International Federation of Accountants (IFAC)/
International Accounting Standards Board (IASB) Updates

Financial Reporting Supply Chain Project
During 2007, IFAC initiated a Financial Reporting Supply Chain project. The focus of the project was to focus on exploring the current state of financial reporting globally, whether or not it has improved in recent years, and whether it is more relevant, reliable and understandable. During March 2008, IFAC issued a final Financial Reporting Supply Chain report which summarizes results from on-line surveys and interviews conducted in 2007 with high-level accounting professionals. A copy of the report can be found below under related documents.

Business Combinations Project
On January 10, 2008, the IASB issued two standards, IFRS # 3, “Business Combinations” (revised version) and IAS #27, “Consolidated and Separate Financial Statements” (amended version). The standards were issued as a result of the IASB’s involvement with a joint project with the Financial Accounting Standards Board (FASB) to address issues related to Business Combinations. Information about access to the standards can be found on the IASB’s website at www.iasb.org.

Strategic Finance Article featured as winning article in IFAC’s 2007 Articles of Merit Competition
An article that appeared in the April 2006 issue of Strategic Finance, “Finding the Right Mix” by Kip Krumwiede and Shannon Charles is featured as the winning article in the International Federation of Accountants ( IFAC’s ) 2007 edition of Articles of Merit. Click here to read more.

IFAC’s 2007 edition of Articles of Merit features award winning articles selected by IFAC’s Professional Accountants in Business Committee as part of its annual Articles of Merit award program. The 2007 publication includes articles on matching management practices to organizational strategy, board processes and the quality of decision making, key client account management, environmental management accounting and evaluating the return on information technology investments.

Three of 10 articles from editions of Strategic Finance were featured in the 2007 edition of Articles of Merit. In addition to the winning article, the other two articles featured were, “Six Levels of Financial Knowledge” by George Manners and “Second Wave Benefits of XBRL” by Brian McGuire, Scott Okesson and Liv Watson from the August and December 2006 editions of Strategic Finance.

The Articles of Merit booklet can be found on IFAC’s website at www.ifac.org/store/Professional Accountants in Business/Articles of Merit-2007 Competition. The articles featured in the booklet from Strategic Finance can be found on archived files under the publications section on IMA’s website.

Professional Accountants in Business Committee’s pronouncement on International Management Accounting Statements
During June 2007, IFAC’s Professional Accountants in Business (PAIB) Committee issued a preface to a proposed principles-based pronouncement, International Management Accounting Statements. The statement relates to core management accounting and financial management topics. The preface is the start of a significant work program based on developing principles-based pronouncements to promote consistent and good practice in decision making across the global community of professional accountants in business. Professional accountants in business could use the pronouncement to promote good practices in the organizations in which they work. The exposure draft is an opportunity to provide feedback on the intended approach. Comments from constituents about the preface are due on September 12, 2007. See a copy of the proposal below under IMA Comment Letters and Related Documents.

Proposed Standard for Small and Medium – Sized Entities
The International Accounting Standards Board (IASB) has issued an exposure draft that proposes an International Financial Reporting Standard for Small and Medium – Sized Entities (SMEs). The proposed standard reduces the volume of accounting guidance by eliminating topics that are not generally relevant to SMEs and provides suggestions for simplifying methods for recognition and measurement. A copy of the exposure draft can be found below under related documents. Comment letters from constituents are due for submission to the IASB by October 1, 2007. IMA’s Financial Reporting Committee submitted a comment letter that addressed all of the pertinent issues in the proposed standard. A copy of the comment letter can be found on IMA’s website under the Professional Advocacy section/Financial Reporting Committee Position Letters.

IFAC Seeks 2008 Board and Committee Members
IFAC is seeking nominations for 2008 boards and committee members, including four public member positions on its independent standard-setting boards. Member bodies, members of the Forum of Firms and, in some instances, members of the public may submit nominations by April 15, 2007. IMA is in the process of identifying members that can be considered for IFAC nominations. Description of IFAC’s boards and committees can be found in its call for nominations below under related documents. Please submit your resume and biography to Linda Devonish-Mills, Director of Professional Advocacy, if you want to be considered for IFAC nominations by April 2, 2007. Please indicate what boards or committees are of interest to you for consideration.

