IFRS and U.S. GAAP:

An Update on Convergence, the SEC’s Reports and Other Activities

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Table of Contents

Learning Objectives ........................................................................................ 4

Introduction ..................................................................................................... 5

Background ..................................................................................................... 6

Significant Events ........................................................................................... 7

International Financial Reporting Standards ................................................ 11

Status of Convergence .................................................................................. 12

SEC Final Staff Report ................................................................................. 16

Response to SEC Final Staff Report ............................................................. 20

What Is Next? ............................................................................................... 21

Summary ....................................................................................................... 23

Glossary / Index ............................................................................................ 24

Feedback Questions ...................................................................................... 26

Final Exam Questions ................................................................................... 33

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Learning Objectives

After completing this course, you should be able to

Understand the history of the IFRS Foundation.

Identify the significant events and activities of the IASB and FASB related

to the international convergence of accounting standards.

Be familiar with key SEC reports issued related to IFRS.

Recognize the current issues and challenges related to convergence and

future activities related to IFRS.

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Introduction

Since 2002 the International Accounting Standards Board and the Financial Accounting

Standards Board have been committed to developing high-quality, compatible accounting

standards for both domestic and cross-border financial reporting. The American Institute

of Certified Public Accountants and other organizations have expressed support for a set

of global standards that would result in the worldwide comparability of financial

statements.

This course will review the significant events that have occurred to achieve the goal of a

common set of global accounting standards. The accomplishments and challenges that

have occurred and status of the convergence efforts will be examined.

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Background

The International Accounting Standards Board (IASB) is the London based, independent

standard-setting body of the IFRS Foundation. In 2001, the IASB assumed accounting

standard-setting responsibilities from its predecessor organization, the International

Accounting Standards Committee (IASC) and adopted the IASC Framework. The IASC

had been in existence since June 1973. New international accounting standards published

since April 1, 2001 are referred to as International Financial Reporting Standards

(IFRSs).

The IASC Foundation was renamed the IFRS Foundation during 2010. The IFRS

Foundation is responsible for the activities of the IASB and other work that centers on

IFRS, such as initiatives related to the translation of IFRS from the English language,

education about IFRS and the development of interactive data taxonomies for IFRS.

Primary objectives of the IFRS Foundation include the development of high quality,

globally accepted IFRSs through the work of the IASB and promotion of the use,

application and adoption of the financial reporting standards. Twenty-two trustees from

designated worldwide geographic locations govern the IFRS Foundation.

The Financial Accounting Standards Board (FASB) has been responsible for establishing

financial reporting accounting standards in the United States for organizations other than

governmental entities since 1973. The standards issued by the FASB generally involve a

specific guidelines and rules based approach versus the more principle-based IFRS

approach. The size of the standards alone illustrates this and also that there will be

various differences as U.S. GAAP can be found in over 9 inches of published guidance,

while IFRS totals approximately 2 inches of guidance. Examples of differences between

the standards include inventory costing and revenue recognition. U.S. GAAP allows the

use of the Last-In-First-Out (LIFO) method of valuing inventory and IFRS does not.

U.S. GAAP contains many specific requirements for revenue recognition, IFRS is not as

detailed particularly where industry requirements are concerned.

Since a joint meeting in Norwalk, Connecticut on September 18, 2002 the IASB and the

FASB have been working together toward the development of high-quality, compatible

accounting standards that could be used for both domestic and cross-border financial

reporting. The joint activities of the FASB and the IASB are often referred to as

“convergence”.

As outlined by the FASB, the international convergence of accounting standards

relates to both the goal and the path used to reach the goal. The goal is a single

set of high-quality, international accounting standards that would be used

worldwide for domestic and cross-border financial reporting. The path consists of

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the collaborative efforts of the FASB and IASB to improve U.S. GAAP and IFRS

and to eliminate the differences between them1.

This course will highlight the significant events regarding the IASB and FASB’s work

and review the current activities and status of the convergence project.

Significant Events

The 2002 working agreement that resulted from the meeting involving the IASB and the

FASB has come to be known as the Norwalk Agreement. The agreement formalized the

commitment of the IASB and the FASB to reach common solutions for identified

differences and to work together on longer-term issues.

To achieve the goal of compatibility, the FASB and IASB agreed, as a matter of high

priority, to:

a) Undertake a short-term project aimed at removing a variety of individual

differences between U.S. GAAP and IFRS including International Accounting

Standards.

b) Remove other differences between IFRS and U.S. GAAP that will remain at

January 1, 2005, through coordination of their future work programs; that is,

through the mutual undertaking of discrete, substantial projects which both

Boards would address concurrently.

c) Continue progress on the joint projects that they are currently undertaking.

d) Encourage their respective interpretative bodies to coordinate their activities.

The European Union also announced in 2002 that they would require the use of IFRS for

all consolidated financial reporting beginning in 2005.

The activities of the IASB and the FASB resulting from the Norwalk Agreement were

followed up with a Memorandum of Understanding issued in February 2006. The

Memorandum reaffirmed the IASB’s and the FASB’s objective of developing common

accounting standards, but also set forth with some specificity the goals they sought to

achieve by 2008. Although their initiative was originally organized to merely eliminate

any differences between their two sets of standards, it became evident in the process that

1 “International Convergence of Accounting Standards – Overview”, Financial Accounting

Standards Board, http://www.fasb.org/jsp/FASB/Page/SectionPage&cid=1176156245663 (accessed 2/15/13)

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additional work was needed. Not only would differences need to be eliminated but in

many areas, a whole new set of standards would have to be jointly developed and agreed

upon. As a result, one of their goals for 2008 was to make significant progress in areas

where they jointly believe current accounting practices under both sets of standards need

improvement.

The Securities and Exchange Commission (SEC) was also following the activities of the

IASB and FASB. In 2007, based on the progress made by the Boards along with other

considerations, the SEC eliminated the requirement that foreign issuers registered in the

United States reconcile their financial statements with U.S. GAAP if their financial

statements were in accordance with IFRSs as issued by the IASB.

The SEC on November 15, 2008 issued its report, “Roadmap for the Potential use of

Financial Statements Prepared In Accordance With International Financial

Reporting Standards By U.S. Issuers” (Roadmap). The full report can be accessed via

www.sec.gov/spotlight/ifrsroadmap.htm.

