IFRS News Clips
Dec. 31, 2008
IFRS in 2008 – CFO.com presents their best IFRS stories from 2008, the year that marks the issuance of the SEC's proposed roadmap for transition to International Financial Reporting Standards.
Dec. 31, 2008
SEC Study Says Improve, Do Not Suspend, Fair Value Accounting – The SEC released its congressionally mandated study on mark-to-market accounting. The report notes that investors generally believe fair value accounting increases transparency. The report also observes that fair value accounting did not appear to play a meaningful role in bank failures that occurred in 2008.
Dec. 31, 2008
IASB and FASB Announce Membership of Financial Crisis Advisory Group – The Financial Crisis Advisory Group (FCAG) is the high-level advisory group set up by the boards to consider financial reporting issues arising from the global financial crisis.
Dec. 30, 2008
Georgia Tech Financial Analysis Lab releases LIFO study. The Georgia Tech Financial Analysis Lab released a study titled The Potential Consequences of the Elimination of LIFO as part of IFRS Convergence. The study examines the income, balance sheet, cash flow and tax effects of a move from LIFO to FIFO.
Dec. 30, 2008
IASB's credibility questioned after rule change. The Washington Post writes about IASB rule changes in October that were made in response to political pressure from the European Commission.
Dec. 30, 2008
IASB wants companies to provide additional disclosures. According to WebCPA, the International Accounting Standards Boards has proposed amendments to IFRS 7, which would require additional disclosures for financial instruments.
Dec. 23, 2008
IASB proposes additional disclosures for investments in debt instruments. The International Accounting Standards Board published proposed amendments to IFRS 7 that would require additional disclosures on all investments in debt instruments, other than those classified in the fair value through profit or loss category.Dec. 23, 2008
FASB and IASB issued a joint discussion paper on revenue recognition rules, CFO Magazine reports. The discussion paper focuses on customer contracts for products and services. The Boards' objective is to improve the guidance in both IFRSs and U.S. GAAP.Dec. 23, 2008
IFRS will have some companies paying higher tax bill, CFO Magazine reports. Advocates of convergence in the U.S. claim that global rules will make U.S. companies' financial statements look better. However, according to research done by the Georgia Tech Financial Analysis Lab, the elimination of LIFO will also raise the income tax bill for many U.S. companies.Dec. 22, 2008
IASB moves on issues demanded by G20 summit.. Gavin Hinks of Accountancy Age writes on the International Accounting Standard Board's moves on issues surrounding impairment, embedded derivatives and difference in accounting for securities investments between IFRS and US GAAP.Dec. 22, 2008
IASB proposes amendments to clarify the accounting for embedded derivatives..The IASB published for public comment proposals to clarify the accounting treatment for embedded derivatives.Dec. 19, 2008
Canadian Executives say they will be ready for IFRS. (CNW Group) A survey of Canadian Chartered Accountants in executive roles reveals that many are in the early stages of preparedness, but 80% believe they will be ready for the changeover to IFRS. The executives were surveyed in November as part of the fourth quarter 2008 CICA/RBC Business Monitor study.
Dec. 19, 2008
Proposed IASB rule will force banks to account for risky assets properly, reports Reuters. The recently released proposed consolidation standard presents a principles-based definition of control that will be more difficult to evade through special structuring.
Dec. 19, 2008
FASB postpones proposal to simplify FAS 133. According to Financial Week, the proposed revisions to FAS 133 would have eliminated the provisions that make it easier for companies to avoid having changes in the fair value of their derivatives affect their earnings. The proposed revisions would have also eliminated differences between the U.S. standard and international rules.
Dec. 17, 2008
FASB will re-examine accounting for financial instruments. According to The Wall Street Journal, the use of mark-to-market accounting might be extended to a wider variety of securities, which could cause a battle between FASB, other regulators, companies and some legislators. However, according to Thomas Linsmeier, a FASB board member, investors said mark-to-market accounting is the "best approach."
View full article > | FASB Agenda Decisions – Financial Instruments >
Dec. 16, 2008
IFRS Taxonomy Module Manager released. The International Accounting Standards Committee Foundation announced the release of the IFRS Taxonomy Module Manager (ITMM 3.0) with Viewer functionality. Based on IFRS Taxonomy 2008, the license-free ITMM 3.0 offers taxonomy users many new features.
Dec. 16, 2008
Regulator worried about independence of IASB - Accountancy Age reports that The Financial Reporting Council, the United Kingdom's independent regulator responsible for promoting confidence in corporate reporting and governance, has cited independence of the International Accounting Standards Board as a concern. The FRC is also worried that work on U.S. convergence will push the IASB towards a more rules-based approach to standard setting.
Dec. 15, 2008
U.S. Accounting Rules "Equivalent" to IFRS – Bloomberg reports that the European Union formally recognizes accounting rules from the U.S., Japan, Canada, China, South Korea and India as equivalent to IFRS and will not require reconciliation to IFRS in EU filings.
Dec. 15, 2008
Leading investor appointed as IASC Foundation Trustee. The International Accounting Standards Committee Foundation announced the appointment of Scott Evans, Executive Vice President, Asset Management and Chief Executive Officer of TIAA-CREF Investment Management LLC, as a Trustee of the IASC Foundation. Dec. 11, 2008
IASB Chairman David Tweedie discusses the year ahead and what it holds for global accounting. CFO Magazine reports on Tweedie's intentions to embark on joint projects with FASB including reducing the number of combined impairment tests in U.S. GAAP and IFRS to two or three tests. In reference to convergence, Tweedie said, "The markets will decide that the world does not need two sets of standards."
Dec. 11, 2008
Chairman Tweedie says "FASB's not going away". WebCPA reports on a Pace University School of Business seminar where IASB Chairman David Tweedie discusses the importance of the FASB in the future standard setting process. Dec. 11, 2008
Fast track procedure could help IASB respond to future crisis. IASB Chairman Sir David Tweedie tells Reuters a fast track procedure could be added to the Board's Constitution. Recent pressure from Europe shows the need to formalize the process. Dec. 11, 2008
Accountancy Age discusses the past year and how the accounting profession will change in the next year. Gavin Hinks explains that 2008 was "a year high politics became preoccupied with accountancy standards and, especially, the fair value principle." He says we go into 2009 still uncertain about the future of fair value and the IASB. Hinks worries that if IASB fails to improve key areas the opportunity will arise for European banks to ignore key elements and a so called carve out of IFRS could occur. Dec. 10, 2008
European politicians forced the IASB into making rule change. Financial Week reports that IASB Chairman David Tweedie said, "We were trapped and felt we had to do it", referring to rule changes in October, which permit reclassification of financial instruments.
Dec. 10, 2008
EU set to recognize U.S. GAAP. The European Union will recognize accounting rules from the U.S. and five other countries. Bloomberg reports that the formal recognition will be made in the next few days according to statements from Financial Services Commissioner Charlie McCreevy. The recognition allows companies with securities traded in EU markets to publish financial results under their local rules.
Dec. 10, 2008
Accounting is not to blame. Reuters reports IASB Member James Leisenring said in a speech at the AICPA National Conference on Current SEC and PCAOB Developments that accounting should not be blamed for the economic crisis. "We are all worried and concerned about how to cope with accounting in this environment. But our concern should be translated into how do we improve confidence in financial reporting, not destroy it," said Leisenring.
Dec. 08, 2008
SEC Chairman Christopher Cox addressed the AICPA national conference stating the Commission's intentions to finalize eXtensible Business Reporting Language (XBRL). Accountancy Age reports on Cox's speech, in which he explained that the proposed rule on XBRL would allow investors to read financial statements from any country in their native language. The Commission expects to finalize its proposed rule on XBRL later this month.
View full article > | Transcript >
Dec. 08, 2008
Zalm will stay at IASC Foundation. Gerrit Zalm, Chairman of the International Accounting Standards Committee Foundation tells Accountancy Age that he plans to remain on the Board and denies that his acceptance of a position leading a bank in Holland creates a conflict of interest.
Dec. 08, 2008
The credit crisis is a regulatory problem not an accounting one. Gerrit Zalm, Chairman of the International Accounting Standards Committee Foundation tells CFO.com that the accountants duty is to record the "actual value" of corporate assets and liabilities. Zalm also believes that the appointment of Paul Volcker to President Obama's economic advisory team will make the move to IFRS "a little less rocky" in the U.S.
Dec. 08, 2008
Trustees seek views on a broad range of constitutional issues. The Trustees of the International Accounting Standards Committee Foundation published for public comment a discussion document on the second part of the five-yearly review of the IASC Foundation's Constitution.
Dec. 03, 2008
IASC Foundation chairman may have to step down, reports Accountancy Age. Gerrit Zalm, Chairman of the International Accounting Standards Committee Foundation has accepted a job leading a bank in Holland. This will lead to potential conflicts in his role serving the parent body of the International Accounting Stands Board.
Dec. 03, 2008
Paul Cherry has been appointed Chairman of the Standards Advisory Council, effective January 1, 2009. The Standards Advisory Council (SAC) is a forum for the International Accounting Standards Board to consult a wide range of representatives from user groups, preparers, financial analysts, academics, auditors, regulators and professional accounting bodies that are affected by and interested in the IASB's work. Mr. Cherry is Chair of the Canadian Accounting Standards Board (AcSB), from which he will step down at the end of March 2009.
Dec. 01, 2008
European and U.S. companies generally favor move to IFRS, WebCPA reports. A study conducted by professors Tim Buthe of Duke University and Walter Mattli of Oxford University found that CFO's favor international standards, but 40% question whether global standards are achievable. According to the survey, American executives have a much more favorable assessment of key aspects of the IASB standard setting process compared to their European counterparts.
Dec. 01, 2008
Rule change to IFRS allows companies to hide their economic reality in their financial statements. Canadian Business reports on the rule change asked for by European lawmakers that allows companies to defer recognizing certain losses when assets are marked to market. Canada is also moving forward with international standards, which, according to Al Rosen, are "untested" and "inferior" to their current standards.
Nov. 27, 2008
The quality of disclosure is improving for banks all over the world. Business Day reports on a study released by PricewaterhouseCoopers, which shows the improvement due to new accounting standards and the recent market conditions. Banks showed an increase in fair value disclosures and in the range and depth of structured finance transactions. In order to reach the desired full transparency, however, further improvement is needed.
Nov. 27, 2008
IASB issues a revised version of IFRS 1. The International Accounting Standards Board issued a revised version of IFRS 1 First-time Adoption of International Financial Reporting Standards. The revised standard has an improved structure but does not contain any technical changes.
Nov. 27, 2008
IFRIC issues guidance on distributions of non-cash assets to owners. The International Financial Reporting Interpretations Committee issued an Interpretation to standardize treatment of distribution of non-cash assets to owners. Under the Interpretation, an entity should measure the dividend payable at the fair value of the net assets to be distributed.
