1 December 2008: Stay Tuned Online – IFRS and UK GAAP updates

The Deloitte London IFRS Centre of Excellence is running a series of hour-long Internet-based financial reporting updates, aimed at helping finance teams keep up to speed with IFRS and other financial reporting issues. Each update lasts no more than an hour, and sessions are held three times a year, approximately at the end of March, July and November. We intend to make a recording of each session available on IAS Plus for a period of at least four months from the date of the presentation.

1 December 2008: 17 IASB pronouncements await EU endorsement
The European Financial Reporting Advisory Group (EFRAG) has updated its report showing the status of endorsement, under the EU Accounting Regulation, of each IFRS, including standards, interpretations, and amendments. Click to download the Endorsement Status Report as of 28 November 2008 (PDF 91k). Currently, there are 17 IASB pronouncements are awaiting European Commission endorsement for use in Europe (including 3 awaiting EFRAG advice and 8 awaiting an ARC recommendation), as follows:

Standards

• IFRS 1 First-time Adoption of IFRS – Restructured standard (2008)
• IFRS 3 Business Combinations (2008)
  Interpretations
  
• IFRIC 12 Service Concession Arrangements
• IFRIC 13 Customer Loyalty Programmes
• IFRIC 14 IAS 19 – The Limit on a Defined Benefit Asset, Minimum Funding Requirements, and their Interaction
• IFRIC 15 Agreements for the Construction of Real Estate
• IFRIC 16 Hedges of a Net Investment in a Foreign Operation
• IFRIC 17 Distributions of Non-cash Assets to Owners
  Amendments
  
• IFRS 1 and IAS 27 Cost of an Investment in a Subsidiary, Jointly-Controlled Entity, or Associate
• IFRS 2 Share-based Payment: Vesting Conditions and Cancellations
• IAS 1 Presentation of Financial Statements (revised September 2007)
• IAS 23 Borrowing Costs (revised March 2007)
• IAS 27 Consolidated and Separate Financial Statements (2008)
• IAS 32 and IAS 1 Amendments for Puttable Instruments and Obligations Arising on Liquidation
• IAS 39 Amendments for Eligible Hedged Items
• IAS 39 Amendments for Reclassification of Financial Assets
• Improvements to IFRSs – 2007 (affects various standards)

30 November 2008: Deloitte Canada IFRS transition newsletter

Deloitte Canada has published the November 2008 issue of their Countdown IFRS transition newsletter, to provide a snapshot of where we are now as far as Canada's transition to IFRSs is concerned – both in Canada and in Deloitte. This edition of Countdown focuses on:

• IFRS Disclosures in Management's Discussion and Analysis (MD&A)
• Tax Accounting in an IFRS Environment
• Launch of our Countdown and IFRS Transition Survey
• SEC Release of the Proposed IFRS Roadmap
• An Update on Current IFRS events

• November 2008 Edition Countdown Newsletter – English (PDF 634k)
• November 2008 Edition Countdown Newsletter – French (Compte à Rebours) (PDF 391k)
• Background on Transition to IFRSs in Canada including past issues of Countdown.

29 November 2008: Credit crunch challenges for directors
The United Kingdom Financial Reporting Council (FRC) has published two alerts to directors on the corporate reporting challenges arising from current economic conditions. Because of the global liquidity squeeze, directors and audit committees may need to spend more time planning the year-end activities, reviewing key assumptions and models used in financial reporting, and reviewing the significant accounting and disclosure judgements. In response to those challenges, the FRC has published:

• Challenges for Audit Committees Arising from Current Economic Conditions (PDF 205k)
• An Update for Directors of Listed Companies: Going Concern and Liquidity Risk (PDF 280k)

28 November 2008: Common professional qualifications

Nine of Europe's accountancy institutes have formed the Common Content Project to bring their professional qualifications closer together. One of the driving forces behind the project has been the globalisation of accounting and auditing regulation, so that a significant part of the relevant learning outcomes are IFRS/ISA based. Common Content qualifications focus on the five service areas of professional accountants:

