Planned IFRS Adoption and Accounting Educators in Taiwan

Report
2010 KAA Summer International Conference
Busan, Korea
Planned IFRS Adoption and Accounting Educators
in Taiwan
Ling-Tai Lynette Chou, Ph.D., CPA(Texas)
Director of International Exchange, TAA
Professor of National Chengchi University
1
Outline
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Progress of planned IFRS adoption in Taiwan
Challenges facing accounting educators
Recent TAA-sponsored conferences on IFRS
CPA exam questions and IFRS
Selected Research on IFRS in Taiwan
Conclusion
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1. Progress of Planned IFRS Adoption
in Taiwan
3
Progress of Planned IFRS Adoption
in Taiwan
• In 2001 Taiwan government held an Economic
Development Meeting and made a decision to
converge with IFRS.
• The Financial Supervisory Commission (FSC) in
2009 officially announced the Roadmap for full
adoption of IFRS:
– Listed and financial companies are required to
prepare IFRS F/Ss beginning 2013 with 2012 included
as the comparative statements.
– Non-listed companies will begin after 2015.
4
Progress of Planned IFRS Adoption
in Taiwan
•The standard statements released based on IFRS during the convergence era include:
Taiwan GAAP
IFRS
SFAS No. 34 Financial Instruments:
Recognition and Measurement
IAS 39 Financial Instruments: Recognition and
Measurement
SFAS No. 35 Impairment of Assets
IAS 36 Impairment of Assets
SFAS No. 36 Financial Instruments:
Disclosure and Presentation
IAS 32 Financial Instruments: Presentation
IFRS 7 Financial Instruments: Disclosures
SFAS No. 37 Intangible Assets
IAS 38 Intangible Assets
SFAS No. 38 Non-current Assets Held
for Sale and Discontinued Operations
IFRS 5 Non-current Assets Held for Sale and
Discontinued Operations
SFAS No. 39 Share-based payment
IFRS 2 Share-based Payment
SFAS No. 40 Insurance Contracts
IFRS 4 Insurance Contracts
SFAS No. 41 Operating Segments
IFRS 8 Operating Segments
5
Progress of Planned IFRS Adoption
in Taiwan
Current GAAP
IFRSs
•Framework: Framework for the Preparation and
Presentation of Financial Statements
•IAS 1 Presentation of Financial Statements
•IAS 16 Property, Plant and Equipment
•IAS 17 Leases
第2號租賃會計處理準則
•IAS 23 Borrowing Costs
第3號利息資本化會計處理準則
第5號採權益法之長期股權投資會計處理準則 •IAS 28 Investments in Associates
•IAS 24 Related Party Disclosures
第6號關係人交易之揭露
•IAS 27 Consolidated and Separate Financial
第7號合併財務報表
Statements
•IAS 8 Accounting Policies, Changes in Accounting
第8號會計變動及前期損益調整之會計處理
Estimates and Errors
•IAS 10 Events after the Reporting Period
第9號或有事項及期後事項之處理準則
•IAS 37 Provisions, Contingent Liabilities and
Contingent Assets
•IAS 2 Inventories
第10號存貨之會計處理
•IAS 11 Construction Contracts
第11號長期工程合約之會計處理準則
N.A
第12號所得稅抵減之會計處理準則
N.A
第13號財務困難債務整理之會計處理準則
•IAS 21 The Effects of Changes in Foreign Exchange
第14號外幣換算之會計處理準則
Rates
•IAS 1 Presentation of Financial Statements
第15號會計政策之揭露
6
第1號財務會計觀念架構及財務報表之編製
Progress of Planned IFRS Adoption
in Taiwan
Current GAAP
第16號財務預測編製要點
第17號現金流量表
第18號退休金會計處理準則
IFRSs
N.A
•IAS 7 Cash Flow Statements
•IAS 19 Employee Benefits
•IAS 26 Accounting and Reporting by Retirement
Benefit Plans
N.A
•IFRS 8 Operating Segments
第19號創業期間之會計處理準則
第20號部門別財務資訊之揭露
(2011年將被第41號公報「營運部門資訊之揭
露」取代)
第22號所得稅之會計處理準則
•IAS 12 Income Taxes
