Result of AOSSG members’ survey
Korea Accounting Standards Board (KASB)
30 September 2010
Contents
I.
Purpose of the survey
II. Overview
III. Issues to discuss
IV. Results
V. Conclusion & Suggestions
1
I. Purpose of the survey
Understand the members’ profile and the different
status on IFRS adoption or convergence
Recognize country specific issues that members want
AOSSG to deal with
Explore additional activities that AOSSG can do
2
II. Overview
Survey questionnaire prepared by KASB,
assisted by MASB and ASBJ
We have received 15 replies (54%) out of 28 countries
as of 25 September
List of respondents:
Replied Countries
China
Dubai International Financial Centre (DIFC)
Hong Kong
India
Japan
Korea
Macao Special Administrative Region, China
Malaysia
Nepal
New Zealand
Pakistan
Philippines
Saudi Arabia
Singapore
Thailand
Your replies are greatly appreciated!
3
II. Overview (cont’d)
Categorized in 6 sections
Survey Sections
Section I
Regulation and Enforcement of Accounting Standards
Section II
Use of IFRSs
Section III
Status of Adoption of IFRSs
Section IV
Implementation Issues
Section V
Work program of AOSSG
Section VI
Other activities of AOSSG
4
III. Issues to discuss
Challenges in adopting IFRSs (Q7)
AOSSG’s roles (Q9)
New topics (Q17)
Operational manner of WG (Q18)
Other issues (non-profit entities) (Q19)
5
IV. Results : Section I
1. How is your organisation being funded?





Government : 4
Members : 3
Corporates : 1
Mixed : 5
Others : 2
 The funding source is found to be diverse among the membership.
Some rely on public funding to some extent, while others rely
more on funding from private sector
6
IV. Results : Section I (cont’d)
2. Is your organization independent of Government?
 Yes : 11
 No : 4
 Of 15 replied countries, 11 countries’ organizations were
independent of Government
7
IV. Results : Section I (cont’d)
3. Please name the organisation(s) responsible for
regulating and enforcing accounting standards
 Regulators such as Securities Exchange Commission : 8
 Standards Setter : 5
 Others : 2
8
IV. Results : Section I (cont’d)
4. Does the organisation as stated in 3 above have the
power to amend the accounting standards issued by
your organisation?




Yes : 3
No : 6
N/A : 5
Others : 1
(Theoretically yes; but there has been no case to date)
9
IV. Results : Section II
5. USE OF IFRSs
*source: IAS PLUS
Country
Domestic Listed Companies
IFRSs Not
Permitted
Australia
Brunei
Cambodia
China
Dubai
Hong Kong
India
Indonesia
Iran
Iraq
Japan
Kazakhstan
Korea
Macao
Malaysia
IFRSs
Permitted
IFRSs
IFRSs
Audit Report States
Required for Required for
Compliance With IFRS
Some
All
X
Yes
X
X
Yes
No stock exchange in Brunei
No stock exchange in Cambodia
X
X
X
X
X
X
X
X
No stock exchange in Macau
Yes
Not yet announced
Yes
Yes
X
10
IV. Results : Section II (cont’d)
5. USE OF IFRSs (cont’d)
Country
Domestic Listed Companies
IFRSs Not
Permitted
Mongolia
Nepal
New Zealand
Pakistan
Philippines
Saudi Arabia
Singapore
Sri Lanka
Thailand
Turkey
UAE
Uzbekistan
Vietnam
Total (28)
Percentage of total
IFRSs
Permitted
IFRSs
IFRSs
Audit Report States
Required for Required for
Compliance With IFRS
Some
All
X
Yes
X
Yes
X
Yes
Yes
X
X
X
X
X
Yes
X
X
Yes
Yes
9
32%
12
43%
X
X
X
10
36%
5
18%
1
4%
11
IV. Results : Section III
6. Status of Adoption of IFRSs
Others, 2, 13%
Adopted, 4, 27%
Adopted
No formal plan , 1, 7%
Made announcement to adopt
Converged
Made announcement
to converge, 5, 33%
Made announcement
to adopt, 1, 7%
Made announcement to converge
No formal plan
Others
Converged, 2, 13%
 Most countries have adopted (converged) or made
announcement to adopt (converge) IFRS
12
IV. Results : Section III (cont’d)
7. What are the challenges you faced/would face in
adopting IFRSs?