• assurance and related services
• performance measurement and reporting
• strategic and business management
• financial management
• taxation and legal services

• Announcement of Completion of Reviews (PDF 27k)
• Link to Common Content Project Website

28 November 2008: Four recent IFRS Insights newsletters

We have posted four recent IFRS Insights newsletters from Deloitte & Touche LLP (United States). IFRS Insights provides news on the latest developments on IFRSs, practical suggestions for companies addressing IFRSs, updates on the regulatory environment, and references to relevant tools and resources. Below are the download links and key features of the four new editions. We have Permanent Links to all IFRS Insights on our USA country page.

IFRS Insights Volume 6 (November 2008) (PDF 361k) A feature about the Securities and Exchange Commission's proposed IFRS roadmap An article about IFRS and tax considerations related to share-based compensation plans A brief overview of IAS 17 Accounting for Leases Preview of results from a recent IFRS poll IFRS Insights Volume 5 (October 2008) (PDF 347k) A feature about which US companies may be eligible to use IFRS An article that looks at merger and acquisition considerations for IFRS A brief overview of IFRS 3 Business Combinations A real IFRS case study IFRS Insights Volume 4 (September 2008) (PDF 910k) An update on the proposed IFRS roadmap and rule changes from the Securities and Exchange Commission An article about developing an IFRS Center of Excellence A brief overview of IFRS 2 Share-based payment A Question & Answer section focusing on IFRS and the oil and gas industry IFRS Insights Volume 3 (August 2008) (PDF 548k) An update on convergence efforts A summary on the SEC Roundtable held on August 4, 2008 An article that explores the technology and systems implications of IFRS A brief overview of IAS 16 Property, Plant and Equipment A Question & Answer section on IFRS lessons from the European Union

28 November 2008: Financial crisis roundtable on 3 December
On 3 December 2008 in Tokyo, the IASB and FASB will jointly hold their final public roundtable on the accounting challenges posted by the current market conditions. The Boards are gathering views from constituents on the most urgent accounting issues and how to approach them. The first roundtable was held in London on 14 November 2008 (click for Our Notes from this Roundtable) and the second was at the FASB's offices on 25 November 2008. There will be two afternoon sessions at the Tokyo roundtable – the first from 13:30 - 15:30 and the second from 16:00 - 18:00. Click here to download the Agenda Papers from the IASB's website. There's a comprehensive Credit Crunch Page on IAS Plus.

28 November 2008: Reminder about upcoming comment deadline

We remind you that comments are due on 5 December 2008 on Exposure Draft: Exposure Draft: Simplifying Earnings per Share, which was issued 7 August 2008. Among other things, the proposed revisions to IAS 33 would:

• Provide a clear principle to determine which shares and other instruments should be included in the EPS calculation. Under that principle, the weighted average number of ordinary shares includes only those instruments that give their holder the right to share currently in profit or loss of the period.
• Clarify the EPS calculation for particular instruments, such as contracts to sell or repurchase an entity's own shares and participating instruments. The ED treats those contracts as if the entity had already repurchased the shares. Therefore, the entity would exclude those shares from the denominator of the EPS calculation.
• Amend the calculation of diluted EPS for participating instruments and two-class ordinary shares. If a convertible financial instrument would have a more dilutive effect if conversion is assumed, then the entity would assume the more dilutive treatment for diluted EPS.
• Simplify the EPS calculation for instruments that are accounted for at fair value through profit or loss. For such instruments (including the derivative component of a compound financial instrument), an entity would not adjust the numerator or denominator of the diluted EPS calculation.

27 November 2008: IFRIC 17 on distributions of non-cash assets

The International Financial Reporting Interpretations Committee has issued IFRIC 17 Distributions of Non-cash Assets to Owners.