第23號期中財務報表之表達及揭露
第24號每股盈餘
第25號企業合併-購買法之會計處理
第28號銀行財務報表之揭露
第29號政府輔助之會計處理準則
第30號庫藏股票會計處理準則
•IAS 34 Interim Financial Reporting
•IAS 33 Earnings Per Share
•IFRS 3 Business Combinations
•IFRS 7 Financial Instruments :Disclosures
•IAS 20 Accounting for Government Grants and
Disclosure of Government Assistance
•N.A
第31號合資投資之會計處理準則
•IAS 31 Interests in Joint Ventures
第32號收入認列之會計處理準則
•IAS 18 Revenue
第33號金融資產之移轉及負債消滅之會計處理 •IAS 39 Financial Instruments: Recognition and
Measurement
7
Progress of Planned IFRS Adoption
in Taiwan
Current GAAP
IFRSs
•IAS 39 Financial Instruments: Recognition and
Measurement
第35號資產減損之會計處理準則
•IAS 36 Impairment of Assets
第36號金融商品之表達與揭露
•IAS 32 Financial Instruments: Presentation
•IFRS 7 Financial Instruments :Disclosures
第37號無形資產之會計處理準則
•IAS 38 Intangible Assets
第38號待出售非流動資產及停業單 •IFRS 5 Non-current Assets Held for Sale and Discontinued
位之會計處理準則
Operations
第39號股份基礎給付之會計處理準 •IFRS 2 Share-based Payment
則
第40號保險合約之會計處理準則
•IFRS 4 Insurance Contracts
第41號營運部門資訊之揭露
•IFRS 8 Operating Segments
高度通貨膨脹經濟下之財務報導 , •IAS 29 Financial Reporting in Hyperinflationary Economies
尚不適用.
未訂
•IAS 40 Investment Property
未訂
•IAS 41 Agriculture
第34號金融商品之會計處理準則
•IFRS 1 First-time Adoption of International Financial
Reporting Standards
未訂
•IFRS 6 Exploration for and Evaluation of Mineral
Resources
係取代IAS 39金融資產分類,目前未•IFRS 9 Financial Instruments
依IFRS 9修訂第34號公報
未訂
8
2. Challenges Facing Accounting
Educators
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(1) Traditional Chinese Translation
Of IFRSs
• The First Committee of the FSC IFRS Task Force is in
charge of the translation and final review of the
Traditional Chinese IFRS (正體中文版). The former
President of TAA, Professor Ding-Wong Cheng(鄭丁
旺教授) of NCCU, is the Chairman of this 11-member
Committee.
• The collaboration among accounting scholars across
the Taiwan Strait is instrumental to maintain certain
level of consistency in key-terms of the traditional
and simplified Chinese translations of IFRS.
• The translation project is due to be completed by the
end of this year.
10
(2) Other Aspects Regarding
the IFRS Adoption
• The Fourth Committee of the FSC IFRS Task Force
is responsible for professional training and public
dissemination of IFRS related information. They
continually sponsor many workshops and classes
for practitioners to obtain updated knowledge
regarding the adoption.
• Many instructors of the training sessions are from
the academics and the Taiwan Accounting
Research and Development Foundation (TARDF),
the standard-setting organization in Taiwan.
11
(2) Other Aspects Regarding
the IFRS Adoption
• To facilitate smooth transitions from historical cost principles
to fair value accounting, many accounting educators have
contributed to the forming of the Valuation Standards
Committee under TARDF.
• Four Statements of Valuation Standards have been released
by the Valuation Standards Committee:
No. 01 : Summary of Valuation Standards (pronounced on
Dec. 26, 2007)
No. 02 : Code of Ethics (pronounced on Aug. 13, 2008)
No. 03 : Valuation Report (pronounced on Aug. 21, 2009)
No. 04 : Valuation Process (pronounced on Dec. 31, 2009)
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(3) Impact of IFRS on Collegiate Accounting
Education: Addition, Change or Reform?
