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December

Challenge to legitimacy of the PCAOB continues

04 Dec 2009

On 7 December 2009, oral argument begins in a US Supreme Court case in which the constitutionality of the Public Company Accounting Oversight Board (PCAOB) is being challenged. If the plaintiffs' arguments are successful, it could mean an end to the existence of the PCAOB as currently structured under law.

The case has been through several levels of court proceedings, the most recent being a decision by the D.C. Circuit Court of Appeals against the challenge to the PCAOB. The plaintiffs have appealed to the US Supreme Court:

 

EU will create 3 financial supervisory authorities

04 Dec 2009

The Council of Finance and Economics Ministers of the European Union, meeting in Brussels on 2 December 2009, agreed on a general approach on draft regulations that would create three new authorities for the supervision of financial services in the EU, namely:

The draft regulations are part of a package of proposals to reform the EU framework for the supervision of banking, insurance, and securities markets in the wake of the global financial crisis. The framework envisions the three new European supervisory authorities working in tandem with a network of member state supervisors. The regulations will require approval of the European Parliament. The Council hopes to have the regulations approved some time during 2010. Click for Press Release (PDF 277k). See also our February 2009 Story EC plans to strengthen supervisors and standard-setters .

 

Eight IFRSs await EU endorsement

04 Dec 2009

The European Financial Reporting Advisory Group (EFRAG) has updated its report showing the status of endorsement of IFRSs under the EU Accounting Regulation.

Click to download the Endorsement Status Report as of 2 December 2009 (PDF 120k). The latest update reflects the Endorsement on 1 December 2009 of the following by the European Commission:
  • IFRIC 18 Transfers of Assets from Customers
  • IFRS 7 Amendment – Improving Disclosures About Financial Instruments
  • IFRIC 9 and IAS 39 Amendment – Embedded Derivatives
The following eight IASB pronouncements await European Commission endorsement for use in Europe:

Standards

Interpretations Amendments
You can always find the endorsement status report Here.

 

SEC Comment Letters on Domestic Registrants (Third Edition)

03 Dec 2009

In January 2008, Deloitte (United States) published two Special Reports analysing the comments by the staff of the US Securities and Exchange Commission on the financial statements of registrants.

One of the 2008 reports reviewed comments on domestic registrants using US GAAP. The other reviewed comments on foreign private issuers using IFRSs. And in February 2009, Deloitte published a revised edition of the first report:   SEC Comment Letters on Domestic Registrants: A Closer Look (PDF 810k). We have now published a third edition that reflects new topics and updates existing topics to reflect new areas that the SEC staff has commented on since the February 2009 edition. The SEC staff has continued to issue comments on all topics included in that edition, such as revenue recognition, business combinations, segment reporting, financial instruments, and impairments. In addition, in light of the troubled credit markets, the staff has continued to closely scrutinize goodwill and intangible asset impairments, other-than-temporary impairments, deferred tax valuation allowances, pension liabilities, executive compensation disclosures, MD&A disclosures, debt covenant compliance, fair value disclosures, and the allowances for loan losses, just to name a few. New to this third edition are sections on the following industries:
  • Financial services, including the banking, securities, and real estate industries
  • Energy and resources, including the power and utilities and oil and gas industries
  • Health sciences, including the health care and life sciences industries
  • Consumer and industrial products, particularly the retail industry
Click to download SEC Comment Letters on Domestic Registrants: A Closer Look (Third Edition) (PDF 2,589k).

 

Accounting Roundup – November 2009

03 Dec 2009

We have posted the November 2009 Edition of Accounting Roundup published by Deloitte & Touche LLP (United States).

