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New Deloitte publication on internal controls

22 Jul 2004

We have posted a new Deloitte publication, Taking Control: A Guide to Compliance with Section 404 of the Sarbanes-Oxley Act of 2002.

This 43-page book provides step-by-step guidance on implementing a strong system of internal control to meet the requirements of Sarbanes-Oxley section 404. SEC-registered companies that have not yet begun to develop their system of internal control – such as non-accelerated filers and foreign private issuers -- may benefit from a cover-to-cover reading. Accelerated filers, who are likely to be further along with their internal control project because of the Act's earlier effective date for them, may opt to pick and choose cafeteria-style from the material either to measure their progress or to ensure quality control. An appendix contains supplementary information, sample forms, glossary, and reference material. Click to (PDF 1.02mb).
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Four IFRIC members reappointed

22 Jul 2004

The Trustees of the IASC Foundation have reappointed four members of the International Financial Reporting Interpretations Committee (IFRIC) for three-year terms expiring 30 June 2007. The four are Jeannot Blanchet, Morgan Stanley Europe; Domingo Mario Marchese, Marchese, Grandi, Meson & Asociados, Argentina; Mary Tokar, KPMG International Financial Reporting Group; and Ian Wright, PricewaterhouseCoopers.

Two other members of the IFRIC will be leaving a year before their terms expire — Clement Kwok, Hong Kong and Shanghai Hotels Limited, and Wayne Lonergan, Lonergan Edwards & Associates Limited. A search is underway for their replacements. Click for Press Release (PDF 17k) and Search Announcement (PDF 9k).
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Notes from the second day of the July 2004 IASB meeting

22 Jul 2004

The IASB met at its offices in London on 21 July 2004, the second day of a three-day Board meeting.

We have combined our notes for all three days in a Separate Page.
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Deloitte comment letter on IAS 39 fair value option

21 Jul 2004

Deloitte has submitted a (PDF 119k) on the IASB's exposure draft of Proposed Amendments to IAS 39 – The Fair Value Option.

Here is an excerpt from the letter:

We believe the Proposed Amendment diverges from a principle-based approach to a set of arbitrary rules. In addition, the basis for the proposed rules is unclear, which creates the potential for differing interpretations that are not consistent with the Board's intent. We also believe the introduction of a new 'verifiability' measurement standard as a condition for using the fair value option will raise numerous implementation issues. We do not believe the Proposed Amendment is an ideal or workable solution.

The worldwide system of reporting should be based on open and transparent accounting, free from national distortions and pressures. We believe political involvement in the standard setting process hinders the movement towards a single set of high quality, globally accepted accounting standards. We note that there has been much debate surrounding the use of fair value as a measurement basis for financial assets (and liabilities). We do not believe the proposals represent a high quality solution and, accordingly, we question whether the Proposed Amendment would be accepted by other standard-setters in the quest for convergence around high quality solutions.

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EU might delete 17 paragraphs from IAS 39 before endorsing

21 Jul 2004

Bloomberg News and Reuters are reporting that EU Financial Services Commissioner Frits Bolkestein told the European Commission, at a meeting in Strasbourg, France, yesterday, that the European Union should 'carve out' 17 paragraphs from IAS 39 before endorsing that standard for use in Europe.

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.
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US House overwhelmingly approves stock options legislation

21 Jul 2004

The United States House of Representatives has approved HR 3574 Stock Option Accounting Reform Act by a vote of 312 to 111, with 10 nonvoting.

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).
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EFRAG posts final and draft comment letters

20 Jul 2004

The European Financial Reporting Advisory Group (EFRAG) has published final and draft comment letters on a number of IASB proposals.

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.

 

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Notes from the first day of the July 2004 IASB meeting

20 Jul 2004

The IASB met at its offices in London on 20 July 2004, the first day of a three-day Board meeting.

We have combined our notes for all three days in a Separate Page.
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New Google search engine for IASPlus website

20 Jul 2004

We have replaced our old search engine for IASPlus with the Google search engine.

Three big improvements:
  • The Google search engine will search within PDF files.
  • The results are returned with the search terms highlighted in the context (one or two sentences) in which they appear in the documents that were found.
  • Google is extremely fast.
Click Search at the top of any page or the button at the left on this Home Page.
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Agenda for IFRIC 29 July 2004 meeting is announced

20 Jul 2004

The International Financial Reporting Interpretations Committee will hold a one-day meeting on 29 July 2004 at the IASB's offices in London.

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

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