December

SEC issues final rule on IFRS reconciliation

28 Dec 2007

The US Securities and Exchange Commission has issued its final rule on Acceptance from Foreign Private Issuers of Financial Statements Prepared in Accordance with International Financial Reporting Standards without Reconciliation to US GAAP.

The rule includes amendments to Form 20-F, conforming changes to Regulation S-X, and conforming amendments to other regulations, forms, and rules under US securities laws. The rule notes that the SEC continues to require the reconciliation for a foreign private issuer that files its financial statements with the Commission using a basis of accounting other than IFRS as issued by the IASB, with one exception. The exception relates to foreign private issuers that use the version of IFRSs that includes the European Commission's 'carve-out' for IAS 39. Such issuers will be allowed to use that version in preparing their financial statements for a two-year period as long as a reconciliation to the IASB's version of IFRSs is provided. After the two-year period, those issuers will either have to use the IASB's version of IFRSs or provide a reconciliation to US GAAP. The new rule is effective 4 March 2008. Click to download SEC's Final Rule Release (PDF 690k).

 

Speeches at AICPA's annual SEC and PCAOB conference

27 Dec 2007

The American Institute of CPAs held its 35th Annual National Conference on Current SEC and PCAOB Developments in Washington on 10-12 December 2007. On 11 December, we posted links to some of the presentations at the conference.

We indicated that we would add to this list as additional presentations are made publicly available, which we have been doing. The SEC continues to release its staff presentations, including four yesterday. We have added these to our List of Presentations.

 

Statistics database on cross-border securities updated

27 Dec 2007

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 December 2007 or 30 November 2007 data on the number of non-US companies listed on member exchanges of the World Federation of Exchanges and details of cross-border listings on the New York Stock Exchange, NASDAQ, and the London Stock Exchange. There is also some data on cross-border lending and on accounting standards used by companies listed on the Deutsche Börse, as well as foreign companies registered with the US SEC.

2007 IFRS financial statements and checklist in German

26 Dec 2007

Deloitte (Germany) has published the German language versions of Deloitte's 2007 IFRS Model financial Statements (IFRS-Musterkonzernabschluss 2007) and 2007 IFRS Presentation and Disclosure Checklist (IFRS-Checkliste zu Ausweis- und Angabevorschriften 2007).

Five proposed IAASB Standards

25 Dec 2007

The International Auditing and Assurance Standards Board (IAASB) has published for comment three proposed new standards.

Two focus on enhancing the auditor's consideration of controls at service organizations, and the third addresses the communication of deficiencies in internal control to those charged with governance. The IAASB has also invited comment on two exposure drafts of International Standards on Auditing (ISA) that were revised and redrafted in accordance with the new clarity drafting conventions.

Proposed new standards:

  • Proposed ISA 402 (Revised and Redrafted), Audit Considerations Relating to an Entity Using a Third Party Service Organization. Addresses the auditor's responsibilities to obtain audit evidence when an entity uses one or more service organizations. This may include obtaining reports prepared by the auditors of those organizations. Comments due 30 April 2008.
  • Proposed International Standard on Assurance Engagements (ISAE) 3402 Assurance Reports on Controls at a Third Party Service Organization. Complements proposed ISA 402 (Revised and Redrafted) in that reports prepared in accordance with proposed ISAE 3402 will be capable of providing appropriate audit evidence under the proposed ISA. It is intended to ensure that reports issued in one country are likely to meet the requirements of the auditors of user entities in other countries. Comments due 31 May 2008.
  • Proposed ISA 265 Communicating Deficiencies in Internal Control. Deals with the auditor's responsibility to communicate to management and those charged with governance deficiencies in internal control that have been identified by the auditor. Comments due 30 April 2008.
New clarity exposure drafts:
  • ISA 501 (Redrafted) Audit Evidence Regarding Specific Financial Statement Account Balances and Disclosures. Comments due 31 March 2008.
  • ISA 520 (Redrafted) Analytical Procedures. Comments due 31 March 2008.
The exposure drafts may be downloaded without charge from www.ifac.org/EDs. Here is the Press Release (PDF 109k).

 

Commissioner updates EU Parliament on accounting matters

24 Dec 2007

In a presentation to the European Parliament's Economic and Monetary Committee in Brussels, EU Commissioner for Internal Markets and Services Charlie McCreevy updated the committee on four topics – the EU-US regulatory dialogue, financial turmoil, single market, Single European Payments Area (SEPA).

The first topic included an update on accounting matters (below). Click to download Commissioner McCreevy's Presentation (PDF 92k).

Accounting

On November 15, the US Securities and Exchange Commission took the major decision to allow foreign issuers to file accounts under IFRS without reconciliation to US standards. We have always wanted this. All EU companies listed in the US will benefit. One estimate puts the savings at €2.5bn – and this just for EU companies. This is clear evidence of the benefits of international regulatory dialogues! We must continually make sure that new standards reflect the real needs of stakeholders. We need to continue to press for improvements in the IASB standard setting process. To avoid unwanted or even unexpected consequences. That means more transparency. Better consultations. Impact analysis at an early stage. Thorough field-testing of any new standards. And rigorous management. We need standards only when they are necessary.

We also need to strengthen further the public accountability of the IASB. That is why last month we issued a statement together with the US SEC, the Japanese Financial Services Authority and IOSCO on key issues where action is needed.

