August

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Accounting Roundup – July 2008

06 Aug 2008

We have posted the July 2008 Edition of Accounting Roundup published by Deloitte & Touche LLP (USA).

Topics covered in this issue include:

SEC Developments

  • SEC Amends Filing Process for Self-Regulatory Organizations
  • SEC Proposes Reforms to Credit Rating Process
  • SEC Issues Report on Examination of Credit Rating Agencies
  • SEC Advisory Committee Releases Draft Final Report
  • SEC Holds Roundtable on Fair Value
  • SEC and Federal Reserve Board Sign Memorandum of Understanding
AICPA Developments
  • AICPA, ACFE, and IIA Join Forces to Issue New Fraud Guidelines
PCAOB Developments
  • PCAOB Adopts New Auditor Registration Rule
GASB Developments
  • GASB Proposes Guidance on Postemployment Benefits
International Developments
  • IASB Issues Additional Guidance on Hedge Accounting
  • IFRIC Issues Interpretation on Construction of Real Estate
  • IFRIC Issues Interpretation on Hedges of a Net Investment in a Foreign Operation
  • IFAC Reissues Auditing Standard on Related Parties
  • IFAC Issues Proposal on Code of Ethics for Accountants
  • IASC Foundation Issues Discussion Document on Constitution Review
Other Developments
  • GAO and PCIE Issue Revised Financial Audit Manual
Click to view July 2008 Edition of Accounting Roundup (PDF 357k). You will find past issues of Accounting Roundup Here.

 

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Malaysian GAAP will converge with IFRSs by 2012

05 Aug 2008

The Malaysian Financial Reporting Foundation and Malaysian Accounting Standards Board have issued a statement about their plans to bring Malaysian GAAP into 'full convergence with International Financial Reporting Standards' by 1 January 2012. To facilitate a phased changeover to IFRSs, the effective date for applying FRS 139 Financial Instruments: Recognition and Measurement (Malaysia's equivalent of IAS 39) will be 1 January 2010. By 2012, all approved accounting standards applicable to publicly listed companies, their subsidiaries, and other publicly accountable entities will converge fully with IFRSs.

Private entities in Malaysia that are currently applying Malaysia's Private Entity Reporting Standards will be permitted to continue to do so. Non-Malaysian companies listed on the Malaysian Stock Exchange are currently permitted to use IFRSs, and the three such companies do use IFRSs. Click for Press Release (PDF 40k).

 

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IFRS resources for accounting educators

05 Aug 2008

The American Accounting Association is holding its 2008 annual meeting this week in Anaheim, California.

Over 3,000 people are attending. At a session titled IFRS Is Here, and What to Do about It, Prof Stephen Zeff of Rice University and Paul Pacter representing the IASB (also IAS Plus webmaster) presented some ideas for introducing IFRSs into university accounting curricula. As part of that presentation, they prepared a detailed list of IFRS resources available to accounting educators from a variety of sources, most without charge, many with hyperlinks to source documents. Click to download:
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Three IAS Plus newsletters in Spanish

04 Aug 2008

Deloitte (Colombia) has published Spanish language translations of three recent IAS Plus newsletters – the July 2008 quarterly newsletter and special edition newsletters on IFRIC 15 and IFRIC 16:

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Newsletter about proposed German 'accounting reform' legislation

04 Aug 2008

In May, the German Government approved a draft 'accounting reform' bill – known as the Act to Modernise the Accounting Law – that is expected to bring about significant changes in how entities report under German GAAP in their individual accounts.

Goals of the reform are:
  • deregulation and cost reduction, particularly for small and medium-sized entities,
  • improving the annual financial statements drawn up under commercial law by removing some of the options that were added on the transformation of the EU's Accounting Directives into German law in the mid-1980s, and
  • bringing German GAAP closer to IFRSs.
However, the reform is not intended to simply copy the provisions of either full IFRSs or the upcoming IFRS for Private Entities. On the contrary, the German Government envisages a revised Commercial Code to be workable alternative to either of those IFRS frameworks that balances the costs to entities preparing accounts with the information needs of the users of individual financial statements. The bill is a proposal that is still being debated in Parliament and is not yet finalised, so changes may occur. The Government expects adoption of a final version some time towards the end of 2008. Deloitte Germany has prepared an English language version of their Praxis-Forum Newsletter that summarises the proposed changes (PDF 316k, 23 pages).

