1. International Accounting Standards Board Update
Mary E. Barth
IAAER Bordeaux
September, 2005
The views expressed in this presentation are those of the speaker. Official positions of the IASB on accounting matters are determined only after extensive due process and deliberation.

2. IASB
… is committed to develop, in the public interest, a single set of high quality, global accounting standards…
…to help users to make economic decisions.

3. Our priorities are Promoting adoption of IFRSs Convergence
Improving standards, filling gaps

4. Projects on the agenda Business Combinations II Revenue Recognition
Gilbert:
Business Combinations II
Katherine
Revenue Recognition
Performance Reporting
Me:
Short-term Convergence
Conceptual Framework

5. Projects on the agenda Consolidations SMEs Fair Value Measurement
Gilbert:
Consolidations
SMEs
Katherine
Fair Value Measurement
Liabilities and Equity
Me:
Insurance Contracts
Emission Rights

6. Short-term Convergence with FASB
Income Taxes
Several detailed changes to eliminate as many differences as possible
Definition of tax base, temporary difference, substantially enacted, undistributed rate for subsidiaries, balance sheet classification, recognition of deferred tax assets, …
Uncertain tax positions – new to both IAS 12 and SFAS 109
Conform
Definition of tax base and temporary difference
Eliminate several US/IAS differences relating to exceptions
Clarify substantially enacted
Conform recognition of deferred tax assets and impairment

7. Short-term Convergence with FASB
Government Grants
IAS 20 is outdated, need new model
Related to revenue recognition project
Use IAS 41 model in IAS 20?
Conditional versus unconditional grants
What about related assets?
Related to Emissions Trading

8. Short-term Convergence with FASB
Segments
Will propose to adopt SFAS 131
Segments and segment results based on how entity reports to management
Research and discussions with analysts support SFAS 131 approach
Also permits more timely information
IAS 37
Not quite converged, but closer
Comments due 28 October

9. Short-term Convergence with FASB
Nonfinancial liabilities ED
Formerly provisions
Related to business combinations
Focus on converging restructuring liabilities
Clarifies contingent and stand ready
IAS 37
Not quite converged, but closer
Comments due 28 October

10. Conceptual Framework Phased approach
Based on and builds on existing frameworks
Converge, complete, and improve
Standards projects will inform CF project and vice versa
Will issue documents as phases complete and revisit all when complete
The main technical issues are:
How to measure uncertain long-term liabiities
When to recognise related revenue
How policyholder options to cancel an insurance contract affects measurement by the insurer.
The project will mainly affect insurers, but some aspects may affect other entities:
Some long-term service contracts meet our definition of an insurance contract, but issuers of these contracts do not view them as insurance contracts.
The project will address accounting by policyholders, not just by insurers.
Entities with long-term service commitments
Policyholder accounting
DP -05/06, ED -07, STD -08
Mandatory -10?

11. Conceptual Framework Objective Qualitative characteristics
Provide information to a wide range of external decision-makers in making economic decisions about the entity
Qualitative characteristics
Relevance, representational faithfulness
Iterative process, not hierarchical
The main technical issues are:
How to measure uncertain long-term liabiities
When to recognise related revenue
How policyholder options to cancel an insurance contract affects measurement by the insurer.
The project will mainly affect insurers, but some aspects may affect other entities:
Some long-term service contracts meet our definition of an insurance contract, but issuers of these contracts do not view them as insurance contracts.
The project will address accounting by policyholders, not just by insurers.
Entities with long-term service commitments
Policyholder accounting
DP -05/06, ED -07, STD -08
Mandatory -10?

12. Insurance Contracts Measuring uncertain long-term liabilities
Revenue recognition
Liabilities and equity
Not just for insurers?
The main technical issues are:
How to measure uncertain long-term liabiities
When to recognise related revenue
How policyholder options to cancel an insurance contract affects measurement by the insurer.
The project will mainly affect insurers, but some aspects may affect other entities:
Some long-term service contracts meet our definition of an insurance contract, but issuers of these contracts do not view them as insurance contracts.
The project will address accounting by policyholders, not just by insurers.
Entities with long-term service commitments
Policyholder accounting
DP -05/06, ED -07, STD -08
Mandatory -10?

13. Financial Instruments Disclosures
New disclosures for credit risk, liquidity risk, market risk
Quantitative and qualitative
Includes IAS 32 disclosures
Applies to all entities
IFRS 7 released in August, effective 1 January 2007
IFRS 7
FIWG

14. Research agenda – what the future holds
Measurement objectives
Extractive industries
Financial Instruments
Leases
Investment entities
Joint Ventures
Hyperinflation
Management commentary
Intangible assets
Measurement objectives (Canada) – coming soon
Concessions (?)
Extractive industries (Australia plus others?)
Hyperinflation (Mexico, Argentina)
Intangible assets (Australia or NZ?)
Investment entities (EFRAG)
Joint Ventures (Australia)
Leases (UK)
Management commentary (NZ)

15. SEC Roadmap
Convergence with US has been a priority since inception of the IASB
Goal to eliminate differences
Takes a long time
SEC has laid out a roadmap to accept IFRS reporting by 2007 to 2009

16. SEC Roadmap 2005-2007 2007-2009 Application of IFRS
Investors gain knowledge
All share implementation experiences
Status of IFRS/GAAP convergence
SEC review additional filings
Evaluate significance of differences
Recommend elimination of reconciliation
Before entering into the future, want to get your views on the past

17. Shorter-term projects
FASB
Fair value option
Investment properties
Research and development
Income taxes
Impairment
IASB
Borrowing costs
Government grants
Joint ventures
Segment reporting
Income taxes
Impairment

18. Longer-term projects Current Projects SEC/CESR interest
Business combinations
Fair value measurement
Performance reporting
Derecognition
Financial instruments
Liabilities and equity
Revenue recognition
SEC/CESR interest
Consolidations
Pensions
Leases
Intangible assets

19. The world is getting smaller

20. Don’t understand Europe Threatening stability of …
The Critics
US dominated
Fair value fixated
Don’t understand Europe
Not listening
Threatening stability of …
Too theoretical

21. The Vision quality global standards.. ..used on the global
…one single set of high
quality global standards..
..used on the global
capital markets.

22. Thank you