Nov. 27, 2008
IASB updates reclassification amendment for financial instruments to clarify effective date. The IASB issued an updated version of the recent reclassification amendments to IAS 39 Financial Instruments: Recognition and Measurement and IFRS 7 Financial Instruments: Disclosures.
Nov. 26, 2008
Only a third of companies have prepped for IFRS, according to the results of a PricewaterhouseCoopers survey. Financial Week reports the findings of PwC's survey in which 43% of companies admitted that they haven't examined how international standards will impact their business. When asked what the greatest opportunity a successful conversion will provide, 57% said reduced complexity in applying accounting policy across business units and geographical areas.
Nov. 25, 2008
Revenue recognition is not any easier under IFRS. Laurie Brannen reports in Business Finance on a 2008 survey conducted by RevenueRecognition.com covering complexities and risks associated with revenue reporting under U.S. and international rules. Survey link (registration required)
Nov. 24, 2008
"We will see how the IFRS rules on goodwill impairment are applied in the current stock-market. The results could be ugly," economist Nicolas Veron warned. The Wall Street Journal reports that this year is the first that IFRS will be implemented against a sharp economic slowdown and heavy stock-market selloff, which could result in a severe hit for companies. Under IFRS, goodwill-impairment tests are carried out annually to determine whether value needs to be written down. (subscription required)
Nov. 24, 2008
Accounting professionals believe IFRS is inevitable, according to CIO Today. The article examines IFRS and the SEC's recently released roadmap. More than 100 countries currently use international standards with 50 more expected to adopt within the next year.
Nov. 20, 2008
G20 statement supports IASB and its mission. According to Accountancy Age, G20 nations support movement towards single set of global accounting standards. The G20 statement asked for financial stability to be a concern of the IASB through governance, not through standard setting.
Nov. 20, 2008
SEC's short-term convergence option is "misguided", according to the Financial Times. With over 100 countries already committed to IFRS, the SEC's plan for the U.S. to adopt international standards is laudable. However, the option to early adopt could cause problems for companies considering there are still significant differences between US GAAP and IFRS.
Nov. 20, 2008
SEC officials vague on IFRS transition - CFO Magazine reports on the reaction of some attendees at the Financial Executives International conference. The article claims that "some steam seems to have gone out of the [SEC's] push" towards IFRS. In his keynote address, chairman Christopher Cox made it clear that IFRS is not a done deal and will only happen, "if the commission believes it to be in the public interest and consistent with the protection of investors." According to the article, the decision to move forward with IFRS will hinge on progress made in the convergence between the U.S and international standard-setters, the level of IFRS education, and the stability of the IASB.
Nov. 18, 2008
SEC Chairman speaks to future of international standards. In a speech at a conference conducted by Financial Executives International, SEC Chairman Christopher Cox says that "two thirds of American investors own securities of foreign companies". He states, "Whatever the future of IFRS for U.S. issuers, retail and institutional investors alike in our country are relying upon IFRS today". The answer to the question as to whether IFRS will serve as the single set of high-quality, global accounting standards depends on "how quickly both the accounting standards and the processes by which they are established and developed can be globally recognized as world-class."
Nov. 18, 2008
Cost of convergence has companies hesitant to adopt early. Reuters reports on the necessary steps companies would need to take to prepare for IFRS, including running parallel sets of accounting books in U.S. GAAP and IFRS. "I don't think this is a particularly good time, given the economy to begin this massive…move to IFRS," Talia Griep, vice president and controller at Honeywell International said.
Nov. 18, 2008
IASB and FASB to move at their own pace - Financial Week reports on Sir David Tweedie, chairman of the IASB, and Robert Herz's, chairman of FASB, desire not to rush projects. Both boards are under pressure from the G20 to help ease the financial crisis.
Nov. 18, 2008
General Motors will not be an early adopter of IFRS. According to Financial Week, Nick Cyprus, controller and chief accounting officer at GM, believes there is no "first-mover advantage" to adopting early. His main concern with adopting early is the fact that rules could change even after early adopters transition to IFRS. "Convergence is key to me," he said. "There needs to be convergence before I lead. You won't see us trying to implement this thing too quickly."
Nov. 17, 2008
Finding volunteers for early adoption of IFRS may be difficult. CFO.com explains that limitations and uncertainties with the SEC's early adoption plan may make it difficult for companies to elect early adoption. Deloitte & Touche partner D.J. Gannon expects the SEC to receive lots of suggestions from commentators wanting the SEC widen its early adoption allowance.
Nov. 17, 2008
IFRS for early adopters will cost approximately $32 million. Financial Week discusses the SEC's estimated cost for each eligible early adopter of International Financial Reporting Standards.
Nov. 17, 2008
IFRS requires more soft skills. Richard Fuchs, PricewaterhousCoopers partner and IFRS specialist explains in a CFO.com article that a move to IFRS will require training in soft skills.
Nov. 17, 2008
G20 asks standard setter to promote financial stability. Accountancy Age reports on communique from G20 summit that asks the IASB to review its governance with a view toward promoting financial stability. G20 leaders also support work toward creating a single, high quality set of global accounting standards.
Nov. 17, 2008
Effects of the fair-value accounting rule change showing in the earnings reports of banks. CFO Magazine explains the findings of a Moody's Investors Service report issued last week. Moody analysts take issue with changes to IAS 39, the standard related to valuing financial assets. The amended standard makes it harder for investors to compare banks' financial statements.
Nov. 14, 2008
More and more countries are moving to IFRS. "No country is moving to US GAAP," Jane Wells said in a CNBC article. Wells reports on the move to adopt international standards by 2014. According to Rosalind Tyson of the SEC, the commission will be releasing a proposed roadmap for convergence "at any moment." Wells explains that "IFRS is supposed to be simpler, easier, more transparent, and provide a more accurate picture of a company's health."
Nov. 14, 2008
Ian Mackintosh, Peter Holgate, and others urge the IASB to remain independent, a Financial Times article reports. The letter states, "The EU has the ability not to accept international standards for use in Europe, or to change them. We strongly believe that these powers should be used only in the most exceptional circumstances and that the present situation does not justify their use. We would not support another carve-out." The authors of the letter strongly believe that if the EU adopts its own version of IFRS, the advantages of global comparability will be lost.
Nov. 13, 2008
Brussels threatens credibility of IASB. Interference from EU leaders could end movement toward global accounting system warns a group of investors and accountants. The Financial Times reports on a letter received from a broad group including the head of the UK Accounting Standards Board, representatives of the Big Four accounting firms and the head of the Association of British Insurers.
Nov. 13, 2008
AICPA Review of IASCF Constitution - While expressing strong support for the objectives of the IASC Foundation and the IASB, the AICPA issued a comment letter on the review of the IASCF constitution. The comment letter was issued in September and supports creation of a monitoring group and believes the IASCF should increase private entity constituency representation. The Institute also supports operating protocols that fully maintains the IASBs independence, while providing sufficient oversight so individual countries do not have a basis for carve-out exceptions.
Nov. 13, 2008
Sarkozy will lead the charge to transform the IASB and give it responsibly for ‘financial stability'. Accountancy Age reports the critical G20 meeting in Washington this weekend could be a platform to change the role of the IASB by adding financial stability to its responsibility. However, the idea has been criticized because it would conflict with the IASB's charge to ensure financial transparency.
Nov. 13, 2008
Uproar over fair value accounting threatens move to IFRS. Business Week reports on move to international accounting standards. Critics say the International Accounting Standard Board's lack of independent funding and tendency to cave into political pressure are stumbling blocks.
Nov. 13, 2008
Did IASB cave-in to political pressure? The International Accounting Standards Board has been under fire for reportedly submitting to political pressure after it suspended normal due process and issued amendments to fair value accounting rules. CFO.com reports on Parliamentary hearings where IASB Chief Sir David Tweedie was called to answer questions.
Nov. 13, 2008
Obama presidency could boost fair value, but slow plans to converge accounting standards. Accountancy Age explains that an Obama administration might be inclined to defend fair value accounting principles. In the area of accounting convergence, criticism about the move to international accounting standards is likely to come from Democrats.
Nov. 11, 2008
President Bush asked to support IASB independence. Trustees of the International Accounting Standards Committee Foundation ask President Bush and other international leaders to support independence of the International Accounting Standards Board. The Trustees believe that steps taken outside of the established accounting standards process would undermine confidence in financial markets.
Nov. 11, 2008
European leaders call for reform to international financial system. The Washington Post reports on conclusions reached in meeting between European heads of state held on November 7, 2008. The leaders call for a 100 day deadline to draw up measures to decide on urgent reforms. The 100 days starts on November 15, 2008, the date of the international summit of G20 countries in Washington. Included in the conclusions released by the European Council, "standards bodies, in particular in the area of accountancy, will have to be reformed to allow a genuine dialogue with all the parties concerned, in particular prudential authorities".
Nov. 11, 2008
Chairman Tweedie thought about quitting after damage done by allowing reclassification of financial instruments, reports Accountancy Age. A European Union carve-out proposal to international accounting standards covering fair value accounting would have derailed convergence efforts. The carve-out threat required suspension of normal due process in making changes to the standards.
Nov. 11, 2008
"All signs point to changing our model in the U.S. to a more globally-focused one," D.J. Gannon, a partner at Deloitte said in an interview with BNet. When asked about the projected schedule for convergence, Gannon predicts that the "commission will adopt a staggered mandatory implementation." Gannon explains the difference between IFRS and US GAAP as being a change in mindset. "The issue isn't figuring out what paragraph to go to, it is applying the principle of what you are trying to do," he says of IFRS.
Nov. 10, 2008
Accounting firms are committed to adopting IFRS by 2014 and are starting to prepare. Richard Stolz of WebCPA writes on the implications and preparations taking place as firms embrace the move to international accounting standards.
Nov. 10, 2008
Will the credit crisis halt IFRS? Lora Bentley of IT Business Edge points out how different the current economic and political climate is from earlier in the year. She says because the SEC has not yet opened its plan for comment, there is no real way to determine what people think about it.
Nov. 07, 2008
Report by Moody's Investor Service suggests IFRS may not actually help comparability. According to CFO Magazine, the credit rating agency found that there are benefits to using a single set of accounting standards, but the financial statements prepared using IFRS are not necessarily easier to compare. The report put out by Moody explains that IFRS loses some of its usefulness because it can create false volatility and undue complexity. Despite doubts, IFRS continues to move forward.
Nov. 07, 2008
The SEC expected to release the roadmap for transitioning to IFRS. According to WebCPA, the SEC wants to publish the roadmap before the Obama administration takes office. While the current SEC will set the roadmap, the SEC under Obama administration will set the final rules.