In the Roadmap the SEC indicates that the use of a single set of widely accepted, high

quality accounting standards would enhance the comparability of financial information

worldwide. The SEC then detailed milestones in the Roadmap which, if achieved, could

lead to the use of IFRS by U.S. issuers. As background for considering the current

activities regarding IFRS, the seven milestones described in the Roadmap by the SEC are

reviewed below.

1. Continued IFRS Development – While the SEC had noted areas in which it

believed IFRS provides insufficient guidance including accounting for insurance

contracts and for extractive activities, the SEC will continue to monitor the

progress of the IASB and the FASB’s work plans. The work plans include

projects involving revenue recognition and financial statement presentation that

the SEC believes should improve financial reporting significantly, when the work

is completed.

The SEC’s future evaluation regarding the use of IFRS by U.S. issuers will

consider whether the standards are comprehensive and of a high quality. The

SEC will also consider whether the standards are developed through a course of

action that includes due process, that considers standards timely and that is able to

produce standards that improve financial reporting and the protection of investors.

2. Changes Required in Funding and Accountability - The IASC Foundation has

financed the operations of the IASB mainly through voluntary contributions from

a wide range of market participants, including accounting firms, corporations,

international organizations, governments and central banks. In 2008 the IASC

Foundation developed a funding plan that involved targeted contribution levels

from individual jurisdictions related to the Foundation’s goal of receiving broad

based, compelling and open-ended commitments that would encourage the

independence of the IASB. The SEC’s future determination regarding the use of

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IFRS will occur only after the IASC Foundation secures a stable funding process

that supports the independent functioning of the IASB.

The IASC Foundation has not been accountable to a national securities regulator

or other governmental body as other national accounting standard setters

traditionally have been. In the United States, the SEC oversees the Financial

Accounting Foundation, (FAF), the parent organization of the FASB. The IASC

Foundation Trustees proposed amendments to its Constitution to establish a

relationship between the IASC Foundation and a Monitoring Board comprised of

securities authorities from various jurisdictions.

Based on the SEC’s assumption that the Monitoring Board will be functioning

when the SEC next considers the use of IFRS, the SEC’s evaluation will take into

account the effectiveness of the oversight of the IASC Foundation when

determining whether mandating the use of IFRS is in the interest of investors.

3. Progress in Developing an IFRS XBRL Taxonomy - In May 2008, the SEC

proposed rules requiring the use of eXtensible Business Reporting Language

(“XBRL”) by companies submitting their financial statements to the SEC and on

their corporate website in order to improve the usefulness of the data to investors.

Based on the anticipated widespread use of interactive data, U.S. issuers would

need to be able to provide IFRS financial statements using XBRL at a greater

level of detail than currently exists. Therefore, the SEC will consider the state of

development of an IFRS taxonomy in its future assessment of whether to require

the use of IFRS for all U.S. issuers.

4. Education and Training - The use of IFRS by U.S. issuers would require the

need for effective IFRS training and education for many parties including

investors, accountants, auditors, audit committees, analysts, rating agencies,

actuaries, regulators, customers, vendors and others involved with or using

financial statement information. The SEC will consider the state of the overall

education, training and readiness of investors, preparers, auditors and other parties

prior to its determination regarding the use of IFRS for all U.S. issuers.

5. Limited Early Use of IFRS Where This Would Enhance Comparability for

U.S. Investors - The Roadmap considers that the SEC would make a decision on

the required use of IFRS for U.S. issuers in 2011. The SEC also would propose

amendments that would allow the limited early use of IFRS by U.S. issuers where

the comparability of financial reporting would be improved for U.S. investors

comparing the largest U.S. issuers with the largest non-U.S. companies in the

same industry.

6. Anticipated Future Timing - Based on the status of the milestones and if it is in

the interest of the public and investors, the SEC expects to determine in 2011

whether to require U.S. public companies to file IFRS prepared financial

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statements with the SEC by 2014. To prepare for the determination in 2011, the

SEC staff has undertaken a review of SEC rules and the Office of the Chief

Accountant has been directed to perform a study and report to the SEC regarding

the impact to the market and investors of the use of IFRS for U.S issuers.

7. Implementation of the Mandatory Use of IFRS - While noting that issues of

non comparability would exist, the SEC is considering a staged implementation of

IFRS. Under the transition, large accelerated filers would submit IFRS financial

statements for fiscal years ending on or after December 15, 2014. Accelerated

filers would begin IFRS filings for years ending on or after December 15, 2015.

Non-accelerated filers, including smaller reporting companies, would begin IFRS

filings for years ending on or after December 15, 2016.

Other areas that the SEC will consider in its determination regarding the use of IFRS

include the standards impact on financial information, the changes that may be required

for controls and accounting systems and auditing considerations. The status of IFRS and

consistency of the application of the standards will also be factors in the SEC’s

determination as indicated in the Roadmap:

In addition to the milestones, the Commission also expects to consider,

among other things, whether IFRS as issued by the IASB is a globally

accepted set of accounting standards and whether it is consistently applied.

The advantages to U.S. investors of increased comparability across

investment alternatives, as contemplated under this Roadmap, are

dependent upon financial reporting under IFRS that is, in fact, consistent

across companies, industries and countries.2

Other national accounting standard setters were also working with the IASB towards

convergence or following the steps taken by the IASB, FASB and other standard setters.

The seven national accounting standard setters that had an IASB Member resident in their

jurisdiction and were having regular meetings with the IASB were:

Australia - Australian Accounting Standards Board (AASB)

New Zealand - Financial Reporting Standards Board (FRSB)

Canada - Accounting Standards Board (AcSB)

France - Conseil Nationale de la Comptabilité (CNC)

Germany - German Accounting Standards Committee (DRSC)

2 “Roadmap for the Potential Use of Financial Statements Prepared in Accordance with

International Financial Reporting Standards by U.S. Issuers”, Securities and Exchange Commission www.sec.gov/spotlight/ifrsroadmap.htm (accessed 2/15/13) p. 20

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Japan - Accounting Standards Board (ASBJ)

United Kingdom - Accounting Standards Board (ASB)

The Group of 20 was also closely following the convergence work and supported the

IASB and FASB process. The Group of 20, or G20, consists of the central bank

governors and finance ministers of 19 countries and the European Union (EU). Along

with the EU, the G20 countries include Argentina, Australia, Brazil, Canada, China,

France, Germany, India, Indonesia, Italy, Japan, Mexico, Republic of Korea, Russia,

Saudi Arabia, South Africa, Turkey, United Kingdom and the United States. The G20

economies represent approximately 90% of global gross domestic product (GDP) and

80% of global trade.3

International Financial Reporting Standards

Although the objective of this course is not to individually review each financial

reporting standard, information on the standards is included below for reference use

during the review of convergence activities.

