The committees, selected in September 2007 and comprising well-respected asset managers and investors, were asked to develop a set of best practices for their respective groups of stakeholders. Click here for:

• US Treasury Department Press Release (PDF 31k)
• Report: Principles and Best Practices for Hedge Fund Investors (PDF 210k)
• Hedge Fund Investors Fact Sheet (PDF 27k)
• Report: Best Practices for the Hedge Fund Asset Managers (PDF 230k)
• Hedge Fund Asset Managers Fact Sheet (PDF 26k)

 

Click to view our Credit Crunch page.

Starting in the summer of 2007, accumulating losses on US subprime mortgages triggered widespread disruption to the global financial system. Large losses were sustained on complex structured securities. Institutions reduced leverage and increased demand for liquid assets. Many credit markets became illiquid, hindering credit extension. Balance sheets of financial institutions became burdened by assets that have suffered major declines in value and vanishing market liquidity. To re-establish confidence in the soundness of markets and financial institutions, national authorities have taken exceptional steps with a view to facilitating adjustment and dampening the impact on the real economy. These have included monetary and fiscal stimulus, central bank liquidity operations, policies to promote asset market liquidity and actions to resolve problems at specific institutions. Financial institutions have taken steps to rebuild capital and liquidity cushions. And both national and international organizations have developed recommendations and resources aimed at reducing the likelihood that this situation would recur. Some of those recommendations and resources relate to financial reporting and disclosure.

The following changes will come into effect from July 2008. All six directors will report directly to the Chairman of the IASB. The IASB Announcement (PDF 53k) said:

• Wayne Upton, Director of Research, will become Director of International Activities - a vital role that better reflects both his current responsibilities and extensive experience in assisting major economies in making the transition to IFRSs and in meeting the growing volume of requests from around the world for assistance in implementing IFRSs. He will also be available for special projects.
• Tricia O'Malley, a former IASB member, will take on the enhanced role of Director of Implementation Activities, combining her existing responsibilities as Co-ordinator of IFRIC activities with the management of post-implementation reviews and annual improvements projects.
• Paul Pacter will retain his existing responsibilities as Director of Standards for SMEs. Paul has shown tremendous energy and leadership driving the SME project forward, which is all the more remarkable given the part-time nature of the role.
• Peter Clark will be promoted to Director of Research, responsible for identifying and managing issues that affect a range of IASB projects, and for overseeing technical quality.
• Gavin Francis will be promoted to Director of Capital Markets and will be responsible for the development of IFRSs, with particular emphasis on financial instruments and related areas.
• Alan Teixeira will become Director of Technical Activities and will be responsible for the development of IFRSs.

 

In that role, he will be working on the Derecognition Project and other financial instruments-related projects.

They have also published an Accounting Alert that summarises some of the key practical, commercial, and technical considerations in applying the standard. Click here for:

• Links to This and Past Australian Accounting Alerts

 

As with the English Language Version, the guide not only explains the detailed provisions of IFRS 2 but also deals with its application in many practical situations. In addition, it includes a summary of accounting for share-based payment under Taiwan GAAP and an comparison against IFRS 2. The Chinese translation of A Guide to IFRS 2 Share-based Payment can be purchased by email to fltsai@deloitte.com.tw.

 

The revised IPSAS 4 can be downloaded without charge from the IFAC's Website. Click for Press Release (PDF 27k).

 

Here is the Press Release (PDF 30k). The paper updates a 2005 paper to reflect the continued growth and rapid innovation in the CRT markets. The main findings of the paper are:

• Some of the more complex CRT instruments developed since 2004 are associated with increased leverage and a high variance of loss or high vulnerability to the business cycle.
• A failure to understand some of these risks contributed to the market turmoil of 2007.
• Despite these shortcomings, the structured credit market is likely to survive, but will remain weak for a period of time.
• Supervisors remain concerned about several aspects of the CRT market: its complexity; valuation issues; liquidity, operational and reputational risks; and the broader effects of the growth of CRT. Supervisors believe that market participants must better understand the structure and risks of the CRT products in which they invest, as well as how the rating agencies assign ratings to specific instruments and what circumstances would lead them to downgrade ratings.
• With continued innovation in the CRT markets, the effort and resources that firms and regulators will need to expend to properly understand these instruments increases significantly.
• There are steps that the industry and regulatory community can take to enhance the robustness of their risk management and oversight of these products. The paper includes recommendations in this regard.

Click to view Credit Risk Transfer (CRT) – Developments from 2005 to 2007 (PDF 628k).

 

The groups also exchanged views on the recent international credit crisis. Click for IASB News Release (PDF 52k).

 

They also completed proposals, to be published shortly, to:

• Create a 'monitoring group' of representatives of official organisations, including securities regulators, that would approve Trustee appointments and review Trustee oversight activities
• Expand the IASB to 16 members from the present 14, and provide for geographical balance

The remaining issues will be dealt comprehensively beginning with a consultation document in the second half of 2008. The Trustees expect to complete the review by the end of 2009. The Trustees have formed a Constitution Committee to guide the review, though decisions rest with the Trustees as a whole. That committee includes: Gerrit Zalm, Chairman of the Trustees; Philip Laskawy, Vice Chairman of the Trustees; Bertrand Collomb; Samuel DiPiazza; Aki Fujinuma; Pedro Malan; and Antonio Vegezzi. Click for Press Release (PDF 63k).

 

Timeline for the 2008 Constitution Review
April 2008	Publication of proposals concerning public accountability and IASB size/geographical diversity – the first track of the Constitutional Review. Comment period to end on 31 July.
April-August 2008	Trustees to meet interested parties to discuss proposals on the first track
September 2008	Constitution Committee to develop proposals to present to full Trustees, based upon analysis of comment letters and other input on the first track proposals.
October 2008	Trustees to conclude the first track of Constitution Review at their Beijing meeting. Changes to take effect for 1 January 2009.
October or November 2008	Trustees to publish a discussion document inviting views on other issues to be incorporated as part of the Constitutional Review – the second track of the Constitution Review.
October 2008-January 2009	Trustees to meet interested parties to discuss the second track of the Constitution Review.
February 2009	Trustees to develop list of issues and the Constitution Committee to develop proposals.
April 2009	Trustees to publish other constitutional proposals on issues identified.
April 2009-October 2009	Trustees to hold a series of meetings on proposals, possibly including public round-table discussions.
October-November 2009	Conclusion of the Constitutional Review.