STANDARDS CONVERGENCE COMES TO PUBLIC SECTOR

The International Public Sector Accounting Standards Board is proposing new financial reporting requirements to help public sector entities account for financial instruments, such as derivatives, bonds and loans, and produce global standards of transparency.

The proposed requirements from the IPSASB, which is part of the International Federation of Accountants, are contained in three newly released exposure drafts: ED 37, Financial Instruments: Presentation; ED 38, Financial Instruments: Recognition and Measurement; and ED 39, Financial Instruments: Disclosures.

The drafts propose standards that converge with the International Accounting Standards Board's standards for financial instruments as of Dec. 31, 2008, with limited changes, representing a significant step in the IPSASB's global convergence program, which is scheduled for completion by the end of this year. As part of this program, International Public Sector Accounting Standards will substantially converge with International Financial Reporting Standards approved as of Dec. 31, 2008, with limited changes to ensure consistency with other IPSASs, while addressing specific public sector issues.

Additional application guidance has been included in each exposure draft on two key public sector issues. These include the provision by government of financial guarantees that are given at zero cost or below market price and, secondly, concessionary loans - that is, loans at below-market interest rates.

The IPSASB is requesting comments to be sent by July 31. They may be submitted by e-mail to edcomments ifac.org.

IASB PLOTS OUT TIMETABLE FOR IMPAIRMENT REVISIONS

London - The International Accounting Standards Board said that the Financial Accounting Standards Board's recently issued guidance on fair value measurement is consistent with its existing guidance, but it still sees a need to revise its own controversial standards to account for the impairment of illiquid assets.

The IASB has set out a detailed six-month timetable for publishing a proposal to replace its existing standard for financial instruments, IAS 39, Financial Instruments: Recognition and Measurement. European Union Internal Market Commissioner Charlie McGreevey and other EU finance ministers have been pushing for more immediate changes in the impairment standards to match the U.S. revisions recently announced by FASB.

Although the IASB is taking more time to revise IAS 39, it apparently considers itself to be more or less in sync with the U.S. on fair value accounting. "We have heard a clear and consistent message on financial instruments accounting - fix this once, fix it comprehensively, and fix it in an urgent and responsible manner," said IASB Chairman Sir David Tweedie. "The IASB is committed to do just that by developing proposals within six months for public comment."

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