The IFRS requirements include International Accounting Standards (IASs), International

Financial Reporting Standards and the related interpretations. The IASB adopted the

IASs, which were developed under IASC, when the IASB assumed accounting standard-

setting responsibilities in 2001.

The IFRSs as of 2012 include:

IFRSs:

IFRS 1 First-time Adoption of International Financial Reporting Standards

IFRS 2 Share-based Payment

IFRS 3 Business Combinations

IFRS 4 Insurance Contracts

IFRS 5 Non-current Assets Held for Sale and Discontinued Operations

IFRS 6 Exploration for and evaluation of Mineral Resources

IFRS 7 Financial Instruments: Disclosures

IFRS 8 Operating Segments

IFRS 9 Financial Instruments

IFRS 10 Consolidated Financial Statements

IFRS 11 Joint Arrangements

IFRS 12 Disclosure of Interests in Other Entities

3 “What is the G20?”, G20 Website, www.g20.org/docs/about/about_G20.html (accessed 3/4/13)

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IFRS 13 Fair Value Measurement

IASs:

IAS 1 Presentation of Financial Statements

IAS 2 Inventories

IAS 7 Statement of Cash Flows

IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors

IAS 10 Events after the Reporting Period

IAS 11 Construction Contracts

IAS 12 Income Taxes

IAS 16 Property, Plant and Equipment

IAS 17 Leases

IAS 18 Revenue

IAS 19 Employee Benefits

IAS 20 Accounting for Government Grants and Disclosure of Government

Assistance

IAS 21 The Effects of Changes in Foreign Exchange Rates

IAS 23 Borrowing Costs

IAS 24 Related Party Disclosures

IAS 26 Accounting and Reporting by Retirement Benefit Plans

IAS 27 Consolidated and Separate Financial Statements

IAS 28 Investments in Associates

IAS 29 Financial Reporting in Hyperinflationary Economies

IAS 32 Financial Instruments: Presentation

IAS 33 Earnings per Share

IAS 34 Interim Financial Reporting

IAS 36 Impairment of Assets

IAS 37 Provisions, Contingent Liabilities and Contingent Assets

IAS 38 Intangible Assets

IAS 39 Financial Instruments: Recognition and Measurement

IAS 40 Investment Property

IAS 41 Agriculture

Access to the current consolidated IFRSs including the Framework and interpretations is

provided by the IFRS Foundation on its website.

Status of Convergence

The convergence work toward a single set of high-quality, international accounting

standards started by the IASB and the FASB in 2002 continued through joint projects to

develop common standards. In September 2008 the IASB and the FASB issued an

update of the 2006 Memorandum of Understanding to report on progress made and

outline the goal of completing major projects by 2011. With the realization that the 2011

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timeframe would not be met for all areas, priorities were established in 2010 for the

projects that would result in the most significant improvements to IFRS and U.S. GAAP.

Periodic reports by the IASB and FASB also addressed topics raised by organizations

following the projects as well as continuing to provide updates of items completed in

comparison to the project plans.

The work plans involved short term and long term projects. The short-term projects

primarily involved areas where differences between the accounting standards could be

resolved by incorporating existing IFRS or U.S. GAAP. In 2008, the updated

Memorandum of Understanding focused the efforts on longer-term projects.

A joint report issued in April 2012 by Hans Hoogervorst, IASB Chairman, and Leslie F.

Seidman, FASB Chairman, detailed the convergence status. The ongoing convergence

activities will be described below along with information on the completed projects. The

IASB and FASB’s full report, “IASB-FASB Update Report to the FSB Plenary on

Accounting Convergence”, can be accessed via the FASB website at

http://www.fasb.org/jsp/FASB/Page/SectionPage&cid=1176156245663.

Short-Term Projects in Process

Investment Property Entities

In October 2011 the FASB issued Proposed Accounting Standards Update—Real

Estate—Investment Property Entities (Topic 973) that would require entities meeting

established criteria to measure their investment properties at fair value. During an

August 2012 FASB Board Meeting to consider the comments and feedback received on

the proposal, the Board decided to assess the status of other projects on its agenda prior to

making a final decision on the investment property guidance.

Income Tax

This topic is currently on hold as it had been reassessed by the IASB and FASB as a

lower priority project. A review of accounting for income taxes may be contemplated at

a future date.

Long-Term Projects in Process

There are three priority projects involving financial instruments, revenue recognition and

leases, in which the technical decisions have not been finalized. The IASB and FASB

are also working on changes to the insurance contract topic. Another long-term project

involving financial instruments with the characteristics of equity was changed to a lower

priority project.

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Financial Instruments

The work of the IASB and FASB has resulted in differences regarding classification and

measurement of financial instruments. The standard setters agreed in January 2012 to

review the key areas in which consistency is needed. Due to the differing stages of the

Board’s projects, separate exposure drafts were planned. During November 2012, the

IASB issued its Exposure Draft, Classification and Measurement: Limited Amendments

to IFRS 9. Deliberations on the proposal will occur in the second quarter of 2013 after

the comment period ends.

In February 2013, the FASB issued its Exposure Draft, Final Instruments – Overall

(Subtopic 825-10): Recognition and Measurement of Financial Assets and Liabilities.

Financial asset classification and measurement under the Exposure Draft would be

established considering the asset’s cash flow characteristics and the organization’s asset

management business model instead of the legal form of the asset. Financial assets

would be classified using either amortized cost, fair value through other comprehensive

income or fair value through net income. The comment period on the FASB proposal

ends May 15, 2013. The Boards expect to hold joint re-deliberations on the feedback

received from the proposals.

The IASB and the FASB’s efforts on impairment continue to focus on the issues related

to an incurred loss impairment model that were evident during the financial crisis.

Exposures drafts issued by the Boards in 2009 and 2010 included different expected loss

models. Responses were received indicating a common impairment solution is very

important resulting in the Boards continued efforts to develop a common model.

However concerns remained in the U.S. regarding the joint “three-bucket model”

approach drafted. In response to the concerns the FASB developed another expected loss

model, its Current Expected Credit Loss approach, and issued its proposal Financial

Instruments – Credit Losses (Subtopic 825-15) in December 2012. The IASB is

expected to issue its Exposure Draft during the first quarter of 2013. The Boards together

will consider the comments received on both approaches during 2013.

