April

Notes from day 1 of the IASB-FASB meeting

22 Apr 2008

The International Accounting Standards Board and the US Financial Accounting Standards Board held a joint meeting on Monday and Tuesday 21-22 April 2008 in London.

Click to go to the preliminary and tentative Notes taken by Deloitte Observers at the Meeting.

 

Updated EFRAG endorsement status report

22 Apr 2008

The European Financial Reporting Advisory Group (EFRAG) has updated its report showing the status of endorsement, under the EU Accounting Regulation, of each IFRS, including standards, interpretations, and amendments.

Click to download the Endorsement Status Report as of 20 April 2008 (PDF 33k). Currently, the following IASB pronouncements have not yet been endorsed for use in Europe:
  • IFRS 2 Share-based Payment: Vesting Conditions and Cancellations
  • IFRS 3 Business Combinations (2008)
  • IAS 1 Presentation of Financial Statements (revised September 2007)
  • IAS 23 Borrowing Costs (revised March 2007)
  • IAS 27 Consolidated and Separate Financial Statements (2008)
  • IAS 32 and IAS 1 Amendments for Puttable Instruments and Obligations Arising on Liquidation
  • IFRIC 12 Service Concession Arrangements
  • IFRIC 13 Customer Loyalty Programmes
  • IFRIC 14 IAS 19 – The Limit on a Defined Benefit Asset, Minimum Funding Requirements, and their Interaction

 

SEC Member would let markets choose IFRSs or US GAAP

22 Apr 2008

In last week Remarks before the American Chamber of Commerce in Brazil, US SEC Commissioner Paul S Atkins discussed regulatory effectiveness and efficiency, including a number of steps that the SEC has taken to reduce regulatory burdens in US financial markets.

He suggests that the choice between US GAAP and IFRSs should be left to market participants, not regulators:

A second step that the SEC took to address concerns about the capital markets was the elimination, last December and effective immediately, of the reconciliation requirement for foreign companies that file using International Financial Reporting Standards (IFRS), as promulgated by the International Accounting Standards Board. Previously, companies had to restate their financial statements according to US generally accepted accounting principles (US GAAP). This action comes in response to a move by much of the rest of the world to shift to IFRS. Brazilian companies, which are scheduled to adopt IFRS by 2010, will be able to benefit from this change. This change also should benefit US investors who seek to invest in non-US companies. The rationale is that US investors are already investing directly abroad in IFRS-reporting companies and have become accustomed to relying on it. At any rate, reconciliations to US GAAP are published only months after the companies' financial statements are released. Thus, performing reconciliations is costly for companies, and reconciliations appear to be of limited use to those who look at financial statements.

Meanwhile, the SEC is considering whether to permit US companies to file using IFRS. If IFRS is good enough for non-US companies, then why not for American companies as well? Making this change would leave the choice between US GAAP and IFRS to the markets. If investors prefer one set of accounting standards over another, they may well reward with premium pricing those issuers who use the preferred set. You can easily see the utility of IFRS for multi-national U.S. companies that access international capital markets and have non-U.S.-based competitors.

IFRS, of course, is still a work in progress, and there are areas in which IFRS has no applicable standards. The US Financial Accounting Standards Board (FASB) and the IASB have much still to do in converging US GAAP and IFRS, but both are committed to this work. Other issues that remain concern the funding and governance of the IASB, supporting the further development and consistent implementation of IFRS, encouraging education of accountants in IFRS, and working towards continued convergence.

Click to view Remarks before the American Chamber of Commerce in Brazil (PDF 66k).

New Global Offerings Services newsletter

21 Apr 2008

We have posted the March 2008 Edition of the Deloitte Global Offerings Services Newsletter.

Global Offerings Services is a global team of Deloitte practitioners assisting non-US companies and non-US practice office engagement teams in applying US and International accounting standards (that is, US GAAP and IFRSs) and in complying with the SEC's financial reporting rules. The GOs Newsletter is an update on relevant GAAP, regulatory, and other matters, webcasts, and publications, with hyperlinks to source material.
Click to view March 2008 Edition of the Deloitte Global Offerings Services Newsletter (PDF 211k).

 

IFRSs in your Pocket 2008

21 Apr 2008

We have published the seventh edition of our popular guide to IFRSs – IFRSs In Your Pocket 2008.

