We have updated our Comparison of South African GAAP and IAS as of 15 March 2002. Click for further information about South African GAAP.

IASB is addressing this issue in its project on Share-Based Payment. Mr. Greenspan said:

The current accounting for options has created some perverse effects on the quality of corporate disclosures that, arguably, is further complicating the evaluation of earnings and hence diminishing the effectiveness of published income statements in supporting good corporate governance. The failure to include the value of most stock-option grants as employee compensation and, hence, to subtract them from pretax profits, has increased reported earnings and presumably stock prices.... The Federal Reserve staff estimates that the substitution of unexpensed option grants for cash compensation added about 2-1/2 percentage points to reported annual growth in earnings of our larger corporations between 1995 and 2000. Many argue that this distortion to reported earnings growth contributed to a misallocation of capital investment, especially in high-tech firms.

Instead, subscribers to IASB's Comprehensive Subscription Service will have access only to electronic versions of IFRIC documents, which can be downloaded immediately after their approval and issue from the IASB Website.

 

SIC-32 addresses the appropriate accounting treatment for internal expenditure for the following phases of website development: planning, application and infrastructure development, content development, and operating.

Click for:

• IASB Press Release on SIC-32 (PDF 31k)
• Our summary of SIC-32.

 

Click to Download the 2001 IASCF Annual Report (PDF 2,237k).

During the discussion of several projects at the IASB meeting last week, the Board indicated that guidance in IFRSs will be of two types:

• IFRSs will include one or more "application supplements" in appendixes that will form part of the Standard.
• IFRSs will include illustrative examples "at the back of the Standard" that are not appendixes to the Standard and do not form part of the Standard.

The report makes recommendations in four areas:

• Strengthening financial management and commitment to ethical conduct
• Rebuilding confidence in financial reporting, the accounting industry, and the effectiveness of the audit process
• Modernising financial reporting and reforming the accounting standards-setting process
• Improving corporate governance and the effectiveness of audit committees

Among other things, FEI recommends a new oversight body for the accounting profession, restrictions on non-audit services provided by the independent auditor, restrictions on hiring senior personnel from the auditor, reform of the FASB (a 'blue ribbon' study panel is proposed), improved MD&As;, more web-based reporting, reporting of performance metrics, and enhanced requirements for foreign SEC registrants, including quarterly reporting.

Pitt has testified before the US Senate Committee on Banking, Housing, and Urban Affairs re: Accounting and Investor Protection Issues Raised by Enron and Other Public Companies. Click for Mr. Pitt's:

• (PDF 294k) and
• (PDF 63k).

Also we have updated our pages for the following projects to reflect those decisions:

• Business Combinations,
• First-Time Application of IFRS,
• Improvements,
• Insurance Contracts,
• Performance Reporting,
• Share-Based Payment, and
• SIC D32.

Jenkins has commented on two bills recently introduced in the United States Congress that include provisions concerning the FASB. Both bills would mandate annual FASB reporting to Congress, and one of them would allow SEC recognition of FASB standards only if FASB's funding is restricted to fees and publications revenue (no contributions). Mr. Jenkins indicated that FASB will support legislation that would provide funding to FASB via a fee collection system run by the government.