The IASB and FASB worked separately on general hedge accountings because of

differences in scope of the original projects. The FASB requested comments on the

IASB’s Hedge Accounting Exposure Draft. The FASB intends to reevaluate hedge

accounting issues after the classification and measurement deliberations are finalized.

Continuing work on the financial instruments topic includes efforts by the IASB on

macro hedge accounting and by the FASB on accounting for repurchase agreements.

Revenue Recognition

The Boards issued a revised revenue recognition exposure draft in November 2011. The

intent of the latest exposure draft, Revenue from Contracts with Customers, is to provide

comprehensive principle and application guidance for revenue recognition. The proposed

standard when issued would replace IAS 18 Revenue and IAS 11 Construction

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Contracts. The standard would replace U.S. GAAP guidance in Topic 605 of the

Accounting Standards Codification. Deliberations have continued on the project and a

final standard is expected to be issued in 2013.

Leases

Due to concerns regarding off balance sheet financing the IASB and FASB have focused

on the recognition of all assets and liabilities resulting from lease contracts. The

exposure draft process and consideration of comments received and re-exposing of the

lease proposals occurred in 2010 through 2012. The Boards have been considering the

profiles and methods for accounting for leases and agreed on an approach for lease

expenses in June of 2012. The revised exposure draft is expected to be issued in the

second quarter of 2013.

Insurance Contracts

Insurance contracts is an area in which IFRS lacked specialized requirements resulting in

various practices being used. Feedback received related to an IASB exposure draft and

FASB discussion paper was jointly reviewed by the Boards in 2011. Technical

discussions have been ongoing as the Boards have not reached a consistent conclusion on

a number of factors affecting a model to determine the current estimates of the amount

necessary to carry out an insurance obligation. The Boards continue to deliberate based

on feedback received. The estimated time frame for the issuance of an Insurance

Contracts Exposure Draft is the second quarter of 2013.

Completed Projects

Accounting Changes – FAS 150, Accounting Changes and Corrections, which included

the converged treatment of requiring retrospective application of voluntary changes in

policy was issued by the FASB in 2005.

Borrowing Costs – The IASB revised IAS 23 in 2007.

Business Combinations – Converged standards where issued in 2008.

Consolidated Financial Statements – The project was completed in 2011 with the IASB

issuing IFRS 10, Consolidated Financial Statements and IFRS 12, Disclosure of Interests

in Other Entities and the FASB’s proposed clarification concerning principals and agents.

Derecognition – Disclosure requirements were substantially aligned.

Fair Value Measurement – The FASB issued FAS 157, Fair Value Measurements in

2006 and the IASB issued IFRS 13, Fair Value Measurement in 2011.

Fair Value Option – The FASB issued FAS 159, The Fair Value Option for Financial

Assets and Financial Liabilities in 2007.

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Financial Statement Presentation – Other Comprehensive Income - The Boards

issued presentation of other comprehensive income amendments to IFRS and U.S. GAAP

in 2011.

Inventory Accounting – The accounting treatment for excess freight and spoilage was

converged in 2004 with the FASB’s issuance of FAS 151, Inventory Costs.

Joint Ventures – The IASB issued IFRS 11, Joint Arrangements in 2011.

Non – controlling Interests - Finalized with the FASB’s elimination of the mezzanine

presentation option as part of business combinations in 2008.

Nonmonetary assets - Converged treatment for certain nonmonetary exchanges

achieved with FASB’s issuance of FAS 153, Nonmonetary Assets in 2004.

Post-employment Benefits – The IASB issued amendments to IAS 19 Employee

Benefits in 2011.

Research and Development – As part of the business combinations project, U.S. GAAP

was amended in 2008 for acquired research and development.

Share-based Payments – Finalized with the issuance of converged standards in 2004.

Segment Reporting – Converged with the IASB’s issuance of IFRS 8 Operating

Segments in 2006.

SEC Final Staff Report

At the direction of the SEC, the Office of the Chief Accountant was tasked with

developing and completing a Work Plan regarding the use of IFRS. The Work Plan was

published in February 2010. The information gained through the work plan process

would be one of the factors considered by the SEC when determining whether and how

IFRS should be incorporated into the financial reporting system for U.S. issuers. In July

2012, the Chief Accountant of the SEC issued a Final Staff Report based on the work

performed titled, “Work Plan for the Consideration of Incorporating International

Financial Reporting Standards into the Financial Reporting System for U.S. Issuers”

(Final Staff Report).

The Office of the Chief Accountant (Staff) studied whether to incorporate IFRS

considering a range of options from taking no action regarding IFRS to designating IFRS

as generally accepted accounting standards for U.S issuers. Factors that the Staff

considered during its research included the influence on standard setting, the role of the

FASB, the burden of conversion, regulatory environment including industry regulators,

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audit considerations, state and federal tax impacts and the reference to U.S. GAAP in

laws and contracts. The Staff determined that designating the IASB standards as

authoritative was not endorsed by a significant majority of U.S. capital market

participants and also did not seem to be consistent with the treatment of IFRS by other

worldwide capital markets. Based on this conclusion, the Staff concentrated on other

methods of using IFRS including endorsement or continued convergence.

The SEC stressed that the issuance of the Final Staff Report did not mean that any policy

decision has been made by the SEC regarding whether IFRS should be incorporated into

the financial reporting system. The SEC also noted that additional analysis would be

needed before any determination related to the transitioning to IFRS for U.S. issuers

could be made. A timeframe for the additional analysis was not specified by the SEC.

The Final Staff Report can be accessed at http://www.sec.gov/news/press/2012/2012-

135.htm . The findings from the Final Staff Report are reviewed below along with a

comparison of the issues presented in the SEC’s Roadmap issued in 2008.

Important analysis topics presented in the Final Staff Report include:

Development of IFRS

Interpretive Process

IASB’S Use of National Standard Setters

Global Application and Enforcement

Governance of the IASB

Status of Funding

Investor Understanding

Development of IFRS

In order to determine the readiness of IFRS for U.S. issuers, the Staff’s IFRS analysis

involved assessments regarding the comprehensiveness of the standards, the

comparability of IFRS financial statements and the enforceability of the standards.

