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International Accounting Standards Board. A set of slides to support our outreach activities 2006/7. Outline. The Vision Improved independence Convergence Stability Due Process and Responsiveness Principles versus Rules Measurement Our agenda. The Vision. … one single set of high - PowerPoint PPT Presentation
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®
International Accounting Standards
Board
International International Accounting Standards Accounting Standards BoardBoard
A set of slides to support our outreach activities 2006/7
®Outline Outline
The Vision Improved independence Convergence Stability Due Process and Responsiveness Principles versus Rules Measurement Our agenda
®The VisionThe Vision
…one single set of high
quality global standards..
..used on the global
capital markets.
®The CriticsThe Critics
Threatening stability of …
Fair value fixated
Too theoretical
Don’t understand our region’s situation …
US dominated
Not listening
®
News 2005 / 2006News 2005 / 2006
Formation of a Trustee Advisory Group New and more Trustees Revised constitution Due process Handbooks Changes within the Board New and more staff on board
®Independent standard settingIndependent standard setting
Independent board members All board meetings in public Internet simulcast Thorough due process Improved oversight Private funding
®IASB’s structureIASB’s structure
22 Trustees
StandardsAdvisoryCouncil
IASB14 board members35 technical staff
IFRIC
National Standard Setters
®
IASB 2001 – 2006IASB 2001 – 2006- five years of progress- five years of progress
IFRS established as the role model for financial reporting for listed companies
A substantial up-grade of standards completed 2004 : the Stable Platform
Global convergence is now in true progress Workplan agreed US and Europe Japan and China moving towards IFRS
®Convergence !Convergence !
Attracting investment by transparency Supports cross-border investments Reducing cost of capital Reducing operational expenses US, China, Japan, others
®
Stability Stability - - with responsivenesswith responsiveness
Only one major change a year No new major standard change
mandatory before 2009 After approval of standard:
12 months before mandatory
®Opinions encouragedOpinions encouraged
The IASB work program is public and open for discussion
Working groups and round tables are now common
Discussion papers more frequent Due process handbook published
®Thorough due processThorough due process
Issuance of new standards, changes of existing and interpretations done only after allowing for opinions from anyone interested
Comment periods enhanced
®Thorough due processThorough due process
Research
National
Standard
Setters
Discussion
Paper
Exposure
DraftStandard
Others
Comment
analysis
Comment
analysisEffective
Date
®Thorough due processThorough due process
Research
National
Standard
Setters
Discussion
Paper
Exposure
DraftStandard
Others
Comment
analysis
Comment
analysisEffective
Date
®
What do we look for in What do we look for in comment letters?comment letters?
InformationDid we miss something?
ArgumentDoes the proposal improve decision-
useful information? Is the benefit in proportion with the costs?
®The Due ProcessThe Due Process
“…they will have to learn to listen to my views…”
Does it mean to obey? - or to listen, consider, form an opinion and decide?
®Thorough due processThorough due process
Research
National
Standard
Setters
Discussion
Paper
Exposure
DraftStandard
Others
Comment
analysis
Comment
analysisEffective
Date
®Principle-based standardsPrinciple-based standards
PrinciplesPrinciples RulesRules
®Principle-based standardsPrinciple-based standards
Few, if any, scope exceptions Few, if any, special provisions Consistency across the set of
standards Explain reasoning for deviating from
principles
®Principle-based standardsPrinciple-based standards
Implications for preparersauditors regulators
®MeasurementMeasurement
Open roundtable discussions as part of the framework project to consider:
What are the available measurement attributes?
What information does each provide?How should the IASB think about the
choices?
®MeasurementMeasurement
Present Fair Value Measurement project – how, not when or whether
The Canadian FVM discussion paper – part of the Framework project
®Convergence with FASBConvergence with FASB
A MOU agreed between IASB and FASB publicly supported by USA and Europe Aiming to eliminate reconciliation
Short to medium term projects with quick implementation
Projects with a medium or long term view and requiring substantial work
®The Active AgendaThe Active Agenda
Conceptual framework
Revenue recognition Financial Statement
Presentation Business combinations Liabilities Insurance Fair value measurement Financial instruments
Leasing Pensions Consolidations Small and Medium
sized entities Emission rights trading Short term
convergence x 10
®The Research AgendaThe Research Agenda
Financial instruments Derecognition Liabilities and equity Extractive activities Intangible assets
®The Conceptual FrameworkThe Conceptual Framework
A guidance for the board when setting standards and support for preparers when lack of applicable standards
Present framework established 1989
A joint IASB – FASB long term project 8 phases Discussion paper published over the first phase Objectives and Qualitative Characteristics
®
Small and Medium sized EntitiesSmall and Medium sized Entities
Much asked for SMEs = 95% of all companies
Simplification of the big book Stand alone document Recognition and measurement simplifications
Designed with a company of 50 employees in mind Each jurisdiction decides who uses Not for listed companies or financial institutions
Exposure Draft to be published 2006 250 pages
®
Global convergenceGlobal convergence- a value creating activity- a value creating activity
High quality common standards:
Better understandingLower expenses
= Better investments
®
The World is getting smallerThe World is getting smaller
RED = IFRS Approved
ORANGE = Stated move to adoption
YELLOW = Adapting to IFRSs
IFRSs Around the World
®The VisionThe Vision
…one single set of high
quality global standards..
..used on the global
capital markets.
®
Get more information at:Get more information at:www.iasb.orgwww.iasb.org