27 November 2008: Revised IAS 39 reclassification amendments

The has issued an updated version of the recent Reclassification Amendments to IAS 39 Financial Instruments: Recognition and Measurement and IFRS 7 Financial Instruments: Disclosures (issued on 13 October 2008) to clarify the effective date of the amendments. Following publication of the amendments, and in response to requests, the IASB subsequently clarified the effective date requirements at its meeting in October, as follows:

Any reclassification made on or after 1 November 2008 takes effect from the date of reclassification. However, any reclassification before 1 November 2008 can take effect from 1 July 2008 or a subsequent date. A reclassification cannot be applied retrospectively before 1 July 2008.

The clarification was published in the October issue of IASB Update and on IAS Plus, and it has now been incorporated in the revised version of the amendments, which can be downloaded from the IASB's Website.

26 November 2008: Half of PCAOB audit firms are non-US based
As of 31 October 2008, there were 1,866 public accounting firms registered with the PCAOB, including 879 firms that are based outside the United States. By law, registered firms with more than 100 public company audit clients must be inspected annually; firms with fewer public company audit clients must be inspected at least once every three years. This information is included in the PCAOB's Announcement (PDF 17k) of its approved budget for 2009 of $157.6 million.

26 November 2008: Highlights of SEC mark-to-market roundtable
On 21 November 2008, the US SEC hosted its second and the final roundtable on fair value or mark-to-market (MtM) accounting. The SEC's study of MtM accounting is mandated by the Emergency Economic Stabilization Act of 2008. The roundtable focussed on challenges of MtM accounting and potential improvements to accounting standards. The roundtable consisted of investors, issuers, auditors, and others with experience in MtM accounting. Here are preliminary and unofficial notes taken by Deloitte observers at the Roundtable:

The general consensus of the panel
The general consensus of the panel was that fair value accounting under Statement 1571 is not the root cause of the current market turmoil. Panelists indicated that regulators should look beyond Statement 157 to address some of the issues prevalent in practice today, such as changing the regulatory capital requirements. In addition, the panelists voiced strong support for independent standard setting, noting that the process needs to be free from any political or regulatory intervention.
Three main themes from the discussion
Impairment guidance The panelists agreed that standard setters should revisit other-than-temporary impairment guidance. Several suggestions were made, including (1) to align the guidance for impairment of investments in debt securities (Statement 1152) with the guidance for loan impairments (Statement 1143) and (2) to segregate impairment loss between credit and other changes in fair value. Panelists from the investor and auditor community suggested a model in which credit loss on debt securities would be recognised currently in income, and other changes in the fair value of the instrument (the plug) would be recognized in other comprehensive income. The credit loss would be calculated on the basis of changes in expected cash flows in a manner similar to the Statement 114 model. Several panelists from the preparer community suggested that the investments should be carried at amortised cost so that only losses associated with credit are recognised and the fair value of the instrument is disclosed in the notes to the financial statements on a quarterly basis. They indicated that recognising liquidity losses in other comprehensive income distorts equity, which affects regulatory capital requirements. Additional disclosures Panelists agreed on the need for (1) more comprehensive disclosures that may include forward-looking information (such as sensitivity analysis) and (2) detailed discussion of techniques and inputs used by management to estimate fair value. Certain panelists suggested that additional disclosure requirements should be provided by regulators or standard setters before year-end financial reporting. Presentation Panelists agreed that improved income statement presentation of fair value measurements would enhance the transparency and usability of financial statements by the investor community and that the FASB should consider improving financial statement presentation as part of a long-term project. 1FASB Statement No. 157 Fair Value Measurements 2FASB Statement No. 115 Accounting for Certain Investments in Debt and Equity Securities 3FASB Statement No. 114 Accounting by Creditors for Impairment of a Loan

