International Accounting Standards Board The Future of International
® International Accounting Standards Board The Future of International Financial Reporting Sir David Tweedie IASB Chairman
Need for Convergence n n Attracting investment through transparency Reducing the cost of capital Increasing world-wide investment Reducing costs ®
IASC Developments n Improvements Project ®
IASC Developments n n Improvements Project IOSCO Agreement ®
IASC Developments n n n Improvements Project IOSCO Agreement The Restructuring ®
IASB Structure ® 19 Trustees Standards Advisory Council IASB National Standard Setters IFRIC
IASC Developments n n Improvements Project IOSCO Agreement The Restructuring EU 2005 ®
IFRS Around the World Countries in 2005 IFRSs permitted Change in 2006 23 0 IFRSs required 65 Total in 2006 23 +1 66 0 6 (for all domestic companies) IFRS required 6 (for some domestic companies) 94 +1 95 ®
Role of National Standard Setter n n Deal with national issues Align agenda Influence IASB debate Lead on certain issues ®
The Agenda n n Improvements IFRS I ®
Grandfather Standards n n Insurance Extractive Industries ®
Share Based Payments n n n Company not party to transaction Employees do not provide services No cost to company EPS hit twice Adverse economic consequences ®
FASB/IASB Agreement n n n Remove differences Align Agendas Interpretation ®
Convergence Short-term Differences IASB – - Business combinations (goodwill/brands, acquisitions, IPR&D) - Asset Disposals and Discontinued Operations (IFRS 5) - Provisions (soon) ®
Convergence FASB - EPS - Voluntary changes in accounting policy - Exchanges of non-monetary assets - Inventory spoilage and idle capacity - Share options ®
Conceptual Framework Issues ® n n n The objectives of financial reporting Qualitative characteristics Definitions of assets and liabilities Recognition Measurement Presentation
® DR = CR
® Dr = Asset or Expense
® Dr = Asset or Expense or Whatsit
Reconciliation Plan – Short Term IASB Joint - Borrowing costs Government grants Joint ventures Segments Impairment Income Taxes ®
Reconciliation Plan – Short Term FASB Joint - Fair value option Investment properties R&D Subsequent events Impairment Income taxes ®
Reconciliation – Major Projects n n n Business combinations Consolidations/SPV Financial Instruments Derecognition Fair value measurement Revenue Recognition ®
Reconciliation – Major Projects (cont) n n n Liability and Equity Leases Intangibles Performance Reporting Pensions ®
Performance Reporting § § Statements Comprehensive income/Cash flows Recycling Remeasurement MD&A ®
Pensions £m Deficit 10 Less 10% of liabilities 4 6 Spread over 10 year working life Deficit per accounts - £ 600, 000 ®
Problems for IASB n Principles v rules ®
Problems for IASB n n Principles v rules Acceptance of Standards Ø EU Ø SEC ®
Problems for IASB n n Principles v rules Acceptance of Standards Ø EU Ø SEC n Enforcement ®
Other Projects n n n Insurance Financial Risk Disclosure (IASB) SMEs (IASB) ®
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