EFRAG was created by a broad range of private sector accounting organisations in Europe to present coordinated views to the European Commission's new Accounting Regulatory Committee and to the Commission itself. Currently, in response to a request from the Commission, EFRAG is reviewing all existing IASC standards and interpretations with a view to advising the Commission, by 30 June 2002, on whether these should be endorsed as a bloc. Click for Information on IAS in Europe.

 

The US SEC has released a 32k) to provide guidance to registrants in light of Andersen's announcement that it will cease practicing before the Commission (that is, stop auditing public companies) by 31 August 2002. In March, the SEC had adopted special (PDF 17k) for companies audited by Andersen LLP.

The American Council of Life Insurers (ACLI), the German Insurance Association (GDV), and the Life Insurance Association of Japan (LIAJ) said IASB's Draft Statement of Principles on Insurance Contracts poses numerous problems, particularly 'mark-to-market' accounting – "immediate recognition of the fair value of the estimated future profitability associated with insurance contracts, especially long-term contracts, sold during the reporting period.... Application of such an approach where there are no verifiable market prices leads to situations where entities are free to develop and use valuation models based on their own assumptions and methods.... There is no question about whether a theoretical model could be developed and required for insurance contracts. The real question is whether doing so would make matters better or worse.... We believe that the deferral/matching approach is appropriate and preferable for life insurance contracts." Click for ACLI-GDV-LIAJ Letter to IASB (PDF 186k).

The study concluded: "Investors lack the single most important element they need to help cut through much of the distortions and dislocations discussed in this paper: Clear, full, disclosure of accurate, unbiased, comparable information." Click for Full Study (PDF 250k).

On the agenda are:

• Insurance Contracts
• Share-Based Payment
• Performance Reporting
• Business Combinations Phase 2
• Convergence Issues.

The Board will meet with its Advisory Council on 20-21 June and will hold a public Seminar on share-based payment on 18 June.

Which browser?		Which operating system?
Internet Explorer 5	74.5%	Windows 98	42.2%
Internet Explorer 6	12.5%	Windows 2000	25.4%
Internet Explorer 4	4.5%	Windows NT	19.0%
Internet Explorer 2	0.8%	Windows 95	9.2%
Total Internet Explorer	92.3%	Windows XP	2.4%
Netscape 4	5.7%	Total Windows	98.2%
Netscape 3	1.2%	Macintosh	0.4%
Netscape 6	0.6%	Others	1.5%
Total Netscape	7.8%	Total Non-Windows	1.9%

The US SEC is proposing to require, for domestic companies, that:

• The principal executive and financial officers certify the contents of the company's quarterly and annual reports.
• Certain new events be reported on Form 8-K, including unusual agreements, terminations of business relationships, contingent obligations, restructurings, write-offs, impairments, rating changes, withdrawals of auditors' reports, and changes in directors and management.
• Form 8-K reports be filed within two business days instead of the current 5 to 15 days.

Click for SEC Press Release.

The regulation establishes an Accounting Regulatory Committee to advise the Commission in this regard and sets a deadline of 31 December 2002 for decisions regarding existing IAS. Under the regulation, IAS can only be adopted if they

• (a) are not contrary to EU Directives,
• (b) are conducive to the European public good, and
• (c) meet the criteria of understandability, relevance, reliability, and comparability.

The regulation requires that the Commission consider the views of national accounting standard setters; securities, banking and insurance regulators; central banks including the ECB; the accounting profession; and users and preparers of accounts. The private sector accounting profession in Europe has created an organisation called the European Financial Reporting Advisory Council (EFRAG) to present coordinated views to the Accounting Regulatory Committee and the Commission. EFRAG has begun its task of reviewing the existing IAS with regard to their applicability in Europe. Click for EFRAG Press Release (PDF 21k).

We have posted the 10 June 2002 edition of the Accounting Roundup newsletter from Deloitte & Touche USA.

The board of trustees of the IASC Foundation will hold an open meeting at the IASB office in London on 12 June 2002. The public session is 08:30-10:30. Agenda topics:

• Report of the IASB Chairman
• Proposed Revision of the Constitution
• Future of IASC Foundation funding