November

Questions about use of IFRSs in the United States

07 Nov 2007

We have posted an article titled If IFRS Offer the Answer, They Sure Raise a Lot of Questions by Glenn Cheney in the November 2007 issue of Financial Executive magazine.

The article presents issues and perspectives relating to whether the US Securities and Exchange Commission should allow foreign registrants to use IFRSs without a reconciliation to US GAAP and, possibly, allow domestic registrants to use IFRSs instead of US GAAP. Click to Download the Article (PDF 335k), which is copyright by Financial Executives International and posted here with their kind permission.

 

IASCF Trustees announce strategy to enhance governance

07 Nov 2007

The Trustees of the International Accounting Standards Committee Foundation (IASCF), the oversight body of the IASB, have announced proposals to enhance the organisation's governance arrangements and reinforce the organisation's public accountability.

The Trustees will begin a series of consultations with key stakeholders on these proposals in the build up to the Constitution Review, which is scheduled to start in 2008. Click for IASCF News Release (PDF 55k).

IASCF Governance Proposals

  • Establish a formal reporting link to official organisations: The Trustees should establish a link to a representative group of official organisations, including securities regulators. This body would approve Trustee appointments and review Trustee oversight activities, including the adequacy of the annual funding arrangements as well as the overall budget.
  • Develop a multi-layered, multi-faceted approach to accountability beyond the formal link to official organisations: The Trustees should intensify and deepen their engagement with key stakeholder groups and develop mechanisms for the Trustees to receive input outside formalised procedures. This would necessarily include mechanisms for meeting with official organisations and policymakers and private sector institutions. Furthermore, such accountability would require consideration of the role and structure of the Standards Advisory Council in the organisation's accountability.
  • Create a mechanism for public input to the Trustees outside regularly scheduled meetings with specific stakeholder groups: The Trustees should establish enhanced mechanisms for input from interested parties who wish to comment on the IASC Foundation's and the IASB's policies, processes, and procedures.
  • Continue efforts towards a sustained, broad-based funding regime: Having already significantly broadened the funding base through the new approach adopted in 2006, the Trustees should continue their work to broaden the funding base further.

 

IASCF Trustee appointments and vacancies

07 Nov 2007

At their meeting in New York last week, the Trustees of the IASC Foundation approved certain changes in their membership and leadership:

  • Philip Laskawy, the current Chairman of the Trustees of the IASC Foundation, will become Vice Chairman of the Trustees when Gerrit Zalm assumes the chairmanship in January 2008. As previously agreed, Bertrand Collomb will stand down as Vice Chairman at year end and will remain as a Trustee.
  • Jeffrey Lucy, former Chairman of the Australian Securities and Investments Commission and incoming Chairman of the Australian Financial Reporting Council, will join the Trustees for a three-year term, beginning January 2008.
  • Kees Storm, former Chairman of AEGON, will resign from the Trustees at the end of the year due to other commitments. The Trustees will initiate a public search for his successor shortly.
  • The Trustees will consult the Trustees Appointments Advisory Group as part of the Trustees' efforts to fill the two other Trustee vacancies, created by the retirements of Roberto Teixeira da Costa and William McDonough.

Click here for a complete List of IASCF Trustees. Regarding the current vacancy in membership of the IASB, the Trustees' Nominating Committee announced that they will begin a new search to fill the vacancy.

Proposed new body to monitor the IASCF and IASB

07 Nov 2007

The European Commission, the Financial Services Agency of Japan, the International Organization of Securities Commissions (IOSCO), and the US Securities and Exchange Commission have proposed the creation of a new monitoring body within the governance structure of the IASC Foundation.

This body would meet regularly with the IASCF Trustees to:
  • Review and comment on the IASB's work programme.
  • Participate in – and have final approval in the selection of – IASCF Trustees.
  • Review the Trustees' oversight activities.
Click to download the Joint Statement (PDF 72k). An excerpt:

 

Excerpt from the Joint IOSCO, EC, SEC, and FSAJ Statement

The IASB, which is overseen by the IASC Foundation Trustees, is an independent standard setter committed to developing, in the public interest, a single set of high quality, understandable, and enforceable global accounting standards. The IASC Foundation Trustees have scheduled a review of the Foundation's Constitution to begin in 2008. The authorities responsible for capital market regulation propose to utilize the opportunity of the Constitution Review to put forward, in collaboration with the IASC Foundation, certain changes to strengthen the Foundation's governance framework, while emphasizing the continued importance of an independent standard-setting process.