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

Consolidations

  • FASB Votes to Defer Statement 167 for Interests in Certain Entities
Income Taxes
  • Accounting Implications of Tax Law Change for Businesses and Home Buyers
Pensions and Other Postretirement Benefits
  • Financial Reporting Considerations Related to Pensions and Other Postretirement Benefits
Revenue
  • Guidance on Material Modifications to Revenue Arrangements With Multiple Deliverables
Financial Instruments
  • IASB Issues IFRS on Classification and Measurement of Financial Assets
  • IASB Proposes New Approach to Accounting for Credit Losses
Earnings per Share
  • EITF Reaches Consensus on Accounting for Stock Dividends, Including Distributions to Shareholders With Components of Stock and Cash
Receivables
  • EITF Reaches Consensus-for-Exposure Regarding Effect of a Loan Modification When the Loan Is Part of a Pool That Is Accounted for as a Single Asset
Stock Compensation
  • EITF Reaches Consensus-for-Exposure Regarding Impact of Denominating the Exercise Price of a Share-Based Payment Award in the Currency of the Market in Which the Underlying Equity Security Primarily Trades
Related Parties
  • IASB Revises IAS 24 on Related-Party Disclosures
SEC Matters
  • SEC Observations and Expectations About Executive Compensation Disclosures
  • SEC Releases PCAOB Proposal on Auditing Standard 7
Other Accounting
  • EITF Reaches Consensus-for-Exposure on Casino Base Jackpot Liabilities
  • EITF Reaches Consensus-for-Exposure on the Definition of Deferred Acquisition Costs of Insurance Entities
Other Auditing
  • Reports Released by the Institute of Internal Auditors Audit Executive Center
  • Sample Forms Published by the PCAOB
You will find past issues of Accounting Roundup Here.

 

Deloitte IFRS for SMEs newsletter in Spanish

02 Dec 2009

Deloitte (Colombia) is publishing a series of Spanish language bulletins about the new IFRS for SMEs.

We have previously posted Bulletins No 1 through 20 – links can be found Here. We have now posted Bulletin No 21 (1 December 2009), which discusses the following sections of the IFRS for SMEs:
  • Section 28 – Beneficios para empleados (Employee Benefits)
  • Section 29 – Impuestos a los ingresos (Income Taxes)
  • Section 30 – Cambio de moneda extranjera (Foreign Currency Translation)
  • Section 31 – Hiperinflación (Hyperinflation)
  • Section 32 – Eventos posteriores (Events after the End of the Reporting Period)
  • Section 33 – Revelaciones sobre partes relacionadas (Related Party Disclosures)
  • Section 34 – Actividades especializadas (Specialised Activities)
  • Section 35 – Transición hacia el IFRS para PYMES (Transition to the IFRS for SMEs)
Click to Download Bulletin 21 (PDF 336k). Nuestros Recursos en Español.

 

IPSASB consults on sustainability reporting

02 Dec 2009

The International Public Sector Accounting Standards Board (IPSASB) of the International Federation of Accountants (IFAC) has published a Consultation Paper Reporting on the Long-Term Fiscal Sustainability of Public Finances.

It seeks views on how information on the long-term sustainability of government programs may complement information available in traditional financial statements, thereby increasing transparency and enhancing accountability and decision making. In issuing the Consultation Paper, the IPSASB notes:

"There is a growing understanding that future generations of taxpayers will have to deal with the fiscal consequences of current government policies. Concerns about the ability of governments to meet future service delivery and financial commitments for health, pensions, debt-servicing, and other obligations have long existed, but have increased in the current economic environment. Uncertainty over the long-term financial consequences of government interventions, including the bailouts and stimulus packages that have characterized the global financial crisis, has added another dimension to concerns over the long-term sustainability of public finances in many countries."

Click here to Download the Consultation Paper (PDF 637k), which is copyright by IFAC and posted on IAS Plus with permission. Comments are requested by 30 April 2010.

 

Japan will allow some companies to use IFRSs

02 Dec 2009

As we Reported in June 2009, on 30 June 2009, the Business Accounting Council (advisory body to the Financial Services Authority of Japan (FSA)) approved its Opinion on the Application of International Financial Reporting Standards (IFRS) in Japan (Interim Report).

