The deleted paragraphs relate to derivatives and hedge accounting and the fair value option. Those paragraphs would not be endorsed pending the IASB's review of concerns that have been expressed by the EU about the effect of the IAS 39 the hedging provisions and fair value option particularly on banks. Mr. Bolkestein indicated that after receiving the non-binding opinion of the Commission's Accounting Regulatory Committee, which meets 9 September 2004, the proposal to endorse IAS 39 minus the carved out parts would be put before the 30-member European Commission for a vote before the end of October 2004, Bloomberg News reported.

This legislation would restrict the SEC from recognising a FASB standard on expensing stock options to options granted to the top five officers of a company, would exclude volatility from the calculation of fair value for those options, and would delay implementation for at least a year pending completion of a joint study by the Secretaries of Commerce and of Labor of the economic impact of the mandatory expensing of employee stock options. The bill would not prohibit voluntary expensing of stock options by SEC registrants. The Senate must also pass the same legislation before the bill becomes law. The FASB has issued an exposure draft proposing that the fair value of all share-based payment, including stock options, be recognised as an expense. The FASB proposal is very similar to IFRS 2. Before adopting HR 3574, the House considered but rejected a substitute bill that sought to preserve the independence of the FASB. Click for the Full Text of the bill as passed (PDF 104k).

EFRAG has submitted to the IASB its final comments on the IASB's proposals for Strengthening IASB's Deliberative Process (PDF 38k).

Also, EFRAG has submitted its final endorsement advice to the European Commission Recommending Adoption of IFRIC 1 Changes in Existing Decommissioning, Restoration and Similar Liabilities (PDF 35k).

Further, EFRAG has drafted its preliminary views on the following IASB and IFRIC proposals and is seeking comments by the dates indicated:

• IFRIC D7 Scope of SIC 12 Consolidation - Special Purpose Entities (20 August 2004)
• IFRIC D8 Members' Shares in Co-operative Entities (20 August 2004)
• ED Amendments to IAS 39: Cash Flow Hedge Accounting of Forecast Intragroup Transactions (24 September 2004)
• ED Amendments to IAS 39: Transition and Initial Recognition of Financial Assets and Liabilities (24 September 2004)

The final comment letters and draft preliminary views can all be downloaded from EFRAG's website www.efrag.org.

 

We have combined our notes for all three days in a Separate Page.

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• The Google search engine will search within PDF files.
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• Google is extremely fast.

Click Search at the top of any page or the button at the left on this Home Page.

The meeting will not continue to 30 July, as had been previously announced. Here is the agenda:

AGENDA OF THE IFRIC MEETING 29 JULY 2004 Service Concession Arrangements – IFRIC will discuss three draft interpretations: D10A Service Concession Arrangements - Determining the Accounting Model D10B Service Concession Arrangements - The Receivable Model D10C Service Concession Arrangements - The Intangible Asset Model D5 Applying IAS 29 Financial Reporting in Hyperinflationary Economies for the First Time IFRS 2, IAS 19, and Employee Benefit Trusts – SIC 12 Exemption for Equity Compensation Benefits IAS 11 Construction Contracts – The Criteria for Combining and Segmenting Contracts

The 2003 SEC Report (PDF 495k) had been prepared pursuant to Section 108(d) of the Sarbanes-Oxley Act of 2002. The FASB response states that "the Board welcomes the SEC's study and agrees with the recommendations." A section of the FASB response (pages 10-11) relates to international convergence. The SEC staff report had made the following recommendations:

• The FASB should issue objectives-oriented standards.
• The FASB should address deficiencies in the conceptual framework.
• The FASB should be the only organization setting authoritative accounting guidance in the United States.
• The FASB should continue its convergence efforts.
• The FASB should work to redefine the GAAP hierarchy.
• The FASB should increase access to authoritative literature.
• The FASB should perform a comprehensive review of its literature to identify standards that are more rules-based and adopt a transition plan to change those standards.

3574, the Stock Option Accounting Reform Act) that would restrict the SEC from recognising a FASB standard on expensing stock options to options granted to the top five officers of a company, would exclude volatility from the calculation of fair value for those options, and would delay implementation for at least a year. The Senate must also pass the same legislation before the bill becomes law. On 8 July 2004, FASB Chairman Robert H. Herz testified on the bill before the Commerce, Trade, and Consumer Protection Subcommittee of the House Committee on Energy and Commerce. Mr. Herz's testimony may be found on FASB's Website.

The enhancements are designed to increase confidence that the activities of the IAASB are properly responsive to the public interest and will lead to high quality international standards. Proposed enhancements include:

• Public forums or round-tables, or the issue of consultation papers, where wider or further input would be appropriate.
• Enhanced meeting agenda material and easier access to comment letters to assist in its deliberative process.
• An expanded description of the process by which the IAASB considers the need to re-expose a draft IAASB international standard or practice statement.
• The possibility of issuing a separate document explaining its basis for conclusions on final IAASB international standards or practice statements where necessary.
• A process to address circumstances where issues over due process are raised with the IAASB.

For IAASB's press release, including a link to download the exposure draft, Click Here (PDF 89k). Comment deadline is 15 October 2004.

The Board intends to request constituent input on that style and will address the advantages and disadvantages of using that style in all FASB standards at a later date."