October

Accounting issues arising from illiquid market conditions

Oct 04, 2007

The Center for Audit Quality (CAQ) issued three white papers addressing key accounting issues arising from the current illiquid market conditions from the perspective of existing United States GAAP.

While the papers are written in a US GAAP context, the issues are likely to be of interest in an IFRS context as well. The CAQ was created by the American Institute of CPAs "to foster confidence in the audit process and to aid investors and the capital markets by advancing constructive suggestions for change rooted in the profession's core values of integrity, objectivity, honesty and trust".

Download the three CAQ white papers:

(PDF 32k). The paper discusses measurement of fair value under existing US GAAP (most of which is contained in SFAS 157 Fair Value Measurements) in the context of illiquid (or less liquid) market conditions that currently exist in many segments of the credit markets. Although much of the discussion is in the context of assets backed by subprime mortgage loans, the GAAP principles discussed regarding the measurement of fair value are also applicable to the measurement of the fair value of other assets (such as unsecuritized assets), not just those backed by subprime mortgage loans.
(PDF 31k). The objective of this paper is to discuss the application of FASB Interpretation No. 46 (revised December 2003) Consolidation of Variable Interest Entities by sponsors of commercial paper conduits, particularly as impacted by market conditions that currently exist in many segments of the credit markets, including illiquid (or less liquid) conditions in the commercial paper markets.
(PDF 39k). This paper discusses existing US GAAP associated with commitments to lend money or underwrite securities in the context of illiquid (or less liquid) market conditions that currently exist in many segments of the credit markets.

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Reminder about upcoming comment deadline

Oct 04, 2007

We remind you that the deadline is Friday, 5 October 2007, for responding to IFRIC Draft Interpretation D21 – Real Estate Sales.

IFRIC D21 addresses accounting by real estate developers for sales of units, such as apartments or houses, 'off plan', that is, before construction is complete. At present, some real estate developers record revenue only when they have handed over the completed unit to the buyer, while others record revenue earlier, as construction progresses, by reference to the stage of completion of the development. IFRIC D21 proposes that revenue should be recorded as construction progresses only if the developer is providing construction services, rather than selling goods (completed real estate units). It proposes features that indicate that the seller is providing construction services. In many countries, these features tend currently not to be present in typical off plan sale agreements.

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There are currently visitors connected to www.iasplus.com

Oct 03, 2007

We are now able to track how many visitors are connected to our website at a point in time.

If you're curious, this number will always be available at the Bottom of Our Home Page, along with the cumulative number of visitors and maps of the locations of the last 500 and last 100 visitors.

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Report from last week's meeting of IASB and ASBJ

Oct 03, 2007

The IASB met with representatives of the Accounting Standards Board of Japan (ASBJ) in London on 27 and 28 September 2007 to discuss progress on convergence of Japanese GAAP and IFRSs.

The discussions included a review of short-term convergence projects, where the goal is to eliminate major differences by the end of 2008, as well as other major projects including segment reporting, intangible assets, special purpose entities and business combinations where the goal is to eliminate major differences by June 2011. In addition, the representatives of the boards exchanged views on the current status of their work on consolidation, liabilities and equity, and revenue recognition. Click for IASB News Release (PDF 48k).

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IAASB invites comments on strategy for 2009-2011

Oct 02, 2007

The International Auditing and Assurance Standards Board (IAASB) is seeking comments on its proposed future technical strategy.

The strategy, when finalised, will form the basis for the IAASB's work program for 2009 to 2011. Comments are requested by 30 November 2007. Click to download:

IAASB Strategy Consultation Paper (PDF 138k)
Related Press Release (PDF 45k)

The IAASB has also has determined that its complete set of clarified International Standards on Auditing (ISAs) will be effective for audits of financial statements for periods beginning on or after 15 December 2009. Announcing this date will allow standard setters, regulators, and auditors to plan for the adoption and implementation of the standards. Click to download:

IAASB Announcement of Effective Dates (PDF 40k)
Update on Clarity Project (PDF 115k)

You will find more information on IAASB's Home Page www.iaasb.org.

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Our table of use of IFRSs by jurisdiction is expanded

Oct 02, 2007

We have expanded our Table that Shows the Use of IFRSs by Jurisdiction for domestic listed companies and for domestic unlisted companies.

