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August

Heads Up on compensation, SOx 404

31 Aug 2006

Deloitte & Touche LLP (USA) has published a (PDF 408k) dealing with two issues: Show Me the Money! – SEC Finalizes Disclosure Requirements for Executive Compensation Oh, What a Relief It Is! – SEC Proposes Extension of Section 404 Compliance Deadlines for Smaller Public Companies and Finalizes Extension for Certain Foreign Private Issuers .

Including estimates of the future in today's financial statements

31 Aug 2006

The Bank for International Settlements (BIS) has posted on its website BIS Working Paper No 208, "Including estimates of the future in today's financial statements", by IASB Board Member Mary Barth.

The paper was presented last November at a BIS workshop on accounting, risk management, and prudential regulation. Below is an abstract of the paper. The full paper may be Downloaded from the BIS Website (PDF 140k).

This paper explains why the question is how, not if, today's financial statements should include estimates of the future. Including such estimates is not new, but their use is increasing. This increase results primarily because standard setters believe asset and liability measures that reflect current economic conditions and up-to-date expectations of the future will result in more useful information for making economic decisions, which is the objective of financial reporting. This is why standard setters seem focused on fair value accounting. How estimates of the future are incorporated in financial statements depends on the asset and liability measurement attribute, and on financial reporting definitions of assets and liabilities. The present definitions depend on identifying past transactions or events that give rise to expected inflows or outflows of economic benefits and, for inflows, control over the expected benefits. Thus, not all expected inflows or outflows of economic benefits are recognised. Note disclosures can help users understand recognised estimates, and can provide information about unrecognised estimates. Including more estimates of the future in today's financial statements would result in an income measure that differs from today's income, but arguably provides better information for making economic decisions.

IFAC papers on sustainability management and reporting

30 Aug 2006

To help professional accountants in business better understand how they can advance, measure, and report on sustainable economic development, the Professional Accountants in Business (PAIB) Committee of the International Federation of Accountants (IFAC) has published two new information papers on the topic.

The papers are:

  • Why Sustainability Counts for Professional Accountants in Business provides an overview of enterprise sustainability and sets out the business case for addressing the risks and opportunities of sustainable development at the enterprise level.  It also discusses the ways in which professional accountants in business, especially those working for organisations with significant environmental or social impacts, will be involved with the measurement, recording and interpretation of sustainability-related information.
  • Professional Accountants in Business – At the Heart of Sustainability? provides first-hand commentary from eleven senior professionals working in various enterprises around the world on the role of PAIBs and the challenges they face in promoting and implementing sustainable development strategies.

Click for IFAC Press Release (PDF 80k). The press release includes hyperlinks for downloading the papers from IFAC's website. Downloading is free, but registration is required.

 

 

A quiet revolution at the AASB?

29 Aug 2006

Deloitte (Australia) has published Accounting Alert 2006/09 A Quiet Revolution at the AASB? (available on-line, not PDF).

This Alert discusses the future role of the Australian Accounting Standards Board (AASB). "The AASB's role may be very different in the future and the potential impacts for financial reporting in Australia are numerous." Among the issues discussed:
  • Towards true IFRS convergence. The AASB is developing an exposure draft that would seek to bring A-IFRSs much closer to IFRSs – reinstating options, deleting many additional disclosures and eliminating Australian guidance. But there will still be areas where differences exist, at least in the short term.
  • The 'missing link' in A-IFRSs. The AASB has negotiated with the IASB to make the 'IASB support materials' – the bases for conclusions, implementation guidance, illustrative examples and so on – freely available to Australian residents.
  • How many GAAPs does Australia need? Does one size really fit all? Recent developments are calling into question whether one set of standards based on IFRSs is the longer-term answer. Will not-for-profit and smaller entities have their own standards?

FASB fair value measurement standard nears completion

28 Aug 2006

At its meeting on 16 August 2006, the US Financial Accounting Standards Board authorised its staff to prepare a final draft of a Statement on Fair Value Measurements for vote by written ballot.

The FASB plans to issue the Statement in September 2006. That Statement will form the basis of the next step of the IASB's project to develop fair value measurement guidance. The IASB plans to issue a discussion paper in the fourth quarter of 2006 that would:
  • indicate the IASB's preliminary views of the provisions of the FASB's Statement on Fair Value Measurements and
  • identify differences between the FASB Statement and fair value measurement guidance in existing IFRSs.
The IASB will invite respondents to comment on the provisions of the FASB's statement on fair value measurements and on the IASB's preliminary views about FASB's Statement. Those comments would be considered in conjunction with the development of an IASB exposure draft on fair value measurements.

