Beruflich Dokumente
Kultur Dokumente
By : Dr. M. S. Pahwa
Chairman, Presidents, fellow accountants, ladies and gentlemen. Good afternoon. It is a great pleasure to be here in Istanbul in the Heart of Asia and Europe to address the 12th World Congress of Accounting Historians . Thank you for your kind invitation Turkey has a special place in Asia & Europe because it is the only land way to access to Europe by Asian countries. I myself have studied about Osmani government and understand about 150 years Turkey government was the governor of west European and Middle East countries.
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Accounting has been called the language of business and accounting standards are grammar of this language. we must have a solid grounding in its fundamentals. Accounting information has been useful for hundreds of years. The double-entry framework was first described in a book written by Luca Pacioli, a fifteenth-century Italian monk and mathematician, although its origins can be traced back another 300 years. The formal structure for processing financial transactions is at least 700 years old. What is the definition of accounting? Accounting is the process of providing quantitative information about economic entities to aid users in making decisions concerning the allocation of economic resources. The term accounting theory is commonly used, but it has no unified, standardized definition. Very closely related to the realm of accounting theory is the area of measurement. Measurement is concerned with the process of assigning numbers to the attributes or characteristics of the elements being measured. In addition to accounting, accountancy has emerged as a profession, alongside the professions of medicine and law.
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Specific accounting policies concerning particular topics or industries, providing descriptions of acceptable methods of treating elements of accounting.
"If globalization is a fact, no single organization can resolve all the problems alone,"
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1987: Peat Marwick International and KMG merger forms KPMG 1989: Arthur Andersen/Price Waterhouse merger collapses in September. Ernst & Young is formed from Ernst & Whinney and Arthur Young. Touche Ross and Deloitte Haskins Sells merge to form Deloitte & Touche 1990: The 'Guinness Four' are found guilty of fraud 1991: Robert Maxwell drowns. BCCI collapses. Polly Peck and Coloroll scandals lead to Ian Cadbury's report on good corporate governance 1995: Deloitte & Touche creates Deloitte Consulting. Barings collapses 1996: Ian and Kevin Maxwell cleared of fraud, Coopers & Lybrand's audits of Maxwell companies face JDS investigation. KPMG produces the first annual report by an accountancy firm, which reveals senior partner Colin Sharman earns a total package of 740,000 1998: Coopers & Lybrand and Price Waterhouse form PricewaterhouseCoopers. JDS turns the spotlight on Arthur Andersen in connection with the 50m overstatement of profits by Wickes
2000: European Commission announces in July that it intends to make IAS mandatory from 2005. The IASC completes its three-year restructuring programme and creates the International Accounting Standards Board, effective from April 2001. Ernst & Young sells consulting arm to Cap Gemini 2001: SEC's Enron investigation begins. Big Five issue a joint statement in December insisting that self-regulation remains the best policy following the collapse of Enron 2002: Andersen's Houston office admits to shredding documents relating to Enron. WorldCom is accused of $4bn fraud, which drags Andersen into another scandal. Andersen UK acquired by Deloitte. SEC implements Sarbanes-Oxley 2003: Grant Thornton is dragged into 4bn accounting 'black hole' at Parmalat. Deloitte & Touche rebrands as simply 'Deloitte'. Higgs and Smith reports take an evolutionary step on from Cadbury and Turnbull 2004: The Financial Reporting Council is revamped. Inland Revenue merges with Customs & Excise.
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IASB Framework
While not a standard, the IASB Framework for the Preparation and Presentation of Financial Statements serves as a guide to resolving accounting issues that are not addressed directly in a standard. Moreover, in the absence of a standard or an interpretation that specifically applies to a transaction, IAS 8 requires that an entity must use its judgment in developing and applying an accounting policy that results in information that is relevant and reliable. In making that judgment, IAS 8.11 requires management to consider the definitions, recognition criteria and measurement concepts for assets, liabilities, income, and expenses in the Framework. The IASB adopted the Framework in April 2001. It had originally been adopted by the IASC in 1989. Currently, the IASB is working on a Project to Revise the Framework.
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What is IFRSs
The term International Financial Reporting Standards (IFRSs) has both a narrow and a broad meaning. Narrowly, IFRSs refers to the new numbered series of pronouncements that the IASB is issuing, as distinct from the International Accounting Standards (IASs) series issued by its predecessor. More broadly, IFRSs refers to the entire body of IASB pronouncements, including standards and interpretations approved by the IASB and IASs and SIC interpretations approved by the predecessor International Accounting Standards Committee. [On this website, consistent with IASB policy, we abbreviate International Financial Reporting Standards (plural) as IFRSs and International Accounting Standards (plural) as IASs.]
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IFRS
International Financial Reporting Standards Preface to International Financial Reporting Standards IFRS 1 First-time Adoption of International Financial Reporting Standards IFRS 2 Share-based Payment IFRS 3 Business Combinations IFRS 4 Insurance Contracts IFRS 5 Non-current Assets Held for Sale and Discontinued Operations IFRS 6 Exploration for and Evaluation of Mineral Assets IFRS 7 Financial Instruments: Disclosures IFRS 8 Operating Segments Framework for the Preparation and Presentation of Financial Statements Framework for the Preparation and Presentation of Financial Statements
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Segment Reporting IAS 15 Information Reflecting the Effects of Changing Prices Withdrawn December 2003 IAS 16 Property, Plant and Equipment IAS 17 Leases IAS 18 Revenue IAS 19 Employee Benefits IAS 20 Accounting for Government Grants and Disclosure of Government Assistance IAS 21 The Effects of Changes in Foreign Exchange Rates IAS 22 Business Combinations Superseded by IFRS 3 effective 31 March 2004. IAS 23 Borrowing Costs IAS 24 Related Party Disclosures
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IAS 25 Accounting for Investments Superseded by IAS 39 and IAS 40 effective 2001. IAS 26 Accounting and Reporting by Retirement Benefit Plans IAS 27 Consolidated and Separate Financial Statements IAS 28 Investments in Associates IAS 29 Financial Reporting in Hyperinflationary Economies IAS 30 Disclosures in the Financial Statements of Banks and Similar Financial Institutions Superseded by IFRS 7 effective 2007. IAS 31 Interests In Joint Ventures IAS 32 Financial Instruments: Presentation Disclosure provisions superseded by IFRS 7 effective 2007. IAS 33 Earnings Per Share IAS 34 Interim Financial Reporting IAS 35 Discontinuing Operations Superseded by IFRS 5 effective 2005. IAS 36 Impairment of Assets IAS 37 Provisions, Contingent Liabilities and Contingent Assets IAS 38 Intangible Assets IAS 39 Financial Instruments: Recognition and Measurement IAS 40 Investment Property IAS 41 Agriculture
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FASB
Since 1973 the FASB has been the organization designated to establish authoritative financial accounting and reporting standards (Statements of Financial Accounting Standards, SFAS) for business and other private-sector entities. Its mission is to be responsive to the entire economic community and to operate in full view of the entire community through a due-process system.
