News

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Convergence of global valuation standards

22 Jun 2006

The International Valuation Standards Committee (IVSC) and The Appraisal Foundation of the United States (TAF) have issued a memorandum of understanding that commits the two bodies to the ultimate goal of a single set of understandable and enforceable global valuation standards.

As a first step towards the goal, both parties are preparing to seek greater convergence of the Uniform Standards of Professional Appraisal Practice (USPAP) and the International Valuation Standards (IVS), and have appointed small working groups to identify current differences between the two sets of standards and to report by September 2006. Both organisations will then use their best efforts to progress towards the elimination of identified differences working within the due process procedures of each organisation. Click for:
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Notes from first day of June 2006 IASB meeting

21 Jun 2006

The International Accounting Standards Board held its June 2006 Board meeting at its offices in London on Tuesday through Friday 20-23 June 2006. We have combined the preliminary and unofficial notes taken by Deloitte observers onto a Separate Page. .

The International Accounting Standards Board held its June 2006 Board meeting at its offices in London on Tuesday through Friday 20-23 June 2006. We have combined the preliminary and unofficial notes taken by Deloitte observers onto a Separate Page.

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UK iGAAP alert on proposed amendments to IAS 23

21 Jun 2006

We have posted a new United Kingdom Borrowing Costs (PDF 51k).

You will find links to this and all past iGAAP Alerts and Newsletters Here.
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SEC Office of International Affairs

19 Jun 2006

We have added to our US Securities and Exchange Commission Page some background information about the SEC's Office of International Affairs (OIA).

OIA promotes investor protection in the global capital market by advancing international regulatory and enforcement cooperation, promoting the adoption of high regulatory standards worldwide, and facilitating technical assistance programs to strengthen the regulatory infrastructure in emerging market countries. The office also seeks to facilitate cross-border securities transactions, while working to minimise the extent to which international borders can be used to avoid regulatory compliance or escape detection and prosecution of fraudulent securities activities. Using OIA staff's specialised knowledge of international markets and foreign law and regulations, the office provides the Commission and staff with advice and assistance in international enforcement and regulatory matters. On the OIA website there is information about the SEC's various international program activities, including in the areas of SEC rulemaking, multilateral policy initiatives, international enforcement cooperation, and technical assistance. There is also find information about the SEC's cooperative arrangements with foreign regulators.
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Insurance Working Group meets 29-30 June

18 Jun 2006

The IASB's Insurance Working Group will meet at the Crowne Plaza London City Hotel, London, on Thursday and Friday 29-30 June 2006. The agenda (details on IASB's Website): Insurance – 29-30 June 2006, London Thursday 29 June Project planning The Board's preliminary conclusions so far Presentation by the [European] CFO Forum, Group of North American Insurance Enterprises and four Japanese life insurance companies International Association of Insurance Supervisors Estimating cash flows Friday 30 June Policyholder continuation and cancellation options Margins – risk margins and profit margins Participating contracts Unit-linked payments Performance reporting, including presentation of premium .

The IASB's Insurance Working Group will meet at the Crowne Plaza London City Hotel, London, on Thursday and Friday 29-30 June 2006. The agenda (details on IASB's Website):

Insurance – 29-30 June 2006, London

Thursday 29 June

  • Project planning
  • The Board's preliminary conclusions so far
  • Presentation by the [European] CFO Forum, Group of North American Insurance Enterprises and four Japanese life insurance companies
  • International Association of Insurance Supervisors
  • Estimating cash flows
Friday 30 June
  • Policyholder continuation and cancellation options
  • Margins – risk margins and profit margins
  • Participating contracts
  • Unit-linked payments
  • Performance reporting, including presentation of premium
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New edition of EITF Snapshot posted

18 Jun 2006

The FASB's Emerging Issues Task Force (EITF) met on 15 June 2006. They reached consensuses on three issues.

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ASX will retain its two month reporting deadlines

17 Jun 2006

The Australian Stock Exchange (ASX) will retain the two-month deadline for listed entities to report their full-year and interim financial results.

An ASX consultation found significant market agreement with the ASX's view that such prompt reporting is both desirable for shareholder protection reasons as well as appropriate given international practice and trends. This means:
  • Listed entities with 31 December financial year ends will need to report their half yearly results to 30 June 2006 by 31 August 2006 and full-year results by 28 February 2007. Approximately 200 listed entities are in this category.
  • The nearly 1,400 listed entities with 30 June year ends will need to report their half yearly results to 31 December 2006 by 28 February 2007 and their full-year results by 31 August 2007.
Click for (PDF 73k).
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EC Roundtable on Consistent Application of IFRSs

16 Jun 2006

Earlier this year, the European Commission agreed to form a Roundtable on Consistent Application of IFRSs.

