Investor Perspectives on IFRS Implementation

The Association Française de la Gestion financière / French Asset Management Association (AFG) and the Fédération Française des Sociétés d’Assurances / French Insurers’ Association (FFSA) recently published a report Investor Perspectives on IFRS Implementation. The overall conclusions are in phase with the results of the collection of essays published in 2004 by the AFG and FFSA: adoption of IFRS is good news for investors assuming that consistent practices emerge in terms of implementation – a condition which, two years after first-time adoption, has still not really been met.

IASB Update and IFRIC Updates – January 2008

Periodically, the International Accounting Standards Board (IASB) and the International Financial Reporting Interpretations Committee (IFRIC) publish newsletters on their activities. The IASB Update and IFRIC Update are published as a convenience to the IASB’s constituents. The reported conclusions are tentative and may be changed or modified at future IASB or IFRIC meetings.

International Business — An SEC Perspective

In January 2008, Christopher Cox, US SEC Chairman, gave an Address to the American Institute of Certified Public Accountants’ International Issues Conference. In his speech, titled International Business — An SEC Perspective, he notes that foreign trading activity in US securities is over $33 trillion. That’s more than twice the GDP of the European Union. He also says “So to sum up, this is what you need to know from the SEC’s standpoint: IFRS is coming. XBRL is coming. And mutual recognition is coming.”

IFRS in Canada newsletter

The IFRS in Canada newsletter distills the ongoing changes to accounting standards and delivers the essential information to public and private companies in Canada. It analyzes current information, including Canada’s Accounting Standards Board publications. (View the Newsletter prepared by The Finance Group.)

IASB - An interview with Sir David Tweedie

The January 2008 issue of Accountancy magazine includes an interview with IASB Chairman Sir David Tweedie titled Tweedie's Best of Breed. In the interview, Tweedie comments on some of the key events relating to IFRS in 2007.

Canada-US GAAP differences

Canada’s Accounting Standards Board has completed an analysis on Reported Canadian/US GAAP Differences. The report summarizes GAAP differences identified in a survey of 150 public companies for fiscal years ending in 2006. All the survey companies have listings on major US stock exchanges or issue debt securities in the US.

Principles-based standards and capital-market stakeholders

On January 15, 2008, the world’s six largest audit and accounting networks hosted the fourth Global Public Policy Symposium in New York. At this meeting, approximately 300 investors, regulators and standard-setters from around the world came together to discuss a series of issues key to the capital markets. A white paper on Principles-Based Accounting Standards was formally released by the CEOs of the international audit networks. The firms believe a commonly-accepted framework on the development of principles-based standards is essential as more countries adopt IFRS.

FASB codification moves into verification phase

The US Financial Accounting Standards Board (FASB) has moved to the verification stage of its Accounting Standards Codification. The FASB is asking constituents to verify that the Codification accurately reflects existing US GAAP and to provide any pertinent feedback. On completion of the verification phase, the Codification will become the single source of authoritative US GAAP. To encourage feedback, the online Codification Research System is available for free during the one-year verification phase. (View the News Release and access the FASB Accounting Standards Codification.)

IFAC - suitability of proposed IFRS

The International Federation of Accountants (IFAC) SMP Committee has examined whether the proposed International Financial Reporting Standards for Small and Medium-sized Entities (IFRS for SMEs), developed by the IASB, are suitable for micro-entity financial reports. The report “Micro-Entity Financial Reporting: Some Empirical Evidence on the Perspectives of Preparers and Users” is based on focus group interviews of users and preparers of micro-entity financial reports in Italy, Kenya, Poland, Uganda and the United Kingdom. It is available from the IFAC bookstore.

Addressing complexity in US financial reporting

In 2007, the US Securities and Exchange Commission formed the SEC Advisory Committee on Improvements to Financial Reporting to study the causes of complexity in the US financial reporting system. On January 11, 2008, the Advisory Committee held its third meeting and made tentative decisions on proposals set out in a Draft Decision Memo. The Advisory Committee plans to publish its final recommendations in the third quarter 2008. (Visit the Advisory Committee's Web Page on the SEC website.)

Canada’s IFRS Advisory Committee — Report on Public Meeting

At its December 2007 meeting, Canada’s IFRS Advisory Committee (IAC) discussed issues including possible amendments to IFRS 1, First-time Adoption of International Financial Reporting Standards, that might assist Canada’s transition to IFRS. (View the Report on Public Meeting).

Academic resources on IFRS

The academic community, responsible for providing the foundational academic education for tomorrow’s Chartered Accountants, faces significant challenges in developing the IFRS expertise they will need in the classroom. The CICA is committed to working with the academic community to provide information and resources. It is developing significant resources, including classroom support materials, that will be available to the academic community free of charge. (Visit the CICA IFRS website.)

IFRS News from PricewaterhouseCoopers

IFRS News is the PricewaterhouseCoopers monthly newsletter highlighting current developments at the International Accounting Standards Board (IASB) and International Financial Reporting Interpretations Committee (IFRIC). The January 2008 edition covers: IFRS 3R Business Combinations and IAS 27R Consolidated and Separate Financial Statements, ED 9 Joint Arrangements, PwC roundtable discussion on business combinations, SEC roundtable on adoption of IFRS, and new roles for PwC partners. There is also a supplement of Q&As covering some of the more challenging aspects of IFRS 3R Business Combinations. (Read IFRS News and Supplement.)

SEC and SEBI announce increased cooperation and collaboration

The US Securities and Exchange Commission (SEC) and the Securities and Exchange Board of India (SEBI) have announced terms for increased cooperation and collaboration. The new SEC-SEBI dialogue has three main objectives: identify and discuss regulatory issues of common concern; continue and expand the existing program of capacity-building and technical cooperation between the SEC and the SEBI; improve cooperation and the exchange of information in cross-border securities enforcement matters. (View the SEC Press Release.)

IASB - business combinations project update

The IASB has completed phase II of its business combinations project by publishing a revised version of IFRS 3 Business Combinations and an amended version of IAS 27 Consolidated and Separate Financial Statements. The new requirements take effect July 1, 2009, although entities are permitted to adopt them earlier. (View the IASB Press Release and Business Combinations Project Data.)

CESR consultation on national GAAP and IFRS

The Committee of European Securities Regulators (CESR) has issued a Consultation Paper on the equivalence of Chinese, Japanese and US GAAP to IFRS. The Paper includes draft conclusions on such equivalence. Responses are requested by February 25, 2008. CESR will consider the views received in developing its advice to the European Commission. The Commission plans to make its decisions by July 1, 2008 regarding the equivalence of third country (non-EU) GAAP under the Prospectus and Transparency Directives.

Review of IASB Standards and Interpretations

Over the past 2 years, the International Accounting Standards Board (IASB) has issued a number of new and revised Standards and Interpretations. Some of these are significant – others address matters of detail. Deloitte’s IFRS Global Office has published a special edition of the IAS Plus Newsletter titled Closing Out 2007. The newsletter summarizes all of the new and revised Standards and Interpretations in effect for December 2007 year ends and beyond. Past IAS Plus Newsletters are also available on the Deloitte website.

Views on IFRS versus US GAAP

The US Securities and Exchange Commission (SEC) is considering accepting financial statements of US companies prepared under International Financial Reporting Standards (IFRS) instead of US GAAP. In August 2007, it issued Concept Release 33-8831: Concept Release on Allowing U.S. Issuers to Prepare Financial Statements in Accordance with International Financial Reporting Standards. The major public accounting firms have expressed their views on the Concept Release (see Deloitte & Touche, Ernst & Young, KPMG and PWC).