CESR's tentative conclusion is that the current programme of the Institute of Chartered Accountants of India to converge Indian GAAP with IFRSs, if completed by 2011 as planned, will result in Indian GAAP that is equivalent to IFRSs. Therefore, CESR's proposed recommendation to the Commission is to allow companies currently using Indian GAAP for listing on a European securities market to continue to do so, without reconciliation through 2011 and, if India's convergence plan is achieved, to continue to do so after 2011. Following this consultation, CESR will report its final conclusion to the European Commission, which must make the final equivalence decision. Here is an excerpt from CESR's paper:

On the basis of the information detailed above, CESR has drawn the following conclusions: The ICAI has made, in July 2007, a public commitment to adopt International Financial Reporting Standards before 31 December 2011; The Indian Government confirmed publicly in May 2008, its intention to achieve convergence with IFRS by 2011; The ICAI has noted that it might make modifications to IFRSs to reflect 'Indian conditions' such as requiring additional disclosures, changing some terminology and omitting some options or alternative treatments. However, these changes are expected to be minor and the stated intention of both the ICAI and the Indian Government is that Indian Accounting Standards will to all intents and purposes be fully IFRS compliant by the end of the program and that Indian issuers will therefore be in a position to make an absolute statement of compliance with IFRS in their notes.; and Effective measures are consequently being taken to secure the timely and complete convergence of Indian Accounting Standards to International Financial Reporting Standards by 31 December 2011.... If the Commission were minded to allow Indian issuers to use Indian GAAP when accessing EU markets, CESR recommends the Commission accept Indian GAAP according to article 4 of the Commission Regulation on the mechanism until it is in a position to make a decision under article 2.

'The following table gives the key milestones that will need to be met for the Indian convergence program to be achieved, based on current assumptions in the concept paper and a changeover date of 1st April 2011 as announced in May 2008 by the Ministry of Corporate Affairs. The table also identifies the key decisions that both the ICAI and the Indian Government will need to make in order to implement the convergence program'.

2008 - 2009	Revisions to be made to Indian accounting standards to converge them with their IFRS equivalents. 14 revised Indian standards will be issued in 2009. Accounting professionals to obtain training and thorough knowledge of IFRS.
1st April 2010	All Indian accounting standards to have been issued by ICAI to allow issuers to prepare comparative information for the changeover date. Any last differences from IFRS to be fixed during the year.
1st April 2011	Changeover date. First year of reporting under new IFRS-based accounting standards.

Click for the Consultation Paper (PDF 508k).

Presented below is the agenda for the meeting. Please note that on 2 October 2008 the Board held an additional Board meeting. Click here for Our Notes from that Meeting.

13-17 October 2008, London

Monday 13 October 2008

• Reclassification of Financial Instruments Under IAS 39 – Whether to eliminate differences with US GAAP
• Meeting of IASB with EFRAG

Tuesday 14 October 2008 (afternoon only)

• Consolidation – US consolidation amendments (Education Session)
• Financial Instruments with Characteristics of Equity – Discussion Paper comment letter analysis

Wednesday 15 October 2008

• Insurance Contracts
• Expert Advisory Panel - update
• IFRS for Private Entities
• Annual Improvements 2009: IAS 39 – Application of the Effective Interest Rate Method
• Annual Improvements 2007: IAS 39 – Definition of a derivative
• Derecognition

Thursday 16 October 2008

• Consolidation – Staff draft of an ED
• Technical Plan
• Financial Instruments with Characteristics of Equity

Friday 17 October 2008

• Sweep Issues (if needed)
• Proposed Amendments to IFRS 2 and IFRIC 11 - Group cash-settled share-based payment transactions
• Fair Value Measurements

 

The paper sets out IFAC's view that International Standards on Auditing (ISAs) are designed to be applicable to audits of financial statements of entities of all sizes. "If auditors intend to issue an ISA audit report, they must comply with the ISAs. This enables a consistent level of assurance to be associated with the word 'audit', and allows users to make decisions in the light of a common understanding about the reliability of financial statements.' The paper points out that SMEs have an alternative to obtaining an audit – they may obtain a review of their financial statements rather than an audit. IFAC Media Release (link to IFAC website).

