2007

SEC (old) Image

SEC hearings on allowing US companies to use IFRSs

16 Nov 2007

The US Securities and Exchange Commission will convene two roundtables, on 13 December 2007 and 17 December 2007, to collect more feedback from the public on the issue of giving US domestic issuers the option to submit financial statements prepared in conformity with IFRSs.

Foreign SEC registrants now have that option (see next news story). In July 2007, the SEC issued a Concept Release inviting comment on whether to allow US issuers to prepare IFRS financial statements.

 

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Two items added to Board agenda for 16 November 2007

15 Nov 2007

The International Accounting Standards Board has revised the Meeting Agenda for the final day of its November 2007 Board meeting, Friday 16 November 2007, to add the following two items:

 

European Union (old) Image

EU Parliament endorses IFRS 8 for use in Europe

15 Nov 2007

The European Parliament voted on Wednesday 14 November 2007 by show of hands in favour of a Draft Resolution endorsing IFRS 8 Operating Segments for use in Europe.

While endorsing IFRS 8, the draft resolution expresses a number of concerns, reservations, and regrets.
Click to view the Draft Resolution (PDF 98k).
Deloitte Comment Letter Image

We support allowing US issuers to use IFRSs

14 Nov 2007

Deloitte has submitted a letter responding to the SEC's 25 July 2007 Concept Release, Allowing US Issuers to Prepare Financial Statements in Accordance With International Financial Reporting Standards. We strongly support the ultimate goal of having a single set of globally accepted accounting standards that all US issuers could use.

To that end, we believe that the SEC should develop a comprehensive plan to eventually transition all US issuers to IFRSs. We believe that in the interim, giving US issuers the option to use IFRSs in preparing their financial statements will facilitate movement toward a single set of standards. We support the SEC's permitting this option as soon as feasible, provided that there is sufficient time for preparers, auditors, and users to be educated and trained on IFRSs. Click for:

 

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Notes from IASB November 2007 meeting day 1

14 Nov 2007

The International Accounting Standards Board is holding its November 2007 meeting at its offices, 30 Cannon Street, London, on Tuesday to Friday, 13-16 November.

Click here for the preliminary and unofficial Notes taken by Deloitte Observers at the meeting.

 

European Union (old) Image

EU Parliament will vote on endorsement of IFRS 8

13 Nov 2007

The European Parliament will vote on Wednesday 14 November 2007 on a Draft Resolution that would endorse IFRS 8 Operating Segments for use in Europe.

While endorsing IFRS 8, the draft resolution expresses a number of concerns, reservations, and regrets.
Click to view the Draft Resolution (PDF 98k).

 

SEC (old) Image

SEC Chairman comments on dropping IFRS reconciliation

13 Nov 2007

In his Remarks at the IOSCO Technical Committee Conference in Tokyo last week, US SEC Chairman Christopher Cox commented on several IFRS issues, including the possibility of eliminating the requirement that foreign registrants using IFRSs reconcile equity and earnings to US GAAP amounts.

An excerpt:

Of course, no regulatory standard is perfect; and international standards are no exception. But often the value of a universal language outweighs the potential cost and confusion from many different standards – even though each may have its own reasonable claim to superiority. It is for just this reason that the SEC is getting ready next week to consider a final rule that would allow issuers who use International Financial Reporting Standards in their home countries to also use IFRSs in their filings with the SEC, without any longer having to reconcile that to US Generally Accepted Accounting Principles*. And it's why we're considering the concept of offering that same option to US domestic issuers. Our long standing support for international regulatory harmonization was also the reason that, seven years ago, the SEC conformed our prospectus disclosure requirements for foreign issuers to IOSCO's International Disclosure Standards.

*See IAS Plus news story of 8 November 2007.

Click to view Remarks at the IOSCO Technical Committee Conference (PDF 63k).

