September

Notes from day 1 of September 2008 IASB meeting

17 Sep 2008

The International Accounting Standards Board held its September 2008 meeting at the IASB's offices, 30 Cannon Street, London on Tuesday to Friday 16-19 September 2008. The meeting was open to public observation and was webcast.

Click here to go to the preliminary and unofficial Notes Taken by Deloitte Observers at the meeting.

 

IFRSs in your Pocket 2008 in German

16 Sep 2008

Deloitte (Germany) has published IFRS im Überblick 2008, the German language version of IFRSs in Your Pocket 2008.

This 134-page guide includes information about:
  • IASB structure and contact details.
  • IASB due process.
  • Use of IFRSs around the world, including updates on Europe, Asia, USA, and Canada.
  • Summaries of each IASB Standard (through 31 July 2008).
  • Background and current status of all current IASB projects.
  • IASC and IASB chronology.
  • Update on IFRS-US GAAP convergence.
  • Other useful IASB-related information.
Click to view IFRS im Überblick 2008 (PDF 1,795k). You will find Links to our Many Other IFRS Publications here.

 

Three FASB derecognition exposure drafts

16 Sep 2008

As part of its response to the 'credit crunch', the US Financial Accounting Standards Board has issued three separate but related exposure drafts (EDs) for public comment.

The proposed FASB Statements Accounting for Transfers of Financial Assets and Amendments to FASB Interpretation No. 46(R) address amendments to FASB Statement No. 140 Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities, and to FASB Interpretation No. 46 (revised December 2003) Consolidation of Variable Interest Entities. Proposed FASB Staff Position FAS 140-e and FIN 46 (R)-e Disclosures about Transfers of Financial Assets and Interests in Variable Interest Entities addresses related disclosure requirements for public entities. Click for press release (PDF 16k). The proposals are available on FASB's Website.

Heads Up on updated FASB-IASB MoU

16 Sep 2008

On 11 September 2008, the International Accounting Standards Board (IASB) and the US Financial Accounting Standards Board (FASB) jointly published an update of their 2006 Memorandum of Understanding (MoU).

The MoU describes the priorities and milestones related to the two boards' completion of major joint projects by 2011. Deloitte & Touche LLP (United States) has published the 16 September 2008 edition of the Heads Up newsletter (PDF 158k) discussing the updated MoU.

An excerpt:

There are two reasons why it is important to complete the projects by 2011. First, a number of countries, such as Canada, India, Japan, and Korea, have announced plans to adopt or converge with IFRSs beginning in 2011. If the projects are completed by 2011, those countries will avoid having to adopt new standards shortly after making the transition to IFRSs. Second, in accordance with its proposed IFRS Roadmap, the SEC will determine in 2011 whether to require mandatory adoption of IFRSs for all US issuers starting in 2014. In doing so, it will evaluate the progress of the various milestones included in that roadmap, one of which is improvements to IFRSs.

 

Deloitte's 7th annual fair value pricing survey

15 Sep 2008

Deloitte LLP United States's 7th Annual Fair Value Pricing Survey has found that mutual funds are converging around certain universal fair value measurement practices.

More than 50 fund managers representing more than 2,700 funds with assets under management exceeding $3.5 trillion participated in the survey. This is Deloitte's seventh survey on the valuation practices and industry policies and procedures used by asset managers. We have seen valuation practices evolve into a mature set of practices, policies, and procedures that continue to be refined as the range and complexity of investment types expand and the investment valuation tools improve. Specific 2008 findings include:
  • Seventy-four percent of those surveyed indicated that they have made changes to their valuation policies and procedures.
  • Sixty-three percent reported that FAS 157 has impacted their valuation policies and procedures.
  • Thirty-seven percent have added internal controls over valuation as a result of the credit crisis.
  • When obtaining broker quotes, more than 50 percent of participants seek more than one quote for fixed-income securities.
  • Greater than 75 percent noted that they are asking pricing services and brokers specific questions designed to understand the inputs and processes behind daily prices provided to mutual funds.

Click to view 7th Annual Fair Value Pricing Survey (PDF 439k).

 

Update on EU response to financial market turmoil

14 Sep 2008

Charlie McCreevy, European Commissioner for Internal Market, presented a report on Financial Turmoil: Latest Developments on Policy Response to the Committee on Economic and Monetary Affairs of the European Parliament on 10 September 2008. He commented, among other things, on activities of the IASB in this regard.

Click to download Commissioner McCreevy's Remarks (PDF 78k). Here are excerpts:

The turmoil has exposed a chronic lack of private sector discipline and competence and some weaknesses in the global financial regulatory framework. We must strengthen market and institutional resilience. This is what the ECOFIN Roadmap of October 2007 is designed to do....

