NEW STANDARDS FOR OFF BALANCE CLARITY

摘要

Despite opposition from multinational companies, international accounting standard setters have changed how joint ventures are accounted for. The International Accounting Standards Board released three standards to improve accounting requirements for off balance sheet activities and joint arrangements. The standards, IFRS 10 Consolidated Financial Statements, IFR5 11 Joint Arrangements and IFRS 12 Disclosure of Interests in Other Entities, also bring IFRS and US GAAP closer together. Under the new package, proportionate consolidation, one of two methods currently used for accounting for joint ventures, will no longer be allowed. Entities will now only be able to report under equity accounting. Sir David Tweedie, chairman of the IASB, said: 'As a package, these changes will provide a check on off balance sheet activities and give investors a much clearer picture of the nature and extent of a company's involvement with other entities.'