The International Public Sector Accounting Standards Board (IPSASB) has released for comment a consultation paper as part of its project to develop a conceptual framework for the general purpose financial reporting of public sector entities. The Conceptual Framework is the IPSASB's key strategic objective from 2010 through 2012, and is of fundamental importance to the future of global public sector standard setting for at least the next 10 to 15 years.

My previous blog on the future of UK GAAP dealt with the overall framework and which entities might be affected by the ASB's latest proposals; this time I would like to highlight the accounting changes that current users of UK GAAP might experience if the new proposals are ratified.

The International Accounting Standards Board is seeking broad public input on the strategic direction and overall balance of its future work programme between the development of financial reporting and the maintenance of current IFRSs.  The IASB have identified five broad strategic areas in each of the two main categories of its future work.

Developing financial reporting

EU regulations for prospectuses when securities are offered to the public or admitted to trading require that financial information should be provided for at least the last two financial years, In the case of demergers or similar kinds of transactions, however, the normal consolidated financial statements do not necessarily show the historical track record of the economic entities being spun-off.

I have a possible requirement to provide a 2-3 day training course on IFRS for a bank in Africa.  They are adopting IFRS and need training for the team on the principles.  I am trying to get more detail on this but if you have delivered something similar in the past and are interested please mail me direct with details of experience, proposed content and likely cost.

Thanks

One of the topics covered in the latest report from the IFAC Business Reporting project (see my earlier blog) is the issue of accountants exercising professional judgement and this is a theme that I think is particularly challenging for the accounting community going forward.

Come 2011 Sri Lanka will be keeping an important step in the field of financial accounting, as it will report the first comparative financial statements based on the international accounting standards. Simple as it may sound, it is not such an easy task!

Our company specialises in blood sampling and we use high quality machinery to determine patients' blood types and levels. Hospitals and universities will pay in advance 3, 6, 9 and 12 month contracts. In return they receive free products for the machinery used. We have service engineers who will regularly service the equipment.

Does anyone know of any IFRS standards or implications of managed service contracts discussed above?

The IASB have issued an exposure draft which proposes requirements for hedge accounting that should enable companies to reflect their risk management activities better in their financial statements, and, in turn, help investors to understand the effect of those activities on future cash flows. 

HM Treasury has launched a consultation on the future role, structure and operational arrangements of the Financial Reporting Advisory Board (FRAB).  The consultation sets out a number of preliminary views related to the future role, structure and operational arrangements of the FRAB, and seeks comments.

This amendment proposes guidance on how an entity should resume presenting financial statements in accordance with International Financial Reporting Standards (IFRSs) after a period when the entity was unable to comply with IFRSs because its functional currency was subject to severe hyperinflation. 

This exposure draft proposes to amend IFRS 1 First-time Adoption of International Financial Reporting Standards to address potential challenges for jurisdictions adopting IFRSs in the near future.  The original standard was primarily aimed at European adoption of IFRS in 2005. The proposal would amend IFRS 1 by replacing references to a fixed transition date of ‘1 January 2004' with ‘the date of transition to IFRSs'.

The IASB has published joint proposals with the FASB for a standard on revenue recognition.  The core principle of the draft standard is that an entity should recognise revenue from contracts with customers when it transfers goods or services in the amount of consideration the entity receives, or expects to receive, from the customer.

To apply this principle an entity would:

Enron brought us Sarbanes Oxley (and a stage show), Maxwell brought us the Cadbury Report, so what will the BP crisis bring us?

A downgrading of an entity's own credit standing will lead to a reduction in the fair value of any debt that it has issued.  If that debt is accounted for under the fair value option then this creates a gain in the books of the entity as the value of its liabilities reduces.  This counter-intuitive result has perplexed many for some time. 

- liabilities arising from legal disputes

- statutory asset decommissioning obligations

- other environmental obligations

XBRL implementation is gathering pace (see my blog XBRL - more than just a regulatory tool ? ) and alongside I am starting to hear concerns with the way things are progressing.  There are worries about the impact of XBRL on internal management accounting and also concerns linked with the proposed switch to IFRS for SMEs in the UK.  On a positive note, the European Federation of Accountants (FEE) has produced a useful project update on XBRL which is well worth a read.

As part of the ongoing review of its Accounting Directives the European Commission has instigated a consultation seeking views from stakeholders on the IASB’s IFRS for SMEs.  Comments are requested by 12 March 2010.

We seem to be in the middle of a concerted European attack on the IASB which may lead to the demise of international standards.  What is the background to this and is it justified?