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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.

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


Financial Instruments: Disclosures

January 2007

October 2005

Amendments to Standards

Effective for periods beginning on or after

IAS Plus newsletter


Capital Disclosures

1 January 2007

October 2005


Revised Guidance on Implementing IFRS 4

1 January 2007


New Interpretations

Effective for periods beginning on or after

IAS Plus newsletter


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

1 March 2006

December 2005


Scope of IFRS 2

1 May 2006

January 2006


Reassessment of Embedded Derivatives

1 June 2006

March 2006


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


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


Presentation of Financial Statements

1 January 2009

September 2007

New Interpretations

Effective for periods beginning on or after

IAS Plus newsletter


IFRS 2–Group and Treasury Share Transactions

1 March 2007

December 2006


Service Concession Arrangements

1 January 2008

December 2006


Customer Loyalty Programmes

1 July 2008

June 2007


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

1 January 2008

July 2007


We comment on two IAASB proposals

20 Dec 2007

Deloitte has recently submitted letters of comment to the International Auditing and Assurance Standards Board (IAASB) on two proposed International Standards on Auditing:

  • ISA 530 (Redrafted) Audit Sampling (PDF 45k). We express serious concerns about the redrafted ISA 530 regarding (1) the exclusion of certain 'anomalies' when projecting misstatements in samples to the population as a whole and (2) the required approach to evaluating sample results. We note that while these comments go beyond clarity matters, we believe that they relate to current practice problems and that their significance warrants the IAASB's consideration at this time.
You will find our past comments to the IAASB Here.


Revised IASCF constitution reflects changes to IFRIC

20 Dec 2007

The IASC Foundation has published a revised version of its constitution reflecting various amendments relating to the International Financial Reporting Interpretations Committee (IFRIC).

Amendments include enlarging IFRIC from 12 to 14 members, changing the quorum and voting requirements accordingly, and basing the selection of IFRIC members on their awareness of current issues and technical ability to resolve them. The IASC Foundation plans to begin its search for two new IFRIC members shortly. Click for:


The SEC holds two roundtables on IFRSs

19 Dec 2007

On 13 and 17 December 2007, the SEC hosted two roundtable discussions on the potential use of IFRSs in the United States.

The roundtables were in response to:

The roundtable participants comprised various constituents, including financial intermediaries, investors, and issuers. The roundtables addressed the effect of giving US issuers the choice of using IFRSs or US GAAP on the capital markets and on competition. Practical issues concerning the possible use of IFRSs by US issuers and the impact on investor protection also were addressed. Issues were addressed from both the US market's perspective and the global perspective.

The 18 December 2007 edition of the Heads Up Newsletter (PDF 114k) from Deloitte & Touche LLP (United States) has the details.


FAF proposes changes to FASB structure

19 Dec 2007

The Trustees of the US Financial Accounting Foundation (FAF), under which the Financial Accounting Standards Board (FASB) and Governmental Accounting Standards Board (GASB) operate, have published for comment proposals for significant changes to the FAF-FASB-GASB structure.

The proposals are designed to make FASB's decision-making more efficient and to strengthen the oversight role of the FAF. Click to download the FAF Proposed Changes to Oversight, Structure, and Operations of the FAF, FASB, and GASB (PDF 83k). Comment deadline is 10 February 2008. Among the proposed changes are the following:

Summary of Main Proposals by the FAF Trustees:

Financial Accounting Standards Board (FASB):

  • Reduce the size of the FASB to five members, from seven currently.
  • Retain the current simple majority FASB voting requirement.
  • Require that FASB have at least one member from each of four backgrounds: investing, auditing, preparing financial statements, and accounting education. The fifth member could be from any background. Currently there is no required mix.
  • Give the FASB chair the authority to add issues to FASB's agenda. Currently the full Board must decide. The FAF would have an oversight role in agenda setting.
Financial Accounting Foundation (FAF):
  • Strengthen the governance and oversight activities of the FAF trustees as to the efficiency and effectiveness of the standard-setting process. Trustees propose taking a more active oversight role in such areas as due process, agenda setting, solicitation of public comment, consideration of comments, and the post-isuance evaluation of the effectiveness and efficiency of standards adopted by FASB.
  • Give the power to choose FAF trustees to the trustees themselves, replacing the current system by which eight non-government trustees are selected by six specified organisations subject only to rejection by the trustees on grounds a nominee is 'not suitable'.
  • Change FAF trustees' maximum terms of service from two three-year terms to one five-year term.
  • Change the number of FAF trustees from 16 currently to a range between 14 and 18.
  • Require that the next chairman of the FAF devote between one-third and one-half time to the job.
Governmental Accounting Standards Board (GASB):
  • Retain the current size, term length, and composition of the GASB.
  • Secure a stable mandatory funding source for the GASB.
  • Give the GASB chair the authority to set GASB's technical agenda. Currently the full Board must decide. The FAF would have an oversight role in agenda setting.