The upgrading of valuation methods, in particular with respect to the valuation of illiquid assets. Work is being led by the Basle Committee and the International Accounting Standards Board (IASB), who have established a panel on fair valuation. Advice is expected by the end of the third quarter of 2008. The IASB is also working on off-balance sheet items with the key question being: when should an entity be brought onto another entity's balance sheet? The input received in these meetings will help the IASB in shaping its forthcoming proposals on reviewing consolidation rules under IFRS. Deliverables are expected in 2009. Proper due process must be carried out. I believe we need to look hard at issues such as dynamic provisioning* – and how to account for prudential reserves built up by banks to buffer for bad times. It should not have escaped people's attention that banks in Spain were better placed to withstand the turmoil because they had not yet adopted the relevant IFRS Standard. There is a lesson there that needs to be drawn....

On accounting, SEC Chairman Cox has unveiled a roadmap where US companies would switch from US GAAP to IFRS by 2014. Unthinkable only two years ago! A dramatic signal indeed. Following the EU's lead, the US is indicating it also wants to choose global standards. One set, in sight, at last. And of course we need to strengthen the governance of the IASB. That is why we are working hard with some of our major counterparts to install new, strengthened oversight mechanisms.

*IAS Plus comment: Dynamic provisioning refers to loan loss provisions measured on the basis of expected future losses rather than incurred losses.

Summary of issues not added to IFRIC agenda is updated

14 Sep 2008

We have updated our Summary of Issues Not Added to IFRIC's Agenda to reflect the IFRIC's final decisions at its September 2008 meeting not to add the following topics to its agenda.

Our summary now includes over 135 issues:
  • IAS 17 Leases – Time pattern of the user's benefit
  • IAS 18 Revenue/IAS 39 Financial Instruments: Recognition and Measurement – Accounting for trailing commissions
  • IAS 32 Financial Instruments: Presentation – Transaction costs to be deducted from equity

EITF Snapshot for September 2008

13 Sep 2008

We have posted the September 2008 edition of EITF Snapshot summarising the 10 September 2008 meeting of FASB's Emerging Issues Task Force.

EITF Snapshot, published by Deloitte & Touche LLP (USA), enables readers to identify relevant topics and to understand quickly the meeting's outcome. Past issues can be downloaded Here. This EITF Snapshot covers the following issues discussed by the EITF at the meeting:
  • Issue 08-1 Revenue Recognition for a Single Unit of Accounting – tentative conclusion reached
  • Issue 08-5 Issuer's Accounting for Liabilities Measured at Fair Value With a Third-Party Guarantee – final consensus
  • Issue 08-6 Equity Method Investment Accounting Considerations – consensus-for-exposure
  • Issue 08-7 Accounting for Defensive Intangible Assets – consensus-for-exposure
  • Issue 08-8 Accounting for an Instrument (or an Embedded Feature) With a Settlement Amount That Is Based on the Stock of an Entity's Consolidated Subsidiary – consensus-for-exposure
Initial EITF consensuses (known as 'consensuses-for-exposure') are exposed for a comment period after ratification by the FASB. At its first scheduled meeting after the comment period, the EITF considers comments received and, as warranted, affirms its consensuses-for-exposure as final consensuses. Those consensuses are then provided to the Board for final ratification.
Click to view EITF Snapshot — September 2008 (PDF 177k).

 

New FASB disclosures about credit derivatives and guarantees

13 Sep 2008

The US Financial Accounting Standards Board has issued FASB Staff Position (FSP) No. 133-1 and FIN 45-4 Disclosures about Credit Derivatives and Certain Guarantees.

The FSP is intended to improve disclosures about credit derivatives by requiring more information about the potential adverse effects of changes in credit risk on the financial position, financial performance, and cash flows of the sellers of credit derivatives. It applies to sellers of credit derivatives, including credit derivatives embedded in hybrid instruments. The new disclosures are effective for reporting periods (annual or interim) ending after 15 November 2008. Click for FASB Press Release (PDF 22k). Here is the link to the IAS Plus Credit Crunch Page.

IASB and FASB update their 'Memorandum of Understanding'

11 Sep 2008

The International Accounting Standards Board (IASB) and the US Financial Accounting Standards Board (FASB) have published an update of their 2006 Memorandum of Understanding (MoU).

The update:
  • reports on the progress they have made since 2006, and
  • sets goals for completing their major joint projects by 2011.
From the IASB's perspective, MoU projects that will be completed by 2011 include: The updated MoU also mentions the Conceptual Framework projects but does not identify specific goals for 2011. Click for Press Release (155k), which includes the updated text of the MoU. The two boards will hold their next joint meeting on 20 and 21 October at FASB's offices in Norwalk, Connecticut.

 

Correction list for hyphenation

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