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SEC
Under the Securities and Exchange Act of 1934, the SEC has statutory authority to establish financial accounting and reporting standards for publicly-held companies. Recent accounting-related scandals, such as Enron, prompted the SEC and Congress to get more directly involved in the oversight of the standards setting process and the monitoring of corporate governance. In August 2002, as part of the Sarbanes-Oxley Act, the SEC's Public Company Accounting Oversight Board (PCAOB) was created to crack down on corporate accounting scandals. Authorized to conduct inspections and discipline accountants, the oversight board supplants the self-regulation of CPAs who audit public companies.
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IASB
Formed in January 2001, the ISAB replaced its predecessor, the International Accounting Standards Committee (IASC), as the international standards setting body. Looking towards greater formalization of international accounting standards, IASB is structured similarly to the FASB. It is currently the focus of the IASB, in collaboration with the FASB and other accounting focused organizations, to "converge" standards and develop a single, universally accepted set of biding international accounting standards. The IASC, and now IASB, issue a series of standards known as International Financial Reporting Standards (IFRS), formerly called International Accounting Standards (IAS).
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Description of IFAC
The International Federation of Accountants (IFAC) is an association of national professional accountancy organizations that represent accountants employed in public practice, business and industry, the public sector, and education, as well as some specialized groups that interface frequently with the profession. IFAC works to develop the profession globally and to harmonies professional standards worldwide to enable accountants to provide services of consistently high quality in the public interest across political borders. Currently, IFAC has 155 member bodies and associates in 118 countries, representing over 2.5 million accountants.
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Originally, the AICPA, the memberships association for CPAs, was the body responsible for defining accounting standards. 1939-1959 - issues Accounting Research Bulletins (ARB) 1959-1973 - Accounting Principles Board (APB) issues series of opinions 1973 - Accounting Principles Board dissolved and standards setting responsibility is transferred to FASB. The AICPA continues its role as authoritative body for establishing auditing standards (Statement of Auditing Standards, SAS) In 1973, the AICPA shifted its focus to supporting it membership and constituency and bringing to the attention of the FASB and SEC issues that it determined important to the accounting and auditing professional communities. While the AICPA continued issuing auditing standards, this responsibility is now being assumed by the Public Company Accounting Oversight Board (PCAOB), a body created by the Sarbanes-Oxley Act of 2002. The Oversight Board's recent authorization to become directly involved with issues auditing standards could have significant impact on the current standards setting process. 26
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PCAOB (USA)
Formed in 2002 to oversee the audit of public companies that are subject to the securities laws in the preparation of informative, fair and independent audit reports. The Board's authority includes: ..Registering public accounting firms that prepare audit reports for issuers ..Conducting inspections of registered public accounting firms ..Conducting investigations and disciplinary proceedings and impose appropriate sanctions ..Enforcing compliance by registered public accounting firms relating to the preparation and issuance of audit reports and the obligations and liabilities of accountants ..Establishing auditing, quality control, ethics, independence, and other standards relating to the preparation of audit reports for issuers
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POB (UK)
The Professional Oversight Board contributes to the achievement of the Financial Reporting Council's own fundamental aim of supporting investor, market and public confidence in the financial and governance stewardship of listed and other entities by providing: independent oversight of the regulation of the auditing profession by the recognized supervisory and qualifying bodies monitoring of the quality of the auditing function in relation to economically significant entities independent oversight of the regulation of the accountancy profession by the professional accountancy bodies independent oversight of the regulation of the actuarial profession by the professional actuarial bodies and promoting high quality actuarial work. The Professional Oversight Board for Accountancy has changed its name as of 5 May 2006 to the Professional Oversight Board. This reflects the extension of its board's remit to include oversight of the regulation of the actuarial profession.
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AADB (UK)
The Accountancy & Actuarial Discipline Board ("AADB") is the independent, investigative and disciplinary body for accountants and actuaries in the UK. It has up to eleven members. The AADB is responsible for operating and administering an independent disciplinary scheme (the Accountancy Scheme) covering members of the following accountants' professional bodies:- the Association of Chartered Certified Accountants, the Chartered Institute of Management Accountants, the Chartered Institute of Public Finance and Accountancy and the Institute of Chartered Accountants in England and Wales; The Institute of Chartered Accountants of Ireland and the Institute of Chartered Accountants of Scotland. The AADB will operate & administer a separate independent disciplinary scheme (the Actuarial Scheme) covering members of the Faculty & Institute of Actuaries, which will be adopted as soon as necessary formalities have been completed. The focus of the AADB is on cases of public interest; other cases will continue to be dealt with by the individual accountancy body of the member concerned or by the Faculty & Institute of Actuaries. The normal channel of reference to the AADB for 'public interest' cases will be the accountancy or actuarial body primarily concerned. However, the AADB also has the power to call in cases whether or not they have been referred to it by an accountancy body. The AADB will also have the power to call in actuarial cases. The AADB was formerly known as the Accountancy Investigation & Discipline Board (AIDB). It changed its name to the AADB on 16/08/2007. 35
GAAS
Generally Accepted Auditing Standards (GAAS). Established by the AICPA, these standards govern the conduct of external audits by public accountants. The Statement of Auditing Standards (SAS) provide guidelines for the auditors' field work and financial reporting. They frame the format and contents of the Auditor's Report or Opinion, which is the formal expression of their examination of a company's financial statements. In May 2003, the PCAOB was given the official go-ahead to assume responsibility for establishing GAAS. It remains to be seen exactly how the PCAOB's new role will play out, its impact on the AICPA's responsibilities, and the form in which the two entities will coexist.
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GAS
Governmental Accounting Standards (GAS). While GAAP defines the accounting for public and private business entities, there also exist standards specific to governmental organizations. Organized in 1984 to establish standards of financial accounting and reporting for state and local governmental entities, the Governmental Accounting Standards Board (GASB), began issues these standards to guide the preparation of external reports for these types of organizations.
