July

EFRAG letter to IASB on work programme and MOU

22 Jul 2008

The European Financial Reporting Advisory Group (EFRAG) has written to the IASB expressing support and also some concerns and the IASB's work programme and the IASB/FASB memorandum of understanding.

The EFRAG Letter (PDF 39k) states:

We have noted that in recent months the IASB has been working on an update of the existing IASB/FASB Memorandum of Understanding to incorporate new milestones covering the period to 2011.... As Europe is currently by far the biggest user of IFRS (in terms of companies), we are very interested in those priorities and in the IASB's work programme in general. We therefore thought it important to let you know our views on the issues discussed. Those views are set out in the numbered paragraphs that follow.

Issues discussed in EFRAG's letter include:

  • Getting IFRS ready for the US and other countries transitioning to IFRS: The need for stability.
  • The credit crunch: EFRAG recognises that, as a result of the current market turmoil, the IASB is carrying out a lot of work over a very short space of time and that this work has to be given a high priority.
  • Balance the work programme between needs of Europe and other jurisdictions: 'The key issue for jurisdictions like Europe in these circumstances is whether an appropriate balance has been achieved between the interests of those jurisdictions using IFRS and those that are currently not using IFRS. There are several aspects of the work programme that concern us in this respect.' EFRAG is concerned about:
    • De-emphasis of the insurance project
    • Placing 'US views above the views of other jurisdictions'
    • Implementing views on fair value measurement 'without even being redebated'
    • The IASB limiting its consideration of the distinction between liabilities and equity to the three approaches mentioned in the recent FASB Preliminary Views document.
  • Cross cutting issues: The IASB should allocate resource to addressing cross-cutting issues and should not cut back its work on the Conceptual Framework. These must be resolved before the IASB can decide on measurement, the difference between equity and liabilities, and revenue recognition.
  • Discontinue work on the projects formerly known as the short-term convergence projects: 'In our view the projects will achieve relatively little but will be resource-hungry because they are relatively controversial'.
  • Special-purpose entities: The IASB should look beyond FASB's FIN 46R for principles that can be used to account for SPEs.
  • IASB comment documents: 'It is clear from the revised Technical Plan that the IASB will need to issue consultative papers and final documents at an almost unprecedented rate over the next few years. This will undoubtedly place a strain on the IASB's constituents. We would encourage the IASB to do all that it can to help constituents cope with that burden. Advance warning about publication dates and careful selection of comment deadlines and effective dates will all help ease that burden.'
  • Public consultation on the IASB's agenda decisions: IASB should consult.

 

IASCF publishes constitution review proposals for comment

21 Jul 2008

The Trustees of the IASC Foundation have published, for public comment, proposals arising from the first part of their 2008 review of the IASC Foundation's Constitution.

The proposals address two issues – a new Monitoring Group for the IASCF and the size and geographical composition of the IASB:

The IASCF Has Invited Comment on These Proposals:

  • Monitoring group. The IASCF Constitution would be amended to establish a formal link between the IASCF and a new Monitoring Group comprising representatives of public authorities and international organisations that have requirements for accountability to public authorities. The Monitoring Group would have the responsibility of approving the selection of IASCF Trustees. The Trustees would also report to the Monitoring Group regularly to enable it to address whether and how the Trustees are fulfilling their role set out in the Constitution. A Memorandum of Understanding will be agreed between the Monitoring Group and the Trustees describing the interaction of the Monitoring Group with the Trustees. Under the proposal, the initial members of the Monitoring Group would be:
    • the responsible member of the European Commission,
    • the managing director of the International Monetary Fund,
    • the chair of the IOSCO Emerging Markets Committee,
    • the chair of the IOSCO Technical Committee,
    • the commissioner of the Japan Financial Services Agency,
    • the chairman of the US Securities and Exchange Commission, and
    • the president of the World Bank.
  • IASB size and composition. The proposal would expand the IASB from 14 to 16 members by not later than 1 July 2012. Up to three members could be part-time. Approval of IFRSs and EDs would require 10 affirmative votes (9 if there are fewer than 16 IASB members serving). The proposal would also adopt new guidelines regarding the geographical diversity of the members of the IASB. The required geographical split of the IASB would be:
    • four members from the Asia/Oceania region,
    • four members from Europe,
    • four members from North America,
    • one member from Africa,
    • one member from South America, and
    • two members appointed from any area, subject to maintaining overall geographical balance.
Comment deadline is 20 September 2008. The Trustees expect to reach final decisions on this part of the Constitution Review at their meeting in Beijing on 9-10 October 2008. The changes would take effect from 1 January 2009. Click for Press Release (PDF 52k). You can download the proposal from www.ifrs.org. The second part of the Constitution Review, covering other aspects of the IASC Foundation's Constitution, will begin after the Trustees' October 2008 meeting. The Trustees will publish a further discussion document inviting respondents to suggest topics for consideration by the Trustees. Consultations will be held during the course of 2009, with changes taking effect from 1 January 2010.