The FSA published an English translation of the 'Interim Report' on the FSA's Website. At the same time, the FSA published on their website for comment, only in Japanese, 13 Related Documents including Proposed Ordinances that would have to be adopted to implement the 'Interim Report'. Yesterday, the FSA announced that they will release the final IFRS Ordinances on 11 December 2009. Those Ordinances will be effective immediately on release. Click here for yesterday's Announcement and Near-final Draft Ordinances on the FSA's website in Japanese only. Among other things, the Ordinances would allow certain Japanese public companies voluntarily to start using IFRS in their consolidated financial statements starting from the fiscal year ending 31 March 2010. As a result of comments received on the proposed Ordinances, the FSA has significantly reduced the parallel reporting requirements for those companies voluntarily electing early use of IFRSs. Japan intends to consider, around 2012, whether to make IFRSs mandatory for all public companies starting around 2015 or 2016.

To be eligible to voluntarily start using IFRSs in 2010, domestic Japanese companies should meet both of (1) and (2) below:

  1. Basic Requirement – All of the following are satisfied:
    • Public company requirement (the entity's shares must be traded on the stock exchange)
    • Disclosure requirement (the entity's annual report includes a disclosure about the entity's policies to ensure proper presentation of the consolidated financial statements in conformity with IFRSs)
    • Human resource/control requirement (the entity has either a member of the board or an employee who is sufficiently knowledgeable about IFRS and has adopted an appropriate internal control framework over the preparation of consolidated financial statements in accordance with IFRSs)
  2. International Financial or Business Criteria – Either of the reporting entity, its parent, or certain other affiliated entities meet one of the following:
    • IFRSs are required by foreign laws or regulations
    • IFRSs are required by foreign stock exchange regulations or rules
    • The entity has a listed subsidiary whose capital under the Company Law is over 2 billion yen

Click for Opinion on the Application of International Financial Reporting Standards (IFRS) in Japan (Interim Report).

Notes from Tokyo fair value roundtable

01 Dec 2009

On 27 November 2009, the IASB held a roundtable at the ASBJ offices in Tokyo, Japan, to discuss its Fair Value Measurements exposure draft (ED).

Roundtable participants consisted of a cross-section of representatives including auditors, financial statement preparers, valuation experts, and industry. We have posted Notes Taken by Observers at the Tokyo Roundtable (PDF 29k). Those notes represent the roundtable observers' interpretations of the discussions, focussing on those issues that were not discussed at the Norwalk Roundtable held on 2 November 2009. As with the Norwalk roundtable, the following issues were identified by the IASB staff for discussion during the roundtable:
  • Issue A – Fair value as an exit price
  • Issue B – Fair value of liabilities
  • Issue C – Fair value of non-financial assets and liabilities
  • Issue D – Fair value in inactive markets
  • Issue E – Fair value in emerging and transition economies
  • Issue F – Jurisdiction-specific issues
  • Issue G – US GAAP convergence
Participants raised points on several other topics, including disclosure requirements and valuation of non-quoted equities.

 

Role of the audit committee in IFRS conversion

01 Dec 2009

Deloitte (United States) has published an Audit Committee Brief newsletter on Making the Transition to IFRS: The Role of the Audit Committee. The newsletter identifies specific steps the audit committee can take, along with other board committees and management, to help develop the company's strategic plan on IFRSs.

The newsletter reviews examples of steps that companies in the United States are already taking in planning for an IFRS conversion, and identifies key questions for the audit committee to ask executive management. Click to download Making the Transition to IFRS: The Role of the Audit Committee (PDF 459k).

Considerations for the audit committee

  • What educational needs and goals does the audit committee have?
  • Has the audit committee considered the implications IFRS may have on the financial-expert designation?
  • Does the audit committee have an oversight plan for IFRS adoption, including the implementation process?
  • How will the audit committee remain informed about changes and the impacts of the company's IFRS transition?
  • How will IFRS adoption affect the duties and responsibilities of the audit committee for internal control and financial statement disclosures?
  • Is the audit committee aware of the accounting policy elections and various implications for the organisation?
  • What are the tax and systems implications of an IFRS implementation?
This page on IAS Plus has links to Many Other Publications about First-time Adoption of IFRSs.

 

Correction list for hyphenation

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