Nov. 07, 2008
The SEC's roadmap for IFRS will be release in a radically different economic and political environment. CFO Magazine reports that if the SEC publishes the roadmap today as expected, it will be about two months late. With Democrats in charge of both houses of Congress and the White House, many are expecting IFRS to be closely examined by the new administration.
Nov. 07, 2008
Accounting for banks was better before the changes to the classification of financial instruments were made, Accountancy Age reports. "I think our accounting was better than the United States, they couldn't change at that particular stage so we had to move to them," Sir David Tweedie said in an interview with the Financial Times. The IASB made changes in order to level the playing field between US standards and international standards. It was an attempt by the IASB to stave off demands for wider changes to fair value.
Nov. 06, 2008
Companies can't afford to procrastinate long on IFRS, John Cummings of Business Finance Magazine says. Many expect transition to international standards to slow under the Obama administration but with India, Canada, Korea and Brazil converging by 2011, Cummings says U.S. companies with operations in multiple countries will want to move to a single accounting language.
Nov. 06, 2008
Oil and gas companies are not achieving full consistency under IFRS an Accountancy Age article reports. KPMG examined the financial statements of oil and gas companies from around the world and found flaws in accounting, classification and terminology. "The oil and gas industry is one of the most international and so stands to benefit significantly from the application of a consistent global accounting framework such as IFRS," Jimmy Daboo KPMG's Global Head of Energy & Natural Resources for auditing and accounting said.
Nov. 05, 2008
SEC Set to Publish IFRS Roadmap. Accountancy Age reports that the Securities and Exchange Commission is expected to publish its IFRS roadmap today or tomorrow. Concerns have been raised about the shift as a result of the credit crisis and questions over fair value accounting, however, the move will force the issue before a new president takes office.
Nov. 05, 2008
IFRS implementation may slow. Business Finance reports on the next steps of IFRS explaining that the current financial crisis and a new administration will likely alter the SEC's original roadmap. However, the switch to IFRS from U.S. GAAP appears inevitable as the reasons for moving to IFRS remain the same.
Nov. 05, 2008
While public companies are expected to adopt IFRS by 2014, the outlook for private companies is still undecided. According to CFO Magazine, private companies aren't required to file audited financial statements with the SEC but they do prepare them for lenders, investors, and potential acquirers. Assuming the changeover eventually occurs for public companies, Ted Rose who runs an accounting-outsourcing firm believes IFRS for private companies will be inevitable.
Nov. 05, 2008
Companies are not in a rush to adopt IFRS earlier than required. Business Finance Magazine reports the current economic environment may halt early adoption of IFRS. A Protiviti survey shows that 48% of respondents admitted that they have made no preparations for convergence. The survey sites cost, education and setting up initial reporting formats as the greatest barrier to IFRS adoption.
Nov. 04, 2008
IASB announces web presentation to introduce discussion paper on Financial Statement Presentation. Two web presentations are scheduled on November 13, 2008. Registration is required to access the web events.
Nov. 04, 2008
EFRAG plans to triple budget in effort to strengthen European contribution to the international accounting standard-setting process reports Jeremy Woolfe for Accounting Today at WebCPA. The increased budget will help the European Financial Reporting Advisory Group strengthen its influence and input in the agenda-setting process.
Nov. 04, 2008
Deloitte helps the tourism, hospitality and leisure industries prepare for IFRS with a white paper. Accountancy Age reports that the report released by Deloitte is designed to provide the THL industry with specific practical insights on IFRS. Deloitte believes that developing a plan around IFRS implementation is crucial in effectively positioning THL companies for the future.
Nov. 03, 2008
AICPA president and CEO Barry Melancon defended fair value accounting. At a securities industry conference, Melancon defended fair value accounting standards, admitting, though, they could be improved, according to WebCPA. The controversy over fair value accounting has complicated the SEC's roadmap for convergence to IFRS. Despite delays due to the current economic crisis, fair value and the presidential elections, Melancon believes convergence is inevitable.
Nov. 03, 2008
The SEC's delay in releasing convergence plans has many wondering if efforts have stalled. The SEC is more than a month behind in producing a specific timetable for convergence to supplement the roadmap that was published in August CFO Magazine reports. "If the credit crisis and recessions start spreading and are longer than people are expecting, the SEC will be reluctant to do a major financial reporting change," Edward Riedle a Harvard Business School professor said. The SEC says it is planning to move forward with convergence and that the timetable should be published next week.
Nov. 03, 2008
The IASB answers questions about fair value accounting in an 84-page document. According to CFO Magazine, the document discusses key controversies, including characteristics of inactive markets and the relevance of judgment in uncertain markets.
Oct. 31, 2008
Upcoming election will impact accountants. An Accountancy Age article by Joseph Goldstein explains that an Obama administration could stall the US's expected shift to IFRS. Some see his pro-labor posture against free trade as a signal of his possible reluctance for IFRS. McCain has said that fair value could be to blame for the current credit crunch which leads some to believe that a McCain administration would also oppose convergence if IFRS is identified as being more committed to fair value.
Oct. 30, 2008
Deutsche Bank Records Profit Instead of Loss. CFO.com reports that recent accounting rule amendments issued by the International Accounting Standards Board allowed the Frankfurt based bank to reclassify some assets for accounting purposes which enabled the bank to record a profit for the quarter instead of a loss. Reported by Marie Leone of CFO.com.
Oct. 30, 2008
What could an Obama Presidency mean to the Accounting Profession? October 30, 2008 - In a series of articles, writers for Accountancy Age probe a number of areas that will be affected by the next U.S. President's administration. The writers explore how an Obama administration might influence important issues, including U.S. GAAP convergence with International Financial Reporting Standards.
Oct. 30, 2008
It's time to slow the international accounting convergence movement according to Jack Ciesielski in an article for the Financial Times. He said, "Instead of a rush-job convergence during the worst financial crisis since the Depression, maybe what is needed is a few more years of friendly competition between standard-setters". Jack Ciesielski is publisher of the Analyst's Accounting Observer.
Oct. 30, 2008
Taiwan regulators are keen to align reporting standards with IFRS practices, and are studying adoption by 2014 according to an article in Asian Investor. Fair value rules, however, are expected to spark debate.
Oct. 29, 2008
New activities in the marketplace will affect IT Managers from a compliance and legal perspective. Jerry Norton of Wise Technology explains how new standards and rules, such as IFRS, will affect IT departments depending on their industry. He says it is only a matter of time before U.S. companies will need to completely convert to IFRS.
Oct. 28, 2008
IASB Chief has been summoned to Westminster to discuss fair value accounting, reports David Jetuah of Accountancy Age. Sir David Tweedie, chairman of the International Accounting Standards Board, will answer questions from MPs on November 11, 2008.
Oct. 27, 2008
Fair-value accounting is "lousy" but better than the alternatives, Thomas Jones, vice-chairman of the International Accounting Standards Board said. CFO Magazine reports Jones beliefs that fair value is not a great system but it is better than the alternatives. Many are blaming fair value accounting for aggravating the current credit crisis, however, Jones doesn't think moving away from fair value is a viable solution.
Oct. 27, 2008
"IFRS is in its infancy and decades behind the rules currently used in the U.S. and Canada," Al Rosen contributing writer for Canadian Business believes. Rosen is concerned about adopting IFRS in Canada citing problems encountered with international standards so far in the EU and Australia. Despite the reasoning of some, Rosen thinks IFRS will worsen comparability, "because of the excessive management leeway that is inherent in the new rules."
Oct. 26, 2008
Experts warn about results of accounting-standards push. Experts say that because international financial reporting standards are more principles-based than U.S. generally accepted accounting principles, they do not offer specific guidance on compliance. Therefore, auditors will likely require more disclosure before they sign off on results. The increased disclosure may lead to a revealing of trade secrets, experts at a recent industry conference warned.
Oct. 22, 2008
One in five CFOs and senior controllers have experience preparing financial statements according to IFRS, according to a recent Grant Thornton survey. Fifty-five percent of the 688 CFOs and senior controllers surveyed by Grant Thornton said that U.S. companies should be permitted to use international standards instead of U.S. GAAP. When asked about the SEC's decision to permit foreign firms to file financial statements prepared according to IFRS without reconciliation to U.S. GAAP, 59 percent disagreed.
Oct. 21, 2008
There are two sides to every coin. Press coverage of a survey conducted by Proviti on U.S. companies' preparedness to adopt IFRS was split. Financial Week reported the survey found a significant number of companies are unprepared for IFRS and are taking a "wait-and-see approach taken." WebCPA pulled out the idea that, if given a choice, more than 40 percent of surveyed companies would choose IFRS over U.S. GAAP.
Oct. 20, 2008
The U.S. transition to IFRS may be moving too fast says Ed Trott, former member of the Financial Accounting Standards Board said in a CFO Magazine article. "My issue is the speed and arbitrariness of the SEC making decisions for…political reasons rather than for the benefit of the capital markets," Trott says. While the SEC proposed a roadmap to place the U.S. on par with the rest of the world, many are worried about the SEC's rush towards replacing US GAAP.
Oct. 20, 2008
Deloitte is helping U.S. universities and business schools incorporate IFRS into their curriculums through the newly formed IFRS University Consortium. According to a Financial Times article, the new program "will develop course materials such as classroom guides and case studies to help professors and students understand the international reporting guidelines." There is currently little IFRS content in existing curriculums but with transition to IFRS on the horizon as soon as 2014, professors are pushing to create course materials.
Oct. 14, 2008
"Going from multiple choice to an essay"is how , Dmitri Shiry, a Deloitte & Touche partner describes the change that will be required in accounting curricula at U.S. universities in a staff written Pittsburgh Business Times article. Professors are now faced with the task of how to best prepare students for convergence. "Kids that are going to school now will graduate having to do this. It may be a niche now, but it is going to be the standard in a few years," KPMG audit partner Pete Mendes said, according to the Business Times article, which could lead to a change in the kind of students that go into accounting.
Oct. 13, 2008
IASB weighs in, lightens up on fair-value accounting, Financial Week's Marine Cole reports The International Accounting Standards Board agreed to allow companies to reclassify certain financial instruments which will impact the bookkeeping treatment of those instruments and may allow some companies to avoid using fair-value accounting.
By amending IAS 39 on recognition and measurement of financial instruments, the IASB allowed reclassifications that were already permitted under U.S. generally accepted accounting principles in "rare" circumstances.
Oct. 13, 2008
As Canada prepares to adopt IFRS by 2011, the Ottawa Business Journal's David Lowdon writes about material differences between IFRS and Canadian GAAP. "Changing from Canadian GAAP to IFRS will be a significant undertaking that may materially affect a reporting issuer's reported financial position and results of operations," Lowdon said.
Oct. 10, 2008
With convergence expected in the next few years, companies will likely have to change their IT systems. "CIOs, of all people in the organization, may need to be thinking of this now versus later, because of the timeline of making changes to accounting systems and infrastructure around how transactions are accounted for through the system," Rebecca Albarelli, global leader of finance operations at Jefferson Wells said in a CIO article.