European Union (old) Image

EU Parliament will vote on 'equivalence'

13 Nov 2007

The European Parliament will vote on Wednesday 14 November 2007 on a draft resolution that would amend the European Accounting Regulation to allow a non-European company listed on a European regulated securities market to continue to use its national GAAP ('third country' GAAP) through 2011, rather than IFRSs, in either of the following two cases:

  1. the third country authority responsible for the national accounting standards concerned has made a public commitment before 30 June 2008 to converge those standards with International Financial Reporting Standards before 31 December 2011 and both the following conditions are met:
    1. the third country authority responsible for the national accounting standards concerned has established a convergence programme before 31 December 2008 that is comprehensive and capable of being completed before 31 December 2011;
    2. the convergence programme is effectively implemented, without delay, and the resources necessary for its completion are allocated to its implementation.
  2. the third country authority responsible for the national accounting standards concerned has made a public commitment before 30 June 2008 to adopt International Financial Reporting Standards before 31 December 2011 and effective measures are taken in the third country to secure the timely and complete transition to International Financial Reporting Standards by that date, or have reached a mutual recognition agreement with the EU before 31 December 2008.
The decision on equivalence of a country's GAAP to IFRSs will be made by the Commission on a country by country basis, but a further condition is imposed: "The decision of the Commission will have to imply in all cases the right for EU issuers to use in any third-country IFRS as adopted in the EU." Thus it would seem, based on this Resolution, that US companies listed in Europe could not continue to use US GAAP unless the US SEC allows European companies to use 'IFRSs as adopted in the EU'. As of March 2007, the equity securities of 102 US companies and the debt securities of 131 US companies traded in European regulated securities markets.
Click to view the Draft Resolution (PDF 121k).

 

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IASB holds roundtable on puttable instruments

13 Nov 2007

On Monday 12 November 2007, the IASB conducted a public roundtable on a revised staff draft of an Amendment to IAS 32.

The issue is whether financial instruments puttable at fair value and obligations arising on liquidation should be classified as debt or equity. Here is a brief report:
  • Thirty-three individuals and organisations participated in the roundtable, as did eight IASB members and several staff.
  • During the roundtable, the IASB indicated that it does not consider the changes from the June 2006 Exposure Draft significant enough to warrant re-exposure.
  • While most participants agreed that amendment of IAS 32 for puttable instruments is needed, and many spoke in favour of the revised draft amendment, numerous technical issues were raised with respect to the proposal. Staff indicated that it plans to consider whether and how to reflect the views expressed at the roundtable in a revised draft of amendments to IAS 32 that it plans to present at the Board's December 2007 meeting.
  • The IASB is aware of the need to finalise the amendment as soon as it can to allow early adoption for many entities. The Board intends to post a near-final draft of the final amendments on its website when available.

 

IOSCO (International Organization of Securities Commissions) (dark gray) Image

IOSCO statement on International Standards on Auditing

12 Nov 2007

The International Organization of Securities Commissions (IOSCO) has issued a statement supporting the work of the International Auditing and Assurance Standards Board (IAASB) and outlining the approach that IOSCO expects to follow in its possible future endorsement of International Standards on Auditing (ISAs) for use for cross-border securities offerings.

Click to download IOSCO Statement on ISAs (PDF 44k).

Excerpt from IOSCO Statement on International Standards on Auditing

The process and structure for setting ISAs has been the subject of reform and improvement efforts in recent years. In 2003, IOSCO and other regulatory and international financial organizations worked with the International Federation of Accountants (IFAC), to create a set of reforms for international audit standard setting and other public interest activities of IFAC. These reforms included the establishment of the international Public Interest Oversight Board (PIOB) to carry out independent oversight of the IAASB's standard setting activities and other IFAC public interest activities, as well as other process changes. The reforms also included provisions for a future evaluation of their effectiveness. IOSCO recognizes the importance of the work of both the IAASB and PIOB.

In recent years, the IAASB has developed and issued a number of new and updated standards in the Board's Clarity project. Additional revised standards are expected in 2008. IOSCO is currently evaluating under what conditions IOSCO could endorse ISAs for use for cross border purposes and the form of such an endorsement. The IAASB's responses to public interest concerns in its standards setting will be relevant to such an endorsement.

 

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