This 112-page guide includes information about:
  • IASB structure and contact details.
  • IASB due process.
  • Use of IFRSs around the world, including updates on Europe, Asia, USA, and Canada.
  • Summaries of each IASB Standard (through IFRS 3 and the amendment to IAS 27) and Interpretation (through IFRIC 14), as well as the Framework and the Preface to IFRSs.
  • Background and current status of all current IASB projects.
  • IASC and IASB chronology.
  • Update on IFRS-US GAAP convergence.
  • Other useful IASB-related information.
We are pleased to grant permission for accounting educators and students to print copies of the PDF file for educational purposes. Please contact your local Deloitte practice office to request a printed copy.
Click to view IFRSs In Your Pocket 2008 (PDF 777k). You will find Links to our Many Other IFRS Publications here.

 

IASB and FASB will meet today and tomorrow

21 Apr 2008

The International Accounting Standards Board will hold a joint meeting with the US Financial Accounting Standards Board on Monday 21 April (starting 11:45am) and Tuesday 22 April (morning only) 2008. The meeting venue is Painters' Hall, 9 Little Trinity Lane, London EC4V 2AD.

We previously posted the agenda, which includes discussion of updates to the Memorandum of Understanding between the IASB and FASB and standard setters' responses to credit crisis. The meeting will be webcast.

 

New Deloitte Audit Committee Brief on FEI 'Top Challenges'

21 Apr 2008

In our News Story of 29 Dec 2007, we posted the list of the Top Challenges for Financial Executives for 2008, prepared by the CEO of Financial Executives International.

Number two on the list was convergence of US GAAP and International Financial Reporting Standards: "Are the US markets ready for principles-based standards?" Deloitte has prepared the 2008 Special Edition of the Audit Committee Brief (PDF 120k) to summarise each of the 11 FEI challenges and provide resources relevant to each topic.

 

CFAs continue to support fair value for financial instruments

21 Apr 2008

The Centre for Financial Market Integrity of the CFA Institute, which represents the views of professional investors, has released the following statement in light of the earnings reports from banks and other financial intermediaries that reflect changes in the market value of financial instruments:

We believe that the widespread use of fair value measurement will ultimately play an important role in improving market discipline and transparency, as well as assist in making more informed risk management decisions. The CFA Institute Centre believes that current chatter about the need to 'roll-back' or revisit fair value is a misguided effort on behalf of preparers that would ultimately result in less transparency and market integrity. Maintaining the current mixed attribute model for reporting financial assets and liabilities has enabled more complacent risk management and has contributed to the lack of market discipline identified by regulators.

The Institute's Statement (PDF 57k) says that "fair value 'smoothing' will mask the reality of market conditions and allow companies to hide risk". The CFA Institute conducted a Survey of its Members regarding fair value requirements for financial institutions. Here is a summary of the responses of 2,006 CFA Institute members:

Do fair value requirements for financial institutions improve transparency and contribute to investor understanding of the risk profiles of these institutions?

  • Yes – 79%
  • No – 21%
Are fair value requirements aggravating the global credit crisis?
  • Yes – 55%
  • No – 45%
What is the overall impact of fair value requirements on market integrity?
  • Improve – 74%
  • Hurt – 19%
  • No impact – 7%

 

Additional postings to IAS Plus 'Credit Crunch' page

20 Apr 2008

We are continuing to add documents to our new page dedicated to tracking recommendations and resources relating to the Credit Crunch.

By 'credit crunch' we mean the recent turmoil in the world's financial markets and responses to it from various international, regional, and national agencies. Two new documents posted are:
  • Observations on Risk Management Practices During the Recent Market Turbulence from the Senior Supervisors Group (PDF 2,334k, March 2008). The seven 'senior supervisors' participating in this project are the French Banking Commission, the German Federal Financial Supervisory Authority, the Swiss Federal Banking Commission, the UK Financial Services Authority, and, in the United States, the Office of the Comptroller of the Currency, the Securities and Exchange Commission, and the Federal Reserve.
  • Policy Statement on Financial Market Developments from the President's Working Group on Financial Markets (PDF 1,428k, March 2008). The policy statement sets out recommendations to improve the future state of US and global financial markets. Those recommendations cover improved transparency and disclosure, better risk awareness and management, and stronger oversight.

 

Deloitte Canada Countdown IFRS transition newsletter

20 Apr 2008

Deloitte Canada has released the third issue of their Countdown IFRS transition newsletter, to provide a snapshot of where we are now as far as Canada's transition to IFRSs is concerned – both in Canada and in Deloitte.

This Special Edition of Countdown focuses on comments from the chair of the Canadian Accounting Standards Board (AcSB); information about AcSB's new omnibus exposure draft Adopting IFRSs in Canada; an interview with Ian Hague of the AcSB staff regarding the transition to IFRSs; and IFRS events. Click for:

 

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