Oct. 10, 2008
The International Accounting Standards Board is working to eliminate the differences between IFRS and US GAAP's classification of financial instruments at fair value. Many blame fair-value accounting as a cause or an accelerant of the current financial crisis. Because of this, bank lobbyists, trade groups, lawmakers, and the Bush administration have called for a suspension of fair value accounting, according to CFO Magazine. In addition, the SEC is conducting a 90-day study on the effects of fair-value accounting as part of the $700 billion Wall Street bailout package.
Oct. 10, 2008
"Should unrealized gains and losses be disclosed separately and accounted for in a different manner than what is currently prescribed?" questions Navin Agrawal in a Live Mint article. The biggest controversy with IFRS is its extreme bias towards fair value. The markets are never perfect, as they continually move from extreme optimism to extreme pessimism and the bias towards fair value may result in sharp fluctuations in earnings.
Oct. 10, 2008
The Implementation of IFRS in the UK, Italy and Ireland: A research report published by The Institute of Charted Accountants of Scotland suggests that the transition to IFRS has had significant impact on the profits and net equity of companies. The study identified which standards had the most impact on financial statements of the companies in the study and which standards were the most problematic to implement.
Oct. 09, 2008
The International Accounting Standards Board is revisiting its fair-value rules because of the credit crisis, according to CFO Magazine. Prior to the meltdown on Wall Street, the U.S. was positioned to adopt IFRS in the coming years. The SEC released a timeline for convergence in August, but has not published a final roadmap. The SEC is now involved in clarifying how to apply controversial fair-value standards, which have been blamed for creating a downward effect on the economy.
Oct. 09, 2008
Upcoming IASB meeting will address possible amendments to IFRS. According to a CFO.com article by Stephen Taub, the IASB has called a special meeting for Oct. 2 to discuss fair-value accounting and off-balance-sheet accounting. The meeting comes in light of the current crisis rocking the global financial world, and is the first meeting of its kind ever called by the IASB.
Oct. 09, 2008
The SEC's road map for IFRS has some questioning the rationale for convergence. In a CFO Magazine article by Marie Leone that touches on PCAOB Board Member Charles Niemeir's opposition to IFRS. SEC spokesman John Nester's answer is "the Commission's proposal comes directly in response to the fact that more U.S. investors are investing in more foreign companies in more international markets than ever before." The SEC's timetable proposed 2014-2016 as the expected transition period for all public companies to move to IFRS. Robert Pozen thinks the conversion process is starting too fast and will drag on too long.
Oct. 09, 2008
More than a third of US retailers CFOs say they are considering switching to IFRS, according to the new BDO Seidman Retail Compass Survey picked up by Marketwatch. The study found that IFRS are becoming more popular, with 28% of CFOs considering the switch, while over half of CFOs at top 100 retailers are evaluating or currently switching to the standards. The findings on IFRS are just one part of the study, which surveyed major retailers across the country during August and September 2008.
Oct. 09, 2008
The implementation of IFRS will mean a new era in accounting according to Brian Downey, partner and co-director of the Technology Group at Amper, Politziner & Mattia who gave an interview to the online legal newsletter The Metropolitan Corporate Counsel. Downey explains the implications of IFRS. He explains the steps in the roadmap proposed by the SEC and suggests management start preparing now, saying, "This change will be one of the most fundamental changes in U.S. business in decades and the planning needs to begin sooner rather than later."
Oct. 09, 2008
How the accounting world is becoming ‘flat.' In his column in The CPA Technology Advisor, Gregory L. LaFollette examines the ways in which technology and the rise of IFRS are changing the way the accounting world functions for firms of all sizes. He says, "The professional accounting educational system has already begun incorporating IFRS into its curricula, and the AICPA has announced that the CPA exam will soon include IFRS as part of the "body of knowledge."
Oct. 09, 2008
Deloitte issues IFRS Real Estate Roadmap. In order to allow real estate companies to begin considering implications and strategies for making the tiered switch to IFRS in 2014, Deloitte recently issued "IFRS in Real Estate: More Than Just Accounting & Reporting." "Real estate is increasingly global, whether it's capital-raising activities, foreign property portfolios or international operations. Moving toward IFRS today sets in motion a process that will eventually open the door to a truly global real estate marketplace," said Robert O'Brien, Deloitte's U.S. head of Real Estate IFRS.
Oct. 09, 2008
British Parliament takes steps towards implementation of IFRS, according to a European Parliament press release. The Parliament has taken a stand in the past against the regulation system in place for implementing IFRS, which currently consists of the IASB overseen by trustees of the International Accounting Standards Committee Foundation (IASCF). Earlier this year the Parliament called for greater accountability in that area, and voted this week in favor of the IASCF's proposal for implementing a Monitoring Group to provide more oversight.
Oct. 09, 2008
Is this the end of fair value? That is the question posed by Gavin Hinks and David Jetuah in their article in Accountancy Age. Not since the Enron scandal has accounting played such a critical role in a worldwide crisis. Politicians on both sides of the Atlantic are blaming fair value and mark-to-market accounting as they try to stem the credit crisis, according to the article. "One regulator told Accountancy Age: 'Fair value is being used as a political football by people that don't know what they are talking about. It's political support for the distortion of the truth. It will cause regulators and auditors trouble."
Oct. 09, 2008
UK government departments rush to issue new balance sheets as public sector transitions to IFRS. Full transition to IFRS is set for the end of 2009, with the first deadline scheduled for the end of September, according to an Accountancy Age article by David Jetuah. Many large public divisions, including the Department for Transport and Ministry of Defense, will be pushed toward adoption of the standards, though there is worry that the balance sheets could prove problematic because the valuation of complex financial instruments are a key and controversial requirement.
Oct. 09, 2008
Will the SEC's roadmap promote world domination for the IASB? That is the question posed by Fergus Condon in his column in Accountancy Ireland. He discusses the implications of the SEC's proposed roadmap for the United States' switch to IFRS in light of the reprioritization of the IASB agenda to adjust its standards to prompt approval from the SEC.
Oct. 09, 2008
The impact of IFRS on Canadian Registrants. As of January 1, 2011, IFRS will apply to certain Canadian registrants. In his article in Mondaq, Barry J. Myers explains which firms will be affected, the CSA staff position on registrants, and the implications for the registrants.
Oct. 09, 2008
A transition to IFRS in India will affect the manner of accounting and presentation of financial instruments, according to Navin Agrawal who has been writing incisive columns about IFRS for LiveMint.com an online news joint venture between the Wall Street Journal and the Hindustan Times. Contracts that give rise to financial assets in entities with corresponding liabilities are defined as financial instruments and will need to be classified into four categories under IFRS. Agrawal believes this will have significant relevance for banks, non-banking finance companies and financial houses.
Oct. 02, 2008
IASB to discuss fair-value, off-balance-sheet accounting. As the global credit crisis continues, the International Accounting Standards Board plans to address two controversial accounting issues at a special meeting on Oct. 2. The IASB will discuss amendments to the rules regarding fair-value accounting and off-balance-sheet risk. "The IASB has already accelerated its work on these two issues in response to the recommendations of the Financial Stability Forum, and holding the additional meeting will enable the staff to make faster progress on those projects," the IASB said.
Oct. 02, 2008
FASB Chairman Robert Herz Delivers Insights about Current Financial Crisis in Speech to Diverse Group of Executives. FASB releases speech, Lessons Learned, Relearned and Relearned Again from the Credit Crisis – Accounting and Beyond. In his speech, Chairman Herz shares his views on the credit crisis and addresses a number of accounting matters which have received attention in recent weeks, including fair value measurement and off balance sheet risk.
Oct. 02, 2008
IASB responds to the credit crisis, Chairman defends accounting. The International Accounting Standards Board provides a response to the credit crisis, focusing on acceleration of work in the areas of off balance sheet accounting, fair value in illiquid markets and disclosures. Commenting on the update, IASB Chairman Sir David Tweedie says accounting is not the cause of the credit crisis, but it is important that market participants should have confidence in the information presented in the financial statements.
Oct. 02, 2008
Upcoming IASB meeting will address possible amendments to IFRS fair value standard. According to a CFO.com article by Stephen Taub, the IASB has called a special meeting for Oct. 2 to discuss fair-value accounting and off-balance-sheet accounting, while specific attention will be given to IFRS 7. The meeting comes in light of the current crisis rocking the global financial world, and is the first meeting of its kind ever called by the IASB. IFRS 7, Financial Instruments: Disclosures, pertains to fair-value measurement and off-balance-sheet risk, issues which have become "lightening rods" in the current global credit crisis, according to the article.
Sep. 26, 2008
CFO Magazine Reports Delay in SEC timetable for switch to IFRS has some wondering whether the conversion will stall. According to an article by Alix Stuart, the delay is due to the current crisis on Wall Street. An SEC spokesperson states that a timetable is expected to be out "in a couple of weeks, if not sooner."
Sep. 26, 2008
The American Institute of CPAs' Private Company Financial Reporting Committee met to discuss IFRS and the implications of private companies making the switch. Judy O'Dell, chair of the PCFRC, said in a WebCPA article that "the main goal is to get the dialogue started and see which way people might go." The committee also discussed FASB Interpretation No. 48, "Accounting for Uncertainty in Income Taxes" and whether FASB would be granting an exemption for private companies. O'Dell says, "If they're going to grant the exemption, we would like to know as soon as possible."
Sep. 26, 2008
European Internal Market Commissioner Charlie McCreevy spoke last week about the EU's policy response to the financial market turmoil, according to The Malta Business Weekly. Amongst his comments regarding financial turmoil he spoke about the IASB's work on off-balance-sheet items, focusing on the question of when one entity should be brought onto another entity's balance sheet. "It should not have escaped people's attention that banks in Spain were better placed to withstand the turmoil because they had not yet adopted the relevant IFRS Standard. There is a lesson there that needs to be drawn."
Sep. 26, 2008
William and Mary School of Business Master of Accounting Program one of the few programs to incorporate IFRS. "Given the SEC's proposed road map for requiring IFRS adoption by US publicly traded companies, it is imperative that educators emphasize the importance of such standards," said Professor Rama Ramamurthy, who has been at the forefront of IFRS education.
Sep. 26, 2008
Forty percent of CEOs agree with SEC's decision to permit foreign firms to file statements using IFRS, according to a Grant Thornton LLP national survey. "We supported the SEC's decision to remove the costly and, increasingly less relevant reconciliation requirement for foreign companies," notes Gary Illiano, Partner-in-Charge of International and Domestic Accounting. "More and more, people are starting to become familiar with IFRS, which is clearly the wave of the future."
Sep. 26, 2008
Barbados taking steps in conjunction with the Institute of Chartered Accountants of the Caribbean (ICAC) to switch to IFRS, according to an article in the Barbados Advocate.
