The Plan includes the decision to move financial reporting for Canadian publicly accountable enterprises to a single set of globally accepted high-quality standards, namely, International Financial Reporting Standards (IFRSs), as issued by the International Accounting Standards Board (IASB).

The AcSB has now published a more detailed Implementation Plan for Incorporating International Financial Reporting Standards into Canadian GAAP (PDF 373k). The Implementation Plan identifies key decisions that the AcSB will need to make as it implements the Strategic Plan for publicly accountable enterprises. Although the Impmentation Plan may be revised and updated as circumstances warrant, currently it envisions 2010 as the last year that publicly accountable enterprises will report under current Canadian GAAP and 2011 as the first year of reporting under a complete set of IFRS-based Canadian standards. Because some current Canadian standards are already IFRS-based, and because others will become IFRS-based before 2011, the changeover to IFRS-based Canadian standards is likely to be more gradual, rather than abrupt, for most enterprises.

Click to view the Strategic Plan for the Direction of Accounting Standards (PDF 139k).

The newsletter reports the decisions made at the meeting of the International Public Sector Accounting Standards Board (IPSASB) 3-6 July 2006. The IPSASB develops standards for accounting and financial reporting by national, regional, and local governments and related governmental agencies. Those standards are generally based on IFRSs, and profit-oriented government business enterprises are required to comply directly with IFRSs. The IPSASB's current work programme includes an ongoing project on convergence with IFRSs and projects on several issues on which the IASB is also working, such as the conceptual framework, service concessions, and employee benefits. Click to download:

• July 2006 IPSASB Update Newsletter (PDF 137k).
• Info about the IPSASB and Links to Past Newsletters.

Deloitte & Touche LLP (USA) has published a (PDF 113k) reviewing the PCAOB's new guidance. The Heads Up explains what option backdating and spring-loading are, and outlines auditing considerations.

The meeting will be open to public observation. Agenda topics for the meeting are as follows:

Agenda: World Accounting Standard Setters Meeting 25-26 September 2006, London Monday 25 September 2006 IFRSs - the IASCF Trustees' Perspective* Conceptual Framework** IFRSs - A view from a Big 4 firm* Discussion of IASB technical plan* International Financial Reporting Standard for SMEs* IASCF educational activities and access to IASB's publications* Tuesday 26 September 2006 Fair Value Measurement** IFRSs - An Analyst's Perspective* IFRIC* Progress on Adoption/Convergence/Implementation of IFRSs** *These sessions will involve an initial presentation by the speaker followed by Q&A; **These sessions will involve an initial presentation, breakout group discussions, and feedback reports

FSA is Japan's securities regulator. The statement encourages continued improvements of Japanese accounting standards so that those standards will be deemed equivalent to IFRSs by the European Commission. A favourable equivalence decision would allow Japanese companies to continue to prepare financial statements using Japanese accounting standards for the purpose of raising capital in European public capital markets.

Click to download the Endorsement Status as of 25 July 2006 (PDF 28k). Currently, the following IASB pronouncements have not yet been endorsed for use in Europe:

• IFRIC 8 Scope of IFRS 2
• IFRIC 9 Reassessment of Embedded Derivatives
• IFRIC 10 Interim Financial Reporting and Impairment

 

Matters discussed include:

• Roundtable on Consistent Application of IFRSs (click for Info on the Roundtable)
• IFRIC working procedures and due process (see our news story of 7 May 2006.
• Equivalence between IFRSs and third country GAAP, in particular US GAAP
• IASB financing
• Update on the Commission's project to consolidate the various Regulations by which IFRSs have been endorsed in the past into a single Regulation containing all endorsed IFRSs
• Creation of a 'Standards Advice Review Group'. The ARC summary states:

  "The creation of the Group was foreseen in the Commission-EFRAG Working Arrangement signed earlier this year. It had not been possible to formally adopt EFRAG as a technical committee of the Commission and this working arrangement had been the alternative, suitable compromise."

• Service concession arrangements
• Segment reporting

The next ARC meeting is planned for 26 September 2006.

We have updated our Summary of Issues Not Added to IFRIC's Agenda to reflect IFRIC's final decision in July 2006 not to add the following topic to its agenda:

• IAS 17 Leases – Recognition of contingent rentals

The IFRIC did not finalise its rejection of a topic related to IFRS 2 Share-based Payment – Fair value Measurement of Post-vesting Transfer Restrictions, which the IFRIC had proposed to reject in March 2006. Instead, the IFRIC re-exposed its reasons for rejection in the July 2006 Edition of IFRIC Update (downloadable from the IASB website).

Network firms are required to be independent of an audit client of another firm within the network. Under the revised definition, a network firm is a firm or entity that belongs to a network. A firm can be a sole practitioner, partnership, or corporation of professional accountants or an entity that controls or is controlled by such parties. A network is a larger structure:

• that is aimed at co-operation, and
• that is clearly aimed at profit or cost sharing or shares common ownership, control or management, common quality control policies and procedures, common business strategy, the use of a common brand-name, or a significant part of professional resources.

The revised definition is effective for assurance reports dated on or after 31 December 2008. Click for the IFAC Press Release (PDF 79k), which includes a link to download the revisions.

The changes would affect disclosure in proxy statements, annual reports, and registration statements, as well as the current reporting of compensation arrangements. The rules would require that most of this disclosure be provided in plain English. Click for (PDF 69k). In announcing the new disclosure requirements, SEC Chairman Christopher Cox said:

With more than 20,000 comments, and counting, it is now official that no issue in the 72 years of the Commission's history has generated such interest. The better information that both shareholders and boards of directors will get as a result of these new rules will help them make better decisions about the appropriate amount to pay the men and women entrusted with running their companies. Shareholders need intelligible disclosure that can be understood by a lay reader without benefit of specialized expertise or the need for an advanced degree. It's our job to see that they get it.