Restructuring proposal of the International Valuation Standards Committee
The International Valuation Standards Committee (IVSC) has proposed a major restructuring process developed by a governance group established by the IVSC’s Management Board. Key recommendations as part of the proposal include: 1) A new International Valuation Standards Board (IVSB) be created as an independent and autonomous decision making body with up to nine compensated (full-time or part-time) members; 2) The IVSC be renamed to the International Valuation Standards Council 3) An elected Board of Trustees would have responsibility for oversight of the work of the IVSC and IVSB; 4) A new International Valuation Professional Board (IVPB) be created to develop criteria for the education of and professional practices of valuation practitioners. Comments towards the IVSC’s restructuring proposal can be made until March 9, 2007. Details of the proposal can be found below under related documents.

IASB’s Discussion Paper – Fair Value Measurements
IFAC’s International Accounting Standards Board (IASB) issued a Discussion Paper during November 2006 that sets out its preliminary views on providing consistency in the measurement of fair value, when already prescribed under existing International Financial Reporting Standards (IFRS). The IASB uses a Fair Value Measurements standard issued recently by the Financial Accounting Standards Board (FASB), (SFAS 157), as a starting point for its own deliberations. Using the FASB standard as a reference for the discussion paper is in line with IFAC’s and FASB’s commitment to the convergence of IFRSs and the United States’ Generally Accepted Accounting Principles (GAAP).Additional information about the FASB standard can be found in the FASB subsection of the Professional Advocacy section of the IMA website under “Fair Value Measurements Project”. The discussion paper issued by IASB can be found below under Related Documents. IMA’s Financial Reporting Committee submitted a comment letter that addressed all of the pertinent issues in the discussion paper. A copy of the comment letter can be found on IMA’s website under the Professional Advocacy section/Financial Reporting Committee Position Letters.

Proposed guidance to develop codes of conduct
IFAC’s Professional Accountants in Business Committee has issued a draft of new guidance to assist companies and their professional accountants in developing and implementing a code of conduct. The proposed guidance, “Defining and Developing an Effective Code of Conduct” highlights the varied roles of professional accountants in business in driving and supporting organizational ethics and conducting ethics programs. It also provides practical guidance on the design and development of such codes. The committee has recognized that effective codes of conduct are a key element of strong corporate governance and internal controls within businesses worldwide. A copy of the proposed guidance can be found below under related documents.

International Accountancy Organizations launch new global resource for Professional Accountants in Business
IFAC has collaborated with its member organizations to develop IFACnet – A KnowledgeNet for Accountants in Business (www.ifacnet.com). This new global resource will provide one-stop access to leading-edge articles, good practice guidance, and tools and techniques for accountants employed in commerce, industry, the public sector, education, and the not-for-profit sector.

According to members of IFAC’s Professional Accountants in Business Committee, users of IFACnet will find relevant information on a wide range of financial and management accounting topics, including strategy, budgeting and planning, corporate governance, risk management, and professional development emphasis.

Thirteen accountancy organizations, including IMA, together with IFAC currently participate in the KnowledgeNet by sharing their electronic resources through IFACnet. Others will be coming on board in the coming months. In addition, during the first quarter of 2007, the KnowledgeNet will be expanded to serve the needs of small and medium practices and, by the end of 2007, will offer customized information for broader audiences of accountants.

Additional information about IFAC’s Professional Accountants in Business Committee can be found on IMA’s website under the Professional Partnerships section/IFAC.

Information Technology Guidance from IFAC
On August 15, 2006, the International Accounting Education Standards Board (IAESB), an independent standard-setting board within the International Federation of Accountants (IFAC), released a proposal for new guidance outlining the knowledge and skills necessary to prepare professional accountants to perform competently in one or more information technology roles. The proposed new International Education Practice Statement, an exposure draft entitled Information Technology for Professional Accountants, provides details of the knowledge and skills required of professional accountants in the IT environment to prepare them to use information technology, work in the information technology environment, and rely on information technology.

The exposure draft updates the previously issued International Education Guideline 11 with the same title. It is primarily directed at assisting IFAC member bodies with implementing International Education Standard (IES) 2, Content of Professional Accounting Education Programs; IES 7, Continuing Professional Development: A Program of Lifelong Learning and Continuing Development of Professional Competence; and IES 8, Competence Requirements for Audit Professionals.

IMA’s IFAC Monitoring and Compliance Advisory Committee submitted a comment letter on November 15, 2006 to express their views on issues addressed in the exposure draft. A copy of the comment letter can be found on the Professional Partnerships/IFAC Advisory Committee section of the website.

Ethics Update
On August 14, 2006, the International Accounting Education Standards Board (IAESB), an independent standard-setting board within the International Federation of Accountants (IFAC), has released a new information paper entitled Approaches to the Development and Maintenance of Professional Values, Ethics and Attitudes in Accounting Education Programs.

