This edition of Countdown focuses on:

• IFRS Disclosures in Management's Discussion and Analysis (MD&A)
• Tax Accounting in an IFRS Environment
• Launch of our Countdown and IFRS Transition Survey
• SEC Release of the Proposed IFRS Roadmap
• An Update on Current IFRS events

Click below for:

• November 2008 Edition Countdown Newsletter – English (PDF 634k)
• November 2008 Edition Countdown Newsletter – French (Compte à Rebours) (PDF 391k)
• Past issues of Countdown
• Our Canada page
  

Because of the global liquidity squeeze, directors and audit committees may need to spend more time planning the year-end activities, reviewing key assumptions and models used in financial reporting, and reviewing the significant accounting and disclosure judgements. In response to those challenges, the FRC has published:

• Challenges for Audit Committees Arising from Current Economic Conditions (PDF 205k)
• An Update for Directors of Listed Companies: Going Concern and Liquidity Risk (PDF 280k)

The purpose of the documents is to assist directors by identifying key questions that they may wish to consider when preparing for the year-end and in meeting their responsibilities in relation to annual reports and accounts. These documents do not impose any new requirements on UK companies or their auditors. These publications are copyright by the FRC and are posted on IAS Plus with the kind permission of the FRC.

Common Content qualifications focus on the five service areas of professional accountants:

• assurance and related services
• performance measurement and reporting
• strategic and business management
• financial management
• taxation and legal services

The nine institutes are from France, Germany, Ireland, Italy, Netherlands, and United Kingdom. The nine institutes have recently completed a 'rigorous self-assessment process by each Institute and a detailed review by teams from other Institutes' to confirm that each Institute has met the requirements for its continued membership in the project. Click for:

• Announcement of Completion of Reviews (PDF 27k)
• Link to Common Content Project Website

 

Among other things, the proposed revisions to IAS 33 would:

• Provide a clear principle to determine which shares and other instruments should be included in the EPS calculation. Under that principle, the weighted average number of ordinary shares includes only those instruments that give their holder the right to share currently in profit or loss of the period.
• Clarify the EPS calculation for particular instruments, such as contracts to sell or repurchase an entity's own shares and participating instruments. The ED treats those contracts as if the entity had already repurchased the shares. Therefore, the entity would exclude those shares from the denominator of the EPS calculation.
• Amend the calculation of diluted EPS for participating instruments and two-class ordinary shares. If a convertible financial instrument would have a more dilutive effect if conversion is assumed, then the entity would assume the more dilutive treatment for diluted EPS.
• Simplify the EPS calculation for instruments that are accounted for at fair value through profit or loss. For such instruments (including the derivative component of a compound financial instrument), an entity would not adjust the numerator or denominator of the diluted EPS calculation.

Click for more information on IASB Exposure Draft: Simplifying Earnings per Share.

Below are the download links and key features of the four new editions.

IFRS Insights Volume 6 (November 2008) (PDF 361k)

• A feature about the Securities and Exchange Commission's proposed IFRS roadmap
• An article about IFRS and tax considerations related to share-based compensation plans
• A brief overview of IAS 17 Leases
• Preview of results from a recent IFRS poll

IFRS Insights Volume 5 (October 2008) (PDF 347k)

• A feature about which US companies may be eligible to use IFRS
• An article that looks at merger and acquisition considerations for IFRS
• A brief overview of IFRS 3 Business Combinations
• A real IFRS case study

IFRS Insights Volume 4 (September 2008) (PDF 910k)

• An update on the proposed IFRS roadmap and rule changes from the Securities and Exchange Commission
• An article about developing an IFRS Center of Excellence
• A brief overview of IFRS 2 Share-based Payment
• A Question & Answer section focusing on IFRS and the oil and gas industry

IFRS Insights Volume 3 (August 2008) (PDF 548k)

• An update on convergence efforts
• A summary on the SEC Roundtable held on August 4, 2008
• An article that explores the technology and systems implications of IFRS
• A brief overview of IAS 16 Property, Plant and Equipment
• A Question & Answer section on IFRS lessons from the European Union

Click to view all previous issues of IFRS Insights.

The Boards are gathering views from constituents on the most urgent accounting issues and how to approach them. The first roundtable was held in London on 14 November 2008 (click for Our notes from this Roundtable) and the second was at the FASB's offices on 25 November 2008. There will be two afternoon sessions at the Tokyo roundtable – the first from 13:30 - 15:30 and the second from 16:00 - 18:00. Click here to download the Agenda Papers from the IASB's website. There's a comprehensive Credit Crunch page on IAS Plus.

 

IFRIC 17 Distributions of Non-cash Assets to Owners clarifies that:

• a dividend payable should be recognised when the dividend is appropriately authorised and is no longer at the discretion of the entity
• an entity should measure the dividend payable at the fair value of the net assets to be distributed
• an entity should recognise the difference between the dividend paid and the carrying amount of the net assets distributed in profit or loss
• an entity to provide additional disclosures if the net assets being held for distribution to owners meet the definition of a discontinued operation.

IFRIC 17:

• applies to pro rata distributions of non-cash assets except for common control transactions.
• is to be applied prospectively
• is effective for annual periods beginning on or after 1 July 2009. Earlier application is permitted.

 

Click for the Press Release (PDF 51k).

Following publication of the amendments, and in response to requests, the IASB subsequently clarified the effective date requirements at its meeting in October, as follows:

Any reclassification made on or after 1 November 2008 takes effect from the date of reclassification. However, any reclassification before 1 November 2008 can take effect from 1 July 2008 or a subsequent date. A reclassification cannot be applied retrospectively before 1 July 2008.

The clarification was published in the October issue of IASB Update and on IAS Plus, and it has now been incorporated in the revised version of the amendments, which can be downloaded from the IASB's website.

By law, registered firms with more than 100 public company audit clients must be inspected annually; firms with fewer public company audit clients must be inspected at least once every three years. This information is included in the PCAOB's announcement (PDF 17k) of its approved budget for 2009 of $157.6 million.