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March 2005 edition of EITF Roundup

29 Mar 2005

We have posted the (PDF 148k), which provides an overview of the issues discussed, consensuses reached, and administrative matters discussed at the 17 March 2005 meeting of FASB's Emerging Issues Task Force.

You will find past issues Here.
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CFA Institute supports FASB and SEC on stock options

29 Mar 2005

In a letter to the chairs of the US SEC and FASB, the president of the CFA Institute urged those organisations "to proceed with the planned implementation of the new stock option expensing rules as embodied in FAS 123(R)....

Any argument that stopping or delaying the expensing requirement is somehow good for investors is pure nonsense. It simply extends the practice of improperly understating compensation expense." With regard to measurement issues, the letter cites the successful implementation of IFRS 2:

The question of how to value stock options is not a valid reason to avoid taking an expense. The issue of stock option expensing has been studied and debated for decades. Refinement of valuation models has occurred over a similar time span by industry experts, Nobel Prize winners and accounting leaders. It is a simple fact that such calculations will never be an exact science. Neither is the estimate of depreciation. Yet, standard methodologies are working well under IASB rules, are being used voluntarily by over 900 U.S. firms already and represent a dramatic improvement over no expensing.

Click to Download the Letter (PDF 34k).
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Survey on extended use of IFRSs in the EU

29 Mar 2005

The European Commission has updated its survey of the 25 EU member states and the 3 EEA member countries concerning their plans for the following four options on use of IFRSs that are permitted under the EU Accounting Regulation: Require or permit IFRSs for unlisted companies Require or permit IFRSs in parent company (unconsolidated) financial statements Permit companies whose only listed securities are debt securities to delay IFRS adoption until 2007 Permit companies that are listed on exchanges outside of the EU and that currently prepare their primary financial statements using a non-EU GAAP (in most cases this would be US GAAP) to delay IFRS adoption until 2007. Here is an overview of the latest findings: .

The European Commission has updated its survey of the 25 EU member states and the 3 EEA member countries concerning their plans for the following four options on use of IFRSs that are permitted under the EU Accounting Regulation:

  • Require or permit IFRSs for unlisted companies
  • Require or permit IFRSs in parent company (unconsolidated) financial statements
  • Permit companies whose only listed securities are debt securities to delay IFRS adoption until 2007
  • Permit companies that are listed on exchanges outside of the EU and that currently prepare their primary financial statements using a non-EU GAAP (in most cases this would be US GAAP) to delay IFRS adoption until 2007.
Here is an overview of the latest findings:

EC Survey on Extended Use of IFRSs

Use of IFRSs in the separate company financial statements of listed companies:

  • 13 countries will permit: DK*, FI, DE**, IE, LU, NL, PT***, UK, NO, IS, LI, HU**, PL*required after 2009; **statutory accounts that conform to national GAAP are also required; ***except banks
  • 9 countries will require: GR, IT*, CZ, CY, EE, LT, MT, SQ, SI*except insurance
  • 5 countries will prohibit: AT, FR, ES, SE, LV
  • 1 country undecided: BE
Use of IFRSs in the consolidated statements of unlisted companies:
  • 24 countries will permit: AT, BE, DK, FI, FR, DE, GR, IT*, IE, LU, NL, PT, ES, SE, UK, NO, IS, LI, CZ, CY, EE, HU, PL, SI *except small
  • 6 countries will require: LV*, LT*, MT, PL*, SQ, SI**for banks only
  • 2 countries will prohibit: LV*, LT**for other than banks
Defer IFRSs to 2007 for companies with only listed debt securities:
  • 13 countries will defer: AT, BE, DK*, FI, FR, DE, LU, ES*, SE, NO, IS, HU, PL*no deferral for banks
  • 15 countries will not defer: all others
Defer IFRSs to 2007 for companies listed overseas using a non-EU GAAP:
  • 6 countries will defer: AT, BE, DE, LU, NO, IS
  • 22 countries will not defer: all others
In some cases, the positions noted above are leanings that are not yet finalised. For details, click to download (PDF 40k)
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Eleventh UK webcast update on transition to IFRSs

28 Mar 2005

The Deloitte London IFRS Centre of Excellence is running a monthly series of hour-long Internet-based IFRS technical updates, focusing on the most important international accounting standards and how they will affect UK companies.

The eleventh webcast was run on Thursday 24 March 2005 and focused on issues affecting whether to adopt IFRSs for entity financial statements (as permitted by UK law) and the impact of the UK Accounting Standards Board's convergence programme for subsidiaries and other companies that continue with UK GAAP. To access the recording Click Here. The recording of each session will be available on this website for a period of at least 3 to 4 weeks from the date of the presentation. Links to past sessions may be found on our United Kingdom Page. The recording is no longer available online.
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IAASB issues four exposure drafts

24 Mar 2005

The International Auditing and Assurance Standards Board (IAASB) has invited comments on exposure drafts of four proposed International Auditing Standards (ISAs).