Central to this effort is the establishment of a new monitoring body within the governance structure of the IASC Foundation to reinforce the existing public interest oversight function of the IASC Foundation Trustees. The creation of such a monitoring body would serve to complement the Trustees in its representation of the interest of the global investor community, thereby enhancing public confidence in IFRS.

One key objective is to have the monitoring body meet regularly with IASC Foundation Trustees to discuss, review and comment on the IASB's work program. We expect the IASC Foundation and IASB Chairmen will also engage with relevant public authorities. The monitoring body would, together with the IASC Foundation Trustees and in consultation with the trustee appointments advisory group, participate in the selection of Trustees. The monitoring body would also be responsible for the final approval of Trustee nominees and would have the opportunity to review the Trustees' procedures for overseeing the standard-setting process and ensuring the IASB's proper funding.

IFRSs adopted in Fiji for a broad range of entities

06 Nov 2007

The Fiji Institute of Accountants (FIA), which is a member body of the International Federation of Accountants, has adopted International Financial Reporting Standards for all accounting periods beginning from 1 January 2007 for all entities that fall within the following categories:

  • Public companies, as defined in the Companies Act*;
  • Government majority owned companies;
  • Banking and financial institutions;
  • Superannuation, insurance, and insurance broking entities;
  • Government entities established under their own statute;
  • Entities with annual group turnover of at least F$20m (US$13m) or with assets exceeding F$20m (US$13m);
  • Entities that are publicly accountable (which have debt or equity instruments on public issue or have coercive power to tax, rate, or levy to obtain public funds); and
  • Entities where any of the above listed entities have significant influence (through more than 20 per cent ownership), as equity accounting would be applicable for the parent company reporting.

*Public companies, as defined in the Companies Act, are companies that do not restrict transfer of shares, and have minimum 7 shareholders. There is no limit on the maximum number of shares. All listed companies on the South Pacific Stock Exchange (in Fiji) are public companies, as are all unlisted companies that are incorporated or converted as public companies in accordance with the Companies Act.

Moreover, the Institute has ruled that the members must follow IASBs IFRSs extant as at January each year with an option to adopt earlier any subsequent new standards or updates.

The chairman of the FIA Standards Committee summarised the new requirements, and also provided an update on standards to be followed by non-IFRS entities and on auditing standards, in the Institute's Journal August 2007 (PDF 23k). We have created a new Fiji Page.

Heads Up on AICPA meeting with SEC staff

06 Nov 2007

We have posted the 5 November 2007 Edition of the Heads Up Newsletter published by Deloitte & Touche LLP (United States).

This issue of Heads Up summarises the discussions at a meeting on 11 October 2007 between the AICPA SEC Regulations Committee and the SEC staff. Those discussions covered, among other things:
  • Eligibility criteria to determine the age of the financial statements of an acquired business that must be provided in a registration statement
  • Disclosure requirements in registration statements for proposed FSP APB 14-a regarding convertible debt securities
  • Financial statements a registrant should use in determining the significance of an acquired business that is a successor to a predecessor company
  • What guarantor financial statements a registrant must provide in an automatic shelf registration statement at the time of filing
  • How a registrant should determine whether separate financial statements or summarised financial information is required when an investment is accounted for under the FASB Statement 159 fair value option rather than under the equity method
  • Financial statements that an issuer of asset-backed securities must provide for entities providing credit enhancements in certain periodic reports
  • Registrant's requirement to update its financial statements in a Form S-8 when subsequent events (such as discontinued operations or changes in segments) have occurred
The Regulations Committee is composed of representatives from various public accounting firms, industry, and academia, and meets periodically with the SEC staff to discuss emerging technical accounting and reporting issues relating to SEC rules and regulations.
Click to view the Heads Up newsletter (PDF 131k).

