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November

IASB December 2007 Board meeting agenda

30 Nov 2007

The International Accounting Standards Board will hold its December 2007 meeting at the Board's offices, 30 Cannon Street, London, on Tuesday to Friday, 11-14 December 2007.

The agenda to the meeting is available on our December 2007 IASB meeting page.

 

IVSC moves forward with restructuring

29 Nov 2007

The International Valuation Standards Committee board and membership have approved a comprehensive restructuring that will enable it to become an independent standard setting organisation that can develop International Valuation Standards for assets and liabilities.

The IVSC had proposed the restructuring in January 2007 (see our IVSC Page).

Key features of the IVSC restructuring plan are as follows:

  • IVSC remains a non-profit organisation incorporated in United States.
  • IVSC acronym is retained but the name changed to the International Valuation Standards Council.
  • The organisation will have three main bodies:
    • A Board of Trustees responsible for the strategic direction and funding of the IVSC.
    • A Standards Board appointed by the Trustees, but with autonomy over its agenda and the creation and revision of standards.
    • A Professional Board appointed by the Trustees to assist in the development of high quality practices by the world's valuers and development of the profession in developing countries.
  • Membership of the IVSC will be broadened beyond national professional valuation institutes to include valuation companies, government, valuation end-users, and academia.
  • Current IVSC directors remain in post for the transitional period November 2007 to May 2008, with responsibility for day to day management of the IVSC.
  • During the November to May period, an advisory board, to be known as an interim Board of Trustees, will be established to oversee the IVSC restructuring process and business plan. Funds raised will be independently controlled by the group and released in accordance with the IVSC restructuring proposal. Michael Sharpe, former Chairman of the International Accounting Standards Committee, will be a Trustee. Mr Sharpe was also a member of IASC's Strategy Working Party that developed proposals leading to the creation of the IASB.

Click for IVSC Announcement (113k).

Deloitte comments to IASB on SME exposure draft

28 Nov 2007

We have submitted to the IASB our Comments on the Exposure Draft: IFRS for Small and Medium-sized Entities.

The IASB issued the Exposure Draft (ED) for comment on 15 February 2007. We note that there is strong demand globally for the introduction of an IFRS for SMEs. As a global issue, we believe that the resulting ED produced by the IASB is a fair compromise given the competing priorities of different jurisdictions and represents a good starting point from which debate and changes may be made to create an effective standard for SMEs. The key matters raised in our letter are summarised below. We also suggest that, to increase the use of the final standard in different jurisdictions, the IASB consider whether it would be viable to make the final standard available free of charge on the internet.

The key matters raised in the Deloitte letter on the SME ED are:

  • The final Standard should be a fully stand-alone document. We support the objective of a self-contained, comprehensive, set of standards for SMEs and do not agree that the IFRS for SMEs should contain any cross referencing to full IFRS, with the exception of financial instruments, as discussed in Appendix C. We believe that SMEs should be able to find all their financial reporting requirements in the one stand-alone document.
  • The IFRS for SMEs has not addressed the needs of SME subsidiaries where consolidated financial statements are prepared by the parent company in accordance with full IFRS. Such entities are likely to prefer to apply the same recognition and measurement principles as applied by the group but with reduced disclosure. We believe that such an option should be included within the IFRS for SMEs.
  • Further simplification of the recognition and measurement principles is required. The needs of users of SME financial statements are not as sophisticated as those of full IFRS financial statements and therefore the accounting requirements should be simplified. This may include further elimination of options, and/or, alternatively, increasing divergence from full IFRS. The proposals also appear to have unintended consequences that make the ED, in some respects, more onerous than for those applying full IFRS.
  • Further disclosure relief is required. Although we acknowledge that the ED proposes significant disclosure relief when compared to full IFRS, we believe this is a key area where simplification has not gone far enough. Further enhancements are possible without any risk of not satisfying the information need of users.
  • Clarification that the IFRS for SMEs is not part of the IFRS hierarchy is required (possibly via an amendment to IAS 8). We are concerned that in circumstances where full IFRS is silent on a transaction, condition or event, users of full IFRS may be required to analogise to the IFRS for SMEs for guidance.
Click to view Comments on the Exposure Draft: IFRS for Small and Medium-sized Entities (PDF 284k). You will find all past Deloitte letters of comment to the IASB and the IASC Here.