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1974
Events First associate members of IASC are admitted: Belgium, India, Israel, New Zealand, Pakistan, and Zimbabwe. IASC holds Board meetings in London (3) and Paris. Exposure Drafts Published: E1 Disclosure of Accounting Policies E2 Valuation and Presentation of Inventories in the Context of the Historical Cost System E3 Consolidated Financial Statements and the Equity Method of Accounting Final Standards Published: None
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1975
Events Proposal to create an International Federation of Accountants (IFAC) to replace the International Coordinating Committee for the Accounting Profession (ICCAP). IASC holds Board meetings in London (3) and Montreal. Exposure Drafts Published: E4 Depreciation Accounting E5 Information to be Disclosed in Financial Statements Final Standards Published: IAS 1 (1975) Disclosure of Accounting Policies IAS 2 (1975) Valuation and Presentation of Inventories in the Context of the Historical Cost System
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1976
Events Joseph P. Cummings of the United States becomes chairman of IASC. Group of Ten Bank Governors funds an IASC project on bank financial statements. IASC holds Board meetings in London (2) and Washington. Exposure Drafts Published: E6 Accounting Treatment of Changing Prices E7 Statement of Source and Application of Funds E8 The Treatment in the Income Statement of Unusual Items and Changes in Accounting Estimates and Accounting Policies Final Standards Published: IAS 3 (1976) Consolidated Financial Statements IAS 4 (1976) Depreciation Accounting IAS 5 (1976) Information to be Disclosed in Financial Statements
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1977
Events IASC Constitution is revised to add to two seats to the IASC Board (in addition to the 9 founder countries), bringing the total to 11. Nine votes are required to adopt a Standard, giving the 9 founder members substantial control. Also, this revised Constitution identified the standards-setting body as the 'Board' of the IASC, not a 'committee'. IFAC is formed. AISG is disbanded. IASC holds Board meetings in London, Amsterdam, and Edinburgh. Exposure Drafts Published: E9 Accounting for Research and Development Costs E10 Contingencies and Events Occurring After the Balance Sheet Date E11 Accounting for Foreign Transactions and Translation of Foreign Financial Statements E12 Accounting for Construction Contracts Final Standards Published: IAS 6 (1977) Accounting Responses to Changing Prices IAS 7 (1977) Statement of Changes in Financial Position
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1978
Events John A. Hepworth of Australia becomes chairman of IASC. South Africa and Nigeria join Board, increasing Board size to 11. IASC holds Board meetings in London (2) and Perth (Australia). For the first time, IASC rejects a proposed standard (based on E11, Accounting for Foreign Transactions and Translation of Foreign Financial Statements), and a new steering committee is appointed for a fresh start. IASC begins discussions with the International Federation of Accountants (IFAC) on 'mutual commitments' regarding the relationship between the two bodies. Exposure Drafts Published: E13 Accounting for Taxes on Income E14 Current Assets and Current Liabilities Final Standards Published: IAS 8 (1978) Unusual and Prior Period Items and Changes in Accounting Policies IAS 9 (1978) Accounting for Research and Development Activities IAS 10 (1978) Contingencies and Events Occurring After the Balance Sheet Date 50
1979
Events Allan V. C. Cook becomes secretary of IASC. IASC meets OECD working group on accounting standards. IASC holds Board meetings in London (2) and Mexico City. Exposure Drafts Published: None Final Standards Published: IAS 11 (1979) Accounting for Construction Contracts IAS 12 (1979) Accounting for Taxes on Income IAS 13 (1979) Presentation of Current Assets and Current Liabilities
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1980
Events J. A. (Hans) Burggraaff of Netherlands becomes chairman of IASC. IASC publishes a discussion paper on bank disclosures (project funded by 'Group of Ten' Bank Governors). IASC holds Board meetings in London, Berlin, and Dublin United Nations Intergovernmental Working Group on Accounting and Reporting meets for first time. IASC proposes a cooperative working arrangement with UN group. Exposure Drafts Published: E15 Reporting Financial Information by Segment E16 Accounting for Retirement Benefits in the Financial Statements of Employers E17 Information Reflecting the Effects of Changing Prices E18 Accounting for Property, Plant and Equipment in the Context of the Historical Cost System E19 Accounting for Leases Final Standards Published: None
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1981
Events Geoffrey B. Mitchell becomes Secretary of IASC. Title is changed to Secretary-General during his tenure. IASC Consultative Group is formed to advise IASC on agenda projects and priorities. Consultative Group members represent both accounting and non-accounting organizations with an interest in financial reporting (stock exchanges, bankers, lawyers, business, unions, government, United Nations, World Bank, OECD, etc.). First meeting in October 1981. IASC begins a joint project on accounting for income taxes with standard setters from the Netherlands, UK, and USA. IASC holds Board meetings in London (2) and Tokyo. Exposure Drafts Published: E20 Revenue Recognition E21 Accounting for Government Grants and Disclosure of Government Assistance E22 Accounting for Business Combinations Final Standards Published: IAS 14 (1981), Reporting Financial Information by Segment IAS 15 (1981), Information Reflecting the Effects of Changing Prices
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1982
Events Stephen Elliott of Canada becomes chairman of IASC. IASC and IFAC make mutual commitments. The IASC Board is expanded to up to 17 members, including 13 country members appointed by the Council of IFAC and up to 4 representatives of organizations with an interest in financial reporting. All members of IFAC are members of IASC. IFAC recognizes and will look to IASC as the global accounting standard setter. Special constitutional status of the 9 founder members of IASC is eliminated. IASC holds Board meetings in London (2) and Amsterdam. Exposure Drafts Published: E23 Accounting for the Effects of Changes in Foreign Exchange Rates E24 Capitalization of Borrowing Costs Final Standards Published: IAS 16 (1982) Accounting for Property, Plant and Equipment IAS 17 (1982) Accounting for Leases IAS 18 (1982) Revenue Recognition
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1983
Events Italy joins IASC Board. Expanded IASC Board under the revised Constitution takes effect. IASC holds Board meetings in London, Edinburgh, and Paris. Title of senior staff executive changed from 'Secretary' to 'SecretaryGeneral'. Exposure Drafts Published: E25, Disclosure of Related Party Transactions Final Standards Published: IAS 19 (1983) Accounting for Retirement Benefits in the Financial Statements of Employers IAS 20 (1983) Accounting for Government Grants and Disclosure of Government Assistance IAS 21 (1983) Accounting for the Effects of Changes in Foreign Exchange Rates IAS 22 (1983) Accounting for Business Combinations
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1984
Events Taiwan joins IASC Board. IASC holds a formal meeting with the US Securities and Exchange Commission. IASC holds Board meetings in London, Toronto, and Dsseldorf. Exposure Drafts Published: E26 Accounting for Investments Final Standards Published: IAS 23 (1984) Capitalization of Borrowing Costs IAS 24 (1984) Related Party Disclosures
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1985
Events John L. Kirkpatrick of UK becomes chairman of IASC. David Cairns becomes Secretary-General of IASC. IASC participates in an OECD forum on global accounting harmonization. IASC responds to SEC proposals for a multinational prospectus. IASC holds Board meetings in London, Rome, and New York. Exposure Drafts Published: E27, Accounting and Reporting by Retirement Benefit Plans Final Standards Published: None
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1986
Events Financial analysts (International Coordinating Committee of Financial Analysts Associations) get a seat on the IASC Board. IASC co-sponsors a conference with New York Stock Exchange and International Bar Association on the globalization of financial markets. IASC holds Board meetings in London, Dublin, and Amsterdam Exposure Drafts Published: E28 Accounting for Investments in Associates and Joint Ventures Final Standards Published: IAS 25 (1986) Accounting for Investments
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1987
