Taking preliminaries a step further: the ASB's latest statement encourages prompt and increased disclosure from the outset

Article Abstract:

The Accounting Standards Board is in the process of developing a new non-mandatory statement of best practice on corporate preliminary announcements. It has already published an exposure draft containing its proposals which cover such issues as content, timing, reliability and distribution of preliminary announcements. Since these announcements are very similar to interim financial reports, the exposure draft recommends that the former contain information similar to those required of the latter. Specifically, the draft encourages the inclusion into the preliminary announcement of a management commentary, a statement of total recognized gains and losses, and summaries of the profit and loss account and the cash flow statement. Companies are further advised to issue their preliminary announcements within 60 days of the year-end.

Accounting Standards Board

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Just one step too far? Accounts users' needs are not well served by IAS 12

Article Abstract:

The International Accounting Standards Committee (IASC) may have gone a little too far in trying to gain US acceptance for its standards when it revised IAS No 12 on income taxes. For years starting Jan 1, 1998, the revision requires all companies that have adopted IASs to record the potential tax consequences of every transaction. This means that balance sheets will have to start reflecting deferred tax liabilities whose payments may not arise during the lifespan of the current management. Another possible effect is the enhancement of equity by deferred tax assets, which may take several years to realize. The changes to IAS 12 will simply require the inclusion of a purely static figure since the deferred tax reported in the current balance sheet will not give corporate report users any meaningful information.

Accounting and auditing, International Accounting Standards Board, Income tax

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Together but different

Article Abstract:

There are only a few differences between the UK Generally Accepted Accounting Principles (GAAP) and the International Accounting Standards (IAS) but they are hotly contested. The first major difference is in the topic of goodwill. The IAS calls for the capitalization and amortization of goodwill for a maximum of 20 years while the British standard permits the selection between the capitalization-and-amortization approach, and the direct writing off of goodwill to reserves in the year of acquisition. Differences are also noted in the issues of deferred taxation, financial instruments, research and development, accounting disclosures, fixed assets and foreign currency. Despite these differences, however, results of different methodologies can be easily reconciled and explained.

Standardization, International aspects

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