remind you that the deadline is Friday, 11 January 2008, for responding to the following three IASB Exposure Drafts:

• Exposure Draft: Annual Improvements to IFRSs (issued 11 October 2007)
• Exposure Draft 9: Joint Arrangements (issued 13 September 2007)
• Exposure Draft: Amendments to IAS 39 – Exposures Qualifying for Hedge Accounting (issued 6 September 2007)

They will be published in the January-February 2008 issue of Financial Executive magazine. We have posted Mr Cangemi's article with the kind permission of Financial Executives International. A summary is presented below. Note that global convergence of US GAAP and IFRSs is high on the list.

FEI CEO's Top Challenges for Financial Executives for 2008

Fair value, the subprime market crisis, and derivatives. Does FAS 157 help? What else is needed friom a financial reporting perspective? Global convergence of US GAAP and IFRSs. Are the US markets ready for principles-based standards? Complexity in financial reporting. The SEC Advisory Committee on Improvements to Financial Reporting (CIFR) expects to finalise recommendations that are practical, doable, and workable that intend to: make financial information more useful, reduce restatements, clarify the process for providing guidance on accounting standards, reduce complexity and promote US GAAP and IFRS convergence. Audit profession. Treasury Department's ACAP is considering, among other things, the auditing profession's ability to cultivate, attract and retain talent; ensure audit quality for investors; audit market competition and concentration and the impact of the independence and other professional standards on the US market. But how will the findings impact preparers and audit fees? XBRL. Expect even more momentum in this direction in 2008 in advance of potential leadership changes at the SEC in an election year. Business combinations. FASB has revised FAS 141 and issued FAS 160. Internal controls. 2007 marks the first year that AS5 and related SEC management guidance will be applied by all public companies. Health care. Expanded coverage? What should the benefits be, and how should they be paid for? How such costs can be better managed. Corporate taxation. Potential for 'anti-business' tax proposals in Congress. Rating agency regulation. Do rating agencies have conflicts of interest? Is more regulation needed? IRS policy restraint and privilege. Will IRS reconsider its 'policy of restraint' towards requesting companies' tax accrual workpapers? Do the tax reserve disclosures mandated by FIN 48 harm companies?

Click to view Top Challenges for 2008 (PDF 45k).

The new database highlights the power of interactive data to transform financial disclosure. The Executive Compensation Reader is available on the SEC's website at www.sec.gov/xbrl. It builds on the Commission's new requirements that went into effect earlier this year to expand executive compensation disclosures. Click for Press Release (PDF 31k).

 

The article has a number of comments from Ken Wild, Deloitte's Global Leader for IFRSs, including the following about the benefits of IFRSs:

The benefits are self-evident. The more investors and other stakeholders think that they understand something the more likely they are to provide money or invest in it. It all depends on how much confidence they have in the company and there will always be an element of doubt if the language is different.

Insight is copyrighted by the IASC Foundation. We have posted the article with the kind permission of the Foundation. Click to view IFRSs Going Global: Implications for the Profession (PDF 472k). You can subscribe to Insight by going to the IASB's Website and then clicking on 'Shop'.