“The paper is the result of a wide-ranging research project into ethics education in the worldwide accountancy profession. It is designed to stimulate discussion and debate on the subject of ethics education,” states IAESB Chairman Henry Saville. “The paper, and the findings of the independent research team, will be of interest and benefit to IFAC member bodies, regional accountancy organizations, accounting educators, and others seeking to implement ethics education programs for professional accountants.”

The information paper, Approaches to the Development and Maintenance of Professional Values, Ethics and Attitudes in Accounting Education Programs, can be downloaded free-of-charge from the IFAC online bookstore at www.ifac.org/store. IMA’s Ethics Committee submitted a comment letter to the IAESB on December 15, 2006, expressing their views on issues addressed in the information paper. See a copy of the comment letter below under Related Documents.

IFAC Monitoring and Compliance Advisory Committee
IMA’s IFAC Monitoring and Compliance Advisory Committee had its initial meeting in Washington, D.C. on August 5, 2006. Currently there are seven committee members that are from the U.S. and international countries. IMA has been a member of IFAC since 1980. The advisory committee was developed to ensure that IMA is maximizing the benefits of its membership. The advisory committee will assist IMA with this goal by monitoring activities of the various committees that are part of the IFAC hierarchy to determine which of them supports IMA’s initiatives. See comment letters written by the Committee under the Professional Partnerships/IFAC Advisory Committee section of the website.

Adoption of International Financial Reporting Standards
In July 2006, the International Accounting Standards Board announced steps to assist in adoption of International Financial Reporting Standards (IFRS). As part of the announcement, the IASB indicated that it will not require the application of new IFRSs under development or major amendments to existing standards before January 2009. In addition, the IASB intends to allow a minimum of one year between the date of the publication of wholly new IFRSs or major amendments to existing IFRSs and the date when implementation is required.

Chairman of Trustees Position – International Accounting Standards Committee Foundation
On May 22, 2006, Tommaso Padoa - Schioppa announced that he was stepping down from the position of Chairman of the Trustees of the International Accounting Standards Committee Foundation as a result of his appointment as Finance Minister of the new Italian Government. The Trustees have appointed Philip Laskawy, a retired Chairman of Ernst & Young International, as Chairman of the Trustees for the interim period.

Proposed Amendments – IAS23, “Borrowing Costs"
In May 2006, the IASB issued an exposure draft of proposed amendments to IAS 23, "Borrowing Costs". The proposed amendments eliminate the option in IAS 23 of recognizing borrowing costs immediately as an expense; to the extent they are directly attributable to the acquisition, construction or production of a qualifying asset. The exposure draft can be found on the IASB website at www.iasb.org. Proceed to click on Current Projects/IASB Projects/Borrowing Costs to find the document.The Financial Reporting Committee of IMA submitted a comment letter to IASB to express its views on issues addressed in the exposure draft. A copy of the comment letter can be found on the Financial Reporting Committee section of the site.

Proposed Amendments – IAS1, “Presentation of Financial Statements"
In March 2006, the IASB issued an exposure draft for amendments to IAS 1, "Presentation of Financial Statements". The proposed amendment recommends including a statement of position as at the beginning of a reporting period in a complete set of financial statements. The exposure draft also includes recommendations on which equity transactions should be reported in a statement of changes in equity vs. a statement of recognized income and expense. The Financial Reporting Committee of IMA submitted a comment letter to IASB to express its views on issues addressed in the exposure draft. A copy of the comment letter can be found on the Financial Reporting Committee section of the site. The exposure draft can be found on the IASB website at www.iasb.org. Proceed to click on Current Projects/IASB Projects/Financial Statement Presentation to find the document. Also, a summary of the exposure draft can be found below under related documents.

Roundtable Discussions for IAS37, “Provisions, Contingent Liabilities and Contingent Assets"
The IASB announced roundtable discussions in three locations focusing on the proposed amendments to the recognition and measurement principles in IAS 37. The U.S. roundtable took place at the FASB headquarters in Norwalk, Connecticut on November 30, 2006.

Related Documents

Financial Reporting Supply Chain Project Report

PAIB pronouncement on International Management Accounting Statements

IASB’s proposed standard for Small and Medium-Sized Entities

IFAC’s Call for Nominations – 2008

IVSC Governance Proposals

Exposure Draft – “Defining and Developing an Effective Code of Conduct”

Exposure Draft – “Information Technology for Professional Accountants”

Summary of Exposure Draft - Amendments to IAS #1
Presentation of Financial Statements

IMA’s Ethics Committee Comment Letter to IAESB

Discussion Paper – Fair Value Measurements