I Survey of accounting faculty members
Ⅱ Survey of accounting department heads
III Remaining questions
13
I. Survey of Faculty Members
• Respondents:
– Accounting faculty members of
universities/colleges in Taiwan
• Date: 2010/5/22
• Location:
– IFRS Teaching Workshop (sponsored by TAA) at
National Taipei University
• Responses: 70 faculty members attended the
workshop and 33 responded.
14
I. Survey of Faculty Members
Do you cover IFRS in your courses?
No
48%
Yes
52%
15
I. Survey of Faculty Members
• Major difficulties in teaching IFRS
– Lack of well-recognized teaching materials
– Simultaneous coverage of U.S. GAAP and IFRS
• Limited teaching hours
• Confusion among students
– Uncertain schedule to fully adopt IFRS
– No sufficient training opportunities for the faculty
– Few examples/exercises illustrating differences
between U.S. GAAP and IFRS
16
I. Survey of Faculty Members
How do you cover IFRS in your courses?
Start specifically dedicated courses
Supplement IFRS materials in the original courses
29%
71%
17
I. Survey of Faculty Members
What are the sources of IFRS teaching materials used?
2%
Textbooks
19%
50%
29%
IFRS statements
IFRS conferences
IFRS training materials
from Big 4
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I. Survey of Faculty Members
How do you keep up with IFRS changes?
3%
5%
29%
Materials from Internet
IFRS related books
33%
Domestic conferences
Online learning courses
30%
International conferences
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II. Survey of Accounting
Department Heads
• Respondents: members of TAA Accounting
Education Committee, all being accounting
department heads
• Responses: A questionnaire was emailed to 23
department heads and 11 responded.
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II. Survey of Accounting
Department Heads
• Characteristics of the sample
Category
Percentage
Public schools
36.36%
PhD. programs offered
27.27%
Master degrees offered
81.81%
Baccalaureate degrees offered
81.81%
4-year technological
institutions
18.18%
Mean of number of faculty
members
16
(S.D.= 6.39)
21
II. Survey of Accounting
Department Heads
• Over 90% of respondents assert that their departments
offer specific courses covering IFRS.
• All respondents assert that IFRS materials are
supplemented in the traditional accounting courses.
• Major difficulties mentioned in offering IFRS courses
– Hard to find qualified teaching faculty
– Lack of appropriate IFRS teaching materials
– Only a few students registered the IFRS-specific courses
while most attendants are non-credit earning students
– Difficulty in learning IFRS for students
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III. Remaining Questions
from the Survey
• How can we attend to the student needs and/or
the accounting curricula in the IFRS adoption era?
• Are pure additions and changes of accounting
course materials sufficient for student learning
needs? Will these future decision makers be well
equipped to deal with challenges in the IFRS era?
• Do we need more comprehensive accounting
curriculum reform to enhance students’
judgment ability and/or professional skills?
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3. Recent TAA-sponsored
Conferences on IFRS
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Recent TAA-sponsored
Conferences on IFRS
• TAA has continuously sponsored conferences
on IFRS.
