The European Union adopts a provision requiring EU-listed companies, including banks and insurers, to prepare their financial statements, beginning in January 2005, in accordance with international accounting standards ( www.fee.be/european/eunews.htm ). European regulators believe the directive will increase the reliability, transparency and comparability of member states’ consolidated accounts, thus promoting cross-border capital investment.
The International Accounting Standards Board (IASB) exposes a draft proposal to revise 12 of its 34 active standards. The ED ( www.iasb.org.uk ) is part of an IASB project to improve the quality and consistency of financial reporting by, for example, drawing on best practices from around the world—an effort with added urgency in view of the European Union’s decision to have publicly listed companies use international standards starting in 2005. The ED proposes prohibiting the labeling of income or expense amounts as extraordinary items either in the income statement or in notes and eliminating certain reporting options, such as Lifo. Comments are due September 16.
The International Federation of Accountants releases Guiding Principles for International Education Statements ( www.ifac.org/News/index.tmpl ), which establishes a framework for the development of global standards governing precertification education and the continuing development of professional accountants. Comments are due September 30.
The IASB amends International Accounting Standard no. 19, Employee Benefits ( www.iasb.org.uk ), to correct certain conceptual and practical problems that led to the reporting of illogical financial results. For example, in some circumstances an actuarial loss in an entity’s pension plan could produce a reported gain in its financial statements and a gain in the fund could create a reported loss.