 

Comment deadline on SEC IFRS Concept Release

06 Nov 2007

We remind IAS Plus visitors that the comment deadline is 13 November 2007 for responding to the US Securities and Exchange Commission's Concept Release on Allowing US Issuers to Prepare Financial Statements in Accordance with IFRSs.

The SEC voted unanimously to publish the release on 25 July 2007. Broadly stated, the release invites comment on whether to allow US issuers, including investment companies, to prepare their financial statements using IFRSs as published in English by the International Accounting Standards Board. Under the SEC's current rules, US issuers are required to follow US GAAP.
Click to view Concept Release on Allowing US Issuers to Prepare Financial Statements in Accordance with IFRSs (PDF 571k).

 

Accounting Roundup – October 2007

06 Nov 2007

We have posted the October 2007 Edition of Accounting Roundup published by Deloitte & Touche LLP (USA).

Topics covered in this issue include:

FASB Developments

  • FASB Decides No Deferral of Fair Value Statements 157 and 159; Proposal to Indefinitely Defer SOP 07-1 Affecting Investment Company Accounting Expected
  • FASB Meets With Accounting Standards Board of Japan to Discuss Global Convergence
AICPA Developments
  • AICPA Proposes Revisions to Accounting and Review Services Guidance
  • AICPA Begins Project to Redraft Standards to Achieve Greater Clarity
SEC Developments
  • SEC Feedback on Executive Compensation Disclosures: 'Where's the Analysis?'
  • SEC Approves the Use of Surrogate to Value Employee Share Options
PCAOB Developments
  • PCAOB Issues Draft Guidance for Auditors of Smaller Public Companies
  • PCAOB Approves Amendments to Inspection Frequency for Firms That Do Not Regularly Issue Audit Reports
  • PCAOB Issues Inspection Report on Small U.S. Audit Firms
International Developments
  • IASB and Accounting Standards Board of Japan Make Progress Toward Goal of Convergence in Accounting Standards by 2011
  • IASB Extends the Deadline for Comments on Proposed IFRS for Small and Medium-Sized Entities
  • IASB Publishes Proposals for Amendments to IFRSs Under the First Annual Improvements Project
  • International Accounting Standards Committee Foundation Appoints Gerrit Zalm as Chairman of the Trustees
Click to view Accounting Roundup (PDF 323k). You will find past issues of Accounting Roundup Here.

 

New IFRS publications from Deloitte Korea

05 Nov 2007

In March 2007, the Korean Financial Supervisory Commission and the Korea Accounting Institute announced a plan for adopting Korean equivalents of International Financial Reporting Standards (K-IFRSs).

All listed companies will be required to prepare their annual financial statements under K-IFRSs beginning in 2011. Listed companies other than financial institutions will be permitted to do so beginning in 2009. Unlisted companies will be allowed to use K-IFRSs. To help clients and staff in the transition to K-IFRSs, Deloitte Korea has just issued four IFRS publications in the Korean language, as follows: Also, Deloitte Korea manages a Korean Language IFRS Website.

FASB codification nears public release for testing

05 Nov 2007

The US Financial Accounting Standards Board (FASB) will release the FASB Accounting Standards Codification™ (Codification) for verification by constituents in late 2007 or early 2008. During the one-year verification period, the FASB will make the Codification available through a new web-based research system to solicit feedback from constituents to confirm that the Codification accurately reflects existing US GAAP for nongovernmental entities.

The goal of the Codification is to simplify the organisation of thousands of authoritative US accounting pronouncements issued by multiple standard-setters, including FASB, the American Institute of Certified Public Accountants (AICPA), and the Emerging Issues Task Force (EITF). Once approved by the FASB, the Codification will become the single source of authoritative US GAAP and will supersede existing FASB, AICPA, EITF, and related literature. At that time, only one level of authoritative GAAP will exist. All other literature will be nonauthoritative. The Codification reorganises the thousands of US GAAP pronouncements into roughly 90 accounting topics, and displays all topics using a consistent structure. Also to be included is relevant Securities and Exchange Commission (SEC) guidance that will follow the same topical structure in separate sections in the Codification.
Click for FASB News Release (PDF 63k).

 

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