Another BLOG on migrating to IFRS

PricewaterhouseCoopers is maintaining a blog on International Financial Reporting Standards (IFRS). Written by senior IFRS partner Ian Wright, it looks at the hot topics in financial reporting and the issues that companies need to think about before “ideas and proposals” become a practical reality. Recent topics focus on IFRS for subsidiaries and measurement concepts for communicating with the market.

Can global standards be principles-based?

Regarding the migration to IFRS, IASB Chairman Sir David Tweedie recently delivered the 2007 Ken Spencer Memorial Lecture at the University of Melbourne, Australia. The title of the paper is: “Keep it simple, stupid! Can global standards be principle-based?” In his opinion, a good principles-based standard must pass four tests: (1) Is the standard written in plain English? (2) Can the standard be explained simply in a matter of a minute or so? (3) Does it make intuitive sense? (4) Does management believe it helps them to understand and describe the underlying economic activity? The lecture is also available as an MP3 audio presentation or slides.

Working through IFRS challenges

The 2005-2006 financial year was the first in which International Financial Reporting Standards were implemented in Australia. The migration to IFRS has gone relatively smoothly and for the first time the country’s financial reporting is in line with guidelines set by the global standards overseer. Submissions from stakeholders on progress with the implementation identified several themes including: the level of Australian influence over the development of IFRS; the education and skill level of those responsible for implementing and interpreting the new standards; and issues affecting small and medium-sized enterprises. To learn more about the challenges, read the article “Working through IFRS challenges ” in the February 2007 issue of Charter magazine.

CESR report on “Equivalence” of Canadian, Japanese and US GAAP

The Committee of European Securities Regulators (CESR) has published a report that responds to a request from the European Commission. The report CESR's advice to the European Commission on the work programmes of the Canadian, Japanese and US standard setters, the definition of equivalence and the list of third country GAAPs currently used on the EU capital markets is available on the CESR website.

Migrating to IFRS from US GAAP

Deloitte's IFRS Global Office has published a new Comparison of International Financial Reporting Standards and United States GAAP as of February 2007. The focus is on differences that are commonly found in practice. The significance of the differences will vary for individual entities depending on the nature of the operations, the industry in which it operates and the accounting policy choices it has made.

European Commission Roundtable on IFRS

The European Commission (EC) has issued a Summary Meeting Report of the January 2007 meeting of the EC Roundtable for the Consistent Application of IFRS. The Roundtable, formed in 2006, will identify cases where the accounting treatment in Europe under IFRS is so divergent, significant and widespread as to warrant “common concern” among the different groups of participants including preparers, auditors, national standard-setters and regulators (view the flowchart). When such cases are identified, the Roundtable will refer them to IFRIC, although circumstances may arise where the matter could be referred directly to the IASB. For more information, visit the European Commission website.

ICAEW studies IFRS implementation in Europe

The European Commission has asked the Institute of Chartered Accountants in England and Wales (ICAEW) to analyze the implementation of IFRS in the European Union. Led by David Cairns, the project team is reviewing the IFRS consolidated financial statements of 200 stock exchange listed companies. The ICAEW study will also incorporate the views of preparers, users and auditors of IFRS financial statements, as well as the experiences of securities and other regulators. Details are provided on the ICAEW website.

Roundtable on IFRS “Roadmap”

The United States Securities and Exchange Commission (SEC) will hold a webcast on March 6, 2007 on the implications of removing the requirement for reconciliations to US GAAP for financial statements prepared using IFRS. For more information, view the press release or visit the SEC website (International Financial Reporting Standards "Roadmap" Roundtable).

CICA Conference on IFRS - Path to Convergence

The CICA will host a “Conference on International Financial Reporting Standards - Path to Convergence” on June 11-12, 2007 in Toronto. According to the program, “The target has been set…IFRS by 2011! How you get there is, to a large extent, up to you. Finding the right path that ensures your organization is prepared may be one of the biggest financial reporting challenges you will face in the coming years. Many have begun reviewing the process and are realizing that to meet the deadline, and ensure that the abundance of details are adequately addressed, means getting underway now. The conference will include technical sessions and insight from jurisdictions that have made the shift to IFRS, to help you prepare for, and define, your path to convergence.”