The expansion includes a column that indicates whether the audit report and basis of presentation note refer to IFRSs without qualification or whether they refer to IFRSs as adopted by the local jurisdiction or to local GAAP. We have also added grand totals of the various columns:

Grand Totals for Listed Companies
Information, to the best of our knowledge, for 140 jurisdictions: IFRSs not permitted — 32 jurisdictions IFRSs permitted — 26 jurisdictions IFRSs required for some companies — 3 jurisdictions IFRSs required for all companies — 79 jurisdictions Of the 108 jurisdictions (26 + 3 + 79) that permit or require IFRSs: In 73 jurisdictions the audit report refers to conformity with IFRSs In 32 jurisdictions the audit report refers to local GAAP or to IFRSs as adopted in the jurisdiction In 1 jurisdiction the audit report for some companies refers to local GAAP and for other companies it refers to IFRSs For 2 jurisdictions we do not have this information
Grand Totals for Unlsted Companies
IFRSs not permitted — 41 jurisdictions IFRSs permitted — 40 jurisdictions IFRSs required for some companies — 17 jurisdictions IFRSs required for all companies — 24 jurisdictions

Grand Totals for Listed Companies

Information, to the best of our knowledge, for 140 jurisdictions:

IFRSs not permitted — 32 jurisdictions
IFRSs permitted — 26 jurisdictions
IFRSs required for some companies — 3 jurisdictions
IFRSs required for all companies — 79 jurisdictions

Of the 108 jurisdictions (26 + 3 + 79) that permit or require IFRSs:

In 73 jurisdictions the audit report refers to conformity with IFRSs
In 32 jurisdictions the audit report refers to local GAAP or to IFRSs as adopted in the jurisdiction
In 1 jurisdiction the audit report for some companies refers to local GAAP and for other companies it refers to IFRSs
For 2 jurisdictions we do not have this information

Grand Totals for Unlsted Companies

IFRSs not permitted — 41 jurisdictions
IFRSs permitted — 40 jurisdictions
IFRSs required for some companies — 17 jurisdictions
IFRSs required for all companies — 24 jurisdictions

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IAS 1 (Revised 2007) compliance checklist

Oct 02, 2007

We have published an (PDF 223k).

IAS 1 (Revised 2007) Presentation of Financial Statements was issued on 6 September 2007 and is effective for annual periods beginning on or after 1 January 2009, with early application permitted. There is a permanent link to this and related Deloitte publications on our Model Financial Statements Page.

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IAS Plus Newsletter on revisions to IAS 1

Oct 02, 2007

Deloitte's IFRS Global Office has published a special edition Presentation of Financial Statements (PDF 129k).

The revisions to IAS 1, which the IASB published on 6 September 2007, represent the first step in the Board's comprehensive project on reporting financial information. The main changes from the previous version of IAS 1 are to require that an entity must:

Present all non-owner changes in equity (that is, 'comprehensive income') either in one statement of comprehensive income or in two statements (a separate income statement and a statement of comprehensive income). Components of comprehensive income may not be presented in the statement of changes in equity.
Present a statement of financial position (balance sheet) as at the beginning of the earliest comparative period in a complete set of financial statements when the entity applies an accounting policy retrospectively or makes a retrospective restatement.
Disclose income tax relating to each component of other comprehensive income.
Disclose reclassification adjustments relating to components of other comprehensive income.

The revised Standard is effective for annual periods beginning on or after 1 January 2009, with early application permitted. You will find all Past IAS Plus Newsletters Here. You can sign up for Free Subscription by Email.

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Overview and impact of the IASB's insurance DP in Denmark

Oct 01, 2007

Deloitte in Denmark has published a booklet about the IASB's Discussion Paper (DP) on Insurance Contracts.

The DP is the first step in the IASB's project to develop a comprehensive global financial reporting standard for accounting for all insurance contracts from the perspective of the insurer. The publication (which is in the Danish language) provides an overview of the DP and examines the expected impact on Danish life and non-life insurance companies, including numerical examples. Click to (PDF 1,082k).

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Accounting issues arising from illiquid market conditions

Reminder about upcoming comment deadline

There are currently visitors connected to www.iasplus.com

Report from last week's meeting of IASB and ASBJ

IAASB invites comments on strategy for 2009-2011

Our table of use of IFRSs by jurisdiction is expanded

IAS 1 (Revised 2007) compliance checklist

IAS Plus Newsletter on revisions to IAS 1

Overview and impact of the IASB's insurance DP in Denmark