In its evaluation, the Staff reviewed the activities of the FASB and IASB including the

Norwalk Agreement, the Memorandum of Understanding, the 2008 update to the

Memorandum of Understanding and the April 2012 Progress Report. In addition, the

Staff performed a comparison of the IFRS standards to U.S. GAAP along with

evaluations of the projects and achievements to date. The Staff documented notable

differences between IFRS and U.S. GAAP it its report released in November 2011,

“Work Plan for the Consideration of Incorporating International Financial Reporting

Standards into the Financial Reporting System for U.S. Issuers: A Comparison of U.S.

GAAP and IFRS” (Comparison), which can be accessed at

http://www.sec.gov/spotlight/globalaccountingstandards.shtml.

The Staff Comparison identified areas that were primarily converged or had similar

objectives where a change to using IFRS would result in financial amounts and

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disclosures that would be similar to those under U.S. GAAP. The Staff also identified

areas of fundamental differences existing between U.S. GAAP and IFRS that include:

Impairment

Certain Nonfinancial Liabilities

Measurement of Certain Asset Classes

Inventory

Research and Development

Income Taxes

Plant, Property and Equipment

The Staff also identified areas where IFRS does not provide industry guidance that exists

under U.S. GAAP. Four significant areas identified were:

Utilities involved in rate-regulated activities

Oil and gas

Investment companies

Broker-dealers

Consistent with the 2008 Roadmap, the quality of the IFRS accounting standards was a

significant consideration for the SEC Staff. Although the Staff determined that the IASB

had made significant improvements regarding the comprehensiveness of IFRS as a result

of standards issued and the convergence efforts, the differences that exist between IFRS

and U.S. GAAP were greater than the Staff expected and would be very challenging to

address. The lack of industry guidance in IFRS was also a contributing factor in the

Staff’s conclusion that a “gap” in the development of IFRS continues to exist.

Interpretive Process

The Staff’s consideration of the interpretive process and use of national standard setters is

consistent with its focus on the standards development process in the 2008 Roadmap.

The Staff evaluated the efforts of the IFRS Interpretations Committee reviewing IFRS

accounting issues and the issuance of authoritative guidance related to the issues. The

Staff concluded that more should be done to address IFRS issues on a timely basis. The

Staff also noted that the IASB had recently made changes that may improve the

interpretive process but it was too soon to determine the effectiveness of the changes.

IASB’s Use of National Standard Setters

The Staff reviewed the IASB’s procedures concerning the use of and meetings with

national standard setters. The Staff concluded that increased interaction and reliance on

areas of expertise of national standard setters would assist the IASB.

19

Global Application and Enforcement

In assessing the application of IFRS the Staff performed a review of financial statements

prepared using IFRS from companies across 22 countries and 36 industries. The Staff

also obtained information from regulators and audit firms to understand the enforcement

considerations of IFRS. Although the Staff determined that the statements generally

complied with IFRS, improvements in disclosures and the consistency of application

were needed to reduce global differences. The Staff suggested that working with

regulators in countries that are using IFRS would lead to the sharing of views on

enforcement and improve consistency.

Governance of the IASB

The Staff reviewed the IASB’s governance structure involving the IFRS Foundation and

the Monitoring Board and the composition and duties of the Boards. The IFRS

Foundation is responsible for oversight of the IASB’s activities including standard-

setting, language translation of the standards, IFRS education and the development of

IFRS taxonomies. The Monitoring Board, which was established in 2009, provides

public oversight of the IFRS Foundation. The membership of the Monitoring Board is

comprised of capital markets authorities. The public oversight currently in place

addresses one of the accountability concerns raised in the 2008 Roadmap.

Although the Staff concluded that the governance structure of the IFRS Foundation

provides oversight while supporting the IASB’s independence, the Staff recognizes that

focusing on a single capital market is not the objective of the IASB. Therefore the Staff

indicated that protections, such as an active FASB to endorse IFRSs, for the U.S. markets

may be required.

Status of Funding

The Staff reviewed the funding history of the IFRS Foundation and also considered the

current funding mechanism, an annual accounting support fee from issuers, of the FASB.

While recognizing that progress has been made regarding funding for the IFRS

Foundation since the 2008 Roadmap, the SEC noted that the non profit organization does

not have the ability to compel funding requests. Funding for the IFRS Foundation is

provided by businesses, governments and non profit organizations from less than 30 of

the over 100 countries using IFRS. In addition large public accounting firms continue to

provide sizable amounts of the IASB’s funding, approximately 25% of the 2012 funding

collections, which is a continuing concern of the Staff.

Investor Understanding

Education and training was one of the milestones included in the 2008 Roadmap. To

assess the current understanding, the Staff conducted research and obtained input

regarding U.S. investors understanding of IFRS and readiness for use of IFRS along with

20

considering the process of investor education. The Staff determined that investor

knowledge of IFRS varies. Based on the review, the Staff will contemplate ways to

improve investor education of accounting standards regardless of the direction taken with

IFRS.

Response to SEC Final Staff Report

The response to the release of the SEC’s Final Staff Report was varied. Some

organizations and individuals supported the SEC’s thoroughness of the review while

other organizations were disappointed that the report did not specify an action plan for

IFRS.

Hans Hoogervorst, IASB Chairman, commenting on the Final Staff Report said: “We are

at a pivotal moment for our organization. The IASB has started working on a new

agenda. The era of convergence is coming to an end. We are revamping our institutional

infrastructure to provide for a more inclusive approach to international standard setting.

This is the right timing to come on board and participate in shaping the future of global

accounting.4”

The European Commission suggested that the Unites States may have to relinquish its

seat on the IASB as a result of its stance on IFRS. Stefaan De Rynck speaking on behalf

of EU Commissioner Michel Barnier indicated, “The lack of a clear vision from the U.S.

creates uncertainty and hampers the IFRS from becoming a truly global accounting

language.5"

The AICPA, a supporter of global accounting standards, encouraged the SEC

Commissioners to review the Final Staff Report on a timely basis and to provide an IFRS

financial reporting adoption option for U.S. public companies.

The IFRS Foundation, at the request of the Foundation Trustees, performed an analysis of

the SEC’s Final Report. The report, “IFRS Foundation Staff Analysis of the SEC Final

Staff Report” is available at http://www.ifrs.org/Alerts/PressRelease/Pages/IFRS-

Foundation-Staff-Analysis-of-SEC-Final-Staff-Report-on-IFRS.aspx and was issued on

October 23, 2012.