Theme
Date
City/County
Location
Challenges to Converge with IFRS in
Taiwan
2009/3/13
Taipei City
Shih Chien University
Outlook and Vision of IFRS Adoption
2009/4/9
Taichung
County
Providence University
Challenges and Impacts of IFRS on
Domestic Capital Markets
2009/5/19
Taipei City
Takming University of
Science and Technology
2009 Accounting Forum on IFRS
2009/5/22
Taipei City
Chinese Culture
University
Impacts of IFRS on Taiwan
Accounting Education and Solutions
2009/6/12
Taipei City
National Taiwan
University
25
Recent TAA-sponsored
Conferences on IFRS
Theme
Date
City/County
Location
Educational and Practical Conference on
IFRS & XBRL
2009/8/21~
2009/8/22
Tainan
County
Tainan University
of Technology
Plan for Convergence with International
Financial Reporting Standards
2009/11/13
Taipei City
Shih Chien
University
Challenges Accounting Educators Face in 2009/12/10~ Tainan City
the IFRS Era
2009/12/11
National Cheng
Kung University
Implementation and Challenges of
International Accounting Principles
2009/12/17~ Taipei City
2009/12/18
Soochow
University
2010 PWC Conference on IFRS
2010/5/14
Taichung
City
National Chung
Hsing University
IFRS Educational and Academic
Conference
2010/5/19~
2010/5/20
Tainan
County
Chang Jung
University
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4. CPA Exam Questions on IFRS
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CPA Exam Questions on IFRS
• The percentages of IFRS-related questions in
recent Taiwanese CPA exams:
Year
Total %
Problems
Objective questions
2005
30%
20%
10%
2006
22%
20%
2%
2007
33%
25%
8%
2008
25%
15%
10%
2009
19%
15%
4%
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CPA Exam Questions on IFRS
Year
Problems
Objective questions
2005
2006
2007
2008
2009
20%
20%
10% 15%
15%
15%
8% 2% 2%
6% 2%
2% 2% 6% 2%
2%
•
•
•
•
SFAS No. 34 Financial Instruments: Recognition and Measurement
SFAS No. 35 Impairment of Assets
SFAS No. 37 Intangible Assets
SFAS No. 38 Non-current Assets Held for Sale and Discontinued
Operations
• SFAS No. 39 Share-based payment
29
CPA Exam Questions on IFRS
• Current Status: The FSC made an official
request to the Ministry of Examination in
March 2010 to include IFRS contents in future
CPA examinations.
• MOEX Response: Meetings of accounting
educators and professionals will start October
2010 to respond to FSC’s request.
• Major Issue: gradual inclusion or immediate
full inclusion after the completion of the
traditional Chinese translation in December?
30
Selected Research on IFRS
in Taiwan
• Duh, R. R., S. H. Yen, and W. Y. Chen, Factors Affecting the
Complete Convergence with International Financial Reporting
Standards in Taiwan: An Empirical Study, Journal of
Accounting and Corporate Governance, 1(2):15-37.(2004)
• Lin, S. and A. R. Yen, The effects of IFRS Adoption on Audit
Fees for Listed Companies in China, The Illinois International
Accounting symposium, June 2010, Taipei
• Hsu, W. H., R. R. Duh, and K. Cheng, Does control-based
approach to consolidated statements reflect market price better
than ownership-based approach, The Illinois International
Accounting symposium, June 2010, Taipei
31
Conclusion
• Impacts of uncertainty regarding IFRS
adoption in the U.S.
– Teach only IFRS?
– Lecture on both IFRS and U.S. GAAP?
– Teach IFRS and supplement some materials of U.S.
GAAP or vice versa?
• Strong demand for well-recognized teaching
materials of IFRS
– Traditional Chinese text books
– English text books
32
Conclusion
• Suggestions regarding pedagogical methods
– Emphasize understanding the essence of
transactions
– Cultivate students’ critical thinking and analytic
ability rather than memorization of the rules
– Apply active learning approaches, e.g. case
studies, role plays, cross debates, etc.
– Test students’ skills and ability accordingly
33
Acknowledgements
• Thank President Jang and KAA for this
excellent opportunity for us to share our
Taiwan experience and learn from colleagues
in Australia, Singapore, Korea and Japan.
• Thank TAA President Shiue and his team
members for providing relevant data and
assistance in administering the surveys.
• Thank FSC Commissioner C.C. Liu for providing
current status information.
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Acknowledgements
• Thank my student assistants for their tireless
efforts:
Assistant
Task
Angela Lin
• Analyze the data
• Collect survey data
Jennifer Chang
• Design the questionnaires
Hsiu-Chin Lin
• Collect data
Hsien-Lian Chiu
• Draft and prepare the PPT
35
Thank you!
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