Events Georges Barthes de Ruyter of France becomes chairman of IASC. IASC begins its Comparability and Improvements Project. Objective is to reduce or eliminate alternatives and make standards more detailed and prescriptive rather than flexible and descriptive of current practice. International Organization of Securities Commissions (IOSCO) joins the Consultative Group and supports the Comparability project. IASC publishes its first Bound Volume of International Accounting Standards, containing the standards extant at 1 September 1987. IASC holds Board meetings in Sydney and Edinburgh. Exposure Drafts Published: E29 Disclosures in the Financial Statements of Banks E30 Consolidated Financial Statements and Accounting for Investments in Subsidiaries E31 Financial Reporting in Hyperinflationary Economies Final Standards Published: IAS 26 (1987), Accounting and Reporting by Retirement Benefit Plans
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1988
Events Jordan, Korea and the Nordic Federation (representing accounting bodies in Norway, Denmark, Sweden, Finland, and Iceland) join the IASC Board, replacing Mexico, Nigeria, and Taiwan. Financial instruments project started in conjunction with Canadian Accounting Standards Board. IASC publishes a survey on the use of IAS. FASB joins the Consultative Group and becomes an observer at the IASC Board table. IASC holds Board meetings in Dsseldorf, Toronto, and Copenhagen. Exposure Drafts Published: Exposure Draft: Framework for the Preparation and Presentation of Financial Statements Final Standards Published: None
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1989
Events European Accounting Federation (FEE) supports international harmonization and greater European involvement in IASC. IFAC adopts a public sector guideline to require government business enterprises to follow IAS. IASC holds Board meetings in Brussels and New York. IASC publishes its Framework for the Preparation and Presentation of Financial Statements. Exposure Drafts Published: E32 Comparability of Financial Statements E33 Accounting for Taxes on Income E34 Disclosures in the Financial Statements of Banks and Similar Financial Institutions E35 Financial Reporting of Interests in Joint Ventures Final Standards Published: IAS 27 (1989) Consolidated Financial Statements and Accounting for Investments in Subsidiaries IAS 28 (1989) Accounting for Investments in Associates IAS 29 (1989) Financial Reporting in Hyperinflationary Economies
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1990
Events Statement of Intent - Comparability of Financial Statements. Arthur R. Wyatt of the United States becomes chairman of IASC. European Commission joins the Consultative Group and takes a seat at the IASC Board table as an observer. Bank regulators and asset valuers also join the Consultative Group. A programmed to seek external funding is launched. IASC holds Board meetings in Amsterdam, Paris, and Singapore. Exposure Drafts Published: None Final Standards Published: IAS 30 (1990) Disclosures in the Financial Statements of Banks and Similar Financial Institutions IAS 31 (1990) Financial Reporting of Interests in Joint Ventures
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1991
Events IASC organizes a conference of national standard setters in conjunction with FEE and FASB. US FASB indicates its support for international accounting standards. IASC holds Board meetings in London, Milan, and Seoul Exposure Drafts Published: E36 Cash Flow Statements E37 Research and Development Activities E38 Inventories E39 Capitalization of Borrowing Costs E40 Financial Instruments Final Standards Published: None
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1992
Events IASC constitution revised. IASC holds Board meetings in Madrid, Amman, and Chicago Exposure Drafts Published: E41 Revenue Recognition E42 Construction Contracts E43 Property, Plant and Equipment E44 The Effects of Changes in Foreign Exchange Rates E45 Business Combinations E46 Extraordinary Items, Fundamental Errors and Changes in Accounting Policies E47 Retirement Benefit Costs Final Standards Published: Revision:
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1993
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Eiichi Shiratori of Japan becomes chairman of IASC. India replaces Korea on Board. IASC and IOSCO agree on a list of core standards. Comparability and Improvements project completed with approval of ten revised IAS. However, IOSCO did not endorse IAS at that time for use in cross-border securities offerings. South African Institute of Chartered Accountants decides that South African accounting standards should be based on IAS -- existing South African GAAP to be revised. IASC holds Board meetings in Tokyo, London, and Oslo. Exposure Drafts Published: None Final Standards Published: Revisions: IAS 2 (revised 1993) Inventories IAS 8 (revised 1993) Net Profit or Loss for the Period, Fundamental Errors and Changes in Accounting Policies IAS 9 (revised 1993) Research and Development Costs IAS 11 (revised 1993) Construction Contracts IAS 16 (revised 1993) Property, Plant and Equipment IAS 18 (revised 1993) Revenue IAS 19 (revised 1993) Retirement Benefit Costs IAS 21 (revised 1993) The Effects of Changes in Foreign Exchange Rates IAS 22 (revised 1993) Business Combinations IAS 23 (revised 1993) Borrowing Costs 65
1994
Events Board meets with standard setters to discuss E48, Financial Instruments. Accounting educators join Consultative Group. World Bank agrees to fund Agriculture project. Establishment of IASC Advisory Council approved, with responsibilities for oversight and finances. IOSCO accepts 14 IAS and identifies some specific issues to be addressed in the remaining core standards (the so-called 'Shiratori letters'). FASB agrees to work with IASC on a joint earnings per share project. The G4+1 group, which includes IASC as the '+1', publishes its first study on Future Events. IASC holds Board meetings in Edinburgh and Budapest. Exposure Drafts Published: E48 Financial Instruments E49 Income Taxes Final Standards Published: None
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1995
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Michael Sharpe of Australia becomes chairman of IASC. Sir Bryan Carsberg becomes Secretary-General of IASC. IASC agrees with IOSCO to complete the core standards by 1999. IOSCO states that if the core standards are successfully completed, IOSCO will review them with the objective of endorsing IAS for cross-border offerings. First German companies report under IAS. Federation of Swiss Holding Companies takes a seat on the IASC Board. Malaysia and Mexico replace Italy and Jordan on Board. India and South Africa agree to share Board seats with Sri Lanka and Zimbabwe, respectively. World Bank's accounting handbook states that 'in the absence of any superior national standards, the Bank requires the use of IASs in the preparation of financial statements'. European Commission supports the IASC/IOSCO agreement and concludes that IAS should be followed by EU multinationals. IASC holds Board meetings in Dsseldorf, Amsterdam, and Sydney.
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1996
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IASB accelerates its core standards programmed by one year, with completion planned by the end of 1998. International Association of Financial Executives Institutes joins IASC Board. IOSCO takes a seat at the IASC Board table as an observer. IASC starts a joint project on Provisions with UK Accounting Standards Board. A study by the EU Contact Committee finds IAS compatible with EU directives, with minor exceptions. US SEC announces its support of the IASC's objective to develop, as expeditiously as possible, accounting standards that could be used for preparing financial statements used in cross-border offerings. US Congress calls for 'a high-quality comprehensive set of generally accepted international accounting standards'. Australian Stock Exchange supports a programmed to harmonies Australian standards with IAS. World Trade Organization encourages successful completion of international accountancy standards. IASC holds Board meetings in Brussels, Stockholm, and Barcelona.
1997 (1)
Events Standing Interpretations Committee is formed. 12 voting members. IASC and FASB issue similar EPS standards. IASC, FASB, and CICA issue new Segments standards with relatively minor differences. IASC discussion paper proposes fair value for all Financial Assets and Financial Liabilities. IASC holds 45 consultation meetings in 16 countries. Actuaries join Consultative Group. Arab Society of Certified Accountants calls for all of its 22 member countries to adopt IAS as their national GAAP ('Dubai Declaration'). APEC (Asia-Pacific Economic Cooperation) expresses its support of the efforts of the International Accounting Standards Committee to develop international accounting standards. Joint Working Group on financial instruments formed with national standard setters. People's Republic of China becomes a member of IFAC and joins the IASC Board as observer. IASC sponsors a conference of accounting standard setters from 20 countries in Hong Kong. FEE calls on Europe to use IASC's Framework. US SEC reports to Congress on the outlook for successful completion of a set of international accounting standards that would be acceptable in the US. IASC appoints a Strategy Working Party (SWP) to make recommendations regarding the future structure and operation of IASC following completion of the core standards. First meeting in April. IASC sets up its Internet website. IASC holds Board meetings in London, Johannesburg, Beijing, and Paris.