Sep. 26, 2008
WebCPA reports FASB asked industry leaders about whether the accounting profession was ready for a switch to IFRS. Robert H. Herz, Chairman of FASB, says FASB's discussions with different groups show that there is a fairly widespread support for movement to international standards.
Sep. 26, 2008
The Institute of Chartered Accountants of India proposed a plan for convergence in 2011. According to The Economic Times, about 180 industries recently attended a workshop on IFRS to prepare for the switch which ICAI Vice-Chairman Atul Parikh believes is significant now that IFRS is mandatory for all companies in the European Union.
Sep. 26, 2008
UKgovernment departments rush to issue new balance sheets as public sector transitions to IFRS .Full transition to IFRS is set for the end of 2009, with the first deadline scheduled for the end of September, according to an Accountancy Age article by David Jetuah.
Sep. 26, 2008
Dr. Kamal Gupta, former Technical Director of the Institute of Chartered Accountants of India (ICAI) believes convergence is good for India. In an interview with The Hindu Business Line, Dr, Gupta said, "If the U.S. does it, the UK does it, Brazil, China, Russia. How can India be left?" He believes India must accept IFRS first, before dealing with the challenges that will come with convergence.
Sep. 18, 2008
Debates on adopting IFRS in Japan are heating up. If Japan stays with its current standards, some believe it could become isolated internationally. "The accounting standards environment has changed greatly. If things remain the same, Japan will be frozen out," said Koichi Masuda, chairman and president of the Japanese Institute of Certified Public Accountants, in a Daily Yomiuri article. Others, however, fear that Japanese corporate cultural will not fit with the European-led standards. Japan's accounting standards board reached an agreement in 2007 with the IASB to convert to IFRS by 2011.
Sep. 18, 2008
A Business Intelligence Network article argues that transitioning to IFRS will be similar in terms of needed system adjustments to the Y2K technology fix many companies faced. Craig Schiff writes that while some programmers may have anticipated Y2K and coded their systems to handle the event without modifications, there are no systems in the U.S. coded to support IFRS at this moment without some changes. "I believe the move to IFRS will drive significant purchases of new software, more so than Y2K did," Schiff adds.
Sep. 17, 2008
"Buckle Up", Straight Talk book issued by Deloitte, addresses the most significant changes in U.S. financial reporting. "With the SEC's proposed IFRS Roadmap and rule that would permit certain U.S. companies to prepare financial statements using IFRS, this book couldn't be more timely, since some companies will be eligible to adopt it in their 2009 financial statements," D.J. Gannon, a partner with Deloitte & Touche LLP said in press release carried by Marketwatch.com. The book discusses the challenges U.S. companies will face when implementing IFRS.
Sep. 17, 2008
More students expected to seek the CA in India due to convergence to international standards according to Jamil Khatri, executive director of KPMG which does auditing in India through BSR & Co. and who tells The Hindu Business Line that more people in India will take up accounting as the convergence of accounting standards across the globe was gaining momentum. The Institute of Chartered Accountants of India released a concept paper on convergence with IFRS in India, detailing the strategy and road map for convergence from Indian GAAP to IFRS.
Sep. 17, 2008
Are Indian Banks Ready? Debating the impact and the challenges of moving to IFRS. According to the Economic Times, the successful adoption of IFRS is based on flexibility and acceptability of IFRS by Reserve Bank of India. The article authored by KPMG outlines the areas of difference between India's current standards and IFRS. Convergence is likely to pose significant challenges for banks but a successful transition is definitely attainable with proper planning and execution.
Sep. 16, 2008
International standards are necessary for creating seamless global markets but IFRS pitfalls, according to the National Center for Policy Analysis, a right-leaning think tank based in Washington, D.C. that promotes free-market policy solutions. U.S. public companies are expected to make the switch by 2016. Some companies could begin their transition as early as 2010, allowing investors to compare a Silicon Valley technology company with one in Germany or Japan. International principles tend to be broad, which could lead to wide variances in profit reporting, the center said.
Sep. 16, 2008
IFRS, if adopted, could result in significant cost savings, according to the International Herald Tribune which outlines the SEC's plan to allow U.S. companies to switch to IFRS by 2016. The transition is expected to be difficult with increased confusion for investors who are only familiar with U.S. GAAP, according to the Paris-based IHT. The decision to converge comes from the realization that U.S. GAAP was not obviously superior to IFRS in terms of effectiveness at revealing issues related to subprime crisis, the IHT says.
Sep. 16, 2008
IFRS will change the way biotech and other life science companies account for mergers and acquisitions, according to NJBiz "Due to the complexity of life science business transactions, it will be especially important for companies to understand and evaluate the impact of IFRS on these transactions," said Scott Bruns, senior manager at Ernst & Young's New York office.
Sep. 15, 2008
The International Accounting Standards Board and the Financial Accounting Standards Board published a new memorandum to iron out differences between US GAAP and IFRS by 2011. According to Markets Media, addressing the differences will help pave the way for IFRS adoption by the SEC. "The boards are aware that continued progress toward convergence is a factor that the Securities and Exchange Commission will consider in evaluating its recent proposal to permit or require use of IFRS in the U.S.," FASB Chairman Robert Herz said.
Sep. 15, 2008
Many express concerns over IFRS. A Financial Week article explains the feeling of some regulators who believe the SEC's plan for convergence is moving too fast. FASB and the IASB are currently working to eliminate differences in the two standards. So far, the boards have completed convergence projects by making US GAAP equal with IFRS in such areas as fair value and business combinations. They plan to continue on other projects that will iron out differences in how IFRS and GAAP deal with income taxes. A major concern for investor advocates, according to the article, is that IFRS will be more lenient than U.S. rules which they believe could be detrimental to shareholders.
Sep. 15, 2008
In a column in the Portland Business Journal, lawyer Jim Verdonik outlines the differences between IFRS and US GAAP, claiming that IFRS assumes it's impossible to anticipate every fact situation and therefore, it's better to apply broad conceptual standards. He explains, as securities trading markets have globalized, the need to agree on a worldwide financial reporting approach has increased. Even though the transition to IFRS is not yet mandatory, Verdonik says that big accounting firms are already "holding a funeral" for US GAAP.
Sep. 15, 2008
Sixty-two percent of professors have not taken any significant steps towards building IFRS into their curriculum, according to an American Accounting Association and KPMG survey reported by AccountingWeb. Only 17 percent of 2010 graduates and 9 percent of the class of 2009 are expected to have exposure to IFRS by their graduation dates. Textbooks and case studies, which are not expected to be available until the 2010-2011 academic year, are the main barrier to incorporating IFRS into university programs.
Sep. 15, 2008
Charles Niemeier says the switch to IFRS could impede the ability of the regulators and auditors to do their jobs. An Accountancy Age article states Niemeier's opinion that Sarbanes-Oxley had gone a long way toward improving US markets and that IFRS would leave the U.S. with rules that are more difficult to enforce. Niemeier is an active member of the Public Company Accounting Oversight Board whose term ends next month. He is, however, expected to remain on the board until his replacement is appointed.
Sep. 15, 2008
Malaysia is expected to go for full convergence with IFRS by January 1, 2012, according to Bernama. KPMG is urging Malaysian listed companies to plan for the transition that will allow a local listed company to be on par with other international companies. Thong Foo Vung, a technical partner of KPMG, believes the establishment of IFRS is imperative to ensure Malaysia is not left out of the globalization wave.
Sep. 15, 2008
Financial statement preparation, leases and revenue recognition are the major issues set for convergence in 2011. A WebCPA article states that convergence is being sped up due to the SEC's proposed roadmap. The state of convergence between GAAP and IFRS will be one of the milestones that the SEC will take into account in 2011 before finalizing the roadmap.
Sep. 15, 2008
Floyd Norris of the New York Times writes on the rush to International Accounting. He says, "International rules are generally good, in my opinion, and the board that writes them is dedicated to high quality standards despite political pressure in Europe to not offend powerful companies." What is unknown, according to Norris, is how uniformly IFRS rules will be applied. If they are not applied consistently, he says, then it is unlikely the move will make it easier to compare companies.
Sep. 11, 2008
The Council of Institutional Investors Urges Delay in the SEC's Proposed Roadmap. The Council questions whether IFRS will be as rigorous and useful as GAAP and raises concerns about the independence of the International Accounting Standards Board. "We urge the SEC to make the switch when, and only when, international standards meet or exceed the high level of investor protection that current U.S. standards afford," CII's General Counsel Jeff Mahoney said in Risk and Governance Blog.
Sep. 11, 2008
Charles Niemeier, PCAOB member, was vocally critical of IFRS at a New York City conference. He says moving away from GAAP will "put in jeopardy the thing that gives the U.S. a competitive advantage." According to CFO Magazine, Neimeier believes no country is as effective as the U.S. given that we have the lowest cost of capital in the world. He also argues that U.S. regulation gives the country a competitive advantage by boosting investor confidence, resulting in a lower cost of capital. SEC spokesman John Nester responded to Niemeier's allegations, stating that the "proposal comes directly in response to the fact that more U.S. investors are investing in more foreign companies in more international markets."
Sep. 11, 2008
Despite looming challenges and uncertainties, IFRS gets the go ahead from some. In response to a September 8th Wall Street Journal article, Professor of Accounting James Largay says "go for it" regarding the switch to international accounting standards. Leonard Steinberg from West Windsor, N.J. believes the tax implications facing businesses adopting IFRS is a concern and urges businesses to prepare now.
Sep. 11, 2008
NYSE Euronext will adopt international accounting standards in order to increase the competitiveness of U.S. equity markets. "It would be inappropriate for me not to volunteer to do IFRS," Duncan Niederauer, chief executive of the transatlantic exchange operator said in an Easy Bourse article. The New York Stock Exchange's role in overseeing U.S. equity markets as well as the experience of Euronext with IFRS before its merger with NYSE makes it a natural candidate for the switch.
Sep. 11, 2008
Hospitality Financial leaders plan to discuss how IFRS will impact the hospitality industry. According to Hotels, the Hospitality Financial and Technology Professionals is hosting a roundtable made up of top global hospitality financial leaders and accounting consulting firm representatives this Fall to determine the implications of these changes on the industry.
Sep. 11, 2008
Insurance companies headed for early adoption of IFRS have to prepare immediately, according to Anthony O'Donnell in Insurance & Technology. Switching to IFRS is especially complicated for insurers due to the nature of insurance contracts. Companies should first review their financials systems and decide if new software is necessary to support the transition.
Sep. 11, 2008
Compensation and benefit plans "high profile" area affected by IFRS, according to Deloitte Tax partner Grace Melton in a CFO Magazine article. The article suggests companies compare the treatment of specific pay programs under IFRS and GAAP in order to determine if compensation agreements need to be rewritten.
