IFRS News Clips
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.