26 November 2008: Report of 6 November 2008 ARC meeting

The Summary Report of the 6 November 2008 Meeting (PDF 39k) of the EC Accounting Regulatory Committee has been released. At that meeting, among other things, the ARC voted to recommend that the following pronouncements be endorsed for use in the EU:

• Amendments to IFRS 1 and IAS 27: Cost of an Investment in a Subsidiary, Jointly Controlled Entity or Associate
• Amendments to IAS 32 and IAS 1: Puttable Financial Instruments and Obligations Arising on Liquidation
• Annual Improvements to IFRSs
• IFRIC 12: Service Concession Arrangements. However, ARC's recommendation is IFRIC 12 should be mandatory in Europe starting in 2010. The IASB's effective date for IFRIC 12 was annual periods beginning on or after 1 January 2008 (see our News Story of 8 November 2008

26 November 2008: SEC Chief Accountant will step down

US SEC Chief Accountant Conrad Hewitt has announced that he is leaving that position in January 2009. He has been Chief Accountant for two-and-a-half years. Click for SEC News Release (PDF 36k).

25 November 2008: IASB releases restructured version of IFRS 1

The IASB has released a restructured version of IFRS 1 First-time Adoption of International Financial Reporting Standards. IFRS 1 was first issued in June 2003, and since then it has been amended frequently. As a result, the IFRS became more complex and less clear. In 2007, therefore, the Board proposed, as part of its annual improvements project, to change IFRS 1 to make it easier for the reader to understand and to design it to better accommodate future changes. The new version of IFRS 1 just issued retains the substance of the previous version, but within a changed structure. It replaces the previous version and is effective for entities applying IFRSs for the first time for annual periods beginning on or after 1 January 2009. Earlier application is permitted. Subscribers can download it from the IASB's Website.

25 November 2008: 'El tránsito hacia los IFRS en seguros'

Deloitte (Colombia) has published El tránsito hacia los IFRS en seguros: Una mirada más allá de los cambios en contabilidad. This is the Spanish language translation of The IFRS Journey in Insurance: A Look Beyond the Accounting Changes. This report examines the implications of the use of IFRSs in the insurance industry across the globe. The report notes that, in some markets, IFRSs will likely contribute to substantial changes in: Insurance product design, price and offerings Investment strategy Risk management practices Securitisation Merger and acquisition (M&A) activity

Click to download El tránsito hacia los IFRS en seguros (PDF 247k). Our other Spanish language resources are Here.

25 November 2008: iGAAP Financial Reporting in Malaysia

Deloitte Malaysia has published iGAAP Financial Reporting in Malaysia – a practical and comprehensive guide on financial reporting under IFRS in Malaysia. This book has: Highlights of and discussions on Malaysia-specific requirements compared to IFRS Practical examples and illustrative applications of IFRS Guidance on the practical issues encountered by users and preparers of IFRS financial statements Suggestions and discussions on the areas in the standards where formal guidance is ambiguous Commentaries and updates on development up to August 2008 of IFRS and Interpretations as of December 31, 2007 as discussed in the book iGAAP Financial reporting in Malaysia (ISBN-13 978-981-4228-56-5 and ISBN-10 981-4228-56-7) is published by CCH Asia Pte Limited and may be ordered from the CCH Malaysia Website.

25 November 2008: Global IFRS and Offerings Services newsletter

We have posted Deloitte's US Reporting Newsletter for Non-US Based Companies October 2008 Edition – includes news through 5 November 2008 (PDF 147k). The newsletter is developed by Deloitte's Global IFRS and Offerings Services (GIOS) team – Deloitte practitioners assisting non-US companies and non-US practice office engagement teams in applying US GAAP and IFRSs and in complying with the SEC's financial reporting rules. The GIOS Newsletter is an update on relevant GAAP, regulatory, and other matters, webcasts, and publications, with hyperlinks to source material. Past GIOS Newsletters are Here.