Sep. 11, 2008
IFRS used to combat fraud scandal. An article from today's Eye of Dubai highlights a growing pressure to use certain measures, such as IFRS, to combat fraudulent practices among large UAE firms.
Sep. 11, 2008
PricewaterhouseCoopers is encouraging companies to prepare early for the transition to IFRS. The company released a series of publications and consultations aimed at guiding business and accounting professionals through the switch. Currently IFRS is used by a significant number of global companies and will replace U.S. GAAP in the next few years.
Sep. 08, 2008
Differences between IFRS and GAAP will force accountants to rethink their jobs writes L. Gordon Crovitz of The Wall Street Journal. While IFRS is based on principles, GAAP is based on rules. Despite the challenges, such as rewriting business school texts and retraining corporate finance departments, having a single set of accounting rules will make it easier to compare companies around the world.
Sep. 08, 2008
Many employers believe improvements to pension accounting standards are needed, but most are not in favor of IASB's proposals. Investor Daily.com reports the findings of a survey by Watson Wyatt Worldwide which says the new defined benefit accounting rules proposed by the International Accounting Standards Board are opposed by 80% of employers. "The IASB's proposal would make significant changes to the way retirement benefits are accounted for under the International Financial Reporting Standards," Watson Wyatt Australia head of benefits practice Brad Jeffrey said.
Sep. 08, 2008
IFRS will not leave Indian banks with much leeway for cheap loans, according to The Economic Times of India. Banks will have to transparently reflect the impact of political loans on their bottom line when India adopts IFRS in 2011.
Sep. 04, 2008
With IFRS on the horizon, professors are grappling with how to teach the new standards. The class of 2011 will most likely be the first class to have a substantial amount of IFRS, according to a survey of accounting faculty conducted by the American Accounting Association and KPMG. Part of the challenge for professors is to make sure that their upperclassmen have some knowledge of IFRS before they leave campus, Phillip M. J. Reckers, Ph.D., vice president of the American Accounting Association and professor of accountancy at the Carey School of Business, Arizona State University, said in a press release.
Sep. 04, 2008
The move to IFRS raises questions about the IASB's governance. Accountancy Age magazine's Penny Sukhraj writes the International Accounting Standards Board has been told by politicians to reform its processes. Senator Jack Reed worries that allowing an external, less-aggressive regulator like the IASB to oversee accounting rules could put U.S. investors at risk. To offset these concerns, the SEC backed proposals for an international monitoring group with representations from different regions to oversee the work of the IASB.
Sep. 04, 2008
Changes need to be made before the U.S. can fully adopt IFRS, according to Anthony Clifford of Ernst & Young who writes in an International Financial Law Review article that U.S. firms will now get very interested in lobbying where changes are being made to IFRS. Off-balance-sheet asset rules could have a big effect on securitization in the U.S.
Sep. 04, 2008
The SEC's roadmap signaled the end of an era KPMG chief Timothy Flynn writes in a Financial Times column. Accounting professionals will now be labeled a GAAPer or post GAAPer depending on what standards you follow, Flynn says. Despite a 75-year relationship with generally accepted accounting principles (GAAP,) Flynn believes it is time for the U.S. to move forward with IFRS as the single, common language of financial reporting.
Sep. 04, 2008
Still wincing from SOX. IT departments will be an integral part in the switch to IFRS. Reporter Sarah Johnson writes in CFO.com that chief financial officers will need help from their colleagues in information technology to fulfill the switch to IFRS. Johnson quotes Terri McClements, a partner at PricewaterhouseCoopers recommending "It's incumbent on the CFOs to include the IT teams as well as the operational teams in the initial dialogue to ensure they all get a seat at the table early to avoid the challenges we saw with Sarbanes-Oxley." The Sarbanes-Oxley Act, officially titled the Public Company Accounting Reform and Investor Protection Act of 2002, was enacted by Congress in 2002.
Sep. 03, 2008
Accounting will never be the same again after the SEC issued its IFRS roadmap writes US Banker magazine's Joseph Rosta who talks to Ernst & Young partner Lisa Filomia-Aktas. "There's a perception that IFRS is so much easier but that's not really true," Filomia-Aktas says. For example, IFRS requires more consolidation on company balance sheets of special purpose entities such as mortgage-backed securities than U.S. GAAP does now. For most U.S. companies, three years is a reasonable time frame for converting to IFRS. Better start revving your pencils, Rosta concludes.
Sep. 03, 2008
Accounting profession leaders didn't get the "date certain" for transition to IFRS they were asking from the SEC, writes Michael Cohn of WebCPA. While the SEC's proposed roadmap provides more concrete details than previously given, it looks a whole lot more like an obstacle course than a date certain. "The SEC is still leaving some wiggle room. In 2011, it will hold a meeting to assess how well IFRS, the IASB, FASB, academia and corporate America are adjusting," Cohn writes.
Sep. 03, 2008
Japanese CPAs switch course, now backing international standards. According to an item on Japan's Jiji Press wire, Japan's certified accountants proposed Monday that all listed companies conform to international accounting standards as well. Following the U.S. SEC's proposal of a timetable to adopt IFRS, Koichi Masuda, chairman of the Japanese Institute of Certified Public Accountants, told a press conference that Japan needs to create a roadmap as well. Japan's accounting standards board had reached an agreement in 2007 with the IASB to convert to IFRS by 2011. Separately the accountants' group had previously pushed for resolving gaps between Japanese and international standards while maintaining Japan's own standards, according to Jiji.
Sep. 02, 2008
In an article drawing comparisons between the adoption of IFRS and the implementation of Sarbanes-Oxley rules, CFO.com's Marie Leone suggests that smaller U.S. companies may play something of a waiting game rather than prepare early for a transition to international standards. "They've been through this drill before — in 2002 when the Securities and Exchange Commission issued the Sarbanes-Oxley Act rules — and this time, the SEC proposal is not yet a foregone conclusion," Leone writes.
Sep. 02, 2008
CFO.com also published an interview, conducted in late July, with International Accounting Standards Board Chairman Sir David Tweedie. In the article by Tim Reason, Tweedie says, "During the next three years, FASB and the IASB will make some major changes to financial reporting. So CFOs really want to get engaged, especially in the next 12 months, because that's when the discussion papers and early exposure drafts will come out."
Sep. 02, 2008
Deloitte released whitepapers offering guidance on IFRS conversion for three industry sectors—insurance, oil and gas and real estate, according to a company press release on MarketWatch. The papers provide an overview of impacts of IFRS implementation, including process and statutory reporting, technology infrastructure, and organizational issues. The papers also explore specific potential differences in technical accounting and the implications of such differences when converting to IFRS from U.S. GAAP.
Aug. 29, 2008
Pensions & Investments picked up on FASB's support of the recently released SEC plan for a transition to IFRS by U.S. public companies. "By setting a proposed road map, the SEC has provided forward momentum to the goal of setting high-quality accounting standards both in the U.S. and internationally, and we've been strongly committed to this goal since 2002," FASB spokesman Neal McGarity said in the report by Doug Halonen.
Aug. 29, 2008
M.P. Vijay Kumar, CFO of the Indian Internet company Sify, tells Howrah News Service that India will be on a more level playing field with Europe and the U.S. in the world of accounting and finance once the country's conversion to IFRS is complete. "Accounting literature is prepared by the U.S. community and representatives from the European Union," Kumar says in the article by Goutam Das. "Today, even though our accounting body is the second largest in terms of the number of chartered accountants in the world, we still don't have an opportunity to influence the standard setting process. Once we adopt IFRS, Indian talent can represent the International Accounting Standards Board," he said. India is working toward convergence with IFRS by 2011.
Aug. 28, 2008
The SEC signaled the end may be near for U.S. accounting standards, The Wall Street Journal and CFO.com reported following the commission's meeting Wednesday. The SEC started a process that could ultimately require all publicly listed American companies to follow international financial reporting standards instead of U.S. GAAP. "Introduced in two steps, the shift could eventually cut costs for companies and smooth cross-border investing," the Journal's Kara Scannell and Joanna Slater reported.
Aug. 28, 2008
In its coverage of the SEC's proposed roadmap, The Washington Post picks up on SEC Chairman Christopher Cox's belief that speaking one international language would improve investor confidence. "The world's capital markets have long searched for a single set of high-quality accounting standards that could be used anywhere on Earth. An international language of disclosure and transparency would significantly improve investor confidence in global capital markets," Cox said in the Post article by Christopher Twarowski.
Aug. 28, 2008
Writing about a potential move from U.S. GAAP to IFRS, The Economist says big companies have been "long been preparing for it with enthusiasm." It could mean greater profits, and will make things easier on investors, as it will, for example, make the comparison of a French drug company with a U.S. rival clearer, according to the article.
Aug. 26, 2008
A recent study by the Institute of Management Accountants found significant convergence by Chinese accounting firms to IFRS since 2006, though there is "still diversity in actual practice, including costing practices," according to WebCPA.
Aug. 26, 2008
Transition to IFRS is a necessary step, and one that must involve all stakeholders, writes Kaushik Dutta in India's Business Standard. The business scandals of recent years reinforced the need for a universal standard of principles to provide transparency and uniformity regardless of culture or geography, writes Dutta, national leader, IFRS practice, for PricewaterhouseCoopers. He examines the complexities posed by the push to make uniform accounting principles and what approach India has taken thus far.
Aug. 26, 2008
Income tax project indefinitely halted by FASB. Crain's Financial Week's Marine Cole reports on the suspension of deliberations on the project to improve the accounting for income taxes and merge the U.S. system with similar international ones. Deliberations were suspended on Aug. 12 after FASB concluded that "it may revisit the project after the International Accounting Standards Board further develops its replacement for IAS 12, the international standard for income taxes," according to the article.
Aug. 26, 2008
More U.S. employees of accounting firms moving outside the country; in part to become more familiar with IFRS. A Philadelphia Inquirer article by Jane M. Von Bergen features KPMG partner Malcolm Dahn, who moved to South Korea for three years on an assignment. According to the article, "part of what is driving the global push for the big accounting firms is the likelihood that IFRS, or international financial reporting standards, will become the norm for U.S. accounting, instead of GAAP."
Aug. 25, 2008
SEC appears ready to unveil IFRS roadmap. The SEC will meet Wednesday to review a proposed timeline to begin a conversion from U.S. GAAP to IFRS. The SEC is considering a roadmap for allowing U.S. publicly-held companies to issue financial reports using IFRS, the international standards set by the London-based International Accounting Standards Board. As part of the roadmap, the commission will consider whether to propose amendments to various rules and forms that would allow early use of IFRS by a limited number of U.S. issuers. Reuters reported that SEC Chairman Christopher Cox said he expects a final rule this fall. CFO.com's Sarah Johnson also reported on the plans to reveal the long-awaited timeline.
