News

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IFAC releases 2004 public sector standards handbook

28 Mar 2004

The International Federation of Accountants (IFAC) has published its Handbook of International Public Sector Accounting Pronouncements.

The Handbook includes all of the currently effective International Public Sector Accounting Standards and other pronouncements related to public sector accounting issued by IFAC as of 1 January 2004. It is available in print, PDF, and electronic formats. There is no charge to download the 2.8mb PDF version. Click for Information. IFAC also recently released its auditing and ethics handbook – see our news story of 25 March.
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Swiss exchange backtracks on IFRS

27 Mar 2004

In August 2003, we Reported an announcement by the Swiss Exchange that starting in 2005 all listed companies would required to use either US GAAP or IFRS.

The Exchange has now announced an exception for companies that are not multinational: "From 2005, companies listed on the Swiss Exchange will have to carry out their accounting according to IFRS or US GAAP. Companies that are oriented towards their home markets in terms of financing may, however, continue to use the Swiss GAAP ARR standards which are tailored to the Swiss marketplace."
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IFRIC project pages updated to reflect recent meeting

26 Mar 2004

We have updated the following Project Pages to reflect the deliberations at IFRIC's meeting on 23-24 March 2004: .

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UK ASB seeks comments on converging with IFRS

26 Mar 2004

The United Kingdom Accounting Standards Board has published a Discussion Paper on UK Accounting Standards: A Strategy for Convergence with IFRS.

The Paper proposes a phased approach to convergence, including:
  • New standards effective in 2005 and 2006 that will "enhance existing UK financial reporting requirements, maintain their position as highly regarded internationally, and adapt to changes in the law"; and
  • Thereafter, a series of 'step changes' replacing one or more existing UK accounting standards with standards based on IFRS as prospective IASB projects are completed.
Click for Press Release (PDF 28k). The Discussion Paper itself must be purchased from ASB. Comments are due 30 June 2004.
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International convergence of auditing oversight

26 Mar 2004

In (PDF 67k) at a meeting of the European Policy Centre, Frits Bolkestein, Member of the European Commission in charge of the Internal Market, Taxation and Customs, addressed the issue of Ensuring Robust International Audit. .

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New EITF Roundup newsletter posted

25 Mar 2004

We have posted the latest edition of the Deloitte (USA) (PDF 322k).

This edition provides an overview of the issues discussed, consensuses reached, and administrative matters discussed at the 17-18 March 2004 meeting of FASB's Emerging Issues Task Force. EITF Roundup is published after each Task Force meeting. You will find past issues Here.
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IFAC's 2004 Handbook is available

25 Mar 2004

The International Federation of Accountants (IFAC) has published its 2004 Handbook of International Auditing, Assurance, and Ethics Pronouncements.

The Handbook includes all pronouncements issued by the International Auditing and Assurance Standards Board (IAASB) and the Ethics Committee through 31 December 2003. It is available in print, PDF, and electronic formats. There is no charge to download the 4.8mb PDF version. Click for Information.
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"Thanks a million" for visiting us

25 Mar 2004

Someone today became the one millionth visitor to www.iasplus.com.

We thank that person and all of our other loyal visitors for making IASPlus The Number One Source in the Internet for Information about International Financial Reporting. Please come back often.
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IASB proposes reforms to its own due process

25 Mar 2004

The IASB has initiated an internal review of its own deliberative procedures alongside the Trustees' Constitution Review now under way.

As part of its internal review, the IASB has published a consultation paper, Strengthening the IASB's Deliberative Processes, inviting public comment on certain proposed improvements to its procedures. Comment deadline is 25 June 2004. The consultation paper cites some steps already taken by the Board to improve its due process and sets out the Board's preliminary views on some further changes:
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Notes from the IFRIC meeting on 24 March

25 Mar 2004

The International Financial Reporting Interpretations Committee (IFRIC) met at the IASB offices in London on 24 March 2004, the second day of a two-day meeting.

Presented below are our observers' preliminary and unofficial notes from the meeting.

Notes from the IFRIC Meeting24 March 2004

Accounting for Service Concession Arrangements

The IFRIC discussed accounting for service concession arrangements, with the objective of providing sufficient guidance to staff to enable a draft interpretation to be prepared for presentation at the May IFRIC meeting. The staff noted that guidance provided by IFRIC would need to cover a range of situations such as a contract that relates to new infrastructure, a contract that relates to existing infrastructure, a contract in which the concession provider pays, and a contract in which the user pays. The IFRIC agreed that the following issues must be addressed

  • Which party effectively owns the fixed asset?
  • What is the nature of the asset (if any) held by the concession operator if they do not effectively own the fixed asset?
  • How should contracts be combined or a contract segmented into separate units of account?
  • How should the high finance costs of such contracts be accounted for?
  • How should the eventual return of the asset to the concession provider (if relevant) be accounted for?

The IFRIC then considered some examples developed by staff. The IFRIC requested that staff develop further examples to illustrate whether or not, if finance costs are capitalised as part of the construction contract, the effect of segmenting or combining the build and operate phases of the project will be significant.

The IFRIC tentatively agreed that in assessing how to account for assets arising under concession contracts, the following hierarchy should be followed

  • Determine whether concession operator owns the fixed asset (and therefore accounts for the asset in accordance with IAS 16); if not
  • Analyse whether a leasing transaction exists (and is therefore accounted for in accordance with IAS 17); if not
  • Analyse whether the concession operator has a receivable (and therefore accounts for the asset in accordance with IAS 39); if not
  • Determine whether the concession operator has a recognisable intangible asset (and therefore accounts for the asset in accordance with IAS 38); if not
  • No asset arises.

The IFRIC discussed interest methods of depreciation and agreed that the basis for conclusions of the eventual interpretation should state that this depreciation method was considered and determined to be inappropriate.

The IFRIC considered the requirements of US GAAP (SFAS 71) and Spanish GAAP in relation to the rights of recovery of finance and other costs. The IFRIC decided that the issues addressed by those pronouncements should be addressed in the draft interpretation, but did not finalise an IFRIC position on how the concepts in these pronouncements would be incorporated into the eventual interpretation.

The IFRIC considered the issue of depreciation of assets arising from concession arrangements on a basis that is less conservative than straight line. The IFRIC agreed that where the concession operator is considered to own the fixed asset, the units of production method is appropriate. The IFRIC agreed that the expected revenue method of depreciation should not be discussed in the interpretation. If the asset arising under the contract is accounted for as an intangible asset, the IFRIC considered that it should not endeavour to override the statement in IAS 38 that it would be rare for a method of depreciation other than straight line to be appropriate.

IFRIC 1: Changes in Decommissioning, Restoration and Similar Liabilities

The IASB recommended a number of changes to this document as a result of their review of the document. The IFRIC considered a draft Interpretation that staff had amended to address the concerns of the Board. The changes included improvement of the explanation as to how the interpretation is applied to revalued assets and the inclusion of an exemption to IFRS 1 for first-time adopters. IFRIC members suggested minor amendments, and the interpretation will be circulated for final approval out of session with a view to the final interpretation being issued in April.

This summary is based on notes taken by observers at the IASB meeting and should not be regarded as an official or final summary.

Scroll down for notes from 23 March 2004.

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