 

US Treasury advisory committee will consider IFRS impacts

28 Nov 2007

In our news story of 4 October 2007, we reported that the US Treasury Department appointed a 19-member Treasury Advisory Committee on the Auditing Profession.

The committee will examine auditing industry concentration, financial soundness, audit quality, employee recruitment and retention, and related topics. The committee is co-chaired by former US SEC Chairman Arthur Levitt and former SEC Chief Accountant Donald Nicolaisen. Paul Volcker, former chairman of the IASCF Trustees, is a member. IASB Chairman Sir David Tweedie is an observer, as is FASB Chairman Robert H Herz. The Committee will hold an open meeting on 3 December 2007. Here is 'Working Discussion Outline' (PDF 82k) for the meeting.

Advisory Committee issues that relate directly to IFRSs include:

  • Consider whether and how training and continuing education relating to IFRSs and international auditing standards need to be enhanced.
  • Consider the impact on the curriculum of the potential acceptance of IFRSs and international auditing standards.
  • Consider the impact of IFRSs and international auditing standards on faculty resources and requirements.
  • Consider how the potential acceptance of IFRSs in the United States and the greater use of fair value and mark-to-model accounting will impact the largest auditing firms' network of affiliates.
  • Consider how the potential acceptance of IFRSs and international auditing standards will impact audit market competition.

EU-US cooperation in financial reporting and auditing

27 Nov 2007

Charlie McCreevy, European Commissioner for Internal Market and Services, spoke today on EU-US Cooperation on Reporting Standards, Audit Oversight, and Regulation at the European Federation of Accountants' Conference on Audit Regulation in Brussels.

Among other things, Commissioner McCreevy:
  • took a strong stand against future EU 'carve-outs from IFRSs';
  • suggested that further changes in IASB governance and processes are needed, but with those changes there should be no need for the EU to 'endorse' each IFRS for use in Europe;
  • said that the pace of change in IFRSs should be slowed;
  • opposed requiring US GAAP companies trading in EU securities markets to present a reconciliation from US GAAP figures to IFRS amounts; and
  • urged the EU and the US to rely on each other's enforcement, supervision, and inspections of audit firms.
Presented below are several excerpts from Mr McCreevy's remarks. Click to Download the Commissioner's Entire Presentation (PDF 72k).

On whether the SEC should accept IFRSs 'as adopted in the EU' And still I hear some voices who say this is a poor outcome [SEC dropping the reconciliation for those who use IFRSs as adopted by the IASB]. They think the SEC should have accepted an EU brand of IFRS along with IFRS as adopted by the International Accounting Standards Board or IASB. I am not sure if these critics suffer from amnesia. Let us not forget the facts here. We in Europe have decided to go for IFRS because we rightly believed in the virtues of having a single accounting language. And when I say 'we' I mean all of us, including the Council of Ministers and the European Parliament. We have been preaching this gospel to our US counterparts for the last five years – asking them with indefatigable stamina to accept IFRS. And we have been very successful apostles indeed. Not only has the US decided to accept IFRS for our firms, they even envisage allowing their firms to use them. So let us be serious here. We have got what we have been asking for. One hundred per cent.

On IASB governance and eliminating the need for EU 'endorsement' of IFRSs I spent the first 18 months in office fighting against those who wanted an EU standards setter because they were so unhappy with the IASB. Members of Parliament were lobbied in order to modify proposed standards. That is how we ended up with the carve-out for IAS 39. Since then, there have been improvements in IASB governance and more is needed.

One of the cornerstones of my strategy is that we must be able to accept any future standards without any serious problems. The endorsement of accounting standards needs to disappear from the political limelight. It should not necessarily be a high profile political issue. Therefore, we must make sure that the new standards reflect the real needs of stakeholders. In more concrete words, we need to have a close look at the standard setting process by the IASB: more transparency, better consultations, impact analyses at an early stage, thorough field-testing of any new standards to avoid unwanted or even unexpected consequences. But above all new standards only where they are really necessary – I shall be very vigilant on that in the future.