The IFRS Foundation Report noted that current initiatives are addressing some of the

issues raised in the SEC Report. One proposed action related to the SEC’s concern

4 “Still in Flux: Future of IFRS in U.S. remains unclear after SEC report”, Ken Tysiac, Journal of

Accountancy, September 2012, www.journalofaccountancy.com/Issues/2012/Sep/20126059.htm (accessed 2/15/13). 5 “IFRS Update”, IFRS Report, American Institute of Certified Public Accountants, issued August

2, 2012.

21

regarding the IASB’s level of involvement with national standard setters and regional

accounting standards organizations. The IASB proposal would establish the Accounting

Standards Advisory Forum, a body of 12 members with designated geographic

representation for 10 seats and two remaining seats. The Report also included a research

appendix documenting support for global accounting standards.

Addressing the release of the IFRS Foundation Report, Michel Prada, Chairman of the

Trustees of the IFRS Foundation commented:

“The IFRS Foundation staff analysis released today complements the findings of

the SEC Staff Report with academic research as well as the experiences of other

jurisdictions that have already completed their own transitions to IFRSs.

Accordingly, the analysis should also be of use to other jurisdictions that are

evaluating whether and how to adopt IFRSs.

While acknowledging the challenges, the analysis conducted by the IFRS

Foundation staff shows that there are no insurmountable obstacles for adoption of

IFRSs by the United States, and that the US is well placed to achieve a successful

transition to IFRSs, thus completing the objective repeatedly confirmed by the

G20 leaders.6"

When the IFRS Foundation issued an Invitation to Comment regarding the Accounting

Standards Advisory Forum the Foundation proposed that Forum participants commit to

promote the endorsement or adoption of IFRS in full and without modification. Under

the Foundation’s proposal it was unclear whether the FASB would be allowed to

participate on the Forum. The FAF addressed its concern to the proposal in a response to

the Foundation during December 2012.

What Is Next?

With no timetable indicated by the SEC for its determination regarding the use of IFRS

and issues and delays arising on existing projects including financial instruments, much

uncertainty exists regarding the working relationship of the FASB and IASB and the

convergence project. Adding to the complex situation is that both a new SEC Chairman

and new Chief Accountant are in place since the release of the SEC Final Staff Report.

The uncertainty was noted when Leslie Seidman, Chairman of the FASB, addressing a

New York State Society of Security Analysts Conference said, “The SEC has not made a

6 “Trustees Publish IFRS Foundation Staff Analysis of SEC Final Staff Report on IFRS”, IFRS

Foundation Press Release, October 23, 2012, http://www.ifrs.org/Alerts/PressRelease/Pages/IFRS-Foundation-Staff-Analysis-of-SEC-Final-Staff-Report-on-IFRS.aspx (accessed 2/3/13).

22

decision that we should adopt IFRS, and so the question is what do we do in the

meantime. …… we do believe that having globally comparable standards is extremely

important.7”

Even though much is unknown regarding the direction the SEC may take regarding IFRS,

the IASB and FASB are continuing to consult on various topics and work together on

projects and positive steps have been noted. In one recent development, the IFRS

Foundation change regarding a requirement to take part in the Accounting Standards

Advisory Forum may allow the FASB to participate in the Forum. The change by the

IFRS Foundation asks participants to support the Foundation instead of the original

commitment regarding the adoption of IFRS without modification. Nominating

submissions to the Forum were due at the end of February 2013. The projected first

meeting of the Forum is expected to occur in April 2013.

As for important topics for CPAs to keep up with regarding international standards one

approach it to follow the activities related to the convergence projects outstanding as

significant accounting developments most likely will follow as a result of the revenue

recognition, leases and insurance contract projects. The FASB and IASB’s recent joint

meetings have discussed revenue recognition disclosures, transition and effective date

timing, transition issues for capital/finance leases and insurance contract topics including

segregated assets and accretion of interest on the margin. Although there have been

many delays encountered during these projects and there is some question as to whether

converged standards will result in the areas of financial instruments and insurance

contracts, it appears likely that a converged revenue recognition standard will be issued

during 2013.

Many parties, including companies that have delayed planning for international

standards, continue to wait for guidance on IFRS from the SEC. CPAs and interested

parties are encouraged to follow IFRS activities and updates using the resources available

from the IASB, FASB and AICPA websites.

7 “Accounting Convergence Process in Limbo without U.S. Decision” by Emily Chasan, The Wall

Street Journal, January 10, 2012, http://blogs.wsj.com/cfo/2013/01/10/accounting-convergence-process-in-limbo-without-u-s-decision/ (accessed 2/16/13)

23

Summary

Over the last ten years the IASB and FASB have achieved significant progress toward

their goal of developing high-quality, compatible accounting standards for both domestic

and cross-border financial reporting. The convergence activities of the Boards have been

supported by many organizations, including the AICPA, that are seeking worldwide

comparability of financial statements and information.

Regulators worldwide have also been following the status of the IASB and FASB

convergence activities along with other IASB actions regarding IFRS. The SEC has

issued a number of key reports over the years as it has monitored the developments

regarding IFRS. Although a determination on IFRS from the SEC was expected, the SEC

issued a report in 2012 without providing a final decision on whether IFRS should be

adopted for use by U.S. public companies.

With no timetable provided by the SEC regarding an IFRS decision, uncertainty exists

regarding the future direction of the IASB and FASB’s joint activities. While the IASB

and FASB continue to work on significant convergence projects involving revenue

recognition, leases, financial instruments and insurance contracts, CPAs are encouraged

to continue to follow international financial reporting updates and the convergence

activities as substantial changes to U.S. GAAP may occur when final standards on these

topics are issued.

