IASC issues two new exposure drafts.

The International Accounting Standards Committee is two steps -- and two exposure drafts -- closer to completing a core set of accounting standards that, if approved by the International Organization of Securities Commissions, could be used for cross-border offerings and listings. The two new Eds, E57, Interim Financial Reporting, and E58, Discontinuing Operations, are expected to be finalized by spring 1998, according to IASC Project Manager Paul Pacter.

What to include in your report

The interim reporting proposal would provide guidance for the business that prepares and reports financial information for a period ending on a date other than its yearend. The draft does not mandate which companies must publish interim reports, how frequently they are required or how soon they must appear after the end of an interim period. "The IASC decided such requirements are regulatory by nature and are best handled by national governments, securities regulators, stock exchanges and accounting bodies," said Pacter.

E57 proposes that, at a minimum, interim reports include four condensed financial statements-the balance sheet, income statement, cash flow statement and a statement showing changes in equity. The notes to the interim reports would explain the events and changes significant to understanding the changes in financial position and performance of the enterprise since the last annual reporting date. Virtually none of the notes to the annual financial statements would be repeated or updated.

Closing shop

The discontinuing operations ED proposes that certain information about a planned discontinuance -- both approved and publicly announced by the boafd of directors -- should be disclosed in the notes to the enterprise's financial statements. The proposal focuses on how to present a discontinuing operation in the financial statements and what information should be disclosed.

"When a company sells off a major portion of its business, its cash flows will experience an abrupt change," said Pacter. Analysts consider a discontinued operation's disclosure of income and expense, cash flows and assets and liabilities vitally important. "This proposal would clearly segregate for the analysts the ongoing from the terrninating activities," said Pacter.

Comments for E58 are due by November 15. Copies of E57 and E58 can be obtained for $16 each by writing the IASC at 167 Fleet Street, London EC4A 2ES, United Kingdom, by phone at 44-171-353-0565 or by email at [e-mail].