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Summary of International Public Sector Accounting Standards

31 Mar 2007

Deloitte has published a booklet summarising the provisions of all International Public Sector Accounting Standards (IPSAS) in issue at 1 September 2006, namely IPSASs 1 to 21. These summaries are intended as general information and are not a substitute for reading the entire Standard.

IPSASs are developed by IFAC's International Public Sector Accounting Standards Board (IPSASB). IPSASs 22 to 24 have recently been issued, and we expect to update this publication to include summaries of these new IPSASs. Click for:

PCAOB will propose changes to auditing standards

31 Mar 2007

The United States Public Company Accounting Oversight Board will meet on 3 April 2007 to consider, among other things:

  • Consistency. Proposing an auditing standard Evaluating Consistency of Financial Statements and related amendments to the Board's existing standards on the auditor's responsibilities to evaluate and report on matters relating to the consistency of the financial statements
  • GAAP hierarchy. Proposing amendments to the PCAOB's existing auditing standards that would remove the hierarchy of generally accepted accounting principles from the auditing standards in light of the proposal by the Financial Accounting Standards Board to place the hierarchy in the accounting standards. The US 'GAAP hierarchy' is similar in nature to the guidance on selection and application of accounting policies in paragraphs 7-12 of IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors. Click for PCAOB Press Release (PDF 36k).

IVSC report on valuations under IFRSs

31 Mar 2007

The International Valuation Standards Committee (IVSC) has reviewed the first audited IFRS financial statements of 59 leading European property investment companies from 13 countries to assess the degree of consistency in valuation reporting of real estate assets under IAS 40.

The IVSC's findings were published in a report titled Valuation Under International Financial Reporting Standards(PDF 74k). The companies included in the survey are all members of the European Public Real Estate Association. The great majority chose to account for their investment property under IAS 40 at fair value through profit or loss, rather than IAS 40's alternative cost-depreciation-impairment model. Some of the key trends that emerged from the review were:
  • A rapidly growing use of the International Valuation Standards (IVS). Of those companies who disclosed that the valuation was carried out according to certain valuation standards, 36% referred to the IVS; 38% to the RICS 'Red Book';
  • If UK companies were excluded, 40% of companies referred to use of the IVS; 24% to the RICS 'Red Book';
  • In all, ten difference sets of valuation standards/guidance were quoted as having been used;
  • Just under half of the companies surveyed reproduced a definition of Market Value or of Fair Value within their financial statement. Only 34% accurately reproduced either the IVS definition of Market Value (also adopted by the RICS) or the IASB definition of Fair Value.

New Deloitte website on Chinese accounting standards

30 Mar 2007

Deloitte (China) has launched a new Chinese language website devoted to Chinese Accounting Standards (CASs).

On 15 February 2006, the Ministry of Finance of the People's Republic of China issued a new set of Accounting Standards for Business Enterprises (ASBEs), comprising a basic standard and 38 specific standards. The ASBEs will become mandatory for all PRC listed companies on 1 January 2007. Other PRC enterprises are encouraged to apply the ASBEs. The CAS Plus website will contain information about the latest developments in accounting standards and the accounting systems in China as well as information on international financial reporting. It will also feature the reference material specially developed by the Deloitte experts available to download, including a comparison between IFRSs and PRC GAAP, model financial statements, and a disclosure checklist.

IFRS e-Learning in Chinese

For several years, Deloitte has made available, in the public interest and without charge, its English language IFRS e-learning training materials. Well over one million modules have already been downloaded by users outside Deloitte. These high quality e-learning materials are currently being translated into Chinese, and some are already available on the website.

SEC eases deregistration for foreign issuers

30 Mar 2007

The US Securities and Exchange Commission has published new rules that make it easier for foreign companies to deregister their securities in the United States.

Under the new rules, a foreign entity may deregister if the US average daily trading volume of the securities has been no greater than 5 percent of the average daily trading volume of that class of securities on a worldwide basis for a recent 12-month period (and some other conditions are met). Under the old rules, a foreign issuer could not deregister if it has more than 300 record holders who are US residents, even if, on the basis of trading volume, there is relatively little interest in the issuer's securities among American investors. Click for:

Patricia O'Malley will become IFRIC Co-ordinator

30 Mar 2007

From 1 July 2007, Patricia O'Malley will become the IFRIC Co-ordinator.

She retires as a member of the IASB on 30 June. Ms O'Malley will replace the current IFRIC Co-ordinator Allan Cook, who is retiring. IFRIC's role is to "interpret the application of International Accounting Standards (IASs) and International Financial Reporting Standards (IFRSs) and provide timely guidance on financial reporting issues not specifically addressed in IASs and IFRSs, in the context of the IASB Framework". The Co-ordinator is the senior staff person for IFRIC.

IASB and ASBJ hold convergence discussions

29 Mar 2007

Representatives of the IASB and the Accounting Standards Board of Japan met on 27 and 28 March 2007 in Tokyo to discuss convergence of Japanese GAAP and International Financial Reporting Standards.

The agenda included:
  • The progress that has been made by the ASBJ in the areas of intangible assets, retrospective restatement, and scope of consolidation (including SPEs and consolidation of foreign subsidiaries)
  • IASB projects on post-retirement benefits, measurement, conceptual framework, and business combinations.
Click for IASB Press Release (PDF 56k).

Revised IAS 23 requires capitalisation of borrowing costs

29 Mar 2007

The International Accounting Standards Board has issued a revised IAS 23 'Borrowing Costs'.

The main change from the previous version is the removal of the option of immediately recognising as an expense borrowing costs that relate to assets that take a substantial period of time to get ready for use or sale. An entity is, therefore, required to capitalise borrowing costs as part of the cost of such assets.

The revised IAS 23 does not require the capitalisation of borrowing costs relating to assets measured at fair value, and inventories that are manufactured or produced in large quantities on a repetitive basis, even if they take a substantial period of time to get ready for use or sale.

The revised Standard applies to borrowing costs relating to qualifying assets for which the commencement date for capitalisation is on or after 1 January 2009. Earlier application is permitted.

Click for Press Release (PDF 51k).


EU Commissioner discusses Transatlantic cooperation

28 Mar 2007

At a conference in Dublin earlier this week, Charlie McCreevy, the European Commissioner for Internal Market and Services, spoke about The Future of the Transatlantic Capital Market – Regulation, Risk, Governance. He commented on several accounting and auditing issues.

Click for Commissioner McCreevy's Remarks  (PDF 95k). Excerpts:

We have cooperation on accounting standards, with work on convergence ongoing and a roadmap towards abolishing reconciliation requirements on both sides of the Atlantic by the end of 2008. I am confident that we and the US will meet our joint deadline....

On my recent visit to the US, PCAOB Chairman Olson and I announced that we would launch roadmap discussions on equivalence of each other's audit oversight bodies, to build on what has been achieved in accounting. Our goal is that, by 2009, we will have a system in place based on mutual trust, in which each jurisdiction will be able to rely on the independent and rigorous inspections of audit firms active on their territory by their home country public oversight authority.

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