 

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EFRAG report – 14 IASB pronouncements await EU endorsement

03 Aug 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 1 August 2008 (PDF 44k). Currently, there are 14 IASB pronouncements that have not yet been endorsed for use in Europe, as follows:
  • IFRS 1 and IAS 27 Cost of an Investment in a Subsidiary, Jointly-Controlled Entity, or Associate
  • 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
  • IAS 39 Amendments for Eligible Hedged Items
  • 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
  • IFRIC 15 Agreements for the Construction of Real Estate
  • IFRIC 16 Hedges of a Net Investment in a Foreign Operation
  • Improvements to IFRSs – 2007 (affects various standards)

 

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Final report of the SEC's financial reporting advisory committee

03 Aug 2008

The US SEC's Advisory Committee on Improvements to Financial Reporting (ACIFR) has published its final report of recommendations to increase the usefulness of financial information to investors, while reducing the complexity of the financial reporting system to investors, preparers, and auditors.

The report sets out 25 recommendations that the ACIFR believes could be implemented by the Commission, the Financial Accounting Standards Board (FASB), the Public Company Accounting Oversight Board (PCAOB), or their respective staff, as appropriate, without legislation. The Committee's proposals to improve financial reporting are categorised into five main areas:
  1. Increasing the usefulness of information in SEC reports
  2. Enhancing the accounting standards-setting process
  3. Improving the substantive design of new accounting standards
  4. Delineating authoritative interpretive guidance
  5. Clarifying guidance on financial restatements and accounting judgments
Click to download:

Examples of some of the proposals relating to the design of accounting standards and the process for setting standards include:

  • Fair value reporting. The SEC should recommend that the FASB be judicious in issuing new standards and interpretations that expand the use of fair value in areas where it is not already required until (a) FASB completes a measurement framework to systematically assign measurement attributes to different types of business activities and (b) the SEC, FASB, and others develop and implement a plan to strengthen the infrastructure that supports fair value reporting.
  • Financial statement presentation. The SEC should recommend that the FASB consider (a) aggregating financial statements by meaningful categories of business activities, such as the operating, investing, and financing sections and (b) developing a practical means for reconciling the statements of income and cash flows by major classes of measurement attributes.
  • Disclosure. Integrate existing SEC and FASB disclosure requirements into a cohesive whole based on consistent objectives and principles.
  • Disclosure of risks and judgements. Require disclosure of the principal assumptions, estimates, and sensitivity analyses that may impact a company's business, as well as a qualitative discussion of the key risks and uncertainties that could significantly change these amounts over time.
  • Recognition. Recognition guidance in US GAAP should be based on a presumption that bright lines should not exist.
  • General vs industry accounting standards. US GAAP should be presumptively based on business activities, rather than industries. Industry-specific standards should be rare.
  • Accounting policy choices. US GAAP should be based on a presumption that formally promulgated alternative accounting policies should not exist. US GAAP should be based on a presumption that similar activities should be accounted for in a similar manner.
  • Scope of standards. US GAAP should be scoped with sufficient precision to minimize the use of scope exceptions.
  • Investor involvement in standards. Add more investor representation to the FASB and the Financial Accounting Foundation.
  • Financial Reporting Forum (FRF). Create a Financial Reporting Forum (FRF) that includes key constituents from the preparer, auditor, and investor and other user communities, to meet with representatives from the SEC, the FASB, and the PCAOB to discuss pressures in the financial reporting system overall, both immediate and long-term, and how individual constituents are meeting these challenges. This may require the FASB to re-evaluate the roles and composition of its advisory groups or agenda committees.
  • Interpretations. FASB should be the single US standards-setter for all authoritative accounting standards and interpretive implementation guidance for US GAAP. The SEC should issue only registrant-specific guidance.

 

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Guía Rápida NIC/NIIF 2008 (Spanish IFRSs in your Pocket 2008)

02 Aug 2008

Deloitte (Spain) has published Guía Rápida NIC/NIIF 2008 – a Spanish translation of IFRSs in your Pocket 2008, updated up through 30 June 2008.

It includes forewords from Manuel Arranz (Deloitte Spain IFRS Leader); a description of the IASB structure; an IASC/IASB chronology; use of IFRSs around the world; summaries of all IFRSs including Interpretations up through 30 June 2008; brief summaries of IASB agenda projects; and more.

Click to view Guía Rápida NIC/NIIF 2008 (PDF 554k, 114 pages, July 2008).

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Two IAS Plus Newsletters on Conceptual Framework

01 Aug 2008

Deloitte's IFRS Global Office has published two Special Edition IAS Plus newsletters on Conceptual Framework documents recently issued by the IASB for public comment.

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