• Remove the concept of a qualifying special-purpose entity (QSPE) from Statement 140 and the related scope exceptions from Interpretation 46(R)
• Changes the derecognition provisions in paragraph 9 of Statement 140
• Modify the consolidation model in Interpretation 46(R)

As a result, if those decisions become final, previously unconsolidated entities may have to be consolidated. Also, because of the potential modifications to the existing Interpretation 46(R) model, enterprises involved with variable interest entities (VIEs) (even VIEs that are not structured finance vehicles) will need to rethink their previous consolidation conclusions. The FASB is expected to issue an Exposure Draft for public comment on the amendments to Statement 140 and Interpretation 46(R) in IQ 2008. All of the details are in Heads Up Newsletter 18 June 2008 (PDF 182k) from Deloitte & Touche LLP (United States).

 

The report puts forward a set of issues that should be addressed by institutions and accounting and auditing standard setters in order to improve the reliability of the values ascribed to these instruments.

The analysis focuses on the following valuation related aspects: challenges for the valuation of complex financial instruments or instruments for which no active markets exist; transparency on valuation practices and methodologies as well as related uncertainty; and auditing of fair value estimates.

Click for:

• CEBS Report (PDF 228k)
• CEBS Press Release (PDF 38k)
• Related Information on Our Credit Crunch Page

That proposal is part of the 2008 Constitution Review currently being conducted by the IASCF. A Joint Announcement (PDF 34k) by the securities regulators said:

We are pleased at the progress being made in advancing interaction between securities authorities and the IASCF. The increased adoption and use of IFRS in capital markets around the world necessitates strengthening the accountability of the Foundation to the authorities responsible for setting financial disclosure requirements by public companies. In organizing the upcoming roundtable, the Foundation acknowledges the need to create a mechanism for interaction between securities authorities and the IASCF that approximates the historical relationship between securities authorities and national standard setters. This, in turn, will enable securities authorities that allow or mandate the use of IFRS to discharge their mandates relating to investor protection, market integrity and capital formation effectively.

 

This publication is the authoritative guide for financial instruments accounting under IFRSs. The 2008 edition expands last year's edition with further interpretations, examples, discussions from the IASB and the IFRIC, and updates on comparisons of IFRSs with US GAAP for financial instruments. It also includes extracts from 2007 annual reports illustrating IFRS 7 Financial Instruments Disclosures. iGAAP 2008 Financial Instruments: IAS 32, IAS 39 and IFRS 7 Explained (Fourth Edition) (851 pages, June 2008) can be purchased through www.lexisnexis.co.uk/deloitte.

The framework will provide a foundation for developing future accounting standards. The two consultative documents are:

• Exposure Draft: Chapters 1 and 2 of the Conceptual Framework (Objective and Qualitative Characteristics). Exposure Draft (ED). Chapters 1 and 2 of the framework (Objective and Qualitative Characteristics). This ED addresses the objective of financial reporting, the qualitative characteristics of information provided by financial reporting, and constraints on the provision of that information. The draft reflects the boards' updated proposals in the light of comments received on an initial consultation document published in July 2006.
• Discussion Paper: Preliminary Views - The Reporting Entity. This publication sets out the boards' preliminary views on the reporting entity concept and related issues. Although the reporting entity concept determines some important aspects of financial reporting, the boards' existing frameworks do not address it specifically.

Deloitte & Touche LLP (USA) has published a Heads Up Newsletter (PDF 112k) describing the proposals.

 

• IFRIC 14 The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction (PDF 59k)
• IAS 1 (Revised 2007) Presentation of Financial Statements (PDF 81k)

The Commission's effect studies relied, in turn, on effect studies undertaken by EFRAG. The Commission Services (EC staff) concluded that both pronouncements will have positive cost-benefits effects and that they should, therefore, be endorsed in the EU without delay.

 

Click here to go to the Preliminary and Unofficial Notes Taken by Deloitte Observers at the meeting.

Click for AICPA News Release (PDF 48k).

 

Click here to go to the Preliminary and Unofficial Notes Taken by Deloitte Observers at the meeting.

Under the Iraq securities markets law, all companies listed for trading on the Iraq Stock Exchange are required to publish financial statements that are prepared in accordance with International Financial Reporting Standards. Those statements must be audited in accordance with International Standards on Auditing. Further, the Iraq banking law (administered by the Central Bank of Iraq) requires all banks to publish IFRS financial statements. We have updated our table of Use of IFRSs by Jurisdiction.