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IASC issues five new comparability project exposure drafts.

The International Accounting Standards Committee (IASC) published five exposure drafts as part of its comparability and improvements project. The project's purpose is to develop revised international accounting standards (IAS) that permit fewer free choices of accounting treatments for like transactions and events and that require better disclosure. All five EDs incorporate the changes agreed to in the IASC Statement of Intent on the Comparability of Financial Statements, which was issued in July 1990.

* E41, Revenue Recognition, revises IAS no. 18. It identifies circumstances in which it is probable that future economic benefits will flow to the enterprise and the revenue can be measured reliably and, therefore, will be recognized.

* E42, Constraction Contracts, revises IAS no. 11. It requires the use of the percentage of completion method for the recognition of revenue and profits on construction contracts.

* E43, Property, Plant and Equipment, revises lASs nos. 4 and 16. It requires the use of historical cost-based measurements for property, plant and equipment. Revalued amounts may be used as an allowed alternative, but a new requirement says any revaluations should be kept up-to-date.

* E44, The Effects of Changes in Foreign Exchange Rates, revises IAS no. 21. It requires the application of the general principles on hedge accounting in E40, Financial Instruments, to foreign currency transactions.

* E45, Business Combinations, revises IAS no. 22. It requires the use of the purchase method for all business combinations in which an acquirer can be identified. Goodwill must be recognized as an asset and amortized to income on a systematic basis over its useful life. The amortization period should not exceed 5 years unless a longer useful life can be justified and explained in the financial statements. The longer useful period should not exceed 20 years.

Copies of the EDs, at [british pounds]5 each, can be obtained directly from the IASC, 167 Fleet Street, London, EC4A 2ES, England. Telephone: + 44 (071) 353-0565.

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Title Annotation:International Accounting Standards Committee
Publication:Journal of Accountancy
Article Type:Brief Article
Date:Aug 1, 1992
Words:382
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