Envoys from 21 countries in Asia and on the Pacific Rim will meet September 8th and September 9th at the Asia-Pacific Economic Cooperation (APEC) 20th economic leaders’ meeting in the far eastern Russian port city Vladivostok.
APEC was founded to liberalise trade and investment among members, better integrate member economies and encourage economic and technical cooperation.
Member countries are expected to discuss the impact of the euro-zone crisis on APEC member countries. China and Russia are Europe’s most important trade partners after the US, and both countries are experiencing the fallout of a deepening crisis that is staunching European demand for goods made in China and Russia.
The International Monetary Fund projected 2012 GDP growth of 8% in China, down from 10.4% in 2010. In Russia, where domestic consumer demand has been strong, GDP growth is expected to dip to 4% in 2012, from 4.3% in 2010, the IMF projected.
Some of the topics that envoys of APEC member countries plan to discuss may also come up during the APEC CEO Summit September 7th and September 8th off the coast of Vladivostok.
“The recent economic turbulence has clearly exposed inefficient business models and the limits of growth,” Andrey Kostin, the chairman of the CEO Summit, wrote. “The world is at a crossroads, while the ‘economic centre of gravity' is shifting eastwards. However, the challenges only better highlight the immense potential of the Asia-Pacific region and the leading role our 21 economies are to play in the XXI century.”
UK labour update
The employment situation in the UK improved in the three months to June. The UK Office for National Statistics will release numbers on September 12th that show how the labour market fared in the three months to July.
During the three months ending June 30th, as employers geared up for the London Olympics, the number of employed workers increased by 201,000. The number of unemployed was down by 46,000. That reduced the unemployment rate to 8%, from 8.1% during the three months ending in May.
Will the Fed take action?
The US Federal Open Markets Committee will offer its views on the US economy – and, perhaps, what that means for US monetary policy – following its meeting on September 13th.
Investors have been watching the committee closely as it mulls monetary stimulus plans. For the past four years, the US Federal Reserve has kept interest rates low in an effort to support the sluggish US economy. The Fed also has considered more bond purchases in recent months.
Minutes from recent FOMC meetings indicate that the Fed’s economic outlook is not growing any brighter. Strains in global financial markets and domestic fiscal uncertainty have caused companies to be more cautious about hiring and investments, minutes from a recent Fed meeting about discount rates said.
“Most directors still expected economic conditions to improve over the medium term, although some expressed considerable uncertainty about the near-term prospects for economic growth,” according to the minutes.
Most Fed directors at the meeting recommended that the current primary credit rate be maintained. But some suggested that economic conditions warranted an increase or decrease.
FASB panel seeks resolutions
The Emerging Issues Task Force (EITF) of the US Financial Accounting Standards Board (FASB) is scheduled to discuss possible resolutions to diversity in practice on a pair of issues when it meets September 11th.
The EITF aids FASB in identifying, discussing and resolving accounting issues that arise with respect to FASB standards.
The agenda includesIssue No. 11-A, Parent’s Accounting for the Cumulative Translation Adjustment Upon the Loss of a Controlling Financial Interest in a Subsidiary or a Group of Assets That Is a Nonprofit Activity or a Business Within a Consolidated Foreign Entity. The objective is to unify practice; there are differences of opinion about whether to apply Subtopic 810-10, Consolidation—Overall, or Subtopic 830-30, Foreign Currency Matters—Translation of Financial Statements, to the release of the cumulative translation adjustment into earnings.
Issue No. 12-G, Accounting for the Excess in the Fair Value of Assets Over Liabilities of a Consolidated Collateralized Financing Entity, also will be discussed. The task force is attempting to determine how a reporting entity should initially and subsequently account for the excess in fair value of assets over liabilities of a consolidated collateralised financing entity.
The EITF also will discuss three issues that originated with the task force for which FASB is scheduled to release final Accounting Standards Updates in the fourth quarter of 2012. These include issues involving not-for-profits’ classification of donated securities, government-assisted acquisitions of financial institutions, and the impairment analysis of unamortised film costs.
IAASB holds round-table meeting
The International Auditing and Assurance Standards Board (IAASB) will hold a daylong round-table discussion on its project to improve the auditor’s report September 10th in New York.
The discussion falls on the last day for the public to respond to the IAASB’s Invitation to Comment on potential changes to the auditor’s report.
The IAASB’s suggested changes to auditor reporting include:
Providing additional information in the auditor’s report to highlight matters that the auditor believes are likely to be most important to users’ understanding of the audited financial statements or the audit. This would be referred to as “Auditor Commentary.” This information would be required for public-interest entities, which at a minimum include listed entities, and could be provided at the auditor’s discretion for other entities.
A conclusion by the auditor on the appropriateness of management’s use of the going-concern assumption in preparing the financial statements, and an explicit statement about whether material uncertainties related to going concern have been identified.
A statement by the auditor identifying whether any material inconsistencies between the audited financial statements and other information have been found based on the auditor’s reading of other information. Specific identification of the information considered by the auditor also would be included.
Prominent placement of the auditor’s opinion and other entity-specific information in the auditor’s report.
Discussion panellists will include Bill Platt of Deloitte, J. Michael Cook of Comcast Corp., Gary Kabureck of Xerox, and Neri Bukspan of Standard & Poor’s.
—From CGMA Magazine staff reports.
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