Accounting Standards

1
Accounting Standards Standard Setting An
international overviewIan MackintoshChairman,
ASB5 October 2007Montrealwww.frc.org.uk/asb
2
Agenda

• The IASB program
• IASB convergence - US
• - Other countries
• Conceptual Framework
• The role of the national standard setters
• The IASB SME project

3
The IASB Program

• Convergence projects
• Other projects
• Research projects

4
The Present
5
The Vision

• one single set of
• high quality global standards
• used on the global
• capital markets

6
The Role-Players

• Standard-setters
• Regulators
• Auditors
• Preparers
• Users

7
IASB Convergence Projects

• Government grants (deferred)
• Joint ventures
• Impairment
• Income tax
• Investment properties
• RD
• Subsequent events
• Business combinations
• Consolidations
• Fair value measurement guidance
• Revenue recognition
• Post retirement benefits
• Leases
• Borrowing costs
• Segment reporting

8
IASB Other Projects

• SMEs
• Insurance contracts
• Liabilities (IAS 37)
• Emission trading schemes

9
IASB Research Projects

• Derecognition
• Financial instruments
• Intangible assets
• Liabilities equity
• Management commentary
• Extractive activities

10
IASB Converge Why Converge?

• Comparability
• Reduced compliance costs
• Abolition of reconciliation
• Different standards do not make sense
• Contrary views

11
IASB/FASB Convergence

• Significant resources from both bodies
• Influence of US style and level of detail
• Not always complete agreement
• Constituency must influence both sides
• Future of FASB after convergence

12
IASB Convergence Other Countries

• Europe
• Japan
• China
• India
• Africa
• South America
• Canada

13
Conceptual Framework

• Fundamental importance
• Fresh work is overdue
• Frameworks are incomplete
• Measurement
• Presentation

14
Conceptual Framework Two Camps
15
Conceptual Framework

• This is a summary and a caricature
• No-one knows all the right answers
• Debate tends to be polarised history counts for
  a lot

16
Conceptual Framework Particular Matters

• Objectives
• Users
• Qualitative Characteristics
• Due Process
• User Needs in Different Types of Entities
• Size
• Sector

17
The Role of National Standard Setters

• Communications
• With constituents
• With IASB and FASB
• With other standard setters
• Within regions
• Interpretations
• Thought leadership
• Domestic issues (including smaller companies,
  public benefit sector and subsidiaries)

18
The Role of Standard Setters

• Regional groupings (geographic and political)
• NSS
• WSS
• IPSASB

19
IFRS Smaller Companies

• IFRS focus needs of investors in large, listed
  companies especially international companies
• Costs of preparation may be too great for smaller
  companies
• User needs may be different
• IASB SME ED being considered
• May have an effect on national convergence
• Invitation to comment issued

20
Accounting Standards Standard Setting An
international overviewIan MackintoshChairman,
ASB5 October 2007Montrealwww.frc.org.uk/asb