The EDs propose new guidance designed to enhance the quality of group financial statement audits, independent auditors' reports, and communications between auditors and those charged with governance. Titles of the documents, which may be downloaded from IAASB's Website, are:
  • Proposed ISA 600 (Revised), The Audit of Group Financial Statements.
  • Proposed ISA 260 (Revised), The Auditor's Communication with Those Charged with Governance.
  • Proposed ISA 705, Modifications to the Opinion in the Independent Auditor's Report.
  • Proposed ISA 706, Emphasis of Matter Paragraphs and Other Matters Paragraphs in the Independent Auditor's Report (derived from ISA 701, Modifications to the Independent Auditor's Report).
Comments on all of the proposals are due by 31 July 2005.
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Special edition of Deloitte's Audit Committee Brief

24 Mar 2005

In a news story dated 6 January 2005 we reported that Financial Executives International had published a list of the top 10 financial reporting challenges for 2005. To assist financial executives and audit committees in addressing those issues, Deloitte & Touche LLP (USA) has prepared a summary, with active hyperlinks, of (PDF 288k).

Note that while the list of challenges is written primarily in a US financial reporting context, nearly all of the challenges relate to IASB projects as well:

FEI's Top 10 Financial Reporting Challenges for 2005

  • Stock Options (SFAS 123 and IFRS 2).
  • Internal Controls.
  • Revenue recognition (a joint IASB-FASB project).
  • Uncertain tax positions (FASB and IASB are working to converge their income tax standards).
  • Unremitted foreign earnings (FASB and IASB are working to converge their income tax standards).
  • Business Combinations (a joint IASB-FASB project).
  • Inventory costs (FASB has issued Statement 151 in late 2004 to converge with IAS 2).
  • Off-balance-sheet arrangements disclosures.
  • XBRL (an IFRS Taxonomy has been developed).
  • MD&A; guidance (an IASB research project).
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EFRAG seeks comments on two drafts

23 Mar 2005

The European Financial Reporting Advisory Group (EFRAG) has finalised its preliminary views on two subjects: IFRIC D12-D14 Service Concession Arrangements - draft comment letter The Fair Value Option - draft endorsement advice The drafts may be downloaded from EFRAG's Website.

Comments on both documents should be submitted to EFRAG by no later than 29 April 2005.
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Przewodnik po MSSF 1 (Guide to IFRS 1 in Polish)

23 Mar 2005

Deloitte has published the Polish translation of our popular guide to IFRS 1 First-time Adoption of IFRSs.

As with the English language version, the guide in Polish includes:
  • A summary of IFRS 1.
  • Specific issues related to first-time adoption.
  • Questions and responses.
  • A disclosure checklist.
Click here to download the English version of (PDF 2,506k, August 2004, 104 pages). Also, 300,000 copies of the Polish translation are being inserted in CD ROM format in the 23 March 2005 issue of the biggest Polish daily newspaper Rzeczpospolita.

Poland Deloitte opublikowal polskie wydanie popularnego przewodnika po MSSF 1. Podobnie jak w wersji angielskiej, polskojezyczny przewodnik zawiera:

  • Podsumowanie postanowien MSSF 1.
  • Kwestie szczególowe zwiazane z pierwszym zastosowanie MSSF.
  • Pytania i odpowiedzi.
  • Liste kontrole prezentacji i ujawnien.
Kliknij, aby sciagnac (PDF 1,426k, marzec 2005, 118 stron). Polskie wydanie przewodnika ukazalo sie równiez w wersji CD ROM wraz z wydaniem Rzeczpospolitej w dniu 23 marca 2005 roku.
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IFRIC will meet 31 March-1 April

23 Mar 2005

The International Financial Reporting Interpretations Committee (IFRIC) will meet at the IASB's offices in London on Thursday 31 March and Friday 1 April 2005. The planned agenda for the meeting is as follows:Agenda of the IFRIC Meeting 31 March-1 April 2005 Thursday 31 March 2005 IFRIC 3 Emission Rights – Possible approaches for revision of IAS 38 IFRIC D9 Employee Benefit Plans with a Promised Return on Contributions or Notional Contributions – Comment letter analysis IAS 19: Effect of Minimum Funding Requirements on Asset Ceiling IFRIC D6 Multiemployer Plans IAS 11: Combining and Segmenting Contracts Friday 1 April 2005 IAS 39: Impairment of an Equity Security IAS 39: Cross Currency Convertible Bonds IFRS 2: Treasury Share Transactions and Group Transactions IFRIC D11 Changes in Contributions to Employee Share Purchase Plans (ESPPs) IFRIC D10 Liabilities Arising from Participating in a Specific Market - Waste Electrical and Electronic Equipment Agenda Committee: Issues Proposed for Rejection Activities of Other Interpretive Bodies .

The International Financial Reporting Interpretations Committee (IFRIC) will meet at the IASB's offices in London on Thursday 31 March and Friday 1 April 2005. The planned agenda for the meeting is as follows:

Agenda of the IFRIC Meeting 31 March-1 April 2005

Thursday 31 March 2005

Friday 1 April 2005

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Notes from 17 March Board meeting

22 Mar 2005

We have combined our notes from the IASB's 15-17 March 2005 meeting onto a Single Summary Page. .

We have combined our notes from the IASB's 15-17 March 2005 meeting onto a Single Summary Page.

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