The proposals seek to clarify the accounting treatment when rights issues are denominated in a currency other than the functional currency of the issuer. Current practice appears to require such issues to be accounted for as derivative liabilities.

The proposals state that if such rights are issued pro rata to an entity's existing shareholders for a fixed amount of currency, they should be classified as equity regardless of the currency in which the exercise price is denominated.

ED/2009/9 Classification of Rights Issues is open for comment until 7 September 2009. The IASB plans to issue the final amendment before the end of 2009 with early application permitted. If adopted the amendment will apply retrospectively.

Click for IASB Press Release (PDF 101k).

 

This publication considers how UK listed companies have met the requirements for an interim management statement in the second year of compliance with the Disclosure and Transparency Rules (DTR). In particular, it surveys interim management statements of UK listed companies (including separate consideration of investment trusts), reviews compliance with the requirements and compares the findings to the 2008 Deloitte publication First Impressions. Click for In Many Styles – The Second Year's Interim Management Statements (PDF 627k).

 

This issue addresses presentation of financial statements in accordance with the IFRS for SMEs. It also explains differences with current GAAP in Colombia. Click to Download the Bulletin (PDF 220k). Nuestros Recursos en Español.

 

• 3 September in Tokyo At the Accounting Standards Board of Japan, Fukoku Seimei Building 20F, 2-2 Uchisaiwaicho 2-chome, Chiyodaoku, Tokyo 100-0011, Japan.
• 10 September in London at the International Accounting Standards Board, First Floor, 30 Cannon Street, London EC4M 6XH, United Kingdom.
• 14 September in Norwalk, CT USA At the Financial Accounting Standards Board, 401 Merritt 7, Norwalk, CT 06856-5116 USA.

 

Deloitte Germany has published a Praxis-Forum Alert newsletter explaining the new law. Click for:

• Newsletter - German Version (PDF 665k)
• Newsletter - English Translation (PDF 817k)

 

Almost all other groups have a choice. They can use IFRSs, UK GAAP as developed by the UK Accounting Standards Board (ASB), and if they are small they have a further option of using the Financial Reporting Standard for Smaller Entities (FRSSE). But from 2012, the options are expected to change. UK GAAP is expected to be replaced with the IFRS for Small and Medium-sized Entities. Deloitte (United Kingdom) has published a newsletter Choosing Your GAAP: Planning for the Proposed Removal of UK GAAP (PDF 236k) explaining the ASB's plan. The newsletter examines the choices and explains the key areas of accounting and tax impact, and provides guidance on planning for the change.

 

Details of the webcast:

• Webcast topic: IAS 39 – The Sequel
• Date and Time: Thursday, 6 August 2009 from 14:00 to 15:00 London time (GMT +1 hour)
• Presenters: John Smith, IASB Board member; Gavin Francis, IASB Director of Capital Markets; Sue Lloyd, IASB Senior Technical Consultant; Jens Berger, IASB Practice Fellow; Veronica Poole, Deloitte, Head of UK IFRS Centre of Excellence; Andrew Spooner, Deloitte, Lead Financial Instrument Partner

 

At the meeting, the IFRIC Chairman announced that the 3-4 September 2009 IFRIC meeting is cancelled. The next IFRIC meeting will be 5-6 November 2009.

Notes from the Special IFRIC Meeting 4 August 2009

Debt to Equity Swap in a Restructuring The IFRIC held a special meeting by teleconference to finalise and approve the consensus on the draft interpretation of IAS 39 regarding debt to equity swap. Thirteen members of the IFRIC were present on the call. The staff clarified two issues regarding changes in the draft consensus and basis for conclusions based on suggestions of some IFRIC members. First of all, the staff proposed providing additional discussion in the draft basis for conclusions regarding the relationship between extinguishing the financial liability and issuance of new shares, and substantial modification of the terms as required by IAS 39.40. Moreover, the staff proposed that the [draft] Interpretation should apply retrospectively, from the beginning of the earliest comparative period. This relief from full retrospective application should facilitate transition. The Chairman then summarised the consensus reached, which reaffirmed the conclusions reached on the July IFRIC meeting. issuing of equity instruments is a form of consideration paid (IAS 39.41); in the debt to equity swap the liability is extinguished (IAS 39.39); new shares issued should be measured at the fair value of the liability extinguished or equity instrument issues whichever is more reliably determinable (IAS 39.41); when only part of the liability is extinguished, and the terms of the instrument are not substantially modified, the remaining part of the liability shall not be re-measured. If the terms are substantially modified, then the original financial liability is extinguished and new financial liability is recognised together with issued equity instrument (IAS 39.40); The profit or loss arising on the debt to equity swap shall be disclosed in the statement of the comprehensive income or in the notes. The IFRIC confirmed the consensus, subject to minor editorial comments. No present member of the IFRIC dissented. The draft interpretation is to be issued in August with 60 days comment period. Re-deliberations are to take place on the November IFRIC meeting. The staff noted that they already informally informed the Board members of the consensus reached by the IFRIC. No member of the Board opposes the consensus. Next Meeting The Chairman noted that the September IFRIC meeting is cancelled and next IFRIC meeting will take place in November. This summary is based on notes taken by observers at the IFRIC meeting and should not be regarded as an official or final summary.

 

The newsletter is now organised by topic rather than by standard-setter. Topics covered in this issue include:

• EITF Issues Draft Abstracts on Revenue Arrangements With Multiple Deliverables and Software Revenue Recognition

Derivative Instruments and Hedging Activities

• IASB Proposes Improvements to Financial Instruments Accounting
• GASB Proposes Statement on Financial Instruments

Other Accounting

• FASB Launches Codification
• IASB Amends the Retrospective Application of IFRSs for First-Time Adopters
• IASB Proposes Guidance on Rate-Regulated Activities
• IASB Issues IFRS for Small and Medium-Sized Entities

SEC Matters

• SEC Proposes Rule on Municipal Securities Disclosure
• SEC Proposes Rule on Proxy Disclosure and Solicitation Enhancements
• SEC Proposes Rule on Shareholder Approval of Executive Compensation of TARP Recipients
• SEC Issues Final Rule Adopting Updated EDGAR Filer Manual

Other Auditing

• PCAOB Adopts New Auditing Standard on Engagement Quality Review
• GAO Issues Guide on Assessing the Reliability of Computer-Processed Data

GASB Matters

• GASB Proposes Suggested Guidelines for Voluntary Reporting of Service Efforts and Accomplishments (SEA) Performance Information
• GASB Proposes Statement on Service Concession Arrangements
• GASB Proposes Statement on Financial Instruments

Click to view Accounting Roundup — July 2009 (PDF 302k). You will find past issues of Accounting Roundup Here.

 

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