With regard to the future role of FASB and IFRSs, the FAF proposal notes:

Recent commitments by many countries to use International Financial Reporting Standards (IFRSs) have opened a broad-ranging debate on issues related to accounting standards convergence and globalization. At its core, this debate must include a realistic assessment of how IFRS will work in actual application across the world and what contributions can be made by the FAF and FASB to the quality and consistency of those standards. The outcome of this debate will affect the future role, structure, and influence of the FAF and FASB on the global standard-setting process. However, regardless of the outcome, the FASB likely will continue to have a meaningful role in how international standards are set, and it may have continuing responsibility for setting standards for private enterprises and not-for-profit organizations in the United States.

CEBS report on Basel Pillar 3 addresses IFRS 7 disclosures

19 Dec 2007

The Committee of European Banking Supervisors (CEBS) has published the findings of a survey on regulatory implementation of disclosures by banks and other credit institutions under EU Directive 2006/48/CE, which transposes the Basel Pillar 3 requirements into EU legislation.

The rationale underlying Pillar 3 is that adequate disclosure should allow market participants to assess an entity's capital adequacy. To this end institutions need to disclose information on the scope of application, capital, risk exposures, and risk assessment processes at the highest level of consolidation. The report notes as an 'area of concern' the interrelationship between Pillar 3 disclosures and accounting disclosures under IFRS 7.

"Dealing with the relationship with accounting is of great importance to ensure that the accounting and Pillar 3 disclosures are to the largest extent consistent or at least not such that they lead to major inconsistency problems."

The survey found that, at the moment, EU countries have refrained from taking measures (either official or informal) in this respect, though many countries indicated that disclosures made in the public financial statements as a result of IFRS 7 do not need to be repeated for the purpose of Pillar 3 compliance. Two countries said that they may issue guidance on this matter. Click for:


We comment to IASB on risks eligible for hedge accounting

18 Dec 2007

We have submitted to the IASB our Comments on the Exposure Draft: IAS 39 Exposures Qualifying for Hedge Accounting.

Overall we are supportive of the proposals.

We support the Board's intention to clarify IAS 39 Financial Instruments: Recognition and Measurement in the areas of what risks are eligible for hedge accounting and what portion can be designated as a hedged item. As the amendments' objective is to provide clarity in what is a qualifying hedge accounting relationship it is important that the finalisation of the amendments on risks and portions is very clear. We currently have concerns that some of the drafting is not clear enough and also that the amendments may have unintended consequences for other hedge accounting designations beyond the intended scope of the amendments. We draw this to your attention as well as our proposals to make the amendments clearer and other drafting comments in the answers to the questions in the Appendix to this comment letter.

Click to view Comments on the Exposure Draft: IAS 39 Exposures Qualifying for Hedge Accounting (139k). You will find all past Deloitte letters of comment to the IASB and the IASC Here.


New IFAC translations database

18 Dec 2007

The International Federation of Accountants (IFAC) has developed a database that enables professional accountants to locate third-party translations of its pronouncements in more than 30 languages.

The database features information on the languages available, publication titles, names of translating organizations and, where available, lists of translated key terms. To facilitate translation and reproduction of its pronouncements, IFAC has released the following two updated policy statements:
  • Policy for Reproducing, or Translating and Reproducing, Publications Issued by the International Federation of Accountants; and
  • Permission to State that the International Federation of Accountants has Considered a Translating Body's Process for Translating Standards and Guidance.
The translations database and the policy statements can be accessed on the IFAC website at Click for Press Release (PDF 56k).


CESR publishes summaries of IFRS enforcement decisions

18 Dec 2007

The Committee of European Securities Regulators (CESR) has published its second batch of extracts from its confidential database of enforcement decisions taken by EU national enforcers of financial information. From time to time, CESR publishes extracts of selected decisions as a source of information to foster appropriate and consistent application of IFRSs in the EU.

Topics covered in batch #2 of CESR's extracts:

  • Amortisation of intangible assets with finite lives included in goodwill
  • Excise tax on fuel
  • Recognition of negative goodwill
  • Deferred tax asset
  • Valuation of offshore rigs at the transition date
  • Use of the fair value option
  • Segment reporting
  • Method of amortising intangible assets
  • Change in accounting for employee benefits
  • Identification of the acquirer in a business combination
  • Real estate projects

Click to download:


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.