24

Glossary / Index

Accounting Standards Advisory Forum

The 12 member body proposed in 2012 will include national and regional standards

setters to work with the IASB. P. 19

Convergence

The international convergence of accounting standards refers to the objective of

establishing a single set of high-quality, international accounting standards that would be

used worldwide and to the efforts and activities of the FASB and IASB to improve

standards. P. 4

Financial Accounting Foundation (FAF)

An independent corporation organized in 1972. The Foundation’s responsibilities

include the oversight, administration and funding of the FASB and Governmental

Accounting Standards Board. P. 7

Financial Accounting Standards Board (FASB)

A board created in 1973 that is responsible for establishing U.S. financial reporting

accounting standards for nongovernmental entities. P. 4

Group of 20 (G20)

The G20 consists of the central bank governors and finance ministers of 19 countries and

the European Union. P. 9

International Accounting Standards (IAS)

IAS were issued by the International Accounting Standards Committee and are

considered part of International Financial Reporting Standards. P. 5

International Accounting Standards Board (IASB)

The IASB is the independent, standard setting body of the International Financial

Reporting Standards Foundation. P. 4

International Accounting Standards Committee (IASC)

The IASC, established in 1973, developed and promoted International Accounting

Standards. The IASB replaced the IASC in 2001. P. 4

International Financial Reporting Standards (IFRSs)

IFRSs include International Accounting Standards issued by IASC, IFRSs issued by the

IASB and the related interpretations. P. 4

International Financial Reporting Standards (IFRS) Foundation

The IFRS Foundation is responsible for the activities of the IASB. The IFRS Foundation

was established in 2010 when the IASC Foundation was renamed. P. 4

25

Monitoring Board

The Monitoring Board provides public oversight of the IFRS Foundation. Capital market

authorities participate on the Board, which was established in 2009. P. 7

Securities and Exchange Commission (SEC)

A U.S. government agency established in 1934 to regulate the securities markets and

protect investors. P. 6

Statement of Financial Accounting Standards (SFAS or FAS)

Pronouncements originally issued by the FASB constituting generally accepted

accounting principles. The FAS and other pronouncements were integrated into the

Accounting Standards Codification in 2009. The Codification reorganized the thousands

of U.S. GAAP pronouncements into roughly 90 accounting topics and displays all topics

using a consistent structure. The Codification is now the single source of authoritative

nongovernmental U.S. generally accepted accounting principles. P. 13

26

Review/ Feedback Questions Review/Feedback Questions are a NASBA requirement and are designed to help reinforce the material. These questions are NOT graded. Answers/Explanations immediately follow.

1. Which of the following organizations became the IFRS Foundation?

a. Accounting Standards Advisory Forum

b. International Accounting Standards Board

c. International Accounting Standards Committee Foundation

d. Financial Accounting Standards Board

2. Which of the following issued by the IASB and the FASB in February 2006

reaffirmed the Boards’ objective of developing common accounting standards and

detailed goals to be achieved by 2008?

a. Norwalk Agreement

b. Roadmap to IFRS

c. SFAS No. 157

d. Memorandum of Understanding

3. Which organization issued the Roadmap for the Potential Use of Financial

Statements Prepared in Accordance with IFRSs by U.S. Issuers?

a. AICPA

b. FAF

c. SEC

d. FASB

4. Which of the following allows the use of the last-in-first-out (LIFO) method of

inventory costing?

a. U.S. GAAP

b. IFRS

c. IAS

d. IASC

5. Which item is a key issue that the SEC noted in its Roadmap that it would be

following?

a. The IASB Framework

b. The development of IFRS

c. The reconciliation of IFRS to U.S. GAAP

d. The U.S. economy

27

6. Which area has the SEC identified as having fundamental differences between

IFRS and U.S. GAAP?

a. Borrowing costs

b. Fair value measurement

c. Impairment

d. Share-based payments

7. Which of the following provides oversight of the IFRS Foundation?

a. Monitoring Board

b. Interpretations Committee

c. Accounting Standards Advisory Forum

d. Financial Accounting Standards Board

8. The IASB’s operations were originally primarily financed through

a. Mandated assessments

b. Voluntary contributions

c. Targeted jurisdictional payments

d. AICPA donations

9. Which in process project has been delayed by differences in technical approaches

resulting in the issuance of separate, divergent exposure drafts by the IASB and

FASB?

a. Financial instruments

b. Leases

c. Revenue recognition

d. Fair value measurement

10. What did the SEC conclude regarding IFRS with the issuance of its Final Staff

Report?

a. IFRS will be adopted for U.S. issuers by 2014.

b. IFRS will be designated as generally accepted accounting principles.

c. Designating IFRS as authoritative was not supported by the majority of

U.S. market participants.

d. Designating IFRS as authoritative was not supported by the majority of

the Board of FASB.

28

Explanations/Answers to Feedback/Review Questions

1. Which of the following organizations became the IFRS Foundation?

a. Accounting Standards Advisory Forum

b. International Accounting Standards Board

c. International Accounting Standards Committee Foundation

d. Financial Accounting Standards Board

a. Incorrect answer. The Forum was proposed in 2012 to increase the

IASB’s involvement with national standard setters.

b. Incorrect answer. The IASB is the standard setting body of the IFRS

Foundation.

c. Correct answer. The IASC Foundation was renamed the IFRS Foundation

in 2010. P. 4

d. Incorrect answer. The FASB is the accounting setter for U.S. GAAP.

2. Which of the following issued by the IASB and the FASB in February 2006

reaffirmed the Boards’ objective of developing common accounting standards and

detailed goals to be achieved by 2008?

a. Norwalk Agreement

b. Roadmap to IFRS

c. SFAS No. 157

d. Memorandum of Understanding

a. Incorrect answer. The agreement between the IASB and the FASB known

as the Norwalk Agreement was issued in 2002.

b. Incorrect answer. The report known as the Roadmap to IFRS was not

issued by the IASB and FASB.

c. Incorrect answer. While the move to the fair value option was consistent

with IFRS, this is not the correct answer.

d. Correct answer. The IASB and FASB issued the Memorandum of

Understanding in 2006. P. 5

3. Which organization issued the Roadmap for the Potential Use of Financial

Statements Prepared in Accordance with IFRSs by U.S. Issuers?

a. AICPA

b. FAF

c. SEC

d. FASB

a. Incorrect answer. While the AICPA supports the convergence project, this

is not the correct answer.

29

b. Incorrect answer. While the FAF supports the convergence project, this is

not the correct answer..

c. Correct answer. The SEC published its Roadmap Report in 2008. P. 6

d. Incorrect answer. While the FASB supports the convergence project, this

is not the correct answer.

4. Which of the following allows the use of the last-in-first-out (LIFO) method of

inventory costing?

a. U.S. GAAP

b. IFRS

c. IAS

d. IASC

a. Correct answer. While the differences between U.S. GAAP and IFRS

have decreased, major differences remain. One of the differences is that

U.S. GAAP allows the use of LIFO while IFRS does not. P. 4

b. Incorrect answer. IFRS (International Financial Reporting Standards) do

not permit the use of LIFO.

c. Incorrect answer. Standards issued by the IASB (the International

Accounting Standards Board) do not permit the use of LIFO.

d. Incorrect answer. Standards issued by IASC (the International Accounting

Standards Committee) do not permit the use of LIFO.

