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IASC Foundation welcomes Australia's move to IFRSs in 2005

07 Apr 2004

The IASC Foundation trustees have issued a Press Release (PDF 14k) welcoming the decision by the Australian Financial Reporting Council regarding adoption of IFRSs in Australia starting in 2005 (see 5 April news story). .

The IASC Foundation trustees have issued a Press Release (PDF 14k) welcoming the decision by the Australian Financial Reporting Council regarding adoption of IFRSs in Australia starting in 2005 (see 5 April news story).

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Deloitte supports Australian decision for IFRSs in 2005

05 Apr 2004

The Australian Financial Reporting Council (FRC) – the government agency that oversees the Australian Accounting Standards Board (AASB) – has unanimously agreed "in principle" to stick with its announced timetable for adopting Australian equivalents of IFRSs as Australian GAAP effective from 1 January 2005. However the FRC said that "this is subject to receiving assurance from the AASB that the set of international accounting standards issued by the IASB is complete and meets the requirements of the Australian market place and that the AASB will be able to make available on its website the corresponding versions of Australian standards by 30 June 2004." Deloitte Australia has (PDF 45k) for the FRC's decision.

Deloitte partner Bruce Porter said that keeping the 2005 start date "will ensure that Australia remains at the forefront of global accounting trends".
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Summary of IAS 39 is updated for macro hedging

03 Apr 2004

We have updated our summary of IAS 39 Financial Instruments: Recognition and Measurement to reflect the Macro Hedging Amendments (PDF 43k) released earlier this week. .

We have updated our summary of IAS 39 Financial Instruments: Recognition and Measurement to reflect the Macro Hedging Amendments (PDF 43k) released earlier this week.

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Summaries of standards are posted

02 Apr 2004

We have posted summaries of the three new IFRSs issued by the IASB earlier this week, and we have updated our summaries of two other standards, as follows: IFRS 3 Business Combinations IFRS 4 Insurance Contracts IFRS 5 Non-current Assets Held for Sale and Discontinued Operations IAS 36 Impairment of Assets IAS 38 Intangible Assets .

We have posted summaries of the three new IFRSs issued by the IASB earlier this week, and we have updated our summaries of two other standards, as follows:

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EFRAG seeks views on whether to endorse IFRIC D5

02 Apr 2004

The European Financial Reporting Advisory Group has Invited Comments on its draft letter to the International Financial Reporting Interpretations Committee commenting on Draft Interpretation D5 Applying IAS 29 Financial Reporting in Hyperinflationary Economies for the First Time.

EFRAG requests comments by 27 April 2004.
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IASB plans to form an international insurance working party

01 Apr 2004

With IFRS 4 Insurance Contracts now published, the IASB is turning its attention to the second phase of its insurance project.

IFRS 4 was issued because the Board saw an urgent need for improved disclosures for insurance contracts, and modest improvements to recognition and measurement practices, in time for the adoption of IFRS by listed companies throughout Europe and elsewhere in 2005. In the second phase, the IASB will address broader conceptual and practical issues related to insurance accounting. The IASB will form an international insurance accounting working party of about 15 members – experts active in the insurance industry and the accounting profession, representatives of the appropriate regulatory and supervisory authorities, and investment analysts. Although the completion of any long-term solution for insurance contracts may take several years, the IASB has said it is willing to revise IFRS 4 in the short term in the light of any immediate solutions arising from the working party's discussions. The Board will announce further details of the insurance working party shortly.
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European Parliament adopts a transparency directive

01 Apr 2004

The European Parliament has approved a new Transparency Directive that will improve the information that investors receive, though not quite as far as had been proposed.

