Introduction to IAS/IFRS

Transcription

1 Risk and Accounting Introduction to IAS/IFRS Marco Venuti 2018

2 Agenda The structure of IASB The standard setting process The introduction of IFRS in EU Endorsement mechanism The introduction of IAS/IFRS in Italy The IASB FASB convergence The SME project Pagina 2

3 The International Accounting Standard Board (IASB) International Accounting Standards Board (IASB) Independent, privately funded accounting standard setter based in London Responsibility to develop International Financial Reporting Standards (IFRSs) (previously International Accounting Standards (IASs) The objectives are: To develop a single set of accounting standards» High quality, understandable, global and enforceable To promote their use and rigorous application To work actively with national standard setters» To bring about convergence of national accounting standards and IFRSs 3

4 The structure of IASB 4

5 The standard setting process Main steps 1. Setting the agenda 2. Planning the project 3. Developing and publishing the Discussion Paper (DP) 4. Developing and publishing the Exposure Draft (ED) 5. Developing and publishing the Standard 6. Process after the standard is issued 5

6 The standard setting process Active Projects 9 15 months 9 15 months months Discussion Paper (DP) Comment analysis Exposure Draft (ED) Comment analysis IFRS published Effective Date Agenda decision Feedback statement Research Standard Setter / EFRAG Others Round table Two year post implementation review 6

7 The standard setting process 7

8 The standard setting process 8

9 The standard setting process 9

10 The introduction of IFRS in EU Lisbona The European Council decided to accelerate the process of harmonization of Accounting rules and established the deadline of 2005 for the adoption of common accounting principles The European Council of Ministers approved the regulation that would require all EU companies listed on a regulated market to prepare accounts in accordance with International Accounting Standards for accounting periods beginning on or after 1 January (Regulation EU n. 1606/2002) The EU Commission endorses the International accounting Standards in European Union. All EU companies listed on regulated markets in the EU to use endorsed IAS for consolidated accounts. 23 March July

11 The introduction of IFRS in EU IAS Regulation (1606/2002/EC) Directly applicable in all Member States Fast, no national variations All EU companies listed on regulated markets in the EU to use endorsed IAS for consolidated accounts as from 2005 Non-EU issuers outside the scope (But: Equivalence under Prospectus and Transparency Directives) Optional extension of the scope: unlisted companies individual accounts 11

12 Endorsement mechanism Objective is to get political and legal endorsement of IAS Criteria IAS not contrary to true and fair view principle of Accounting Directives IAS must be conducive to public good (competitiveness and convergence) IAS must be understandable, relevant, reliable and comparable 12

13 Endorsement mechanism IASB European Commission European Parlament EFRAG Council Interest Group ARC 13

14 Endorsement mechanism Tempistica media della procedura di endorsement in Europa 14

15 Endorsement mechanism EFRAG 15

16 Endorsement mechanism 16

17 The introduction of IFRS in Italy In Italy the European Rule 1606/2002 have been effected through the emanation of the Legislative Decree n. 38/2005 Listed company Company with listed financial instruments banks Listed and not listed insurance companies Company controlled by: - Listed company banks Companies with consolidated financial statement or controlled by a company with a consolidated financial statement Other companies Small companies (art bis c.c.) Consolidated FS Individual FS Consolidated FS Individual FS Consolidated FS Individual FS Individual FS Individual FS IAS mandatory from 2005 IAS Mandatory from 2006 IAS mandatory Excluded application IAS Optional application IAS Optional application Excluded application 17

18 The Italian jurisdition Code civil: Limited Companies: Individual Financial Statements (FS) Legislative Decree 127/1991: Limited Companies Consolidated FS Reg. EC 1606/2002- Legislative Decree 38/2005 imposing or permitting the application of the IAS/IFRS in relation to a large number of enterprises (publicly accountable enterprises and othes): Consolidated and/or Individual FS Legislative Decree 173/1997: insurance companies: individual FS Legislative Decree 87/1992: not regulated financial institutions: Consolidated and Individual FS. 18

19 US GAAP IFRS convergence 2007 SEC accepts filling from FPI s without reconciliation to US GAAP 2008 SEC announced a series of steps to potentially lead to the required use of IFRS by US issuers by Also announced that certain domestic large groups could use IFRS for their 2010 filings. Final decision on use of IFRS for all filers to be taken in 2011, possibly with a 2014 effective date 2010 Update on road map issued 2012 SEC decided to postpone the implementation of the road map The IASB and US FASB have an objective of convergence of IFRS and US GAAP 19

20 US GAAP IFRS convergence 20

21 IAS/IFRS in the world 21

22 The SME project 22

23 The SME project The FRS for Small and Medium-sized Entities (SMEs) is a set of high quality financial reporting principles that is tailored for the capabilities of smaller businesses and for the needs of those who use non-publicly accountable enterprises financial statements. Pros: Improve access to credit supports lending based on financial statements vendors evaluate finances of buyers foreign loans and suppliers Improve access to equity capital non-management investors foreign venture capital Cons: Complexity, administrative burden, similarity to full IFRS and substance and frequency of changing 23

24 The SME project Who is the standard aimed at? Millions of companies (over 99%)! The 52 largest stock exchanges in the world together have only around 45,000 listed companies globally Europe has roughly 25 million private sector enterprises USA has roughly 20 million private sector enterprises UK alone has 4.7 million private sector enterprises 99.6% have fewer than 100 employees 24

25 Who is planning to use it? The SME project 25