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.