5. Which item is a key issue that the SEC noted in its Roadmap that it would be

following?

a. The IASB Framework

b. The development of IFRS

c. The reconciliation of IFRS to U.S. GAAP

d. The U.S. economy

a. Incorrect answer. The IASB Framework was approved by the IASC

Board and adopted by the IASB in April 2001. The Framework was not a

key issue noted in the SEC’s Roadmap to IFRS.

b. Correct answer. The continued development of IFRS is a topic identified

by the SEC as a key factor that would be considered in its IFRS

determination, prior to recommending convergence. P. 6

c. Incorrect answer. Although some suspect this will be time consuming, the

reconciliation of IFRS to U.S. GAAP was not a key issue in the SEC’s

Roadmap.

d. Incorrect answer. While the economy is an issue in the U.S., this is not

the correct answer.

30

6. Which area has the SEC identified as having fundamental differences between

IFRS and U.S. GAAP?

a. Borrowing costs

b. Fair value measurement

c. Impairment

d. Share-based payments

a. Incorrect answer. Borrowing costs have been converged.

b. Incorrect answer. The FASB issued FAS 157, Fair Value Measurements

in 2006 and the IASB issued IFRS 13, Fair Value Measurement in 2011

c. Correct answer. IFRS and U.S. GAAP have fundamental differences

regarding impairment with work continuing in this area. P. 16

d. Incorrect answer. The convergence project for share-based payments was

completed.

7. Which of the following provides oversight of the IFRS Foundation?

a. Monitoring Board

b. Interpretations Committee

c. Accounting Standards Advisory Forum

d. Financial Accounting Standards Board

a. Correct answer. The Monitoring Board established in 2009 provides

public oversight of the IFRS Foundation. P. 17

b. Incorrect answer. The IFRS Interpretations Committee reviews issues and

provides authoritative guidance.

c. Incorrect answer. This body involving national standard setters does not

provide public oversight of the IFRS Foundation.

d. Incorrect answer. The FASB is the U.S. GAAP standard setter.

8. The IASB’s operations were originally primarily financed through

a. Mandated assessments

b. Voluntary contributions

c. Targeted jurisdictional payments

d. AICPA donations

a. Incorrect answer. The IASB has considered possible mandates, but this is

not the correct answer.

b. Correct answer. Voluntary contributions from market participants were

the primary original funding source for the IASB. P 6

c. Incorrect answer. The IASC Foundation moved to a funding plan for the

IASB involving targeted contribution levels from jurisdictions in 2008.

d. Incorrect answer. While the AICPA supports the convergence project,

they do not finance it.

31

9. Which in process project has been delayed by differences in technical approaches

resulting in the issuance of separate, divergent exposure drafts by the IASB and

FASB?

a. Financial instruments

b. Leases

c. Revenue recognition

d. Fair value measurement

a. Correct answer. Differences between the IASB and FASB regarding

classification and measurement and impairment have resulted in the

issuance of separate exposure drafts at different times. P. 12

b. Incorrect answer. The IASB and FASB have agreed on an approach for

lease expenses.

c. Incorrect answer. The IASB and FASB have jointly revised the most

recent revenue recognition exposure draft.

d. Incorrect answer. The FASB issued FAS 157, Fair Value Measurements

in 2006 and the IASB issued IFRS 13, Fair Value Measurement in 2011.

10. What did the SEC conclude regarding IFRS with the issuance of its Final Staff

Report?

a. IFRS will be adopted for U.S. issuers by 2014.

b. IFRS will be designated as generally accepted accounting principles.

c. Designating IFRS as authoritative was not supported by the majority

of U.S. market participants.

d. Designating IFRS as authoritative was not supported by the majority

of the Board of FASB.

a. Incorrect answer. The SEC’s Final Staff Report did not provide any

indication of future timing.

b. Incorrect answer. The SEC’s Report did not indicate that IFRS will be

designated as U.S. GAAP, although pressured to do so by many.

c. Correct answer. The SEC determined that designating IFRS as generally

accepted accounting principles was not supported. The SEC indicated

further analysis would be performed but no specific timing was indicated.

P. 15

d. Incorrect answer. The FASB Board does support the concept of a single

set of standards, although they may have differences of opinion on what

those standards should be.

32

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CPE Exam Please select the single best answer and transfer it to the preceding sheet.

1. International Accounting Standards were issued by the

a. Accounting Standards Board

b. Financial Reporting Standards Board

c. International Accounting Standards Committee

d. International Accounting Standards Board

2. What year did the SEC eliminate the U.S. GAAP reconciliation requirement for

foreign issuers filing IFRSs statements?

a. 2002

b. 2005

c. 2007

d. 2010

3. Which convergence project was completed with the revision of IAS 23?

a. Accounting Changes

b. Borrowing Costs

c. Joint Ventures

d. Non-controlling Interests

4. The joint ventures project was completed with the issuance of which standard?

a. IAS 27

b. IAS 28

c. IFRS 11

d. IFRS 12

5. Which project was completed with the issuance of converged standards in 2004?

a. Derecogntion

b. Fair Value Option

c. Post-employment Benefits

d. Share-based Payments

6. Which standard was issued as part of the fair value measurement project?

a. FAS 150

34

b. FAS 151

c. IFRS 12

d. IFRS 13 P.13

7. Which project was converged with the issuance of IFRS 8?

a. Business Combinations

b. Inventory Accounting

c. Leases

d. Segment Reporting

8. Which project has been delayed by differences regarding the “three-bucket model”?

a. Accounting Changes

b. Financial Instruments

c. Investment Property Entities

d. Revenue Recognition

9. Which of the following was concluded by the SEC in its Final Staff Report?

a. IFRS had improved guidance for broker-dealers.

b. IFRS interpretive issues were addressed timely.

c. The IASB would benefit from increased interaction with and guidance

from national standards setters.

d. The level of investor IFRS education and training was high and much had

been done regarding readiness for using IFRS.

10. Which body was formed to address the SEC’s concern regarding the IASB’s

involvement with national standard setters?

a. Accounting Standards Advisory Forum

b. Financial Reporting Standards Board

c. IFRS Interpretations Committee

d. Monitoring Board