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IAS /IFRS in Estonia and IAS/IFRS and SMEs

IAS /IFRS in Estonia and IAS/IFRS and SMEs

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IAS /IFRS in Estonia and IAS/IFRS and SMEs

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  1. IAS/IFRS in EstoniaandIAS/IFRS and SMEs Rita Ilisson Member, IASBs Standards Advisory Council 2001-2005 Chairman, Estonian Accounting Standards Board 1993-2001 ilisson@online.ee, 372 53323713 (c) Rita Ilisson Dec. 2005

  2. IAS/IFRS and Europe 2005 •  listed companies & consolidated accounts • listed companies & separate accounts? • to include mamma in the group accounts •  mamma restates mamma to IFRS ? • other companies & IAS/IFRS? • to include baby in group accounts •  mamma restates baby to IFRS? • ...... (c) Rita Ilisson Dec. 2005

  3. IAS/IFRS and Europe 2005 • Baltics - three different approaches to the EU directives and regulations ! • Estonia – all entities may use IFRS - 2003? • EAS - in compliance with IAS as of 1994 • Latvia - if IFRS complies with Latvian law ! • LAS – few... • Lithuania – unlisted only local GAAP • NAS – in compliance with IAS as of 2003 (c) Rita Ilisson Dec. 2005

  4. IAS/IFRS in Europe 2005 • ...IFRS as adopted by the EU? • political posing or legal necessity? • ...IAS adopted by the EU  or  IFRS? • …the fate of local GAAPs based onIAS/IFRS e.g. Est (1993), Lith (2003)...? • ...how can countries aspiring to enter the EU incorporate IFRS into their legal framework? (c) Rita Ilisson Dec. 2005

  5. IAS/IFRS in Estonia • Estonian-American, living in Sweden appointed Chairman of the EASB on Feb 12, 1993 • Strategy • IAS = accounting platform • mix of Common/Roman law traditions • framework law/ independent standard-setter to issue IAS compliant standards • mandatory application of standards • enact company law via the accounting law (c) Rita Ilisson Dec. 2005

  6. IAS/IFRS in Estonia • Framework Accounting Law - 06.94 • IAS basis for accounting by law • EU formats • balance sheet in order of liquidity • Treasury stock (Own shares) in equity • Conclusion: if right options picked from the directives  IAS in 1993 (c) Rita Ilisson Dec. 2005

  7. IAS/IFRS in Estonia • EU expert opinion 4 Jan 1994 … • would prefer or insist • would prefer - unrealized gains in equity and unrealized losses in P&L • insist on the true and fair override • continental law  standard setter and mandatory standards • cannot conform to IAS and directives • 1997 - IAS/directives mix considered feasible! (c) Rita Ilisson Dec. 2005

  8. The Accounting Reform Cookbook • no mandatory chart of accounts • think! • if the accountant is not capable?… • separate financial accounting and taxation • set up an independent standard setter with the might to issue and enforce • financed by the state or set up a trust • framework law + mandatory standards (c) Rita Ilisson Dec. 2005

  9. The Accounting Reform Cookbook • encompass the regulation of all accounting entities under 1 hat • banks, insurance, manufacturing, retail • work across the board – • privatization issued • company registries • address any and all accounting issues • natural monopolies (c) Rita Ilisson Dec. 2005

  10. The Accounting Reform Cookbook • disclosure - carrot or the stick? • examples – use the press! • Flagship of …Accounting • lead/times – 3-5 standards…wait two years • address SMEs in two standards -need to know principle • address impairment issues • allow all group entities consolidated into IFRS group accounts to apply IFRS! (c) Rita Ilisson Dec. 2005