 

Upcoming Deloitte dBriefs webcast on IFRSs

20 Jul 2008

Deloitte (United States) will present a dBriefs webcast relating to IFRSs as follows:

Topic: International Financial Reporting Standards: Opportunities and Challenges Facing Consumer Businesses
Date: 24 July 2008
Time: 11:00 AM EDT (15:00 GMT)
Host: Stacy Janiak, Partner - Deloitte LLP

By 2010 or 2011, it is expected that US companies will have the option of using IFRSs for their financial reporting.
What can leading consumer business and retail companies do to position themselves for such a transition? We'll discuss:
  • Regulatory updates, including recent SEC activity.
  • Benefits, challenges, and the broader implications of IFRSs.
  • Approaches and strategies for adopting IFRSs.
Learn more about how consumer businesses can effectively respond to the global movement toward IFRSs.

 

 

ARC okays endorsement of 5 IFRSs, defers on IFRIC 12

20 Jul 2008

The European Commission's Accounting Regulatory Committee (ARC) met on 11 July 2008. Here are meeting highlights: By formal votes, it agreed to recommend endorsement of the following pronouncements for use in the European Union: IAS 1 (revised 2007), IAS 23 (revised 2007), IFRS 2 (revised 2008), IFRIC 13, and IFRIC 14. EFRAG has also recommended that those pronouncements be adopted.

They will now continue through the next step in the adoption process – the European Parliament's Regulatory Procedure with Scrutiny Committee. IFRIC 14 is effective for calendar 2008 financial years, IFRIC 13 for years beginning 1 July 2008, and the others starting in 2009.
  • IFRIC 12, which is effective for annual periods beginning on or after 1 January 2008, was discussed, but discussions will continue at the ARC's October meeting.
  • The ARC discussed the equivalence of third country GAAPs and EU-endorsed IFRSs, IASB governance, and EFRAG enhancement, but no decisions or recommendations were made.
  • Draft proposals for reorganising EFRAG were agreed and will be issued as a consultation document in third quarter 2008.

    Why you need to know about XBRL

    18 Jul 2008

    Here are the questions.

    Download Deloitte's new booklet Why You Need to Know About XBRL (PDF 153k) for answers. The booklet is written from the point of view of a US SEC registrant, but most of the answers are relevant in a global context as well.

    Why you need to know about XBRL

    1. What is XBRL or 'interactive data'?
    2. How does XBRL make data interactive?
    3. What if a registrant reports a financial statement line item that is unique to it (i.e., other companies would not use this line item)? Will the registrant be forced to use one of the predefined tags?
    4. What are the principal elements of the SEC proposed rules?
    5. What is the phase-in schedule?
    6. What filings and other financial information are subject to the proposed rules?
    7. At what level of detail must the footnotes be tagged in the first year and subsequent years?
    8. Under the proposed rules, when must the interactive data (XBRL-based information) be submitted to the SEC?
    9. Will XBRL replace the EDGAR (Electronic Data Gathering, Analysis, and Retrieval) system? Will current filing formats in the EDGAR system be replaced by XBRL (i.e., will registrants be required to file XBRL documents rather than conventional financial statements, or will they be required to file both)?
    10. What steps can a registrant take now to prepare for the SEC's XBRL mandate?
    11. What implementation options are available to a registrant for preparing XBRL-based financial statements?
    12. Will XBRL documents submitted to the SEC be subject to an audit requirement? What might assurance on XBRL-formatted financial statements include?
    13. Do the current proposed rules apply to mutual funds?
    14. Where can I find more information about XBRL?
    15. How can Deloitte help companies prepare for and make the most of XBRL?
    Our XBRL page is Here.

     

    IFRS Insights newsletter from Deloitte (United States)

    18 Jul 2008

    Deloitte & Touche LLP (United States) has published the second issue of its new publication, IFRS Insights.