25 November 2008: IASCF appoints two new Trustees

The International Accounting Standards Committee Foundation (IASCF), oversight body of the IASB, has appointed two new Trustees to renewable three-year terms effective 1 January 2009:

• Clemens Boersig, Chairman of the Supervisory Board, Deutsche Bank AG, Germany
• Noriaki Shimazaki, Executive Vice President, Sumitomo Corporation, Japan.

24 November 2008: FASB will issue new F/Y 2008 disclosures

The US Financial Accounting Standards Board (FASB) has announced plans to issue a final FASB Staff Position (FSP) on FAS 140-e and FASB Interpretation (FIN) 46(R)-e Disclosures about Transfers of Financial Assets and Interests in Variable Interest Entities by 15 December 2008. The FSP will increase disclosure requirements for public companies for reporting periods that end after 15 December 2008 (that is, including calendar year 2008). Click for Press Release (PDF 17k).

23 November 2008: Agenda project pages updated for Nov. meeting

We have updated the following agenda project pages to reflect the discussions and decisions at the 18-21 November 2008 meeting of the International Accounting Standards Board.

• Conceptual Framework Phase C – Measurement
• Conceptual Framework Phase D – Reporting Entity
• Consolidation
• Derecognition of Financial Instruments
• Fair Value Measurements
• Financial Instruments – Comprehensive Project
• Financial Instruments with Characteristics of Equity (Liabilities and Equity)
• IFRIC D23 – Non-cash Distributions to Owners
• Leases
• Post-employment Benefits including Pensions
• IFRS for Private Entities (formerly IFRS for SMEs)
• Related Party Disclosures

22 November 2008: Notes from day 4 of the IASB meeting

The International Accounting Standards Board held its November 2008 meeting at the IASB's offices, 30 Cannon Street, London on Tuesday to Friday 18-21 November 2008. Click here to go to the preliminary and unofficial Notes Taken by Deloitte Observers at the Meeting.

21 November 2008: Notes from day 3 of the IASB meeting

The International Accounting Standards Board held its November 2008 meeting at the IASB's offices, 30 Cannon Street, London on Tuesday to Friday 18-21 November 2008. Click here to go to the preliminary and unofficial Notes Taken by Deloitte Observers at the Meeting.

20 November 2008: Notes from day 2 of the IASB meeting

The International Accounting Standards Board held its November 2008 meeting at the IASB's offices, 30 Cannon Street, London on Tuesday to Friday 18-21 November 2008. Click here to go to the preliminary and unofficial Notes Taken by Deloitte Observers at the Meeting.

20 November 2008: Chairman Cox speaks on IFRS in United States
US SEC Chairman Christopher Cox spoke on The Future of International Standards and Cooperation In Light of the Credit Crisis (PDF 45k) at the FEI 2008 Current Financial Reporting Issues Conference in New York on 18 November 2008. Among other things, Chairman Cox discussed the principles that are critical to the success of IFRSs as 'a uniter of the world's capital markets and a powerful tool for investors everywhere':

• First, the standards must be crafted in the interest of investors. That has to be their overarching purpose.
• The second principle for the success of IFRS is that the standard setting process must be transparent. That is essential not only to maintain investor confidence, but to ensure the integrity and quality of the standards.
• Third, the standard setter must be independent.
• The standard setter must also be accountable.
• All of the stakeholders themselves must participate in the standard setting process in order to ensure the continued success of IFRS.

20 November 2008: Research report on intangibles

The Australian Accounting Standards Board (AASB) has published Initial Accounting for Internally Generated Intangible Assets, a discussion paper addressing the inconsistent accounting treatments for intangible. The discussion paper, authored by staff of the AASB, with the encouragement and support of the group of National Standard Setters (NSS), represents a significant step toward encouraging the International Accounting Standards Board to review its existing accounting standards relating to intangible assets. Currently, accounting standards treat intangible assets acquired as part of a business acquisition differently from the same kind of intangible assets that are internally generated. Comments on this paper are requested by 15 May 2009. The AASB intends that comments received on the paper will provide valuable input into any future work on intangible assets that the IASB might initiate. In December 2007, the IASB rejected an agenda proposal on intangibles. Click for:

