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July

IASCF seeks members for two XBRL committees

31 Jul 2007

The Trustees of the IASC Foundation have invited applications for membership of two committees relating to the Foundation's work on XBRL – an XBRL Advisory Council (XAC) and an XBRL Quality Review Team (XQRT):

  • The XAC will provide strategic advice to the Trustees and the Foundation's London-based XBRL team on the future development and adoption of the XBRL Taxonomy for International Financial Reporting Standards (IFRSs). It will comprise ten members who should broadly reflect the diverse areas and professional interests affected by XBRL adoption and the implementation of IFRS taxonomies.
  • The XQRT will review the developed taxonomies and offer strategic advice and practical recommendations on the quality of the IFRS taxonomy.
XBRL (Extensible Business Reporting Language) is an XML-based language that is developed specifically for the automation of business information requirements, such as the preparation, sharing, and analysis of financial reports, statements, and audit schedules. The IASC Foundation has developed a high quality XBRL 'taxonomy' for IFRSs (in effect, a dictionary of data tags that explains what each tagged element is and how it should be treated under IFRSs) that will be maintained in line with the annual Bound Volume of IFRSs. Click for Press Release (PDF 24k).

 

Updated background page on financial reporting in Hong Kong

31 Jul 2007

We have updated our comprehensive page of Background Information on Financial Reporting in Hong Kong.

On this page you can find information about mandatory and other sources of GAAP in Hong Kong, the Companies Ordinance, the Securities and Futures Commission, stock exchange requirements, requirements for banks and insurance companies, income tax requirements, and the Hong Kong Institute of CPAs.
Click for our Hong Kong jurisdiction page.

 

New AICPA standard on valuation

30 Jul 2007

The Consulting Services Executive Committee of the American Institute of Certified Public Accountants (AICPA) announced today the release of a new professional standard on valuation services, Statement on Standards for Valuation Services No. 1 (SSVS No. 1) Valuation of a Business, Business Ownership Interest, Security, or Intangible Asset.

The 76-page standard provides guidelines to CPAs for developing estimates of value and reporting on the results. It applies to AICPA members who perform an engagement that estimates the value of a business, business interest, security, or intangible asset for a wide range of purposes, including financial reporting. SSVS No. 1 is effective for engagements accepted on or after 1 January 2008.

SSVS No. 1 specifies two types of engagements: valuation engagements and calculation engagements. For valuation engagements, two types of written reports are permitted – detailed reports and summary reports. For calculation engagements, one type of written report is permitted – calculation reports. Oral reports are allowed for all engagements under the standard.

Click for Press Release (PDF 62k).

 

IFRIC agenda project pages updated

30 Jul 2007

We have updated the following IFRIC agenda project pages to reflect discussions and decisions at IFRIC's meeting in July 2007.

We support enlarging IFRIC to 14 members

28 Jul 2007

Deloitte has submitted a Letter of Comment to the Trustees of the IASC Foundation supporting their Proposal to increase the size of the International Financial Reporting Interpretations Committee from 12 to 14 voting members.

In doing so, we agree with the Trustees that the IFRIC would benefit from a greater diversity of members with practical experience in the application of IFRSs and analysis of financial reports using IFRSs. Our letter notes our concern that enlarging the IFRIC may have some adverse effects on its work. However we are aware that the IFRIC has more staff resources than it had historically and note that the IASCF's 2008 budget reiterates the Trustees' commitment to ensuring that the IFRIC 'has the capacity to respond to interpretation issues in an efficient manner'. Consequently, we are willing to accept the Trustees' assessment that, within reason, any effect on the IFRIC's efficiency should be outweighed by the benefit of greater participation by preparers and users of IFRS financial reports.
Click to view our Letter of Comment to the Trustees of the IASC Foundation (PDF 108k). Click here for links to all Past Deloitte Comment Letters to IASC, IASB, SIC, IFRIC, and the IASCF.

 

Three new jurisdiction pages added

27 Jul 2007

We have added pages for Albania, Botswana, and Jordan describing each jurisdiction's financial reporting framework and explaining the extent to which IFRSs are used.

The information has been extracted from Reports on Standards and Compliance (ROSC) – Accounting and Auditing prepared by the World Bank. You will find links to all of our pages of information by jurisdiction Here.

 

Views sought on format of International Valuation Standards

26 Jul 2007

The International Valuation Standards Committee (IVSC) has issued for comment the report of a group brought together to undertake a critical review of the structure and format of International Valuation Standards (IVS).

Concurrently the IVSC is engaged in a project to modernise its own organisational structure (see our News Story of 19 April 2007). The report on IVSs, titled Review of the International Valuation Standards (PDF 128k), sets out the review group's views on the format of an 'ideal' set of international valuation standards. The report raises a number of specific questions on which views are sought (see below). The comment deadline is 31 October 2007.