 

The roundtable will be held at the SEC's headquarters in Washington, DC, on 8 October 2008 09:00 to 13:00 (ET). It will be webcast. The roundtable will consist of an open discussion on the Commission's financial disclosure system, including the information needs of investors, public companies, and others and the capabilities of modern information technology to improve transparency and ease of use. The roundtable will be organised as two panels, each consisting of investors, issuers, academics, and other parties with experience with the Commission's financial disclosure system. Click for SEC Announcement (PDF 45k).

 

That meeting was in addition to the Board's regular meeting that is set for 14-17 October 2008. Because the 2 October meeting was arranged at short notice, some Board members took part via video conferencing facilities. To make allowance for the different time zones involved, the meeting was held in two sessions, morning and afternoon, with the same topics discussed. Click to go to the combined preliminary and unofficial Notes Taken by Deloitte Observers at Both Sessions of the Meeting.

 

In its announcement, the IASB indicated that it 'is closely monitoring developments in the United States and other jurisdictions to avoid unnecessary inconsistencies in accounting treatments under IFRSs and US generally accepted accounting principles (GAAP)'. The IASB's next steps will be in the following areas:

1. Ensure consistency of fair value measurement guidance between IFRSs and US GAAP
2. Consider the possible impact of the US Emergency Economic Stabilization Act of 2008 and other similar programmes internationally on the valuation of assets and liabilities
3. Immediately consider the ability to reclassify financial instruments.

   US GAAP permits entities, in rare circumstances, to reclassify financial instruments that are in the form of securities from their trading portfolio (measured at fair value with changes through the income statement) to 'held to maturity' (measured at amortised cost and subject to testing for impairment). Also US GAAP permits some loans that are not securities to be transferred from Held for Sale (measured at lower of cost or market with changes through the income statement) to Held for Investment (measured at amortised cost and subject to testing for impairment). IAS 39 does not currently permit such transfers. The IASB intends to assess (at its October 2008 Board meeting) any inconsistencies in how IAS 39 and US GAAP practice address the issue of reclassifications and decide whether to eliminate any differences.

4. Be willing to participate in any study on the impact of accounting in the credit crisis

Click for:

• IASB Press Release (PDF 118k)
• Our Complete Credit Crunch Page

President Bush signed it into law. The final bill included the following two sections relating to fair value measurement issues that were noted in our News Story of 29 September 2008:

• Sec. 132. Authority to suspend mark-to-market accounting
  Restates the Securities and Exchange Commission's authority to suspend the application of Statement Number 157 of the Financial Accounting Standards Board if the SEC determines that it is in the public interest and protects investors.
• Sec. 133. Study on mark-to-market accounting
  Requires the SEC, in consultation with the Federal Reserve and the Treasury, to conduct a study on mark-to-market accounting standards as provided in FAS 157, including its effects on balance sheets, impact on the quality of financial information, and other matters, and to report to Congress within 90 days on its findings.

They issued this guidance pending the completion by FASB of additional interpretative guidance about the requirements of FASB Statement No. 157 Fair Value Measurements in illiquid markets. The news story has a link to the SEC-FASB release. The IASB has issued a Press Release (PDF 99k) stating that its staff has reviewed the SEC-FASB release and considers it consistent with IAS 39 Financial Instruments: Recognition and Measurement.

Click to view the announcement (PDF 83k).

This large volume (approximately 2,900 pages) provides the complete and up-to-date consolidated text of IFRSs with extensive cross-references and other annotations. It covers all IFRSs and IASs, IFRIC and SIC Interpretations, and IASB-issued supporting documents – illustrative examples, implementation guidance, bases for conclusions, and dissenting opinions – approved by the IASB at 1 July 2008. Other annotations to IFRSs in the Guide include IFRIC agenda decisions and clarifications.

This Guide identifies the interrelationship between paragraphs and sections of each IFRS and the IASB issued accompanying material. For instance, when reading a particular paragraph or section of IFRSs, the text answers the question: which paragraphs of this IFRS, other IFRSs and accompanying material help me understand this paragraph better? It also provides some explanatory annotations and includes the text of relevant IFRIC agenda decisions.

The price is £90 plus shipping, with discounts are available for multiple copies, students/academics, and residents of middle and low income countries. For more information and ordering details, go to the Guide Web Page.