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1997(2)
Exposure Drafts Published: E55 Impairment of Assets E56 Leases E57 Interim Financial Reporting E58 Discontinuing Operations E59 Provisions, Contingent Liabilities and Contingent Assets E60 Intangible Assets E61 Business Combinations Final Standards Published: New: IAS 33 (1997) Earnings Per Share Revisions: IAS 1 (revised 1997) Presentation of Financial Statements IAS 14 (revised 1997) Segment Reporting IAS 17 (revised 1997) Leases Final Interpretations Published: SIC 1 Consistency - Different Cost Formulas for Inventories SIC 2 Consistency - Capitalization of Borrowing Costs SIC 3 Elimination of Unrealized Profits and Losses on Transactions with Associates
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1998(1)
Events Stig Enevoldsen of Denmark becomes chairman of IASC. New laws in Belgium, France, Germany, and Italy allow large companies to use IAS domestically in their consolidated financial statements. First official translation of IAS (German). IFAC/IASC membership expands to Latin America (new member bodies in Bolivia, Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua) as well as Haiti, Iran, and Vietnam, bringing membership to 140 bodies in 101 countries. IFAC Public Sector Committee begins a programmed to develop International Public Sector Accounting Standards based on IAS. Strategy Working Party proposes structural changes (including a bicameral standardsetting structure) and closer ties to national standard-setters. In response to Asian financial crisis, the G8 Summit, the G7 finance ministers and central bank governors, the World Bank, and the IMF all call for rapid completion and global adoption of high quality international accounting standards. International Federation of Stock Exchanges expresses support for IAS. IAS published on CD ROM. IASC completes the core standards with approval of IAS 39 in December. IASC holds Board meetings in London, Kuala Lumpur, Niagara-on-the-Lake, Zurich, and Frankfurt.
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1998(2)
Exposure Drafts Published: E62 Financial Instruments: Recognition and Measurement E63 Events After the Balance Sheet Date Final Standards Published: New: IAS 34 (1998) Interim Financial Reporting IAS 35 (1998) Discontinuing Operations IAS 36 (1998) Impairment of Assets IAS 37 (1998) Provisions, Contingent Liabilities and Contingent Assets IAS 38 (1998) Intangible Assets IAS 39 (1998) Financial Instruments: Recognition and Measurement Revisions: IAS 16 (revised 1998) Property, Plant and Equipment IAS 19 (revised 1998) Employee Benefits IAS 22 (revised 1998) Business Combinations IAS 32 (revised 1998) Financial Instruments: Disclosure and Presentation Final Interpretations Published: SIC 5 Classification of Financial Instruments - Contingent Settlement Provisions SIC 6 Costs of Modifying Existing Software SIC 7 Introduction of the Euro SIC 8 First-Time Application of IASs as the Primary Basis of Accounting SIC 9 Business Combinations - Classification either as Acquisitions or Uniting of Interests SIC 10 Government Assistance - No Specific Relation to Operating Activities SIC 11 Foreign Exchange - Capitalization of Losses Resulting from Severe Currency Devaluations SIC 12 Consolidation - Special Purpose Entities SIC 13 Jointly Controlled Entities - Non-Monetary Contributions by Ventures SIC 14 Property, Plant and Equipment - Compensation for the Impairment or Loss of Items
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1999(1)
Events IOSCO begins its review of IASC core standards. IASC Board meetings are opened to public observation. First public meeting is held in Washington in March. G7 Finance Ministers and IMF urge support for IAS to 'strengthen the international financial architecture'. New IFAC International Forum on Accountancy Development (IFAD) commits to support 'use of International Accounting Standards as the minimum benchmark for raising national accounting standards' worldwide. EC study fins no significant conflicts between IAS and the European Directives. EC adopts a financial services action plan that includes use of IAS as 'European GAAP'. FEE 'reporting strategy for Europe' strongly supports use of IAS in Europe without requiring compliance with EC accounting Directives, plus phase-out of US GAAP. Eurasian Federation of Accountants and Auditors plans adoption of IAS in CIS countries. Various meetings of SWP to discuss the comments on their initial proposal and to develop final recommendations. SWP publishes a revised proposal. IASC Board unanimously approves restructuring into 14-member board (12 full-time) under an independent board of trustees. IASC Board appoints a Nominating Committee, chaired by US SEC Chairman Arthur Levitt, to select first Trustees under new IASC structure. Looking beyond financial statements, IASC publishes a study of business reporting on the Internet. IASC holds Board meetings in Washington, Warsaw, Venice, and Amsterdam. 73
1999(2)
Exposure Drafts Published: E64 Investment Property E65 Agriculture Final Standards Published: Revision: IAS 10 (revised 1999) Events After the Balance Sheet Date Final Interpretations Published: SIC 15 Operating Leases - Incentives SIC 16 Share Capital - Reacquired Own Equity Instruments (Treasury Shares)
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2000 (1)
Events Thomas E. Jones (UK citizen, career primarily in the United States) becomes chairman of IASC. SIC meetings open to public observation. Basel Committee expresses support for IAS and for efforts to harmonies accounting internationally. SEC issues a concept release inviting comments on the use of international accounting standards in the United States. As part of restructuring programmed, IASC Board approves a new Constitution. IOSCO recommends that its members allow multinational issuers to use IASC standards in crossborder offerings and listings. Nominating Committee announces initial Trustees of the restructured IASC. Paul Volcker, former US Federal Reserve Board Chairman, will chair the board of trustees. IASC Member Bodies approve IASC's restructuring and a new IASC Constitution. European Commission announces a plan to require all EU listed companies to use IAS starting no later than 2005. Trustees name Sir David Tweedie (chairman of the UK Accounting Standards Board) as the first Chairman of the restructured IASC Board. Trustees announce search for new Board members. Over 200 applications are received. IASC Board approves limited revisions to IAS 12, IAS 19, and IAS 39. IASC publishes first batch of Implementation Guidance Q&A on IAS 39. IAS 41 Agriculture is approved at the last meeting of the IASC Board (published in 2001). IASC holds Board meetings in Sao Paulo, Copenhagen, Tokyo, London. As one of its last official acts, the IASC Board approves a Statement to the new IASC Board commenting on projects to be carried forward and possible additional projects to be undertaken. 75
2000 (2)
Exposure Drafts Published: E66 Financial Instruments: Recognition and Measurement - Limited Revisions to IAS 39 E67 Pension Plan Assets E68 Income Tax Consequences of Dividends Final Standards Published: New: IAS 40 (2000), Investment Property Revisions: IAS 12 (revised 2000) Income Taxes IAS 19 (revised 2000) Employee Benefits IAS 28 (revised 2000) Accounting for Investments in Associates IAS 31 (revised 2000) Financial Reporting of Interests in Joint Ventures Final Interpretations Published: SIC 17 Equity - Costs of an Equity Transaction SIC 18 Consistency - Alternative Methods SIC 19 Reporting Currency - Measurement and Presentation of Financial Statements under IAS 21 and IAS 29 SIC 20 Equity Accounting Method - Recognition of Losses SIC 21 Income Taxes - Recovery of Revalued Non-Depreciable Assets SIC 22 Business Combinations - Subsequent Adjustment of Fair Values and Goodwill Initially Reported SIC 23 Property, Plant and Equipment - Major Inspection or Overhaul Costs SIC 24 Earnings Per Share - Financial Instruments that May Be Settled in Shares SIC 25 Income Taxes - Changes in the Tax Status of an Enterprise or its Shareholders 76
2001 (1)
Events Trustees appoint the initial 14 members of the International Accounting Standards Board. In March 2001, IASC Trustees activate Part B of IASC's new Constitution and establish a non-profit Delaware corporation, named the International Accounting Standards Committee Foundation, to oversee the IASB. On 1 April 2001, the new IASB takes over from the IASC the responsibility for setting International Accounting Standards. New Board holds its first meeting, adopts existing IAS and SICs, and deliberates its agenda and other issues. Trustees appoint 49 charter members to the IASB Standards Advisory Council. First SAC meeting is held in July. European Commission presents legislation to require use of IASC Standards for all listed companies no later than 2005. EFRAG (European Financial Reporting Advisory Group) is created by the accounting profession, preparers, users, and national standard-setters in EU countries to advise the European Commission on acceptability of individual IAS for Europe, as well as to respond to IASB comment documents. European Directives amended to allow compliance with IAS 39. IASB moves into new offices at 30 Cannon Street, London. IASB meets with chairs of those national accounting standards-setting bodies that have a formal liaison relationship with IASB - Australia/New Zealand, Canada, France, Germany, Japan, UK, and US - to begin coordinating agendas and setting out convergence goals. IASB adopts its initial agenda of nine technical projects and agrees to have an advisory or monitoring role on 16 additional projects being worked on by partner national standard setters. Debate over IASB's stock options project reaches US Congress. Seven largest accounting firms strongly endorse IAS for Europe. New SEC Chief Accountant urges global convergence of accounting standards. Trustees appoint the members of the restructured Standing Interpretations Committee. IFAD publishes GAAP 2000 a comparison of IAS and GAAP in 53 countries as part of its effort to bring national GAAP up to an IAS benchmark. IASB holds Board meetings in London (6), Washington, and Paris.
