35 of Internal Market News, the Directorate's newsletter. An article on pages 6 and 7 titled The Wider Impact of IAS/IFRS provides background on the EU IAS Regulation and discusses why IAS 39 was adopted "with exceptions". Click to (PDF 1,298k).

This issue covers recent EITF, SEC, and PCAOB activities and announces the availability of a US GAAP Compliance Checklist. There are also links to 15 recent Deloitte publications. You will find past issues of the GOS Newsletter Here.

This newsletter is published by Deloitte (USA) and includes the latest news from FASB, GASB, SEC, PCAOB, AICPA, IASB, and IFRIC. You will find past issues of Accounting Roundup Here.

While the framework is not endorsed by the Public Company Accounting Oversight Board (PCAOB), and it should be read in conjunction with PCAOB Auditing Standard No. 2 on internal control audits, companies may find it a useful reference as they implement the requirements of Section 404. Click to Download the Framework (PDF 80k).

The EC Recommendation requires auditors to identify, consider, and document potential threats to their independence and to detail the safeguards that have been put in place to eliminate those threats. The FEE publication also provides a comparison of the requirements of the EC Recommendation with that of the independence section of the International Federation of Accountants (IFAC) Code of Ethics. Click to:

• (PDF 24k).
• Link to FEE Website where the publication may be downloaded without charge (click on 'ethics', free registration is required).

Click to download:

• (PDF 15k)
• (ZIP 948k, 17 files, not including IFRSs 2-5 or IASs 32, 36, 38)

It is devoted to the American Jobs Creation Act of 2004, the first major broad-based restructuring of US business taxes since 1986. The Act gives multinational companies a limited, one-time tax incentive to repatriate up to 85% of their foreign earnings tax-free. Accounting implications may include:

• A need to recognise deferred tax and tax expense in 2004 on the planned repatriation in 2005.
• For companies that have provided deferred taxes on unremitted earnings, consideration of the 85% deduction likely will reduce the deferred tax liability.
• The timing of recognising tax expense or benefit could be complicated by the Act's requirements to have specific plans for reinvesting the undistributed earnings.

All companies will still have to report unconsolidated results to Russian standards. Two additional votes of the Duma are required before the bill would become law. The bill as passed calls for companies to report under IFRSs as of 2004. It may be changed to a 2005 effective date before final adoption. Some large Russian companies already report under IFRSs. Others currently use US GAAP. The US GAAP companies will have until 2008 to switch to IFRSs.

 

FSA Press Release (PDF 54k, contains link to consultation paper and a related newsletter):

• In the treatment of cash-flow hedges, we propose to eliminate from the measurement of regulatory capital all fair value gains and losses arising from the fair valuation of derivatives that have been accumulated in equity;
• In the treatment of available-for-sale assets we propose to follow the US approach and to leave equities at fair value, but write available-for-sale debt instruments back to cost or amortised cost;
• For fair value options we propose that unrealised gains or losses arising from the fair valuation of a firm's own credit risk should be eliminated from regulatory capital; and
• In accounting for defined benefit pension schemes we propose that the accounting measure of actuarial losses should be eliminated for regulatory purposes. It should be replaced by the company's best estimate of the level of additional funding that it will need to provide for its pension scheme over the next five years.

Click to Download the FSA Letter (PDF 195k).