 Application/Practical difficulties : 9
- Local laws that are inconsistent with the requirements of IFRSs
- Difficulties in fair value measurement
- Issues addressing particular requirements of Islamic Finance under IFRS
 Lack of technical references : 6
- Complexity of IFRSs
- IFRS is crafted from the perspectives of highly developed capital markets which is not
the case yet in developing countries
 Lack of support from the community : 3
- Strong objections from the industry on a specific standard
 Financial constraints : 2
 Other : 6
- Language barriers ( Interpretation & translation)
- Difficulties in learning new standards
13
IV. Results : Section III (cont’d)
8. How would you address the challenges stated in 7
above?
 More participation on the IASB standard setting process
 Investment in training and education of IFRS
 Establishment of discussion forum aiming to share experiences and
issues
 Involvement of stakeholders in the adoption and implementation
process
 References to the technical position papers of the Big 4
14
IV. Results : Section III (cont’d)
9. What type of roles do you expect to the AOSSG
in resolving the challenges?
 Increasing active role of Asia-Oceania region in participating in IASB
and IFRSs setting
 Leverage on a stronger voice to convey Asia-Oceanian concerns and
issues to the IASB
 Focus on commenting to IASB EDs
 Further development of guidance and illustrations on complex
standards like IAS 12, 19, 36, 38, 39 and IFRS 4, 7 etc.
 Organization of regional workshops or seminars on complex IFRSs
 Urge the IFRS Foundation to speed up the translation of IFRSs into
other languages
 Providing and sharing knowledge among members
 Joint research on accounting issues such as revenue and consolidation
15
IV. Results : Section IV
10. How important is adoption of or convergence with
IFRS to your country and why?
 Very important : 13
 Essential for listed companies so that they remain internationally
competitive
 To produce financial information of a high quality that is relevant,
comparable, consistent and transparent so as to serve the needs of the
stakeholders
 To improve the quality of financial reporting and improve the
comparability
- Improve the degree of liquidity
- Reduce the cost of obtaining funds
16
IV. Results : Section IV (cont’d)
11. How do you deal with conflict between the
accounting and tax requirements?
 Regularly communicate major accounting changes that may have tax
implications to tax authority
 Tax Department revised the tax forms
 Work closely with regulatory bodies, government agencies, and other
relevant bodies to educate and explain the financial reporting standards
 Prepare reports for financial reporting purposes under accounting
standards and reports for taxation purposes under tax legislation
 Amendments are proposed in the tax legislation to overcome the
conflict
 Establish a committee to examine the differences between the GAAP
and tax laws
17
IV. Results : Section IV (cont’d)
12. How do you deal with conflict between accounting
standards and other rules / regulations?
 The local rules and regulations make references to International
Accounting Standards and do not create parallel standards
 Adjustments will be made in accordance with corresponding rules or
regulations. In that case, preparers cannot state compliance with
accounting standards but rather compliance with those rules and
regulations
 Deal with conflicts between accounting and other rules/regulations on a
case-by-case basis
 When conflict exists, preparers are required to comply with the laws,
rules, or regulations of higher hierarchy
 Entities apply the requirements relevant to the report being prepared
18
IV. Results : Section IV (cont’d)
13. How do you intend to educate the users of financial
statements, such as regulators, investors, and
academia?
 Conduct regular “Out reach” sessions for the stakeholders to update on
relevant issues
 Hold regular technical update evenings, financial reporting forums and
issues staff summaries of newly released standards, etc.
 Organize training courses
 Inform users of financial statements through articles, standards board
updates etc.
 Train the trainers, establishing TFRS Clinic, producing CD or e-Learning
classes, issuing application guidance
19
IV. Results : Section IV (cont’d)
14. How do you ensure that preparers of financial
statements and auditors are well-trained to apply
the IFRS?