77
2001(2)
Exposure Drafts Published: Preface to International Financial Reporting Standards Final Standards Published: New: IAS 41 (2001) Agriculture (approved by old IASC Board in December 2000). Final Interpretations Published: SIC 27 Evaluating the Substance of Transactions in the Legal Form of a Lease SIC 28 Business Combinations - 'Date of Exchange' and Fair Value of Equity Instruments SIC 29 Disclosure - Service Concession Arrangements SIC 30 Reporting Currency - Translation from Measurement Currency to Presentation Currency SIC 31 Revenue - Barter Transactions Involving Advertising Services SIC 33 Consolidation and Equity Method - Potential Voting Rights and Allocation of Ownership Interests
78
2002 (1)
Events IASB Chairman Sir David Tweedie and IASC Foundation Chairman Paul Volcker testify at US Senate hearing on Accounting and Investor Protection Issues Raised by Enron and Other Public Companies. IASB issues its first exposure draft and final Standard on an accounting issue (IAS 19, Employee Benefits: The Asset Ceiling). SIC renamed to International Financial Reporting Interpretations Committee, with a mandate not only to interpret existing IAS and IFRS but also to provide timely guidance on matters not addressed in an IAS or IFRS. Europe adopts regulation requiring all listed companies, including banks and insurance companies, to prepare their consolidated accounts in accordance with IAS starting 2005. IASB Board member Robert Herz is appointed chairman of the U.S. Financial Accounting Standards Board. IASB issues its first exposure draft of a Standard that will be in its new series of International Financial Reporting Standards: ED1 First-Time Application of International Financial Reporting Standards. US accounting reform legislation requires FASB to consider international convergence in adopting US GAAP. IASB Chairman Sir David Tweedie and IASC Foundation Chairman Paul Volcker both speak at the opening plenary session of the World Congress of Accountants in Hong Kong. FASB and IASB hold a joint meeting and issue a memorandum of understanding pledging convergence of their accounting standards and coordination of their work programmes. 79
2002 (2)
Exposure Drafts Published: Amendment to IAS 19, Employee Benefits: The Asset Ceiling Improvements to International Accounting Standards Amendments to IAS 32, Financial Instruments: Disclosure and Presentation, and IAS 39: Financial Instruments: Recognition and Measurement ED 1: First-Time Application of International Financial Reporting Standards ED 2: Share-Based Payment ED 3: Business Combinations Amendments to IAS 36 and IAS 38 Final Standards Published: Revisions: Preface to International Financial Reporting Standards (2002), replaced Preface to Statements of International Accounting Standards (1982). IAS 19 (Revised 2002) Employee Benefits. Final Interpretations Published: SIC 32 Intangible Assets - Website Costs
80
2003 (1)
Events IASB holds public roundtable discussions on financial instruments. Representatives of 108 organization participate. IASB adopts the first standard in its new series of International Financial Reporting Standards: IFRS 1, First-time Adoption of IFRS. IFRIC publishes its first draft Interpretation. Based on the recommendation of its Accounting Regulatory Committee, the European Commission endorses all existing IAS (except IAS 32 and 39) for use in Europe. Official translations are published. IFAC proposes that, to be a member of IFAC, an accountancy body must commit to use its best endeavors to persuade governments and standard setting bodies that published private sector financial statements should comply with IFRSs. IASC Foundation trustees begin a constitution review.
81
2003 (2)
Exposure Drafts Published: ED 4 Disposal of Non-current Assets and Presentation of Discontinued Operations ED 5 Insurance Contracts Fair Value Hedge Accounting for a Portfolio Hedge of Interest Rate Risk Final Standards Published: New: IFRS 1 (2003), First-time Adoption of International Financial Reporting Standards Revisions: IAS 1 Presentation of Financial Statements IAS 2 Inventories IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors IAS 10 Events after the Balance Sheet Date IAS 15 Information Reflecting the Effects of Changing Prices Withdrawn IAS 16 Property, Plant and Equipment IAS 17 Leases IAS 21 The Effects of Changes in Foreign Exchange Rates IAS 24 Related Party Disclosures IAS 27 Consolidated and Separate Financial Statements IAS 28 Investments in Associates IAS 31 Interests in Joint Ventures IAS 32 Financial Instruments: Presentation and Disclosure IAS 33 Earnings per Share IAS 39 Financial Instruments: Recognition and Measurement IAS 40 Investment Property
82
2004 (1)
Events IASB and various European groups engage in extensive discussions about IAS 32 and IAS 39. European Commission endorses all IASs and IFRSs for use in Europe except that two sections of IAS 39 are 'carved out' Australia, Hong Kong, New Zealand, and Philippines adopt improved IASs and IFRSs virtually word for word as national GAAP. IASB and Accounting Standards Board of Japan begin convergence project. IASB initiates an internal review of its deliberative processes. IASC Foundation trustees propose constitutional changes, including super-majority vote. First web casts of an IASB board meeting. First IFRIC interpretation is published. First IASB Discussion Paper is published: Preliminary Views on Accounting Standards for Small and Medium-sized Entities. Exposure Drafts Published: ED 6 Exploration for and Evaluation of Mineral Resources ED 7 Financial Instruments: Disclosures Amendments to IFRS 3 Business Combinations: Combinations by Contract Alone or Involving Mutual Entities Amendments to IAS 19 Employee Benefits: Actuarial Gains and Losses, Group Plans and Disclosures Amendments to IAS 39 Financial Instruments: Recognition and Measurement - The Fair Value Option Amendments to IAS 39 Financial Instruments: Recognition and Measurement - Financial Guarantee Contracts and Credit Insurance Amendments to IAS 39 Financial Instruments: Recognition and Measurement - Cash Flow Hedge Accounting of Forecast Intragroup Transactions Amendments to IAS 39 Financial Instruments: Recognition and Measurement - Transition and Initial Recognition of Financial Assets and Financial Liabilities
83
2004 (2)
Final Standards Published: New: IFRS 2 IFRS 3 IFRS 4 IFRS 5 IFRS 6 Share-based Payment Business Combinations Insurance Contracts Non-current Assets Held for Sale and Discontinued Operations Exploration for and Evaluation of Mineral Assets Revisions:
IAS 19 Employee Benefits (Actuarial Gains and Losses, Group Plans and Disclosures) IAS 36 Impairment of Assets IAS 38 Intangible Assets IAS 39 Financial Instruments: Recognition and Measurement (Macro Hedging, Transition) Final Interpretations Published: New: IFRIC 1 Changes in Existing Decommissioning, Restoration and Similar Liabilities IFRIC 2 Members' Shares in Co-operative Entities and Similar Instruments IFRIC 3 Emission Rights IFRIC 4 Determining Whether an Arrangement Contains a Lease IFRIC 5 Rights to Interests Arising from Decommissioning, Restoration and Environmental Rehabilitation Funds Revisions: SIC 12 Consolidation Special Purpose Entities (Scope amendment) 84
