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Obstacles to good financial reporting

06 Sep 2003

In a recent speech before the American Enterprise Institute, US SEC Commissioner Cynthia A.

Glassman made some observations about Obstacles to Good Financial Reporting that, we believe, are equally relevant in an international financial reporting context as in a domestic one. Click to View Commissioner Glassman's Presentation.
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Valuation issues arising from IFRS

05 Sep 2003

The International Valuation Standards Committee (IVSC) has published the September 2003 issue of its Global Valuation Issues Newsletter (PDF 257k).

This edition includes a seven-page update on the valuation implications of International Financial Reporting Standards, a discussion of investment performance standards, as well as general global valuation news. Click for More Info about IVSC including a link for downloading the 2003 International Valuation Standards without charge.
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British securities regulator warns companies on IFRS

05 Sep 2003

In a letter to all companies listed on the London Stock Exchange, the Director of Listing of the Financial Services Authority of the United Kingdom issued a stern warning to be prepared to make the change to IFRS.

He wrote:

For a company with a reporting date of 31 December 2005, the date of its transition to IFRS will be 1 January 2004. This means such a company will be required to prepare comparative IFRS accounts for 2004.... I am very concerned to learn that many issuers are poorly prepared for these changes.... I appreciate that the timetable is made more difficult, given the fact that not all the relevant standards have been agreed and some have not yet been published. Nevertheless a consequence of not being in a position to adopt IFRS will be that issuers are unable to meet the reporting requirements and deadlines of the listing rules. Failure by issuers to submit preliminary or interim results within the required timescale is likely to result in the suspension of the issuer's securities.

Click for FSA Press Release (PDF 34k)
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IFRIC issues draft interpretation D2

04 Sep 2003

The International Financial Reporting Interpretations Committee has issued Draft Interpretation D2 'Changes in Decommissioning, Restoration and Similar Liabilities'.

Under IAS 37 Provisions, Contingent Liabilities and Contingent Assets, a provision must be recognised when an asset is acquired if the acquirer is obligated to incur costs for decommissioning, restoration, and similar future activities. The costs are included as part of the cost of the asset.

The proposed Interpretation deals with accounting for subsequent changes in the estimated cash flows relating to the provision. The proposed Interpretation concludes, among other things, that decommissioning, restoration, and similar liabilities should be remeasured at each balance sheet date using a current market-assessed discount rate.

Comments are due by 3 November 2003. Click for:

 

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Proposal to extend the scope of IFRS in Denmark

04 Sep 2003

Denmark is a member of the European Union, and its listed companies will be required to adopt IFRS in their consolidated financial statements starting in 2005. The Danish Parliament has invited public comment on proposed legislation that would: Require the use of IFRS in individual company financial statements if an entity uses IFRS in its consolidated statements. Permit non-listed companies to choose to follow IFRS, instead of Danish GAAP, in both their consolidated and individual company statements. The draft legislation does not include a proposed starting date for use of IFRS in place of Danish GAAP but leaves this for the Minister of Economic and Business Affairs to determine (through an executive order) at a later stage.

Danish listed companies are already permitted to use IFRS provided that they also comply with the provisions of the Danish Financial Statements Act.
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Executive Briefings on ED 5, Insurance Contracts

01 Sep 2003

Deloitte Touche Tohmatsu has published three Executive Briefings on IASB Exposure Draft ED 5, Insurance Contracts: (PDF 139k, in English) (PDF 185k, in English) (PDF 118k, in Danish) .

Deloitte Touche Tohmatsu has published three Executive Briefings on IASB Exposure Draft ED 5, Insurance Contracts:

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Survey of assumptions used for employee benefit calculations

01 Sep 2003

Deloitte & Touche (USA) has published its annual Survey of Economic Assumptions Used for SFAS No.

87 and SFAS No. 106 Purposes. Those two FASB Standards require the use of discount rates and other assumptions in measuring an entity's obligations under pension plans (SFAS 87) and other post-employment benefit plans (SFAS 106). IAS 19, Employee Benefits, contains similar requirements. This survey reports on the disclosures made by 287 companies about their SFAS 87 and SFAS 106 assumptions. Click to (PDF 121k).
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New Accounting Roundup newsletter is available

01 Sep 2003

We have posted the 25 August 2003 Edition of Accounting Roundup from Deloitte & Touche (USA).

Topics covered include updates on recent FASB and SEC activity, a brief summary of the IASB's macro hedging exposure draft, and an overview of the Deloitte & Touche 2003 Survey of Economic Assumptions Used for SFAS No. 87 [pensions] and SFAS No. 106 [other post-employment benefit] Purposes.
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Tax impact of adopting IFRS: UK Alert

31 Aug 2003

Deloitte & Touche (United Kingdom) has published the first in a series of Alerts describing tax implications of adopting International Financial Reporting Standards.

The Alert notes: "The Inland Revenue position is that they do not believe IAS requires wholesale tax changes but there are circumstances where it is, or would be, 'good policy' to depart from following the accounts for tax purposes. " Click to Download (PDF 421k). Future Alerts will focus on transfer pricing and financial instruments, among other issues.
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Calendar of important dates

26 Aug 2003

IASB watchers returning from their summer holidays may find the following recap of upcoming dates helpful: 17-19 September: IASB Board meeting, London 22 September: Meeting of the IASB and World Standard Setters, London 23 September: Meeting of the IASB and its partner national standard setters, London 30 September-1 October: Meeting of the IFRIC, London 22-24 October, IASB Board meeting, Toronto 24 October: Comment deadline on ED 4, Disposal of Non-Current Assets and Reporting of Discontinued Operations 31 October: Comment deadline on ED 5, Insurance Contracts 14 November: Comment deadline on ED, Hedge Accounting for a Portfolio Hedge of Interest Rate Risk .

IASB watchers returning from their summer holidays may find the following recap of upcoming dates helpful:

  • 17-19 September: IASB Board meeting, London
  • 22 September: Meeting of the IASB and World Standard Setters, London
  • 23 September: Meeting of the IASB and its partner national standard setters, London
  • 30 September-1 October: Meeting of the IFRIC, London
  • 22-24 October, IASB Board meeting, Toronto
  • 24 October: Comment deadline on ED 4, Disposal of Non-Current Assets and Reporting of Discontinued Operations
  • 31 October: Comment deadline on ED 5, Insurance Contracts
  • 14 November: Comment deadline on ED, Hedge Accounting for a Portfolio Hedge of Interest Rate Risk

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