The purpose of the Roundtable is to identify cases where the accounting treatment in Europe under IFRSs is so divergent, significant, and widespread as to warrant 'common concern' among the different groups of participants (preparers, auditors, national standard setters, regulators). When such issues of common concern are identified, the Roundtable will generally recommend referring them to IFRIC, though circumstances could also arise where the matter should be addressed directly to the IASB Board. The Roundtable itself will not make any interpretations.

We have formed a Roundtable Web Page on IAS Plus that includes background information and summaries of Roundtable meetings.

The Roundtable held its first meeting in May 2006 at which it considered 11 issues. Roundtable members concluded that three issues are of common concern, one of which (de facto control) should be further discussed at the Roundtable's next meeting. The other two are already on IFRIC's agenda; the Commission will monitor and work with IFRIC on these.

 

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Agenda topics for IFRIC meeting 6-7 July 2006

16 Jun 2006

The International Financial Reporting Interpretations Committee (IFRIC) will meet at the IASB's offices in London on Thursday 6 July and Friday 7 July 2006. The list of topics to be discussed has been released, but not yet the running order:6-7 July 2006, London Draft Interpretations to be approved for publication: IAS 19 Post-employment Benefits - The effect of a minimum funding requirement on the asset ceiling – review of text of a Draft Interpretation Customer Loyalty Programmes - review of text of a Draft Interpretation Discussion of previously published Drafts: IFRIC D12-14: Service Concession Arrangements IFRIC D17 - IFRS 2: Group and Treasury Share Transactions Issues papers: Employee Benefit Trusts (Consideration of various difficulties arising in practice in the separate or individual financial statements of an entity sponsoring an employee benefit trust established in connection with a share-based payment arrangement within the scope of IFRS 2); Guidance on Identifying Agency Arrangements (Proposal for new agenda item considering inter alia possible criteria for distinguishing agency from sub-contracting and other arrangements); Financial Instruments - Eligibility of 'portions' of exposures for hedge accounting IFRIC Agenda Decision IAS 17 Leases – Recognition of contingent rentals (Comments due by 26 June). IFRIC Tentative Agenda Decisions Various items, including those deferred from the May meeting and others subsequently reviewed by the Agenda Committee. .

The International Financial Reporting Interpretations Committee (IFRIC) will meet at the IASB's offices in London on Thursday 6 July and Friday 7 July 2006. The list of topics to be discussed has been released, but not yet the running order:

6-7 July 2006, London Draft Interpretations to be approved for publication:

Discussion of previously published Drafts: Issues papers:
  • Employee Benefit Trusts (Consideration of various difficulties arising in practice in the separate or individual financial statements of an entity sponsoring an employee benefit trust established in connection with a share-based payment arrangement within the scope of IFRS 2);
  • Guidance on Identifying Agency Arrangements (Proposal for new agenda item considering inter alia possible criteria for distinguishing agency from sub-contracting and other arrangements);
  • Financial Instruments - Eligibility of 'portions' of exposures for hedge accounting
IFRIC Agenda Decision IFRIC Tentative Agenda Decisions
  • Various items, including those deferred from the May meeting and others subsequently reviewed by the Agenda Committee.
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IASB Chairman testifies before US Senate committee

15 Jun 2006

IASB Chairman Sir David Tweedie testified yesterday before the US Senate Committee on Banking, Housing and Urban Affairs, which was conducting a hearing on "FASB's Proposed Standard on Employers' Accounting for Defined Benefit Pension and Other Postretirement Plans".

FASB Chairman Robert H Herz also testified. Sir David updated the committee on the work of the IASB in general, the use of IFRSs globally, the February 2006 joint IASB-FASB memorandum of understanding, the SEC 'roadmap', and progress toward convergence of IFRSs and US GAAP. He then commented on pension accounting – here is an excerpt:

Accounting standard-setters often hear that accounting should not change behaviour, but there is a case, I fear, that poor accounting has led to neglect or mismanagement of pension resources. The numbers are staggering, and the emergence of large pension deficits are not confined to the United States. The overall deficit for the European companies in the Dow Jones STOXX 50 was €116 billion at 31 December 2004 and for the UK FTSE 100 was £37 billion at July 2005. The SEC staff estimated in June 2005 that the overall deficit for active US filers might be $201 billion. [Citations omitted]

For a long time, companies and investors failed to give proper attention to a growing problem of increasingly unhealthy pension programmes, and the accounting shares some of the blame. The international standard, IAS 19 Employee Benefits, and US GAAP obscure reality by permitting gains and losses to be smoothed over time with the result that

  • income and expense may be under or overstated.
  • the asset or liability in the balance sheet may be under or over stated.
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