2005 (1)
Events Meetings of IASB working groups opened to public observation. Constitutional changes adopted including expanding IASCF trustees from 19 to 22, raising IASB vote from simple majority to 9 out of 14, and independent chair of SAC. IASB Board member appointed as chair of IFRIC. SEC publishes 'roadmap' to eliminating reconciliation from IFRSs to US GAAP. First independent chairman of SAC appointed. New IASB publication series proposed, but abandoned after public comments: Technical Corrections. IASCF Trustees form Trustee Appointments Advisory Group. Exposure Drafts Published: Amendments to IFRS 1 First-time Adoption of International Financial Reporting Standards and IFRS 6 Exploration for and Evaluation of Mineral Resources. Amendments to IAS 19 Employee Benefits Amendments to IAS 27 Consolidated and Separate Financial Statements Amendments to IAS 37 Provisions, Contingent Liabilities and Contingent Assets Replacement of IFRS 3 Business Combinations
85
Accounting standard-setters should encourage their constituents to comment on IASB consultative documents direct to the IASB as well as to the national or regional standard-setter. Forms of communicating views other than comment letters are increasingly important in gathering views, including forums such as round-tables on specific issues. Accounting standard-setters should use these forums as a mechanism for encouraging their constituents to participate in the IASB s standard-setting process, particularly those constituents who might not otherwise make their views known. Where practicable, the IASB should make Board members and staff available to facilitate these forums.
86
Accounting standard-setters should be involved in roundtables and other forums organised by the IASB in their jurisdictions, and at the regional or global level where this is practicable and relevant. They can assist the IASB in identifying constituents who should be involved and issues of particular relevance to constituents. Without limiting the direct communication of ideas to the IASB, accounting standard-setters have an important role in communicating the views and ideas of their constituents to the IASB through the consultation process providing a focus for views. Other organisations, such as representative bodies, may also contribute to this.
87
Accounting standard-setters, not the IASB, should encourage national and regional regulators to participate in international convergence efforts in their own regulatory fields where this would help to facilitate financial reporting convergence. Accounting standard-setters around the world have an important role in communicating the work of the IASB to their constituents through educational and promotional activities, including publishing and/or distributing IASB consultative documents in their jurisdictions, and providing the IASB with feedback.
88
FSF-IASB-IFAC Roundtable on Financial Reporting and Auditing Regulatory and practical challenges in quality implementation of IFRS and IFAC standards Antoine Bracchi, Member of the Public Interest Oversight Board 16 February 2006, Paris
89
2005 (2)
Final Standards Published: New: IFRS 7 Financial Instruments: Disclosures Revisions: IAS 39 Financial Instruments: Recognition and Measurement Cash Flow Hedge Accounting of Forecast Intragroup Transactions IAS 39 Financial Instruments: Recognition and Measurement Fair Value Option Amendments to IFRS 1 First-time Adoption of International Financial Reporting Standards and IFRS 6 Exploration for and Evaluation of Mineral Resources Amendments to IAS 39 Financial Instruments: Recognition and Measurement and IFRS 4 Insurance Contracts with respect to financial guarantee contracts Amendments to IAS 1 Presentation of Financial Statements with respect to capital disclosures Amendment to IAS 21 The Effects of Changes in Foreign Exchange Rates with respect to net investment in a foreign operation Final Interpretations Published: New: IFRIC 6 Liabilities Arising from Participating in a Specific Market - Waste Electrical and Electronic Equipment IFRIC 7 Applying the Restatement Approach under IAS 29 Financial Reporting in Hyperinflationary Economies Revisions: IFRIC 3 Emission Rights Withdrawn 90
2006 (1)
Events Updated IASB-FASB agreement on convergence IASB statement on working relationships with other accounting standard setters Trustees publish Due Process Handbook for the IASB Trustees propose due process steps for IFRIC IOSCO database on enforcement of IFRSs by securities regulators IASB announces that no new major standards will be effective before 2009 Exposure Drafts Published: ED 8 Operating Segments Amendments to IAS 1 Presentation of Financial Statements: A Revised Presentation Amendment to IFRS 2 Share-based Payment: Vesting Conditions and Cancellations Amendment to IAS 23 Borrowing Costs Financial Instruments Put table at Fair Value and Obligations Arising on Liquidation
91
2006 (2)
Final Standards Published: New: IFRS 8 Operating Segments Revisions: Final Interpretations Published: New: IFRIC IFRIC IFRIC IFRIC IFRIC 8 Scope of IFRS 2 9 Reassessment of Embedded Derivatives 10 Interim Financial Reporting and Impairment 11 IFRS 2 Group and Treasury Share Transactions 12 Service Concession Arrangements
92
2007
Events Board proposes a separate IFRS for entities that are not in the public capital markets Trustees publish Due Process Handbook for the IFRIC Trustees propose to expand IFRIC to 14 members, from 12 Exposure Drafts Published: International Financial Reporting Standard for Small and Mediumsized Entities Amendments to IAS 24 Related Party Disclosures Amendments to IFRS 1 First-time Adoption of International Financial Reporting Standards Final Standards Published: New: Revisions: IAS 23 Borrowing Costs Final Interpretations Published: New: Revisions:
93
95
NASs Nos.
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27
Subject
Presentation of Financial Statements Cash Flow Statements Revenue Accounting for Contingencies Accounting for Events After the Balance Sheet Date Reporting Financial Performance Accounting for Research & Development Costs Accounting For Inventories Accounting for Long-term Contracts Accounting for Government Grants Accounting for Tangible Fixed Assets Related Party Disclosures Accounting for Borrowing Costs Presentation of Current Assets & Current Liabilities Accounting for Investments Foreign Currency Translation Accounting for Intangible Assets Consolidated Financial Statements and Accounting for Investments in Subsidiaries Business Combinations Accounting for Investments in Associates Accounting for Leases Interim Financial Reporting Accounting for Joint Ventures Financial Reporting by Development Stage Entities Segment Reporting Agriculture
IASs Nos.