• Discussion Paper (PDF 677k) – it is copyrighted by the Commonwealth of Australia and posted here with permission
• AASB Press Release (PDR 32k)

19 November 2008: Two IAS Plus newsletters in Spanish

Deloitte (Colombia) has published Spanish translations of the following two English language IAS Plus Special Edition newsletters: Amendments to IAS 39 and IFRS 7 – reclassification of financial assets (PDF 193k) Proposed amendments regarding discontinued operations (PDF 95k) Las ediciones especiales de IAS Plus Octubre 2008, en español, así: Enmiendas a IAS 39 y IFRS 7 – reclasificación de activos financieros (PDF 26k) Enmiendas propuestas relacionadas con operaciones descontinuadas (PDF 24k)

19 November 2008: Notes from day 1 of the IASB meeting

The International Accounting Standards Board held its November 2008 meeting at the IASB's offices, 30 Cannon Street, London on Tuesday to Friday 18-21 November 2008. Click here to go to the preliminary and unofficial Notes Taken by Deloitte Observers at the Meeting.

18 November 2008: New valuation standards board is appointed
Over the past year, the overall structure for establishing International Valuation Standards (IVS) has been reorganised. Within the new structure – known as the International Valuation Standards Council (IVSC) – the International Valuation Standards Board (IVSB) is the new body that sets the standards for how to perform and report on valuations. The IVSB replaces the outgoing IVSC Standards Board. A second body in the new structure is the International Valuation Professional Board (IVPB). The IVPB's responsibilities are to promote the profession generally and to benchmark educational and professional standards for valuation. The members of the new IVSB and IVPB have just been appointed. Also, the outgoing standards board has prepared a transition memo to advise the new board of the status of its current projects and to make recommendations as to future projects and activities, including liaison with the IASB. Click for:

• Press Release Announcing the IVSB and IVPB Appointments (PDF 22k)
• Transition Memo from the Outgoing Board (PDF 110k)
• IVSC Page on IAS Plus

18 November 2008: Heads Up on US SEC IFRS Roadmap
Deloitte (United States) has published a special issue of the Heads Up newsletter discussing the SEC's proposed IFRS Roadmap. The roadmap outlines certain milestones that, if achieved, could lead to mandatory transition to IFRSs in the United States starting in financial years ending on or after 15 December 2014. The roadmap also contains proposed rule changes that would give certain US issuers the early option to use IFRSs in financial statements for financial years ending on or after 15 December 2009. Click to Download the Heads Up Newsletter (PDF 150k).

The proposed roadmap outlines seven milestones

Milestones 1-4 discuss issues that need to be addressed before mandatory adoption of IFRSs: 1. Improvements in accounting standards. 2. Accountability and funding of the International Accounting Standards Committee Foundation. 3. Improvement in the ability to use interactive data for IFRS reporting. 4. Education and training on IFRSs in the United States. Milestones 5-7 discuss the transition plan for the mandatory use of IFRSs: 5. Limited early use by eligible entities – This milestone would give roughly 110 US issuers the option of using IFRSs for financial years ending on or after 15 December 2009. 6. Anticipated timing of future rule making by the SEC – On the basis of the progress made on milestones 1-4 and experience gained from milestone 5, the SEC will determine in 2011 whether to require mandatory adoption of IFRSs for all US issuers. Potentially, the option to use IFRSs could also be expanded to other issuers before 2014. 7. Implementation of mandatory use – The roadmap raises many questions, including whether the transition to IFRSs should be phased in. According to the roadmap, large accelerated filers would be required to file IFRS financial statements for financial years ending on or after 15 December 2014, then accelerated filers in 2015, and nonaccelerated filers in 2016.

Click for Earlier November News.

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