October

IFRSs and IASB on EU Parliament committee agenda

08 Oct 2007

The Committee on Economic and Monetary Affairs of the European Parliament will meet in Brussels on Monday 8 October 2007 and Tuesday 9 October 2007.

Among the agenda items:

  • Consideration of draft opinion – International Financial Reporting Standard 8 concerning disclosure of operating segments
  • Establishing a mechanism for the determination of equivalence (to IFRSs) of accounting standards applied by third country issuers of securities pursuant to Directives 2003/71/EC and 2004/109/EC of the European Parliament and of the Council
  • Consideration of draft motion for a resolution – International Financial Reporting Standards and the governance of the IASB

SEC Commissioner speaks on global accounting convergence

08 Oct 2007

At a recent conference in the United States, Commissioner Kathleen L. Casey of the US Securities and Exchange Commission spoke about the SEC's role in support of international financial reporting convergence – development of a "single set of high-quality global accounting standards that promise to produce significant benefits for investors, issuers, and our markets as a whole".

Click to Download Commissioner Casey's Remarks (PDF 74k). Among other things, Commissioner Casey spoke about eliminating the IFRS-US GAAP reconciliation, the need for consistent and faithful application of IFRSs, the need for converged global audit standards and auditor oversight, and the need for a long-term funding mechanism for the IASB. An excerpt:

If the Commission decides to eliminate the reconciliation requirement, it will be a major change. Some commenters see the elimination of reconciliation as an accommodation that would merely reduce costs for the relatively small number of foreign issuers registered in the United States. But in my view, eliminating reconciliation would be a watershed event. It would represent a much more significant recognition on the part of the Commission of the need and desirability of continuing down the path of convergence efforts towards the ultimate goal of the development of a single set of global accounting standards.

IAESB issues two Education Practice Statements

07 Oct 2007

The International Accounting Education Standards Board (IAESB) has released two new International Education Practice Statements (IEPSs).

The new practice statements assist IFAC members, associates and other educators in developing ethics education programs and in implementing the information technology (IT) knowledge component of a professional accounting education program. The two statements are:
  • IEPS 1 Approaches to Developing and Maintaining Professional Values, Ethics, and Attitudes provides guidance to IFAC members and associates on how to achieve good practice in developing and maintaining professional values, ethics, and attitudes in accordance with the requirements in International Education Standard 4 Professional Values, Ethics and Attitudes. The practice statement identifies a number of methods for the delivery of ethics education, stressing the importance of workplace learning and assessment. It also identifies continuing professional development as the means for member bodies to ensure that professional accountants continue to develop professional values, ethics, and attitudes throughout their careers.
  • IEPS 2 Information Technology for Professional Accountants outlines the knowledge and skills necessary to prepare professional accountants to perform competently in the IT environment.
The two practice statements can be downloaded without charge from the IFAC online bookstore at www.ifac.org/store. Click for Press Release (PDF 55k).

Belarus requires banks to report using IFRSs

06 Oct 2007

The National Bank of the Republic of Belarus has ordered Belarusian banks to publish IFRS financial statements along with financial reports prepared using national standards starting in 2008.

IAS Plus Newsletter on hedging exposure draft

05 Oct 2007

Deloitte's IFRS Global Office has published a special edition IAS Plus Newletter on Exposures Qualifying for Hedge Accounting.

The newsletter  discusses an Exposure Draft (ED) of proposed amendments to IAS 39 Financial Instruments: Recognition and Measurement that the IASB published for comment on 6 September 2007. The ED addresses:
  • What can be designated as a hedged item in a hedge accounting relationship – that is, which risks qualify for designation as hedged risks when an entity hedges its exposure to a financial instrument.
  • Circumstances in which an entity may designate a portion of the cash flows of a financial instrument as a hedged item.
Comment deadline is 11 January 2008. 

IASB October 2007 Board meeting agenda

05 Oct 2007

The International Accounting Standards Board will hold its October 2007 meeting at the Board's offices, 30 Cannon Street, London, on Tuesday to Friday, 16-19 October 2007. The agenda for the meeting is set out below.

The IASB and the US Financial Accounting Standards Board will hold a joint meeting at the FASB's offices in Norwalk, Connecticut, USA on Monday 22 October to Tuesday 23 October 2007. The joint meeting agenda is not yet available.

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16-19 October 2007, London

Tuesday 16 October 2007 (afternoon only)

  • Post-employment Benefits – Discussion paper issues relating to defined benefit promises
  • Conceptual Framework – Phase A: Objectives and Qualitative Characteristics
  • Conceptual Framework – Phase B: Elements and Recognition
  • Annual Improvements 2008
    • Should IFRS 5 be amended to clarify the disclosures required for non-current assets (or disposal groups) classified as held for sale or discontinued operations?
    • Should the Appendix to IAS 18 be amended to add guidance on determining whether an entity is acting as a principal or as an agent?