1 7 18 10 10 8 38 2 11 20 16 24 23 1 32,39 21 38 27 22 28 17 34 31 N/A 14 41 26
Explanations
--Note A --------------Note B --------Note C Note D --Note E --Note F ------Note G Note H Note I ---
97
Explanations
Note A (NAS # 2 and IAS # 7) With the exception of the following requirements, application of NAS No. 2, results into compliance with IAS No. 7: Returns on Investments, and Servicing of Finance and Income Tax activities have been segregated from the other major classifications used in the cash flow statements. (b) Cash equivalents have been excluded from the definition of cash. Note B (NAS # 10 and IAS # 20) With the exception of the following requirements, application of NAS No. 10 results into compliance with IAS No. 20: (a) If an accounting treatment for government grants is specified in statutory regulations, the treatment should be followed by the entity. (b) When the evaluation bases of non-monetary assets received, are specified in the statutory regulations, the application of these bases is acceptable provided that it does not result in reflecting the granted assets in more than the fair value at the time of transfer.
98
Note C (NAS # 15 and IAS # 32 & 39) With the exception of the following requirement application of NAS No. 15 results into compliance with IAS No. 32, 39: The most current financial instruments in Iran are shares and the instruments like options, futures and forward hardly exist in Iran. Accounting Standard 15, Accounting for Investments, permits using either the fair value or cost for measuring current and long-term investments. Note D (NAS # 16 and IAS # 21) With the exception of the following requirements, application of NAS No. 16 results into compliance with IAS No. 21: (a) Exchange differences arising on foreign currency assets and liabilities of government entities should be, according to substances of the Article 136 of the General Inspection Act approved in Sharivar 1366 (August 1987), included in the account of translation reserve of foreign currency assets and liabilities and classified as equity. If at the end of the financial period, the reserve account balance is debit, the amount will be included in loss and gain of the period. Also, net exchange differences which, in the order mentioned above, result in a change in exchange reserve during the period, should be included in comprehensive income statement of the period. (b) Exchange differences arising on a monetary item that, in substance, forms part of an entity s net investment in a foreign entity should be classified as equity in the entity s balance sheet and be presented in comprehensive income statement until the disposal of the net investment. The differences, at the time of investment disposal, should be taken into account of accumulated loss and gain. (c) Exchange differences arising on a foreign currency liability accounted for as hedge of an entity s net investment in a foreign entity should be classified as equity in the entity s balance sheet and be included in comprehensive income statement until the disposal of net investment. The differences, at the time of net investment disposal should be taken into account of accumulated loss and gain. (d) On the disposal of a foreign entity, the cumulative amount of the exchange differences on foreign currency items which relate to that foreign entity and which have been recognized as equity, should be taken in to account of accumulated loss and gain on disposal. Note E (NAS # 18 and IAS # 27) With the exception of the requirements relating to the proper accounting treatment of the debit balance of the minority interests account, application of NAS No. 18 results into compliance with IAS No. 27: Profits or losses arising in a subsidiary should be apportioned between controlling and minority interests in proportion to their respective interests held over the period. When losses attributable to the minority interest result in debit balance, the controlling interest should be adjusted to the extent that it has any commercial or legal obligations to provide finance that may not be recoverable in respect of the accumulated losses attributable to the minority interest.
99
Note F (NAS # 20 and IAS # 28) With the exception of the following requirements, application of NAS No. 20 results into compliance with IAS No. 28: (a) An investment in an associate that is included in the separate financial statements of an investor that issues consolidated financial statements should be carried at cost after deduction of perpetual impairment provision or revaluation amount as an allowed alternative treatment, conforming to the investor s accounting policies on long-term investments, according to NAS No.15, Accounting for Investments. (b) When the investor does not issue consolidated financial statements, the amounts related to the associate should be presented under equity method as following: (a) preparation and presentation of total financial statements, or (b) disclosure of supplementary information in explanatory notes of the investor s financial statements. Note G (NAS # 24) There currently exists no specific International Accounting Standard relating to this subject. Note H (NAS # 25 and IAS # 14) With the exception of the following requirements, application of NAS No. 25, results into compliance with IAS No. 14: (a) According to IAS No. 14, the dominant source and nature of an entity s risks and returns should govern whether its primary reporting format will be business segments or geographical segments. Detailed information is normally presented in the primary format and the secondary format contains condensed information. NAS No.25 has excluded the application of the primary and secondary format in order to narrow the extent of personal judgments and unnecessary technical complexity. (b) According to IAS No. 14, segment revenue should include an entity s share of profits and losses of associates, joint ventures, or other investments accounted for under the equity method. Such requirements do not exist in NAS No. 25. 100
Note I (NAS # 26 and IAS # 41) With the exception of the following requirements, application of NAS No. 26 results into compliance with IAS No. 41, Agriculture: (a) According to IAS No. 41, Agriculture, all biological assets should be measured at fair value less costs estimated on disposal, unless the fair value is not reliably determinable. However, according to this standard, with a reference to environmental conditions of the country and lack of an active market for biological productive assets, these assets should be measured at cost, according to NAS No. 11, Accounting for Tangible Fixed Assets. (b) According to IAS No. 41, Agriculture, a government grant related to biological productive assets recognized at fair value less costs estimated on disposal, is recognized as income (if not conditioned) when it is collectible and (if conditioned) when the conditions are satisfied. However, according to this standard, all government grants related to biological productive assets are recognized according to NAS No. 10, Government Grants.
101
104
105
IT Trends with Accounting Implications New Technologies * Information capture technology. * Access and monitoring technology. * Storage. * Telecommunications and inter-networking. * Pervasive computing. * XML standards. * Cryptography. * Automatic confirmation. * Automatic work papers. * System monitoring architectures. * Automatic inventory tracking. Measurement and Continuous Reporting Management Accounting: Core or Context? Updating the Reporting Function From Auditing to Continuous Assurance
106
What Will the Next 15 Years Bring? The single greatest change agent facing accounting in the next 15 years is technology. Emerging trends in technology will fundamentally alter the way in which both business and accounting will be conducted. The measurement and reporting of business transactions, long considered a core competency of accountants, will be challenged by the information economy, forcing accountants to justify their role in business. The foundations of the profession will be eroded by the opposing demands of emerging services and established values.
107
Standard Number
5-50 10 20 21 22 23 24 25 30 31 32 40 50 51 52 53 54 55 56 57 58 60 61 62 70 71 72 80 91 92 93 105 107 340
108
the prospects for accountants have never looked better: There is a growing demand for the provision and analysis of information in the new economy. But the value chain that accountants used to dominate, that between the firm and the long-term shareholder, is now on the margins of a wider environment marked by day traders, continuous media coverage, and rapid equity shifts. Accountants have yet to come up with a strategy, much less products, for how they will take a larger share of this marketplace. While continuous reporting and assurance are promising, there is no guarantee that the market will grant accountants a monopoly on these products; their legally protected role as auditors might actually be an artificial barrier to tackling competitive threats head on. It makes little difference to the emerging global economy whether its information processing needs are carried out by professionals called "accountants" or someone else. But that choice will clearly determine the future of the profession.
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Sources: Accounting in 2015 CPA Journal By Michael Alles, Alexander Kogan, and Miklos A. Vasarhelyi In Brief
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