® international accounting standards committee foundation december 2005 1 1world bank—advanced...

December 2005 1 1World Bank—Advanced Program in Accounting and Auditing Regulation

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International Accounting Standards Committee Foundation

IFRSs—an overviewIFRSs—an overview

Tricia O’Malley Tricia O’Malley

IASBIASB Board MemberBoard Member

6 December 2005

* The views expressed are those of the speaker, not the IASB

December 2005 World Bank—Advanced Program in Accounting and Auditing Regulation2

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Advisory Groups

Standards Advisory Council

IASC Foundation

StructureStructure

International Accounting

Standards Board

Staff

IFRIC (Interpretations)

The standard setting operation


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IASC FoundationIASC Foundation—Oversight—Oversight

22 trustees: 6 from North America 6 from Europe 6 from Asia/Oceania 4 Any area

Appoint members of IASB, SAC and IFRIC Monitor IASB’s performance, raise funds,

approve budget, responsible for constitution


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Standards Advisory Standards Advisory Council (SAC)Council (SAC)

41 members—worldwide Meets 3 times a year Advises IASB on strategy/priorities Informs IASB of implications of major

projects


®BoardBoard

12 full-time and 2 part-time members Sole responsibility for setting agenda

and standards Presently from 9 countries and 5

continents


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International Financial Reporting International Financial Reporting Interpretations Committee (IFRIC)Interpretations Committee (IFRIC)

Chaired by Board member (non-voting)

12 volunteer voting members Interpretation and clarification of

principles


®StaffStaff

The Board’s work is supported by: 25 technical staff 25 support and publications staff

- from 12 countries


®IASB objectiveIASB objective

To develop a single set of high quality, understandable and enforceable global accounting standards that require high quality, transparent and comparable information

To co-operate with national accounting standard setters to achieve convergence

But, why?


®Outcomes soughtOutcomes sought

Improved economic decision makingBetter pricing of capitalMore efficient allocation of resources

Increased world-wide investment Reduced preparation costs Enhanced regulatory interface


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IASB’s a standard-setter IASB’s a standard-setter not a regulatornot a regulator

Standard setters Determines

appropriate financial reporting

Regulators Specify which

regulations should be followed

Responsible for enforcement


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Principle 1:Principle 1:Independent standard settingIndependent standard setting

Independent board members All board meetings in public Thorough due process Private funding No political influence


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Principle 2: Principle 2: Principle based standardsPrinciple based standards

PrinciplesPrinciples RulesRules


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Principle 3:Principle 3:Thorough due processThorough due process

Research

National

Standard

Setter

Discussion

Paper

Exposure

DraftStandard

Others

Comment

analysis

9-15 months 9-15 months

Comment

analysisEffective

Date

6-18 months


®Tracking the processTracking the process

Websitewww.iasb.org

Meetings:Observer notes Web cast of IASB meetingDecision summaries / Update

Newsletter - Insight (quarterly)


®IASBIASB priorities priorities

Promoting adoption of IFRSs Convergence Improving standards, filling gaps


®IASB prioritises by…IASB prioritises by…

Relevance &reliabilityConvergence

Quality

Resourceconstraints

Existing guidance


®What is convergence?What is convergence?

Old approach was ‘harmonisation’ Convergence differs:

Topic is addressed at the same time using the same due process

Objective is to reach one common high quality answer


®Convergence processConvergence process

National standard-setters work with the IASBMulti-board teams developing projectsConverge standards to best international

practice


®Convergence with FASBConvergence with FASB

The work is focused upon: Short to medium term projects with

quick implementation Projects with a medium or long term

view and requiring substantial work SEC accept IFRS reporting without

reconciliation 2007/09


®SEC roadmapSEC roadmap

2005-2007 Application of IFRS Investors gain

knowledge All share implementation

experiences

2007-2009 Status of IFRS/GAAP

convergence SEC review additional

filings Evaluate significance of

differences Recommend elimination

of reconciliation


®Active agenda projectsActive agenda projects

Convergence FV Measurement Puttable Instruments Amendments to IFRS 2 Conceptual Framework Revenue Recognition Financial Instruments

Business Combinations II

Performance Reporting (A/B)

Emission Rights Consolidation Insurance SMEs


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Research Research agendaagenda – What the future holds– What the future holds

Measurement objectives

Extractive industries

Financial instruments

Hyperinflation Intangible assets

Management commentary

Investment entities

Liabilities and equity

Leases Joint ventures

December 2005 23

23World Bank—Advanced Program in Accounting and Auditing Regulation

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International Accounting Standards Committee Foundation

Questions?Questions?

® international accounting standards committee foundation december 2005 1 1world bank—advanced...

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