 Hold IFRS seminars and provide training courses
 Review the audit working paper files to ensure its compliance with
IFRSs
 Has a compliance and quality assurance function, the former being
handling complaints from third parties on practising CPA on their
practices whereas the latter being regular review of CPA practices on
rotation basis
 Have CPE requirements
 Put more focus to train, coach, mentor and share best practices to
assist medium and small national accounting firms
20
IV. Results : Section IV (cont’d)
15. How do you ensure that the university students, i.e.
the future accountants are well-trained on IFRS
before they join the workforce?
 Work with the colleges / universities to revise the syllabi to include
IFRSs as a part of their curriculum
 Arrange IFRS training courses and provide assistance on teaching
material for professors and lecturers
 IFRS is tested in the professional qualification examinations.
 Set up qualification programme which is a comprehensive training
programme that provides the knowledge and skills necessary to
become a CPA
21
IV. Results : Section V
16. Do you agree with current topics of the WGs?
 Since 2009 : IAS 39, Fair value measurement, Revenue,
Financial statement presentation
 Since 2010 : Consolidation, Leases, Insurance Contracts,
Emission Trading Schemes, Islamic Finance, Website
 Yes : 15 (100%)
22
IV. Results : Section V (cont’d)
17. Is there any technical topic which should be
added other than current topics of the WGs?
Besides, do you want the AOSSG to deal with
IFRS implementation issues as well?
 IAS 41 Agriculture
 Disclosures
 IFRS for SMEs
 Rate-regulated activities
 Conceptual Framework
 Business combination under common control
 IAS 12 Income Taxes
 Dealing with IFRS implementation issues (Yes : 7)
- Though we recognize that IFRS implementation issue is important, we tend to think that
it is the issue for future consideration
- Should be sending implementation issues to the IFRS Interpretation Committee rather
than trying to deal with them at AOSSG
23
IV. Results : Section V (cont’d)
18. Is there any operational manner of WG which
should be complemented or revised?
 Need to clarify the working procedures of WG, for example, how to
consolidate comments from WG member, if there has been
disagreement among the group
 Sufficient time should be given to the working group members to
provide feedback particularly for IASB exposure drafts issued close to
the AOSSG meeting date
 Some AOSSG Discussion Paper prepared for presentation at the AOSSG
annual meeting were prepared based on staff view of the working
group members which may not represent the official views of the
AOSSG member
24
IV. Results : Section VI
19. Are there any issues for the AOSSG to deal with
besides IASB work program?
 AOSSG can deal with accounting standards for non-profit entities (5)
 Although we can take note of accounting standards for non-profit
entities or public entities, for the time being, AOSSG should focus on
IASB’s work program, in order to make the best use of our resources
 Accounting standards for non-profit entities can be dealt in the future
 In New Zealand, we have traditionally prepared accounting standards
that apply to all entities – for-profit, not-for-profit and public sector
 AOSSG should be able to deal with auditing standards for cross border
transactions
25
IV. Results : Section VI (cont’d)
20. Do you have any additional comment for the
AOSSG?
 AOSSG should have strong representatives sitting at the IASB level so
that the comments will directly impact at the right level
 AOSSG should be involved on research & study on Accounting
Standards also
26
V. Conclusion & Suggestions
Challenges in adopting IFRSs
- Application/Practical difficulties
- Lack of technical references
AOSSG’s roles
- Continuing participation in IASB and IFRSs setting
- Organizing of regional workshops or seminars on complex IFRSs
- Providing and sharing knowledge among members
We suggest holding additional sessions during the AOSSG meeting
- Educational session by IASB
- Discussion session to share experiences among members
27
V. Conclusion & Suggestions (cont’d)
New topics
-
IAS 41 Agriculture
Disclosures
IFRS for SMEs
Rate-regulated activities
Conceptual Framework
Implementation issues
Business combination under common control
IAS 12 Income Taxes
Operational manner of WG
- To be discussed
Other issues
- Non-profit entities can be dealt in the future
28
Questions or Comments?
Do you agree with the suggestion?
- AOSSG’s roles
- New topics
- Operational manner of WG
- Other issues (Non-profit entities)
29