International Finance and Accounting Handbook

• Third, no national standard setter is in a position to set accounting standards that can
  gain acceptance around the world.


• Lastly, there are many areas of financial reporting in which a national standard setter
  finds it difficult to act alone.

16.10 ACTIVITY OF THE IASB SO FAR. When it started its operation in 2001, the
IASB was able to hit the ground running because there were a number of projects left
in the pipeline from its predecessor. Exhibit 16.6 summarizes the IASB technical
agenda projects at the end of 2002.
Any summary of the “current” activity of the IASB in a handbook such as this is
bound to be out of date rather quickly. The best places to look for up-to-date infor-
mation about IASB projects are two Web sites:

1.www.iasb.org.uk—IASB’s own Web site

2.www.iasplus.com—An IASB-related Web site maintained by Deloitte Touche

Tohmatsu

16.11 RECENT TRENDS IN INTERNATIONAL FINANCIAL REPORTING STANDARDS.
The standards issued by the IASC in its last few years and the direction that the IASB
has taken in its first few years allow the following observations about trends in in-
ternational financial reporting standards:

• Greater use of fair value in measuring transactions:
  
  
  • Financial instruments (trading investments)
  
  
  • Impairment recognition (write-down to fair values)
  
  
  • Prohibition of pooling interests
  
  
  
  


• More fair values on the balance sheet:
  
  
  • Financial instruments (available for sale investments)
  
  
  • An entity’s own debt (proposed by IASB in its IAS 39 revisions)
  
  
  • Investment property
  
  
  • Commodity inventories
  
  
  • Biological assets and agricultural produce
  
  
  • Property acquired in exchange for similar property
  
  
  • Venture capital funds
  
  
  
  


• More unrealized components of income: performance reporting becomes key.


• No income smoothing, cost deferrals, or general provisions:
  
  
  • Remove the corridor approach to pensions
  
  
  • Balance sheet approach to deferred taxes
  
  
  • No accruals for future losses
  
  
  • Rigorous hedge accounting rules
  
  
  
  


• Moving off-balance-sheet items onto the balance sheet:
  
  
  • Special-purpose entities
  
  
  • Derivatives
  
  
  • Stock compensation
  
  
  
  


• More disclosure, especially judgements, plans, and assumptions:
  
  
  • Judgment in applying accounting policies
  
  
  
  

16 • 16 INTERNATIONAL FINANCIAL REPORTING STANDARDS