Issues on which IVSC is seeking comment

Question 1
The Group recommends that the IVS be principles-based and interprets this as meaning that the standards should contain the requirements to be complied with together with essential explanatory material to make the requirements understandable by an experienced professional valuer. Do you agree with this recommendation?

Question 2
Valuations are performed in a variety of contexts – from financial reporting, lending purposes, business acquisitions to tax and litigation services. The Group believes that the same concepts, definitions and principles apply to all valuations whatever their purpose although there may be differences in their application and reporting. Do you agree with the Group?

Question 3
The Group believes that the primary role of the IVS is as a body of international standards in their own right to meet the needs of the global market place and to provide a basis for the convergence of national standards to international valuation standards. It therefore recommends that the IVS should not cover areas that are still subject to significant national regulation, for example valuation for taxation purposes.... Do you agree with the Group?

Question 4
The Group acknowledges that different jurisdictions will take different routes to the same destination of a single set of global valuation standards. While this is understandable, the Group recommends that the IVSC should seek to introduce a similar requirement to that of the International Financial Reporting Standards; i.e. that valuation reports should not be said to comply with IVS unless they comply with all the requirements of IVS. Do you agree that the IVSC should introduce such a requirement?

Question 5
Do you agree that the proposed structure for the IVS will provide for clear navigation through the standards to determine the valuation and reporting bases for a particular asset/liability and purpose?

Question 6
A number of specific questions have been raised by the Group on the proposed structure for the IVS on which comment is sought:

  • 6(a) The forthcoming eighth edition of IVS will define 'fair value' in International Valuation Standard 2 Valuation Bases other than Market Value. Do you consider that this is sufficient or should the IVSC develop a Standard on Fair Value as a separate basis of valuation?
  • 6(b) The proposed structure for the IVS discusses the application of GAVP and the basis of valuation to specific asset and liability types before considering their application to the specific purposes of valuation. Some members of the Group believed that this order should be reversed. What are your views?
  • 6(c) A number of topics have been proposed to be covered by additional more detailed guidance notes. Do you agree with the list? Are there other issues that should be considered?
Questions 7 and 8 [These relate to the format of IVSs and recommendations for clarity of the standards.]

 

 

SEC approves PCAOB's new internal control audit standard

26 Jul 2007

The US Securities and Exchange Commission has approved Auditing Standard No. 5 An Audit of Internal Control Over Financial Reporting That Is Integrated with An Audit of Financial Statements.

AS 5 was adopted by the Public Company Accounting Oversight Board in May 2007. AS 5 replaces the PCAOB's previous internal control auditing standard, Auditing Standard No. 2. With SEC approval in place, audit firms registered with the PCAOB are required to use the new standard for all audits of internal control no later than for fiscal years ending on or after 15 November 2007. The PCAOB has announced that it intends to undertake several initiatives to support the successful implementation of the new standard. Click for:

 

Summary of issues not added to IFRIC agenda is updated

26 Jul 2007

We have updated our Summary of Issues Not Added to IFRIC's Agenda to reflect the IFRIC's final decisions at its July 2007 meeting not to add the following four topics to its agenda.

SEC seeks views on use of IFRSs by US listed companies

26 Jul 2007

Yesterday, the US Securities and Exchange Commission voted unanimously to publish a Concept Release for public comment on whether to allow US issuers, including investment companies, to prepare their financial statements using International Financial Reporting Standards (IFRSs) as published in English by the International Accounting Standards Board.

Under the SEC's current rules, US issuers are required to follow US GAAP). The Concept Release is an information-seeking document that describes the policy issues and, in the form of questions, seeks public input regarding the possibility of allowing US issuers to report under IFRSs. The comment period will be for 90 days after the Concept Release is published in the Federal Register. The Concept Release has not yet been posted on the SEC's website. In introducing the proposal to the Commission, SEC Chairman Christopher Cox said:

This morning, we are considering publishing a staff Concept Release that solicits public comment on the future role of IFRSs in US markets and asks whether US issuers should be permitted to use IFRSs for purposes of complying with our rules and regulations. In some respects, this is the mirror image of allowing foreign private issuers to file IFRS financial statements without reconciling their financial statements to US GAAP, in that it would give US issuers the same choice that foreign private issuers would have. Such a concept would also touch potentially every aspect of the US capital markets – from how US accountants are educated and trained, to how US issuers prepare their financial statements, to how US investors understand financial statements, and to how accounting standards are developed and interpreted to apply to US companies.

Click for:

Correction list for hyphenation

These words serve as exceptions. Once entered, they are only hyphenated at the specified hyphenation points. Each word should be on a separate line.