    IFRS Insights provides news on the latest developments on IFRSs, practical suggestions for companies addressing IFRSs, updates on the regulatory environment, and references to relevant tools and resources. This issue features a regulatory update and summary of the June FASB forum, High-Quality Global Accounting Standards: Issues and Implications for US Financial Reporting, as well as articles on the tax implications of IFRSs, IAS 27, and XBRL taxonomy for IFRS. Click to download the July 2008 Edition of IFRS Insights (PDF 205k). We have Permanent Links to IFRS Insights on our USA country page.

     

    2008 Strategy matrix for global transfer pricing

    18 Jul 2008

    Deloitte's Strategy Matrix for Global Transfer Pricing continues to be the most comprehensive and authoritative guide of its kind.

    The 2008 edition contains essential information on transfer pricing regimes in 46 jurisdictions around the world and the Organisation for Economic Co-operation and Development (OECD). This booklet provides guidance for planning for transfer pricing methods, documentation, penalties, and other issues. Click to download Deloitte's 2008 Transfer Pricing Guide (PDF 8,886k, 73 pages).

     

    IASCF announcement on constitution review proposals

    18 Jul 2008

    The Trustees of the IASC Foundation have announced the conclusions reached at their meeting in Washington, DC on 8 and 9 July.

    The main conclusions include:
    • Constitution Review Part 1. The Trustees decided to publish for public comment proposals on the first part of their review of the IASC Foundation's Constitution. The proposals would:
      • Monitoring group. Establish a link between the organisation and a Monitoring Group comprising representatives of public authorities and international organisations that have requirements for accountability to public authorities
      • IASB size and composition. Expand the IASB from 14 to 16 members and adopt new guidelines regarding the geographical diversity of the members of the IASB.
      The proposals will be released shortly and have a 20 September 2008 comment deadline. The Trustees expect to reach final decisions on this part of the Constitution Review at their meeting in Beijing on 9-10 October 2008. The changes would take effect from 1 January 2009.
    • Credit crunch. The Trustees supported the IASB's efforts to respond expeditiously to the report of the Financial Stability Forum relating to the current Credit Crunch.
    • Advisory Council. The membership structure of the Standards Advisory Council will be changed so that members would serve primarily as representatives of organisations. To accomplish this, the terms of all SAC will expire at the end of 2008. The Trustees will invite interested organisations to put forward candidates for membership. They will also seek qualified candidates to serve as chairman of the SAC (the current chairman's three-year term ends at the end of this year).
    • Review of working groups. The Trustees' Due Process Oversight Committee and the IASB have agreed to launch a review of the effectiveness of existing IASB working groups. The review will survey working group members.
    • Trustee appointments. Nine Trustees have terms expiring on 31 December 2008. Six will be reappointed for a second term – Marvin Cheung, Sam DiPiazza, Robert Glauber, Liu Zhongli, Sir Bryan Nicholson, and Mohandas Pai. Max Dietrich Kley, David Shedlarz, and Junichi Ujiie are not seeking a second term or have served a second term already. Therefore, the Trustees will advertise for one Trustee each from Asia-Oceania, Europe and North America.
    Click for IASCF Press Release (PDF 56k). The Deloitte observers' report on the public part of the meeting is Here (Part 1) and Here (Part 2).

     

    Comparison of Brazilian GAAP and IFRSs

    17 Jul 2008

    Brazil's two professional accountancy bodies – Conselho Federal de Contabilidade (CFC) and Instituto dos Auditores Independentes do Brasil (IBRACON) – have jointly published a comparison of Brazilian accounting standards and IFRSs.

    Sumário da Comparação das Práticas Contábeis Adotadas no Brasil com as Normas Internacionais de Contabilidade - IFRS presents a side-by-side comparison as of January 2006, in Portuguese. All Brazilian listed companies will be required to switch to IFRSs starting in 2010 (optional from 2007), as will most banks and other financial institutions. The accountancy bodies and government in Brazil are considering whether to extend the IFRS requirement to unlisted companies. We are grateful to the CFC and IBRACON for allowing us to post this comparison on IAS Plus. Click to:

    IFRIC agenda pages are updated

    16 Jul 2008

    We have updated the following IFRIC agenda issues pages to reflect the discussions and decisions at the meeting of the International Financial Reporting Interpretations Committee on 10-11 July 2008:

     

    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.