Currently – Financial instruments are valued at mark-to-market ie. the price they would fetch if sold on the open market now.
To be adopted soon – They would be valued at historical cost if such financial instruments were to be held to maturity.
Who has adopted the change already?
Hong Kong, Taiwan and Europe. Quite a significant number already.
When is Singapore’s ASC expected to give their blessing?
By end of the week.
He said under the new regime, the auditor and consequently the management of business entities would have to present written submission on risks considered and any actions taken to mitigate that risks in the preparation of the financial statements.
In the past, putting “Non Applicable / NA” in checklist may suffice.
To carry that idea to the extreme (if it is not in the extreme now) would be that a management of a business entity now could be required by the auditor to provide a management representation letter certifying that
- all risks, man made or otherwise, has been considered and deemed acceptable
- and also attached supporting documents for that conclusion ie. weather reports from MET office, geography records for earthquake risks, CIA reports for terrorist risks etc etc etc.
Does it mean higher audit fees too? 🙂
Current rule – interest accruing on ongoing projects shall be expensed off
New rule – such interest can be capitalised
- balance sheets could be carrying assets with bloated values initially and subsequently requiring more effort in reviewing them for impairment
- difference in capital/financing structure would have a direct implication on the carrying value of the asset
Delays in completion of projects under current economic environment ==> would mean that more of the interest “expense” would be capitalised onto the balance sheets instead being expensed off in the P&L.
Mr Kon Yin Tong, Partner of Foo Kon Tan Grant Thornton said he is not comfortable with the new rule. As for me, I would need to find out the basis behind Accounting Standards Council’s (ASC) reasons for the change in the first place. Can someone share on this?
My summary may not do justice to the quality and quantity of information being delivered by the many distinguished speakers from 9am to 5pm. As the Chairman of the afternoon session, I must admit that I tried to absorb as much as possible. The end result is that I have learned something more than at the beginning of the day. I am sure about 400 people who attended the conference too will agree with me.
Dato’ John Raslan, Exec. Chairman of PWC Malaysia
- He is for convergence of IFRS.
- But he urged all of us to participate actively in the convergence process whether at national or international level.
Mr Barmaky, Partner, Deloitte & Touche
- He gave us a macro review of FRS changes to date and changes to come at IASB level.
Mr Tirumalai, Oracle
- He briefed us on a solution in the form of platform which can enable us to implement the standards.
In the panel discussion chaired by Professor Pearl Tan of SMU, the following are my general feel of the panelists
- Fair value should not be blamed for the current state of financial turmoil.
- Global standards should not be tweaked too much to accomodate local market needs and culture as differing standards may lead to greater uncertainty to practitioners.
- How can our voice from this region be heard in between the dominating noises from Europe and US?
- FRS on SMEs/Private Entities – As there are significant differences between big and small business entities, they should thus be treated separately as apples and oranges.
- Should we take on other non-FRS standards on board? – Officially perhaps no but there are invisible forces moving business entities towards taking on non-FRS stds like Corporate Social Responsibility (CSR) in their reporting.
Mr Kon Yin Tong, Partner, Foo Kon Tan Grant Thornton
He gave us a rundown of the many FRSs due for implementation in 2009.
Mr Tham Sai Choy, Partner, KPMG, spent “5 minuates” telling us about Clarity Project and possible implications to the audit committees.
Mr Sum Yee Loong, Partner, Deloitte & Touche explained why IRAS has collected more billions than expected (just kidding) and shared another billion ideas for us to be more tax efficient.
Ms Kala Anandarajah, Partner, Rajah & Tann gave us a lengthy review of 2 cases on auditor’s responsibility and director’s responsibility.
Finally, I reached the end of the conference, exhausted with adrenalin still pumping for many hours after.
I had a meeting with a prospective client recently who complained about their existing “accountant”. The “accountant” has apparently allowed toner for office printer to be capitalised and depreciated over time. The client was flabbergasted that an accountant can make such mistake.
While I am not sure of the person’s credentials, I ended up trying to explain to the client that almost everyone in Singapore can call themselves an accountant without breaking any law.
Recently in UK, Mr Alan Shooter submitted a petition with 4,000 signatures to the Prime Minister to seek protection for the designation “accountant”.
There must be some regulation in this area to ensure that the integrity and professionalism of those who have dedicated years of their life in securing formal accounting training, are not eroded away by irresponsible individuals.
If you are serious about your profession, please say “Yes” when you post your message here.
Global Standards – The Business Benefits: Engineering a Global Business Community
Friday, 17 October 2008, Raffles City Convention Centre
In the morning session, we will have the STRATEGIC segment. Mr Thomas Thomas of Singapore Compact will chair a series of presentations as follows:-
- Dato Johan Raslan, Executive Chairman, PwC Malaysia with the keynote address
- Mr Shariq Barnaky, Partner at Deloitte & Touche to give us a review of global IFRS Development
- Mr Joseph Alfred, our technical advisor for ACCA Singapore will present the findings of ACCA/CFO survey on Asia Pacific’s Road to Global Standards
- Mr Ravi Tirumulai of Oracle Corp will present their approach for enabling Global Standards
- Dr Pearl Tan of SMU will then lead a panel of distinguished professionals to discuss the pros and cons for Global Standards.
In the afternoon session, Edgar will have the honour of chairing the afternoon’s TECHNICAL segment.
Mr Kon Yin Tong of Foo Kon Tan Grant Thornton will kick off with FRS updates while Mr Tham Sai Choy of KPMG will do the Audit updates.
After the break, Mr Sum Yee Loong of Deloitte & Touche will then give us the Tax updates. Our anchor for the day will be Ms Kala Anandarajah, Partner of Rajah & Tann will address the legal issues that we need to know.
So for those who are interested, please check out more details here.