The Directive now goes to the Council of Ministers for final approval. Among the provisions:

  • All securities issuers will have to provide annual financial reports within four months after the end of their financial year.
  • More detailed half-yearly financial reports by share issuers will be required, based on IAS 34.
  • The Parliament did not adopt the Commission's proposal for quarterly financial reports. Instead, the compromise Directive requires that share issuers publish interim management statements in between the annual financial report and the half-yearly financial report. These statements should include a narrative description of the financial position and of the impact of material events on that financial position. This would not apply to those share issuers who publish full quarterly financial reports.
  • The Parliament considered but did not adopt management remuneration disclosure requirements.
  • More information is required on related party transactions.
  • More information will be provided by bond issuers.
  • A mechanism will be established for assessing at EU level the equivalence between international accounting standards and non-EU country accounting standards for the purpose of allowing companies from non-EU countries to submit their national GAAP financial statements rather than IFRS statements.
Click for (PDF 79k).
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FASB proposes to charge share-based payments to expense

01 Apr 2004

The US Financial Accounting Standards Board has issued an exposure draft, Share-Based Payment, proposing that all share-based payment transactions – including share options – be recognised in the financial statements and measured at fair value.

An expense is recognised when the goods or services received are consumed. The FASB's proposals are generally similar to the accounting requirements in IFRS 2, though FASB would permit nonpublic (unlisted) entities to elect to use either (a) the fair-value-based method or (b) the intrinsic value method with final measurement of compensation cost at settlement date. Under the intrinsic value method, compensation cost is recognised at grant date only if the exercise price of an option is below the market price at that date. Current US GAAP (FASB Statement 123) allows companies to choose either to recognise the fair value of stock options and other share-based payment as expense or to disclose those fair values in the notes. Nonpublic entities may measure at "minimum value", which excludes a volatility factor, rather than fair value. Click for FASB News Release (PDF 18k). You can download the exposure draft from FASB's Website. Comment deadline is 30 June 2004.
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IASB issues three new and three revised standards

31 Mar 2004

The International Accounting Standards Board has issued three new International Financial Reporting Standards – on business combinations, insurance, and asset disposals – and has issued three revised International Accounting Standards, including the finalised macro hedging amendment to IAS 39.

These are briefly noted in the table below.  We will post more detailed summaries shortly.  IASB subscribers will be able to download the new pronouncements from IASB's Website.

 

New IFRSs

IFRS 3 Business Combinations, replacing IAS 22

  • All business combinations are accounted for using the purchase method
  • Pooling of interests is prohibited
  • Goodwill may not be amortised but must be tested for impairment at least annually
  • Post-combination restructuring costs are not accrued as liabilities at the time of the acquisition.
  • Press Release (PDF 60k).

IFRS 4 Insurance Contracts

  • Insurers are exempted from applying the IASB Framework and certain existing IFRSs
  • Catastrophe reserves and equalisation provisions are prohibited
  • Requires a test for the adequacy of recognised insurance liabilities and impairment test for reinsurance assets
  • Insurance liabilities may not be offset against related reinsurance assets
  • Accounting policy changes are restricted
  • New disclosures are required
  • Press Release (PDF 32k).

IFRS 5 Non-current Assets Held for Sale and Discontinued Operations, replacing IAS 35

  • Assets held for sale are measured at the lower of carrying amount and fair value less costs to sell
  • Such assets are not depreciated
  • A major line of business or area of geographical operations must be classified as discontinued when its assets are classified as held for sale
  • Requirements are substantively the same as US FASB Statement 144
  • Press Release (PDF 32k).
Revised IASs

IAS 36 Impairment of Assets

  • The amendments to IAS 36 relate to adoption of IFRS 3 (see press release above) and are not a comprehensive revision of IAS 36

IAS 38 Intangible Assets

  • The amendments to IAS 38 relate to adoption of IFRS 3 (see press release above) and are not a comprehensive revision of IAS 38

IAS 39 Financial Instruments: Recognition and Measurement

  • This amendment incorporates new provisions that permit, in certain cases, fair value hedge accounting for a portfolio hedge of interest rate risk (macro hedging)
  • Press Release (PDF 43k).
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Change of dates for IASB May 2004 meeting

31 Mar 2004

The IASB's May Board meeting will be held on 19-21 May 2004 (Monday to Wednesday) rather than 21-23 May. .

The IASB's May Board meeting will be held on 19-21 May 2004 (Monday to Wednesday) rather than 21-23 May.

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