® International Accounting Standards Board Special Libraries Association – Toronto, June 2005 Update on International Accounting Standards Ian P.N. Hague Principal, Accounting Standards AcSB Canada June 2005

® Special Libraries Association – Toronto, June 2005 History 1973International Accounting Standards Committee (IASC) founded by 10 national accountancy organisations. 1981All members of IFAC became members of IASC countries. Structure reviewed. 2001International Accounting Standards Board (IASB) began operations. 2005Europe, Australia, 90+ countries adopting IFRS

® Special Libraries Association – Toronto, June 2005 Board (14) (approves IAS [IFRS], ED, SIC [IFRIC]) 7 Liaison Members Intnl. Financial Reporting Interpretations Committee (12+1) (publishes draft Interpretations and prepares draft of final Interpretations) Standards Advisory Council (SAC) (advises Board) Trustees (19) (appoint Board, IFRIC and SAC) (6 North America, 6 Europe, 4 Asia/Pacific, 3 Other) National standard setters (Australia/NZ, Canada, France, Germany, Japan, UK, US.) IASB Structure Structure

® Special Libraries Association – Toronto, June 2005 IASC Foundation 19 trustees:  6 from North America  6 from Europe  4 from Asia Pacific  3 from any area Appoint IASB members, SAC and IFRIC Monitor IASB’s effectiveness, raise funds, approve budget, responsible for constitution

® Special Libraries Association – Toronto, June 2005 Standards Advisory Council (SAC) About 50 members from throughout the world Meets three times each year Provides advice to IASB on priorities Informs IASB of implications of proposed standards

® Special Libraries Association – Toronto, June 2005 IASB Has the sole responsibility for setting standards. Approves principles-based standards, – does not issue detailed application guidelines. Addresses business ventures – not public sector, government or not-for- profit activities.

® Special Libraries Association – Toronto, June 2005 IASB Composition Australia / NZ*1Auditor5 Canada*1Preparer3 France*1Analyst/User2 Germany*1Academic2 Japan*1Other2 South Africa114 Sweden1* National standard- setter liaison United Kingdom*3 United States*4 14

® Special Libraries Association – Toronto, June 2005 International Financial Reporting Interpretations Committee (IFRIC) 12 voting members and a non-voting chairman Provide guidance on reporting issues not specifically addressed in IASB’s standards, or where unsatisfactory or conflicting interpretations have developed.

® Special Libraries Association – Toronto, June 2005 IASB … is committed to developing, in the public interest, a single set of high quality, global accounting standards that require transparent and comparable information in financial statements …

® Special Libraries Association – Toronto, June 2005 Convergence – Benefits (SEC 2003) Inter-firm comparability = lower cost to investors Lower listing costs with multiple listings Greater competition amongst exchanges More efficient resource allocation Lower cost of capital Higher global economic growth rate

® Special Libraries Association – Toronto, June 2005 IASB Has an agreement with FASB to achieve convergence of standards. Works in close co-operation with other national standard setters. Board members have liaison responsibilities with a large number of countries and international organisations.

® Special Libraries Association – Toronto, June 2005 IFRS – How does it affect me? EU Adoption (+ Australia/New Zealand)  Consequences for parent/subsidiary accounting  Consequences for comparability  Consequences for raising capital in EU IFRS/US Convergence  Consequences for future global standards

® Special Libraries Association – Toronto, June 2005 Roadmap to convergence: April 2005 Highlights the steps needed to eliminate the U.S. GAAP reconciliation requirement for foreign private issuers that use IFRS. Establishes a goal of eliminating the requirement as early as possible between now and 2009 at the latest. Donaldson (SEC) and McCreevy (EU)

® Special Libraries Association – Toronto, June 2005 Process Comment period for each document Decisions made in open, public meetings Explain basis for conclusions in each standard Voting – approval by 8 of 14 members Dissenting views published

® Special Libraries Association – Toronto, June 2005 Process Research Discussion Paper Exposure Draft Standard Implementation

® Special Libraries Association – Toronto, June 2005 Tracking the process Website

® Special Libraries Association – Toronto, June 2005

® Tracking the process Website Meetings:  Observer notes  Web cast of IASB meeting  Decision summaries / Update

® Special Libraries Association – Toronto, June 2005

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® Publications and Education Standards, exposure drafts, etc. Educational materials are being prepared Available from the IASCF Shop on the website

® Special Libraries Association – Toronto, June 2005 Publications and Education Comprehensive subscription package Standards, EDs, Newsletters, etc. Education materials Practical, implementation oriented Seminars High level

® Special Libraries Association – Toronto, June 2005 Publications (1) A Briefing for Chief Executives, Audit Committees and Boards of Directors  Overview of each standard in non-technical language

® Special Libraries Association – Toronto, June 2005 Publications (2) Framework DVD/CD-Rom  High-level comparison of IASB Framework and FASB Framework (US)

® Special Libraries Association – Toronto, June 2005 In development (1) Electronic—Illustrated IFRSs  A high-level summary of IFRS x  The conceptual context of IFRS x  Link IFRS x to the Framework and IFRSs  explanatory text  ‘how to’ examples (recognition and measurement)  Pictorial presentations (presentation and disclosure) Market—Preparers, users and business schools

® Special Libraries Association – Toronto, June 2005 In development (2) Financial Instruments Volume  Electronic version—multi-language  Hardcopy—Languages for which a demand is indicated Market—Executives, preparers, users and business schools

® International Accounting Standards Board Special Libraries Association – Toronto, June 2005 Questions? Comments? Further information