New data on foreign companies registered with the US SEC

28 Aug 2006

We have updated our Database of Statistics that, we believe, provide clear evidence of the globalisation of the world's capital markets and of the need for global financial reporting standards.

The latest updates reflect new data on the number of non-US companies registered with the US Securities and Exchange Commission: 1,236 non-US companies from 53 countries were registered at 31 December 2005: Additionally, 684 foreign companies whose securities trade in the US claim exemption from SEC registration because they are registered in, and file comparable information in, their home jurisdiction or another jurisdiciton. Here is the List at 21 June 2005 (399k).

Australian Alert on IASB debt-equity proposals

28 Aug 2006

Deloitte (Australia) has published Accounting Alert 2006/08 Financial Instruments Puttable at Fair Value and Obligations Arising on Liquidation – Proposed Amendments to AASB 132.

Alert 2006/08 explores the IASB's proposals to amend the debt versus equity distinction in IAS 32 in relation to puttable instruments and obligations on liquidation.

In our view, the proposals lack sufficient scope to address the common investor confusion arising in the Australian context surrounding unit trusts, co-operatives and similar entities. Many of these entities may still classify their 'equity' as a liability, even if the proposals go ahead.

Affected entities have until 22 September 2006 to make a submission to the Australian Accounting Standards Board. Click to:

IFRS presentation and disclosure checklist 2006

28 Aug 2006

On 20 August 2006, we posted Deloitte's new for the year ended 31 December 2006 in PDF format (PDF 1,181k).

Agenda topics for IFRIC meeting 7-8 September 2006

26 Aug 2006

The International Financial Reporting Interpretations Committee (IFRIC) will meet at the IASB's offices in London on Thursday 7 September and Friday 8 September 2006. The meeting agenda is set out below.7-8 September 2006, London Thursday 7 September 2006 (10:00 - 18:00) Opening remarks and administrative matters Service Concession Arrangements IAS 18 Revenue – Real Estate Sales IFRIC D17: IFRS 2 – Group and Treasury Share Transactions IFRS 2 Share-based Payment – Employee benefit trusts in the individual or separate financial statements of the sponsor Friday 8 September 2006 (09:00 - 12:30) IAS 18 Revenue – Upfront revenue recognition by a fund manager IAS 38 Intangible Assets – Update on accounting for catalogues and other marketing costs Recommendations regarding requests for IFRIC agenda items IAS 39 Financial Instruments: Recognition and Measurement – Testing of hedge effectiveness on a cumulative basis IFRS 7 Financial Instruments: Disclosures – Presentation of 'net finance costs' on the face of the income statement IAS 38 Intangible Assets – Classification of SIM cards IAS 38 Intangible Assets – Adoption of IAS 38 (rev 2004) IAS 11 Construction Contracts – Allocation of profit in unsegmented contracts Agenda Committee update .

The International Financial Reporting Interpretations Committee (IFRIC) will meet at the IASB's offices in London on Thursday 7 September and Friday 8 September 2006. The meeting agenda is set out below.

7-8 September 2006, London Thursday 7 September 2006 (10:00 - 18:00)

Friday 8 September 2006 (09:00 - 12:30)
  • IAS 18 Revenue – Upfront revenue recognition by a fund manager
  • IAS 38 Intangible Assets – Update on accounting for catalogues and other marketing costs
  • Recommendations regarding requests for IFRIC agenda items
    • IAS 39 Financial Instruments: Recognition and Measurement – Testing of hedge effectiveness on a cumulative basis
    • IFRS 7 Financial Instruments: Disclosures – Presentation of 'net finance costs' on the face of the income statement
    • IAS 38 Intangible Assets – Classification of SIM cards
    • IAS 38 Intangible Assets – Adoption of IAS 38 (rev 2004)
    • IAS 11 Construction Contracts – Allocation of profit in unsegmented contracts
  • Agenda Committee update

Nearly 700,000 e-learning downloads from IAS Plus

26 Aug 2006

As of 23 August 2006, -->693,777 Deloitte IFRS e-learning modules have been downloaded --> from IAS Plus by people in over 150 jurisdictions.

Deloitte's IFRS e-learning was launched at the end of January 2004. Many of the downloaded modules have multiple users because organisations are permitted to install them on their own servers for the internal use of their employees or students. In addition, hundreds of thousands of additional modules have been completed online and offline by Deloitte staff. You can always access IFRS e-learning without charge by clicking on the light bulb icon on the IASPlus home page. Thirty-five modules are now available covering virtually all IFRSs. Because of the complexity of accounting for financial instruments, there are three modules on IAS 32 and IAS 39 (a general introduction and special modules on hedge accounting and derecognition).

Correction list for hyphenation

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