Next year it will be the EU's turn to take the decision to accept US GAAP – and other well developed third country GAAPs. We are working hard together with European securities regulators to determine whether those GAAPs are equivalent to IFRS. We will make a serious and balanced decision – taking into account the competitiveness and attractiveness of our capital markets. As regulators we must help financial markets to function as friction-free as possible.

 

US GAAP XBRL taxonomy is released for comment

22 Dec 2007

XBRL US Inc. has publshed 'Beta release 1.0' of the XBRL US GAAP Taxonomies and Documentation for a four month comment period ending 4 April 2008.

The XBRL US GAAP Taxonomies are collections of financial reporting concepts that companies will use to report their financial statements in XBRL. Each financial reporting concept in the Taxonomy is an element or 'tag'. Elements in the taxonomy cover all US GAAP reporting requirements for both the primary financial statements (for example, the balance sheet) and the notes to the financial statements. Additionally, the Taxonomy provides elements that cover common financial reporting practices. A preparer's guide is available online or for download. Click for More Information on the XBRL US Website.

 

Heads Up on FASB's proposed definition of equity

22 Dec 2007

We have posted the 21 December 2007 edition of the Heads Up Newsletter from Deloitte & Touche LLP (United States).

On 30 November 2007, the FASB issued for public comment a Preliminary Views document on how to distinguish liabilities from equity. If adopted, these Preliminary Views could radically change how contracts are classified either as liabilities or assets or as equity. Under what FASB calls the basic ownership approach, only the most subordinated class of common stock will qualify as equity. Other contracts currently classified as equity (such as preferred stock and certain option and forward contracts on an entity's own equity) would instead be classified as liabilities (or, in some cases, assets). This Heads Up discusses the FASB's Preliminary Views, their application to some common contracts, and how they compare with current accounting requirements. Interested parties should provide comments to the FASB by 30 May 2008. The IASB expects to issue a Discussion Paper in the first quarter of 2008 inviting comments on FASB's Preliminary Views.
Click to view Heads Up newsletter (PDF 141k).

 

Special IAS Plus Newsletter – Closing Out 2007

21 Dec 2007

Deloitte's IFRS Global Office has published a special edition of our IAS Plus Newsletter titled Closing Out 2007.

The newsletter summarises all of the new and revised Standards and Interpretations in effect for December 2007 year ends and beyond. Presented below is list of those pronouncements. Click to view Closing Out 2007 (PDF 198k). You will find all Past IAS Plus Newsletters Here.

Effective for 31 December 2007 year ends

New Standard

Effective for periods beginning on or after

IAS Plus newsletter

IFRS 7

Financial Instruments: Disclosures

January 2007

October 2005

Amendments to Standards

Effective for periods beginning on or after

IAS Plus newsletter

IAS 1

Capital Disclosures

1 January 2007

October 2005

IFRS 4

Revised Guidance on Implementing IFRS 4

1 January 2007

None

New Interpretations

Effective for periods beginning on or after

IAS Plus newsletter

IFRIC 7

Applying the Restatement Approach under IAS 29, Financial Reporting in Hyperinflationary Economies

1 March 2006

December 2005

IFRIC 8

Scope of IFRS 2

1 May 2006

January 2006

IFRIC 9

Reassessment of Embedded Derivatives

1 June 2006

March 2006

IFRIC 10

Interim Financial Reporting and Impairment

1 November 2006

August 2006

Available for early adoption for 31 December 2007 year ends

New Standards

Effective for periods beginning on or after

IAS Plus newsletter

IFRS 8

Operating Segments

1 January 2009

December 2006

Amendments to Standards

Effective for periods beginning on or after

IAS Plus newsletter

IAS 23

Borrowing Costs

1 January 2008

April 2007

IAS 1

Presentation of Financial Statements

1 January 2009

September 2007

New Interpretations

Effective for periods beginning on or after

IAS Plus newsletter

IFRIC 11

IFRS 2–Group and Treasury Share Transactions

1 March 2007

December 2006

IFRIC 12

Service Concession Arrangements

1 January 2008

December 2006

IFRIC 13

Customer Loyalty Programmes

1 July 2008

June 2007

IFRIC 14

IAS 19–The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction

1 January 2008

July 2007

 

Integration of the world's capital markets

21 Dec 2007

Earlier this week, US SEC Chairman Christopher Cox delivered the keynote address at the Columbia Law and Business Schools' Cross Border Securities Market Mergers Conference.

Chairman Cox reviewed the recent evolution and integration of the world's capital markets – including demutualisation, electronic securities trading, and amalgamations such as NYSE Euronext, ISE Eurex, and Nasdaq OMX. And he examined the implications of those changes for regulators. Click to download Chairman Cox's Remarks (PDF 75k). An excerpt:

There will probably never be a global securities regulator, and we probably wouldn't want one. But strong national regulators working closely together is an exceptionally positive development. It will require relationship building, and a willingness as national regulators to take a different look at common issues and to be open to considering the approaches of others. All of us have got to recognize that there is not just one way to effectively regulate markets. So long as our commitment to protecting investors and maintaining the integrity of markets remains strong, then new regulatory partnerships will undoubtedly continue to flourish, to the everlasting benefit of investors all around the world.

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