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November 04, 2008

Comments

chartered accountant

Nice article regarding lifestyle and money. Citizens deserves freedom and wealth. Instead of comparing to different countries people should focus on their own community.

NannieSALINAS29

People deserve wealthy life time and loan or student loan would make it much better. Just because freedom relies on money.

blessing mhizha

BLESSING MHIZHA TRAINEE ACCOUNATNT

For us to say that we have a sound reporting standards we need to make sure that our standards need not to be casted away because suddenly there is a problem on the market.What i personally i would recomend is to simplify the standard,we need to do away with the assumptions that are unrealistic.if there are any assumptions used to arrive at a value of an instrument then these need to be clearly documented.We need to ensure that there is comparabity on the world market to enhence the levels of investments.

Paul Parks, IFRS.com

In response to John’s questions below, Yes, Sir David Tweedie and the IASB have taken a lot of heat for the October rule change and suspension of due process. The fallout from this event is what led to the Chairman’s statement that he considered quitting.

The IASB responded in such a fashion because they felt that if the EU carve-out had been successful, the international accounting convergence movement would have been threatened. In a recent speech, Chairman Tweedie said, “We were trapped and felt we had to do it”.

To my knowledge, this has not happened before. If it happens again, the reputation of the IASB would be severely damaged. Independence and due process have to be the foundation of standard setting.

In a related note, the IASB is now exploring a fast track procedure to respond to future crises.

Joe Jefferis

Disclosure of fair values is good for investors who are able to understand that just because a commodity is priced higher one day, there is no assurance that it will sustain its high price.

Global markets needed to learn the definition of speculation. Since the commodity markets collapse over the past six months, global markets have seen the collapse of the myth that oil prices will never materially retreat. They did and now all the like minded investors are confused. Fair value is misleading because making a smart buy is not the same as knowing when to sell and make a profit. just because others sell and make a profit (market) doesn't mean you are smart too. You are still holding and the outcome of your purchase is unknown. No credit for smartness until you sell at a profit or loss. There must actually be an arm's length transaction.

GAAP is designed to account for profits, not manifest smart futures commodity buyers like IFRS seems to reward. IFRS may give you bragging rights at the club, but GAAP will help you pay for your membership by recognizing actual profits, not social gains.

The alternative is lower of cost or market. It eliminates any confusion about when you've made a profit and keeps the priority off "paper" profits that are worthless to the stakeholder.

Those who are interested are encouraged to read The US Department of Treasury's AN OVERVIEW OF ISLAMIC FINANCE Occasional Paper No. 4. from August 2006. It represents a unique perspective and identifyins underlying trends and issues for policy makers. We should not encourage regulatory adjustments to accomodate Islamic (religious) financial practices. US GAAP is non-denominational with regard to its application.

John Anderson

Thank you for this very informative article! I have been looking for an explanation for the context of the changes to IAS 39 and IFRS 7 for a couple of weeks and this is the first authoritative document I have found.

I assume that this is the matter which brought Sir David Tweedie to the point of threatening to resign as the head of the IASB; correct?

Not really having a frame of reference here, it would be helpful to know precisely how frequently this has happened to the IASB, or with preceding European, legacy, country-specific GAAPs. Or, as we hope to hear, learn that this is as extremely abnormal as was the US transition from the APB to the FASB in the early 70’s.

Thanks again for your terrific article!

John Anderson CPA, CISA, CITP

Darla Sycamore (IFRS Exorcist)

I believe this international coordination is a silver lining in the "credit crisis". Accounting rules on fair value accounting in these market conditions needed clarification and I have been impressed with the ongoing cooperation among SEC,FASB and the IASB on these issues.
There may be people in the USA that believe converting to IFRS will be an obstacle. In a sense it will be an obstacle to unilateral government changes to rules by any individual jurisdiction (without consultation). We are in a global society, much more than in the 1930s. We know what happened in the 30s when the US (and other countries) took a proctectionist attitude. It made things worse.

By the way congratulations to Mr. Obama - I wish him well in meeting all the challenges he faces.

I write a blog on IFRS issues and I am following this debate closely.

"The IFRS Exorcist"

matthew

thank u r information

My Said BEN CHAD

BEN CHAD
trainee chartered accountant
Morocco

I think that whatever the actions the IASB take in response to the current credit crisis, the problems related to exceptional circumstances such as measuring and disclosing fair value of financial instruments in markets that are no longer active, could not be avoided as long as the IFRS – US GAAP convergence process does not reach an advanced level.

I would like to mention here that even the definition of the fair value concept is not at present the same under IFRS and US GAAP (even though the IASB fair value measurement project forms part of the Memorandum of Understanding between the IASB and the FASB which sets out a Roadmap of Convergence between IFRSs and US GAAP 2006-2008).

My conclusion is this: international comparability will not become a reality till the world capital markets benefit from having one set of global standards that have comparability across the world and till local regulatory rules have less impact on the content and presentation of the financial statements prepared under IFRS.

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