On acceptance of US GAAP in EU securities markets without reconciliation to IFRSs Now it will be Europe's turn to accept accounts in US GAAP. This decision will have to be taken next year. And it is certainly my intention to propose that no reconciliation to IFRS will be needed for companies filing their accounts under US GAAP. This is the only sensible way forward.

 

PCAOB policy on international cooperation in inspections

27 Nov 2007

At its upcoming meeting on 5 December 2007, the US Public Company Accounting Oversight Board (PCAOB) will consider issuing for public comment a proposed policy statement concerning its non-US inspections.

The policy statement identifies the factors relevant to 'full reliance' by the Board on the inspections systems of its non-US counterparts that are sufficiently rigorous to meet the level of protection for investors that is required by the Sarbanes-Oxley Act. The proposed policy would expand the guidance already in the Board's Rule 4012 Inspections of Foreign Registered Public Accounting Firms, which permits the Board to adjust its reliance on the inspections of auditor oversight entities located in the home countries of registered non-US audit firms based on the independence and rigor of those entities. Click for News Release (PDF 57k). PCAOB Chairman Mark W Olson explained the proposed policy statement during his remarks at the European Federation of Accountants' Conference on Audit Regulation in Brussels on 27 November 2007. Click to Chairman Olson's Remarks (PDF 102k).

 

SEC staff comments on dropping IFRS-US GAAP reconciliation

26 Nov 2007

As we reported in our News Story of 16 Nov 2007, on 15 November 2007 the US Securities and Exchange Commission approved a proposal that foreign companies may submit financial statements to the Commission using IFRSs as adopted by the IASB without having to include a reconciliation of the IFRS data to US GAAP.

The SEC has made available the remarks of three staff that were made at the meeting recommending that the Commission approve the proposal: Also, our New Story of 20 Nov 2007 includes a link to a video cast of SEC Chairman Cox's opening remarks on dropping the reconciliation.

 

Recent changes in financial reporting in Singapore

26 Nov 2007

Changes in Financial Reporting in Singapore, published by Deloitte & Touche (Singapore), is an annual update of the recent changes to Singapore's financial reporting framework.

This edition includes a summary of the new and revised Singaporean FRSs (standards) and INT FRSs (interpretations) issued since the previous edition in November 2006 and up to end of September 2007. There is also an updated comparison against IFRSs. To assist entities in considering and disclosing any potential impact arising from FRSs and INT FRSs issued but not effective in current year, the booklet includes a list of FRSs and INT FRSs with their respective issue dates and effective dates. Click to Download the Booklet (PDF 210k, October 2007, 23 pages). Links to this and earlier editions may be found on our Singapore Page. Comparisons of national GAAP with IFRSs for other jurisdictions may be found Here.

 

'3L3' consultation on joint work programme

24 Nov 2007

The three 'level three' financial supervisory organisations in Europe (CEBS for banks, CEIOPS for insurance companies, and CESR for securities markets) have jointly published a consultation document on their co-operative work programme through the end of 2010. The joint programme relates to a number of cross-sector matters.

The goal is to ensure consistency of regulation, supervision, and enforcement. Several of the matters relate to IFRSs, including valuation of financial instruments and the possibility of an IFRS Q&A database. Click to download the Proposed Work Programme (PDF 100k). Comments are requested by 18 January 2008.

 

IASCF appoints two XBRL advisory groups

23 Nov 2007

The IASC Foundation, under which the IASB operates, has appointed an XBRL Advisory Council and an XBRL Quality Review Team.

Click here for the IASCF Announcement (PDF 17k).
  • The XBRL Advisory Council will provide strategic advice to the Trustees and the Foundation's XBRL team on the future development and adoption of the XBRL Taxonomy for International Financial Reporting Standards (IFRSs).
  • The XBRL Quality Review Team will help to assure the quality of XBRL taxonomy by reviewing taxonomies developed by the IASC Foundation.
XBRL (eXtensible Business Reporting Language) is a computer software 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 XBRL taxonomy for IFRSs is, in effect, a dictionary of data tags that explains what each tagged element is and how it should be treated under IFRSs. It will be maintained in line with the annual Bound Volume of IFRSs. Click for More Information.

 

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