Aug. 22, 2008
Indian blue-chip companies are making the switch to IFRS ahead of time, according to a Financial Express article by Neha Pal. The switch by several companies three years ahead of the mandatory date is because IFRS is mandatory for listing in European markets after 2007, and because IFRS provide stiffer provisions for mark-to-market losses, or AS-30 standards, according to Pal. The switch is also a proactive move for companies in order to increase transparency which will in turn raise capital for those with exposure in European markets through equity or debt.
Aug. 22, 2008
KPMG report shows major impact of IFRS on Indian banks. According to The Economic Times, the KPMG report recommended that the banks should start preparing for the April 2011 switch, which will have the most impact in areas like loan loss provisioning, financial instruments and derivative accounting. "This is likely to have significant impact on financial position and financial performance, directly affecting parameters like capital adequacy ratios and outcome of valuation metrics that analysts use to measure and evaluate performance," the report said.Note: The KPMG press release on the report's issuance can be seen here.
Aug. 22, 2008
Changing the rules for auditors. Between the JSE's new listings requirements and the trade and industry department (DTI) continual tweaking of companies' legislation, the rules for auditors are shifting, according to an article in South Africa's Business Day. Additionally, the JSE plans to establish a register for auditors – any firm that wants to audit a listed company will have to be on the register. The idea is to ensure that those allowed to audit listed firms know and understand IFRS.
Aug. 22, 2008
Auditors less-than-thrilled about new JSE requirements. "We really fail to see why it must be auditors who must be IFRS specialists and not listed companies themselves," said Garth Coppin, an audit partner at Ernst & Young, in an article by Sanchia Temkin in today's Business Day. The new requirements call for auditors to have registered specialists in IFRS to audit listed companies. To become registered, an auditor must prove that they have 800 hours of working knowledge of IFRS, or members of an audit team must show that they have 500 hours of working knowledge of IFRS. Coppin said that since listed companies are responsible for complying with IFRS, they themselves should employ a specialist.Note: This story was also covered by UK's Management Consultancy, and can be found here.
Aug. 21, 2008
Audit regulators must also be held to one global, standard language, says Financial Times columnist Jennifer Hughes in her column about major accounting firms taking steps to align their member firms more closely. She says that firms are really a series of national partnerships operating under a "thin global umbrella" organization, which she says is organized in that way so as to protect auditors from conflicts of interest with clients. And as more than 100 countries prepare to adopt IFRS, Hughes says, "It is a little ironic that accounting is on course to become one of the most globally unified pieces of business infrastructure, using a single set of rules, but that the other end of the process, the audit, is still a regulatory jigsaw."
Aug. 20, 2008
Impact of IFRS on technology systems should not be overlooked. Such was the recommendation of a paper released by Deloitte, according to a PR Newswire release on the MarketWatch Web site. Deloitte's paper, "Technology Implications of IFRS Adoption for U.S. Companies," warns that viewing IFRS as simply a reporting change can lead to negative outcomes such as costly rework at a later date. "Adoption of IFRS is not just about understanding technical accounting differences. Companies will need to understand the impact such differences have on technology and information systems," says D.J. Gannon, a Deloitte & Touche LLP partner and leader of its IFRS Solutions Center, in the release.
Aug. 20, 2008
FASB proposal stirs debate over who should have authority to make rules. A recent FASB proposal to amend FASB Statement no. 5, Accounting for Contingencies, has stirred debate about whether companies should have to disclose estimates about potential losses they face from lawsuits and has also prompted discussion over whether FASB should even write new accounting rules. In a CFO.com article, Tim Reason reports that several companies are of the opinion that because of the anticipated switch from U.S. GAAP to IFRS, FASB should no longer "unilaterally issue" accounting rules.
Aug. 20, 2008
South African exchange issues new listing requirements demanding IFRS expertise. The new requirements, outlined in an article in MoneyWebTax by Clifford Amoils, a partner and head of audit at Grant Thornton Johannesburg, concern financial directors and auditors of listed entities. JSE, the South African securities exchange, cited the increasing complexity of IFRS as one of the factors behind the tightened rules. Any firm that wants to audit listed companies on JSE must register with the exchange, which could mean listed many companies may need to search for new auditors, Amoils says. Under the rules, also covered by Business Day, listed companies must have financial directors with appropriate expertise and experience and audit firms must have registered IFRS specialists, Amoils says.
Aug. 19, 2008
The Confederation of Indian Industry creates Journey to IFRS. The Financial Express' Corporate Bureau reports that CII, in collaboration with Ernst & Young, has developed a guide aimed at helping make the transition from Indian GAAP to IFRS easier. The paper is intended to raise awareness about the challenges that the switch could present. Journey to IFRS: A Guide on Transition to IFRS "is a key initiative to map the process of integrating internationally recognized financial standards with the financial statements as presented in India," according to the article.
Aug. 19, 2008
Ernst & Young partner Dolphy D'Souza writes in The Hindu Business Line that the most crucial aspect of converting from local GAAP to IFRS is restating "the opening balance sheet as if the new accounting framework was always followed." D'Souza outlines differences between accounting for fixed assets under Indian GAAP and IFRS, including areas such as component accounting and treatment of residual values.
Aug. 18, 2008
IFRS could cause PPE practice pain for some Indian companies. Under Indian GAAP, the rules for the accounting for property, plant and equipment are not drastically different from those in IFRS. But differences exist between India's existing guidelines and practices followed by many businesses, including listed companies, Asish K. Bhattacharyya writes in India's Business Standard. "The pain in transition from the Indian GAAP to IFRS will vary between enterprises," Bhattacharyya says.
Aug. 18, 2008
Conversion to IFRS beneficial but challenging. In a report in The New Zealand Herald, PricewaterhouseCoopers' global and regional valuation strategy leader Andreas Mackenstedt discusses lessons learned from the conversion to IFRS in his home country, Germany. Mackenstedt tells the Herald's Tamsyn Parker that the change although beneficial, had come at a huge cost to businesses that have had to retrain staff who previously worked only on an accountancy basis. PWC New Zealand partner Justin Liddell adds that in New Zealand, where companies had until January 2007 to convert to IFRS, the two biggest issues revolved around valuing intangible assets of a new business when an acquisition took place and valuing financial instruments.
Aug. 18, 2008
Varun Gupta, managing director of the Indian arm of the valuation advisory firm American Appraisal, says the implementation of IFRS in India, expected by 2011, is driving opportunities for fair valuation work there. Gupta, formerly of Deloitte Financial Advisory Services India, tells Ashish K. Tiwari and Satish John of DNA (Daily News & Analysis) that he sees a reasonable level of awareness of IFRS in India and he expects that speaking the same language as global companies will deliver benefits. "Currently the discount rate for valuations of Indian companies is much greater than IFRS-compliant companies," he says. "There is a very clear distinction.
Aug. 15, 2008
CFO magazine picks up findings in a report by PwC. Banks' Disclosures Lack Substance. Based on 2007 Financial Reports, investors could have a hard time understanding global banks' risk positions and fair value measurements, according to the accounting firm writes CFO reporter Sarah Johnson. 2007 was the first time European banks applied IFRS 7, the International Accounting Standards Board's rule for disclosures related to financial instruments. The rule was issued under the premise that it would lead to better transparency about firms' financial risks. PwC contends most banks "did not take the opportunity to present a truly comprehensive and clear picture of how they manage risk, opting instead to focus on achieving compliance with IFRS 7 minimum requirements."
Aug. 15, 2008
Coming revolution in accounting: Rule change would shake everyone from CFOs to ordinary investors. Ted Pincus, an adjunct professor at DePaul University, writes in the Aurora Beacon News in suburban Chicago. "Bean counters at public companies in Chicago and elsewhere are preoccupied with soft markets and tight credit, when perhaps they should be focused on an even bigger problem: a seismic change in their own ground rules," says Pincus who quotes Ben Resch, a partner at Deloitte and "a Chicago accounting wizard whose mission is to teach American companies the new ropes and guide them through the maze" of IFRS.
Aug. 14, 2008
Move to boost Europe's voice on standards. The UK's Accountancy Age reports on a move by the European parliament to create a pan-European accounting standards body to boost the EU's representation at the IASB. "Experts have answered the call of Europe's parliament and proposed a pan-European accounting standards body for stronger representation of the continent," writes Penny Sukhraj at Accountancy Age. "The European Financial Reporting Advisory Group, which advises the European Parliament in endorsing IFRS, is proposing to beef up its own resources and structures so it can confer on international standards, on equal terms with the International Accounting Standards Board." Sulhraj reported on calls by European commissioners for a term limit for the chairman of the IASB and cited Sir David Tweedie's reaction in the UK Telegraph, an interview that reverberated through the accounting profession.
Aug. 14, 2008
Dr. Ashwinpaul "Tony" Sondhi, who served as an advisor to the FASB on its project comparing US and IFRS reporting, will do a free, live executive webcast on Aug. 26 for Softrax Corporation, a Canton, Mass.-based provider of enterprise revenue management and billing, on how U.S. GAAP accounting guidance for compares to international standards and practice and implications for revenue recognition. Dr. Sondhi is a current member of the Emerging Issues Task Force (EITF) of the FASB and co-author of the 2008 Revenue Recognition Guide.
Aug. 12, 2008
UK Telegraph newspaper's talented business reporter Yvette Essen lands an interview with IASB's Chairman Sir David Tweedie who says he's confident that the U.S. is poised to adopt International Financial Reporting Standards. "The mood in the U.S. is it will happen," Tweedie says. "The debate in the US is not if, but when. There are 112 countries using our standards and in three years will be 150, with Canada, India and Japan switching in 2011. There is one major economy that is out - that is the US. It cannot be the only one left out." Essen writes a glowing feature about Sir David, an "affable Scot" who "seems to take pride in his fearsome reputation" and laughs off a "string of insults and calls for his resignation from industry bodies." The centerpiece of Sir David's agenda in his second term as IASB chairman ending in 2011 is to bring the U.S. under IFRS, make airline companies carry leased planes on their balance sheets, rationalize pension fund valuations and update insurance accounting presently a "blackhole," Tweedie says.
Aug. 12, 2008
Deloitte CEO Jim Quigley tells India's NDTV Profit reporter Vijay Ganeshan in a Q&A interview: "I am committed to a global set of accounting standards. Our global capital markets will be better served once we have a single set of high quality global accounting standards. That's true in the emerging markets as well as the developed markets. I totally support the move that is underway for the adoption of International Financial Reporting Standards (IFRS) and encourage countries like India to move towards adoption of IFRS." Link.
Aug. 12, 2008
Kate Plourd of CFO magazine reports the Chamber of Commerce is "speaking out sharply" against the Financial Accounting Standards Board proposal to change accounting for contingent liabilities. The Chamber says FASB's plan would force companies to provide immaterial or confidential information, and boost the ability of plaintiff lawyers to win lawsuits. Instead, the Chamber says FASB should synchronize revisions with the International Accounting Standards regulation that governs contingent liabilities and contingent assets (IAS 37.)
