International Accounting Standards Board News

The global trade association for shipowners, the International Chamber of Shipping (ICS), has submitted detailed comments to the International Accounting Standards Board (IASB) on its controversial proposals to overhaul international accounting rules for leases, which could have an impact on contracts used in international shipping, including those governing operational arrangements. Following intensive discussion amongst its member national shipowners’ associations during the last few weeks, the ICS comments represent the consensus view of the world’s shipowners.

The Board of Directors of the International Chamber of Shipping (ICS) representing national shipowners’ associations from the Americas, Asia and Europe met in London last week. Issues discussed included: the development by the International Maritime Organization (IMO) of a global mechanism for the Monitoring, Reporting and Verification (MRV) of CO2 emissions; the entry into force of the International Labor Organization (ILO) Maritime Labor Convention (MLC); and ICS’s response…

Financial reporting is a sobering issue. Creative accounting, “cooking the books,” earnings manipulations and other accounting shenanigans have been around as long as folks have had income, paid bills, taxes or sought investors for their ventures. With intent to defraud for economic gain and financial crimes, came the passage into law of the Sarbanes-Oxley Act of 2002 (Sarbox or SOX) that made the consequences of such behavior more than just a slap on the wrist. The 2000’s were to some companies public and private, financial reporting’s wild, wild, west.

Since the middle of 2006, the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) have been working towards changing how companies report their lease transactions on their balance sheets. Those companies (including publicly traded entities) whose reporting complies with Generally Accepted Accounting Principals (GAAP) must observe the reporting regulations as set down by FASB. The most recent FASB statement regarding lease accounting was made in 1976 and is known as FAS 13. FAS 13 as we know it is undergoing major change.

Since the middle of 2006, the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) have been working towards changing how companies report their lease transactions on their balance sheets. Those companies (including publicly traded entities) whose reporting complies with Generally Accepted Accounting Principals (GAAP) must observe the reporting regulations as set down by FASB. The most recent FASB statement regarding lease accounting was made in 1976 and is known as FAS 13. FAS 13 as we know it is undergoing major change.

According to a July 30 report from the JoongAng Daily, with the scheduled adoption of the International Financial Reporting Standards (IFRS) shipbuilders were expected to see higher debt ratios. However, the Financial Services Commission and Financial Supervisory Service said that the International Accounting Standards Board (ISAB), the London-based group that supervises the IFRS, had accepted in principle a request by Korean financial authorities to allow a fair value hedge accounting system in the case of the shipbuilders. A fair value hedge system would allow shipbuilders to declare an intermediate payment in their financial accounts for contracts they received. (Source: JoongAng Daily)

International accountant and shipping consultant Moore Stephens has reminded the shipping industry that it has until July 17 this year to respond to an International Accounting Standards Board (IASB) discussion paper on the accounting treatment of leases. “Although it is likely to be at least two years before any new standard comes into effect, the big decisions on what will constitute that standard will be made now,” says Richard Greiner, a partner with the Moore Stephens shipping group. The discussion paper, which deals primarily with leases from the perspective of the lessee, has been prompted by the IASB view that operating leases, using the existing definition, give rise to assets and liabilities which are not currently reflected in financial statements.

financial reporting for publicly traded companies in the EU will mean that the insurance industry will have to develop a much sharper focus on actuarial processes and claims run-off projections. The IASs are due to be introduced in the EU during 2005. been gestating since 1997. potential source of problems for non-life insurers. outstanding claims liabilities and settlement patterns. MVMs are to be calculated. different classes of insurance. some non-life insurers. recorded and recognized at the time a contract is written. underwriting results from the year of contract inception. business. products will need to be re-examined. accounting standards.