News

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Acting SEC Chief Accountant speaks on convergence

16 Feb 2003

In recent Remarks before the New York State Society of CPAs, Acting SEC Chief Accountant Jackson M.

Day spoke about the efforts underway to bring about international convergence of accounting standards. He commented on the importance of consistent application of accounting standards across national borders:

Important to the success of convergence is an infrastructure that enables consistent, comparable and appropriate application in multiple jurisdictions around the world. This may be the most difficult part given the diversity of backgrounds and regulatory structures of each of the jurisdictions. The use of interpretive bodies, such as the Emerging Issues Task Force in the U.S. and the International Financial Reporting Interpretations Committee in the international arena, is a critical part of this infrastructure. While not every question can, or should, be answered, there also cannot be fifteen answers to a pervasive question. That would undermine the credibility of the global accounting system.

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FASB launches new guidance series: FASB Staff Positions

15 Feb 2003

The FASB has started a new series of application guidance known as FASB Staff Positions (FSP) as a way of improving information flow from its staff.

The FASB staff will circulate a draft of a proposed FSP to Board members for their review. If a majority of Board members do not object to the proposed FSP, it will be posted on the FASB website for comment for a period of 30 days, which will be announced in FASB's newsletter Action Alert. At the end of the exposure period, the FASB staff will draft the final FSP. FSPs are intended to achieve more timely and consistent communication about the application of FASB literature. You can download the first Proposed FSP here ("Accounting for accrued interest receivable related to securitised and sold receivables under Statement 140").
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Advisory Council meeting will focus on financial instruments

14 Feb 2003

When the IASB meets with the Standards Advisory Council on 24-25 February 2003, virtually the entire agenda will be a roundtable discussion of financial instruments -- particularly the IASB's proposed amendments to IAS 32 and IAS 39. On the first day, discussion will centre on derecognition, derivatives and hedge accounting, and impairment of financial assets.

The second day's discussion will focus on the distinction between debt and equity. Click for Agenda Details. The IASB will also hold public roundtable discussions of IAS 32 and IAS 39 in Brussels (10-11 March) and in London (12-14 March). A total of 108 firms, organisations, and individuals (the majority from the banking and insurance sectors) have asked to participate. Click to download the Questions that IASB has asked participants to address (PDF 74k).
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Study shows global trend toward GAAP convergence

13 Feb 2003

A study conducted jointly by the world's six largest accountancy firms, including Deloitte Touche Tohmatsu, shows a marked leap toward worldwide convergence with IFRS from previous years.

The study, titled GAAP Convergence 2002, examines the current and planned adoption of IFRS in 59 countries. In 58 percent of the countries surveyed, national accounting standards will be replaced with IFRS for all listed companies, except where national issues remained not covered by the new standards. Another 22 percent said they were adopting IFRS on a standard by standard basis, and a further 20 percent said they were eliminating differences between national standards and IFRS as and when practical. 57 percent of those planning to adopt IFRS were driven by a government or regulatory requirement and 13 percent by standard setters. 51 percent of the 59 countries indicated that the complex nature of some of the international standards - in particular, those relating to financial instruments, and others incorporating fair value accounting - is a barrier to convergence in their country. In addition, 49 percent of the countries surveyed also cited the tax-driven nature of their national accounting regime as a hurdle. Consequently, many countries are at present limiting implementation of IFRS to listed companies, rather than extending it to all companies. Survey respondents also stressed the importance of getting better and more timely access to national language translations of the new standards and interpretations. While translations of IAS were available in 70 percent of the countries covered, in many cases the translations were not sanctioned by the IASB, and in nearly one-third of the countries where IFRS are available in the national language, the translations were not considered to be available quickly enough. Another area of challenge identified was the availability of IFRS training, for which demand is expected to build up significantly as the world moves towards new standards. Click to:
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New DTT publication on corporate governance

13 Feb 2003

The Sarbanes-Oxley Act of 2002 has rewritten the rules for corporate governance, disclosure, and reporting.

The new and proposed SEC rules that influence Sarbanes-Oxley are complicated and require immediate and decisive action. Sarbanes-Oxley focuses heavily on the critical role of internal control. It is a process in which a company's board of directors, management, and other personnel must actively participate to drive business success. In a new publication, Moving Forward - A Guide to Improving Corporate Governance Through Effective Internal Control, Deloitte & Touche (US) recommends developing an internal control program with a single methodology to address the provisions of both Sections 302 and 404 of Sarbanes-Oxley. The comprehensive five step program provides a reliable approach to linking effective internal controls to sound corporate governance. Click to (PDF 665k).
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IFRIC project summaries have been updated

13 Feb 2003

We have updated the Summaries of the IFRIC Agenda Projects to reflect decisions made at the February 2003 IFRIC meeting. .

We have updated the Summaries of the IFRIC Agenda Projects to reflect decisions made at the February 2003 IFRIC meeting.

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Use of IFRS around the world continues to grow

12 Feb 2003

We have updated our table showing the Countries that Use IFRS for Reporting by Domestic Companies.

The table reflects new information about required use of IFRS for listed companies in the Bahamas, Bulgaria, Jordan, Lebanon, and Mauritius – bringing to 65 the number countries in which IFRS must be used for reporting by domestic companies either currently or by 2005.
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Merits of IFRS debated at US NASD symposium

12 Feb 2003

The NASD – the private-sector self-regulatory organisation for the United States securities industry, stock brokers, and brokerage firm – sponsored an international symposium on "Global Adoption of International Accounting Standards" at the Harvard Law School on 3 February 2003. The purpose of the symposium was to provide a forum at which international business and regulatory leaders could debate the merit and need for establishing a set of internationally accepted accounting standards.

Among those participating were Sir David Tweedie, Chairman of the International Accounting Standards Board; Robert Herz, Chairman, Financial Accounting Standards Board; Howard Davies, Chairman of the UK's Financial Services Authority; Henry Paulson, Jr., Chairman and CEO of Goldman Sachs; Roel Campos, SEC Commissioner; Peter Fisher, US Treasury Undersecretary; and Robert Glauber, Chairman and CEO of NASD. The symposium was the first in a new NASD International Symposium Series on Transparency in Capital Markets. NASD News Release.
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Implementation of IFRS in Australia

11 Feb 2003

In a paper presented at an investor relations forum in Sydney, Keith Alfredson, chairman of the Australian Accounting Standards Board (AASB), discusses Australia's approach to full implementation of International Financial Reporting Standards for financial years commencing on or after 1 January 2005. Click to Download Mr.

Alfredson's Remarks (PDF 24k). An excerpt:

Most IFRSs do not operate in isolation because of their frequent cross-references to other IFRSs. Consequently it is most impracticable for the AASB to issue and make operative selective IFRSs in isolation. For this reason, and given the wide-ranging planned amendments to existing standards over the next two years to 2005, while further study is required by the AASB, it is far more likely that the AASB will be forced to make most IFRSs operative for financial years commencing on or after 1 January 2005 in a "big bang" rather in what is somewhat hopefully envisaged in CLERP 9 through a transition process. While this may be considered to be unfortunate, it is, I believe, inevitable and is, of course, largely out of the hands of the AASB, given that implementation is dependent on the IASB's timetable and output.

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SEC requires analyst certification of research reports

10 Feb 2003

The US Securities and Exchange Commission has voted to adopt a new regulation that will require research analysts to certify the truthfulness of the views they express in research reports and public appearances, and to disclose whether they have received any compensation related to the specific recommendations or views expressed in those reports and appearances.

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