Aug. 12, 2008
Fitch Ratings issued a special report, entitled 'IFRS and their Impact on the Chilean Banking System', saying the introduction of IFRS should significantly increase transparency within the Chilean banking industry. The impact on balance sheets is expected to be lower for Chilean banks than it has been for most European banks, as Chilean banks have already been using fair value accounting for their investment portfolios and derivative contracts. IFRS is being phased in for Chilean banks in 2008 and 2009.
Aug. 08, 2008
FASB's revised proposed standard on earnings per share, issued Aug. 7, drew coverage in the U.S.'s WebCPA and the UK's Financial Director. The Financial Accounting Standards Board is seeking views on whether it has achieved its goal of simplifying an accounting rule which sets out how to calculate earnings per share (EPS), so that differences between the U.S. and international standard are eliminated, Financial Director said. The EPS proposal seeks to simplify the method of calculating EPS while providing for the convergence of U.S. and international accounting standards, reconciling FASB Statement 128 with International Accounting Standard 33, according to WebCPA.
Aug. 08, 2008
Wall Street Technology magazine's blog carries an item from Ernst & Young advising U.S. Firms Must Start Preparing Now for Massive IFRS Reform. The U.S. Conversion from GAAP to International Financial Reporting Standards (IFRS) should take place in 2013, the entry says. But if financial firms want to be ready, they must start preparing now. Calling it the most significant financial/accounting reform since Sarbanes-Oxley, Ernst &Young says the standard will impact all facets of financial service firms, not just accounting.
Aug. 08, 2008
India's respected daily newspaper the Business Standard editorializes that some India companies are using a contradiction between two sets of rules (one on accounting standards, and another provided under company law) to improve the profits that they report. Foreign exchange losses on capital assets should be booked in the profit and loss account, the paper argues. "That is what India's accounting standards ask you to do. That is what the U.S. accounting standards ask you to do. And that is what the international accounting standards ask you to do."
Aug. 07, 2008
Jim Hamilton, an analyst at Wolters Kluwer Law & Business, reports in his blog the Big Four Voice Strong Support for Mandatory IFRS at SEC Roundtable As the SEC holds a roundtable on how IFRS performed during the recent market turmoil, there is a growing consensus that the Commission should allow US issuers to use IFRS in preparing their financial statements, Hamilton says. PricewaterhouseCoopers believes that the SEC should prepare a detailed roadmap to IFRS, including a mandatory date for all domestic issuers to convert to IFRS. KPMG said the SEC should establish a timeline with clear action steps with the goal of requiring all domestic issuers to apply IFRS within a reasonable transition period.
Aug. 07, 2008
Darla Sycamore, a trustee at the Canadian Financial Executives Research Foundation and a blogger who calls herself the IFRS exorcist, reported on Monday's SEC hearing. A majority of the participants were of the view that IFRSs have stacked up very well against US GAAP, Sycamore writes As well, the IASB is seen as being responsive to issues surrounding the credit crisis. The IASB initiatives in process are discussed on its Web site. Concerns were expressed about the lack of maturity of IFRSs as a body of Standards. There were also concerns about the absence of specific rules in IFRS when compared with US GAAP.
Aug. 06, 2008
Sify.com, an India Web portal, announces PricewaterhouseCoopers (PwC) and the Indian Institute of Management, Calcutta (IIM-C) have joined hands to develop executive training programs for IFRS. The aim is to meet huge demand of IFRS-trained professionals that India will need once the Institute of Chartered Accountants of India (ICAI) adopts IFRS on April 1, 2011.
Aug. 06, 2008
How did we get here? The South African Insurance Times and Investment News runs an interview with Adrian Dadd, technical partner at PricewaterhouseCoopers SA, who says that while IFRS have become "extremely complex" the IASB is pursuing a principles-based approach to improving clarity. "It is key that International Financial Reporting Standards setters clarify their vision, and in the short-term," Dadd says. "Otherwise we run the risk of adopting an excessive amount of U.S. Generally Accepted Accounting Principles as if they are IFRS guidance and it will be difficult to regain this lost ground."
Aug. 06, 2008
Calgary-based Agrium Inc., (NYSE:AGU) a $5.8 billion supplier of nitrogen and phosphate for agricultural and industrial markets throughout the Americas, noted Canada's 2011 conversion to IFRS: "We are currently completing an analysis of the impact of the transition from Canadian GAAP to IFRS on our consolidated financial statements. Upon completion we will develop our IFRS changeover plan, which will include project structure and governance, resource planning and training, and a phased plan to assess accounting policies under IFRS."
Aug. 06, 2008
As the SEC debates its next move, Deloitte issued a "whitepaper" Aug. 5 advising corporate leaders need to understand IFRS enterprise-wide impact for a successful transition. "In light of the regulatory landscape, the time is now for companies to develop a plan for the accounting switch," according to Deloitte.
Aug. 06, 2008
CFO magazine writer David M. Katz reads the tea leaves at Monday's Securities and Exchange Commission hearing on IFRS and concludes the is in no hurry to flip the switch from U.S. GAAP for U.S. filers. Global Standards: Jilted at the Altar? Despite glowing words for International Financial Reporting Standards, Securities and Exchange Commission Chairman Christopher Cox seems no closer to pulling the trigger on U.S. conversion. "A word of advice," writes Katz, "to those holding their breaths" until the SEC issues a deadline for U.S. companies to convert from GAAP to IFRS: "exhale."
Aug. 05, 2008
Harder to keep assets off books in IFRS Says UK's Boyle. Reuters interviewed Paul Boyle, the chief executive of the UK's Financial Reporting Council, an independent regulator of accounting and auditing standards at yesterday's Securities and Exchange Commission hearing on IFRS vs. U.S. GAAP. International accounting standards will make it harder for banks to keep assets off their balance sheets, Boyle said, as the United States mulls whether to broaden its use of foreign rules.
Aug. 05, 2008
WebCPA reported on Monday's SEC hearing in story titled "SEC Holds Panel on Subprime Accounting." The SEC roundtable was a discussion on the performance of International Financial Reporting Standards and U.S. generally accepted accounting principles during the subprime crisis, fair value accounting and the treatment of off-balance-sheet items, according to WebCPA. The SEC's two newest members, Luis Aguilar and Troy Paredes, were in attendance after they were sworn in last week. They will be helping to set the roadmap for the convergence of IFRS with U.S. GAAP, WebCPA said. "What we hope to learn today is a bit more about the reasons why companies are using IFRS," said SEC Chairman Christopher Cox. "We cannot speak about financial reporting in 2008 without paying heed to current times. We all know what's going on in the capital markets."
Aug. 05, 2008
The South African Institute of Chartered Accountants spoke to the South African Insurance Times and Investments News about the IASB's issuance of amendments IAS 32 (AC 125) to improve accounting for financial instruments, unit trusts, private equity and hedge funds. The amendments respond to requests from entities around the world, among them South African financial institutions, unhappy with the required accounting under IFRS. Tonia Jackson, project director – financial services at the SAICA says that the main feature of the instruments in question is that they have characteristics similar to ordinary shares but are at present classified as financial liabilities.
Aug. 04, 2008
SEC unveils guest list for IFRS and US GAAP summit, David Jetuah of Accountancy Age notes Paul Boyle, the chief executive of the UK's Financial Reporting Council, will sit on the financial services industry sector panel at the Securities and Exchange Commission's "summit" today to determine whether the recent capital The SEC roundtable has been organized into two panels. Envoys from Grant Thornton, KPMG and BP will be part of the second panel.
Aug. 04, 2008
India Govt to Adapt IFRS to Domestic Needs, New Dehli – The EconomicTimes of India reports a government official said on Saturday India "would not blindly follow" the norms but adapt them to domestic conditions. "We are distinguishing between full convergence and outright adoption," Secretary of Corporate Affairs Anurag Goel said while speaking at a seminar adding that the country would adopt International Financial Reporting Standard subject to the condition of reviewing it in the national perspective.
Aug. 01, 2008
SEC Announces Panelists, Agenda For August 4 Roundtable On Performance Of IFRS, U.S. GAAP During Subprime Crisis, Washington, D.C. – The Securities and Exchange Commission today announced the panelists and agenda for its August 4 roundtable concerning the performance of International Financial Reporting Standards (IFRS) and U.S. Generally Accepted Accounting Principles (U.S. GAAP) during the recent period of market turmoil.
SEC Chairman Christopher Cox will begin the roundtable with opening remarks at 1 p.m. ET, followed by brief introductory comments about IFRS by John Smith, a Board Member of the International Accounting Standards Board.
Aug. 01, 2008
The Edge Daily, the financial and business daily of Malaysia reports Kuala Lumpur's Financial Reporting Foundation (FRF) and Malaysian Accounting Standards Board (MASB) are targeting 2012 to bring Malaysia to full convergence with International Financial Reporting Standards. MASB Chairman Datuk Zainal Abidin Putih said: "Since 1978, we have been incorporating the provisions of the international standards into local accounting standards, and today we are convinced that by becoming fully IFRS-compliant, Malaysia's capital and financial markets will be further enhanced".
Aug. 01, 2008
The Economic Times of India reports on a "power-packed panel" discussion that included Deloitte CEO James Quigley, Kevan Watts, president of DSP Merrill Lynch, YM Deosthale, CFO of Larsen & Toubro, Gautam Vir, CEO of the Development Credit Bank and Keval Handa, MD at Pfizer. The discussion was "engaging and the conversation veered around current issues like the impact of the rising price of crude and the implementation of the International Financial Reporting Standards against the framework of the theme for the evening — Globalisation of Capital Markets and the Facilitation of Cross-Border Investment".
Aug. 01, 2008
SEC Associate Chief Accountant Sondra L. Stokes Joins Deloitte's Audit & Enterprise Risk Services Practice, New partner in SEC services practice will specialize in IFRS. Deloitte's press release headline reads: Addition of Former SEC Associate Chief Accountant Bolsters Deloitte's IFRS Service Offering. "It's all about talent, and we're extremely fortunate to welcome such a high-caliber professional as Sondra Stokes to Deloitte," said Christine Davine, national partner in charge of Deloitte & Touche's SEC Services Group. "Sondra brings hands-on experience from the SEC, which is at the forefront of one of the most significant developments in financial reporting since its creation -- adoption of IFRS. Sondra's wealth of knowledge in this arena will serve Deloitte and its clients very well."
July 31, 2008
SEC to Hold Hearing on IFRS, GAAP Role in U.S. Stock Market Declines, The Securities and Exchange Commission plans a hearing Aug. 4 to analyze the performance of International Financial Reporting Standards versus U.S. generally accepted accounting principles during the U.S. credit crunch and subprime mortgage meltdown.