Wednesday 17 October 2007

Thursday 18 October 2007

Friday 19 October 2007 (morning only)

Accounting Roundup – third quarter 2007 review

05 Oct 2007

We have posted Accounting Roundup: Third Quarter in Review–2007, prepared by the National Office Accounting Standards and Communications Group of Deloitte & Touche LLP (USA).

This newsletter provides brief descriptions of pronouncements affecting accounting, financial reporting, and corporate governance issued during 3Q-2007 by standard setters and regulators including FASB, EITF, AICPA, SEC, FASAB, PCAOB, GASB, IASB, and IFRIC. It also outlines other third-quarter regulatory and professional developments. This quarterly review consists of articles, adapted as necessary, from issues of Accounting Roundup published in July and August 2007, as well as new articles for the month of September. You will find past issues Here. International developments covered in this edition of Accounting Roundup are:
  • IASB Issues Exposure Draft on Accounting for Joint Arrangements
  • IASB Proposes Additional Guidance on Hedge Accounting
  • IASB Issues Revised Standard on Presentation of Financial Statements
  • IFRIC Issues Interpretation of IAS 19
  • IFRIC Issues Proposed Guidance on Real Estate Sales
  • IFRIC Issues Proposed Guidance on Hedges of a Net Investment in a Foreign Operation
  • Meeting to Promote Global Convergence in Emerging and Transition Economies
  • Japan and India Agree With IASB on Achieving Convergence by 2011

New ISA on audits of group financial statements

05 Oct 2007

The International Auditing and Assurance Standards Board (IAASB) has issued International Standard on Auditing (ISA) 600 (Revised and Redrafted) Special Considerations – The Audit of Group Financial Statement (Including the Work of Component Auditors).

ISA 600 is intended to assist the group engagement partner in taking responsibility for the direction, supervision, and performance of the group audit and the issue of an auditor's report that is appropriate in the circumstances. The ISA specifies the types of work that the group engagement team, or component auditors on its behalf, should perform on the financial information of significant components. Click for Press Release (PDF 35k). ISA 600 is effective for audits of financial periods commencing on or after 15 December 2009. This date is consistent with the effective date for all the standards being redrafted under the IAASB's Clarity project (see our News Story of 2 October 2007).

US Treasury committee will examine the auditing profession

04 Oct 2007

The United States Department of the Treasury has named a 19-member Treasury Advisory Committee on the Auditing Profession.

The committee will examine auditing industry concentration, financial soundness, audit quality, employee recruitment and retention, and related topics. The committee is co-chaired by former Securities and Exchange Commission Chairman Arthur Levitt and former SEC Chief Accountant Donald Nicolaisen. Paul Volcker, former chairman of the Trustees of the International Accounting Standards Committee Foundation, is a member. IASB Chairman Sir David Tweedie is an observer, as is FASB Chairman Robert H Herz. Treasury expects the committee to produce findings and recommendations by early summer 2008. Appointment of the committee is part of a four-pronged initiative to strengthen auditing and financial reporting in the United States, announced in May 2007 (see our News Report of 18 May 2007). Click for:

Accounting issues arising from illiquid market conditions

04 Oct 2007

The Center for Audit Quality (CAQ) issued three white papers addressing key accounting issues arising from the current illiquid market conditions from the perspective of existing United States GAAP.

While the papers are written in a US GAAP context, the issues are likely to be of interest in an IFRS context as well. The CAQ  was created by the American Institute of CPAs "to foster confidence in the audit process and to aid investors and the capital markets by advancing constructive suggestions for change rooted in the profession's core values of integrity, objectivity, honesty and trust".

Download the three CAQ white papers:

  • Fair Value Measurements in Illiquid (or Less Liquid) Markets (PDF 32k). The paper discusses measurement of fair value under existing US GAAP (most of which is contained in SFAS 157 Fair Value Measurements) in the context of illiquid (or less liquid) market conditions that currently exist in many segments of the credit markets. Although much of the discussion is in the context of assets backed by subprime mortgage loans, the GAAP principles discussed regarding the measurement of fair value are also applicable to the measurement of the fair value of other assets (such as unsecuritized assets), not just those backed by subprime mortgage loans.
  • Consolidation of Commercial Paper Conduits (PDF 31k). The objective of this paper is to discuss the application of FASB Interpretation No. 46 (revised December 2003) Consolidation of Variable Interest Entities by sponsors of commercial paper conduits, particularly as impacted by market conditions that currently exist in many segments of the credit markets, including illiquid (or less liquid) conditions in the commercial paper markets.
  • Accounting for Underwriting and Loan Commitments (PDF 39k). This paper discusses existing US GAAP associated with commitments to lend money or underwrite securities in the context of illiquid (or less liquid) market conditions that currently exist in many segments of the credit markets.

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