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PCAOB staff guidance on internal control for SMEs

31 Jan 2009

The US Public Company Accounting Oversight Board (PCAOB) has published a 62-page guidance publication Staff Views An Audit of Internal Control Over Financial Reporting That Is Integrated With An Audit of Financial Statements: Guidance For Auditors of Smaller Public Companies.

The PCAOB's objective in issuing the Guidance is to help auditors apply the provisions of PCAOB Auditing Standard 5 An Audit of Internal Control Over Financial Reporting That Is Integrated with An Audit of Financial Statements to audits of smaller, less complex public companies. Click for:


IASB proposes amendments to IFRICs 9 and 16

31 Jan 2009

Based on decisions reached at the IASB's January 2009 meeting, the Board has issued Exposure Draft ED/2009/1 'Post-implementation Revisions to IFRIC Interpretations (Proposed amendments to IFRIC 9 and IFRIC 16)'.

The proposals would amend IFRIC 9 Reassessment of Embedded Derivatives and IFRIC 16 Hedges of a Net Investment in a Foreign Operation as follows:
  • IFRIC 9: Exclude from the scope of IFRIC 9 embedded derivatives in contracts acquired in combinations of entities or businesses under common control or in the formation of a joint venture. The proposed effective date is annual periods beginning on or after 1 July 2009 – in time for the effective date of IFRS 3 (2008).
  • IFRIC 16: Allow entities to designate as a hedging instrument in a hedge of a net investment in a foreign operation an instrument that is held by the foreign operation that is being hedged. The ED proposes to amend IFRIC 16 paragraph 14 by deleting a parenthetical comment: '(except the foreign operation that itself is being hedged)'. The proposed effective date is annual periods beginning on or after 1 October 2008.
The IASB requests comments on the ED by 2 March 2009. Click for: Note that the IASB has redesigned the covers of its pronouncements and proposals and has instituted a new numbering system for EDs (this one is ED/2009/1).


9 IASB pronouncements await EU endorsement

30 Jan 2009

The European Financial Reporting Advisory Group (EFRAG) has updated its report showing the status of endorsement, under the EU Accounting Regulation, of each IFRS, including standards, interpretations, and amendments.

Click to download the Endorsement Status Report as of 27 January 2009 (PDF 105k).

The report reflects the recent endorsement of the following for use in Europe:

  • IAS 32 and IAS 1 Amendments for Puttable Instruments and Obligations Arising on Liquidation
  • Improvements to IFRSs – 2007 (affects various standards)
  • IFRS 1 and IAS 27 Cost of an Investment in a Subsidiary, Jointly-Controlled Entity, or Associate
Currently, there are 9 IASB pronouncements are awaiting European Commission endorsement for use in Europe, as follows:


  • IFRS 1 First-time Adoption of IFRS – Restructured standard (2008)
  • IFRS 3 Business Combinations (2008)


  • IFRIC 12 Service Concession Arrangements
  • IFRIC 15 Agreements for the Construction of Real Estate
  • IFRIC 16 Hedges of a Net Investment in a Foreign Operation
  • IFRIC 17 Distributions of Non-cash Assets to Owners


  • IAS 27 Consolidated and Separate Financial Statements (2008)
  • IAS 39 Amendments for Eligible Hedged Items
  • IAS 39 Amendments for Reclassification of Financial Assets


IFRSs will be available without charge

30 Jan 2009

The Trustees of the IASC Foundation have announced that, in response to many public requests, the IASB's standards, but not the accompanying documents such as the basis for conclusions or implementation guidance, will be made available free of charge on the IASB's website.

Click for IASB's website.

IASCF forms Monitoring Board, enlarges IASB

30 Jan 2009

The IASC Foundation Trustees have announced important amendments to the IASCF Constitution effective 1 February 2009, including formation of a Monitoring Board and expansion of the IASB from 14 to 16 members.

The Trustees approved the changes at their meeting in New Delhi, India, on 15 and 16 January 2009. Among the changes:


Monitoring Board

  • A Monitoring Board (MB) of public authorities has been formed. The goal is to enhance public accountability of the IASC Foundation while not impairing the independence of the standard-setting process. (During the Trustees' deliberations and due process leading to these Constitution changes, this body has been referred to as the 'Monitoring Group' rather than 'Monitoring Board'.)
  • The MB will initially comprise the relevant leaders of the European Commission, the Japanese Financial Services Agency, the US Securities and Exchange Commission, the Emerging Markets Committee of IOSCO, and the Technical Committee of IOSCO. The chairman of the Basel Committee on Banking Supervision will be a non-voting observer.
  • The MB will participate in the Trustee nomination process and approve appointments to the Trustees.
  • The MB will have oversight responsibilities in relation to the Trustees and their oversight of the IASB's activities, in particular the agenda-setting process and the 'IASB's efforts to improve the accuracy and effectiveness of financial reporting and to protect investors'.
  • The MB 'may refer accounting issues to, and will confer regarding these issues with, the Trustees and the IASB Chair'. The MB may request a meeting with 'the Chairpersons of the Trustees and the IASB'.
  • 'If the IASB determines that consideration of the issue(s) identified by the IASCF Monitoring Board is not advisable or that the issue(s) cannot be resolved within the time frame suggested by the Monitoring Board, the Trustees should:
    • Call on the IASB to undertake all reasonable efforts to consider issue(s) in a manner that is consistent with the public interest, taking into account the protection of investors.
    • Call on the IASB to explain its position through the Trustees regarding the IASB's position on the issue(s); and
    • Promptly notify the IASCF Monitoring Board of the IASB's position.
  • The IASCF has released the Memorandum of Understanding related to the Monitoring Board. This is in process of being signed by all parties.
International Accounting Standards Board
  • The IASB will increase from 14 to 16 members (with up to 3 part-time members) by 2012. To ensure a broad international diversity, by July 2012 there will normally be:
    • four members from the Asia/Oceania region;
    • four members from Europe;
    • four members from North America;
    • one member from Africa;
    • one member from South America; and
    • two members appointed from any area, subject to maintaining overall geographical balance.


Click for:


IASB Board appointments

30 Jan 2009

The Trustees of the IASC Foundation have approved a change in the status of Stephen Cooper from part-time to full-time member of the IASB.

Mr Cooper has served on the Board since August 2007. His term expires 30 June 2012. The Trustees also confirmed the reappointment of Jan Engstrom to serve a second five-year term as a member of the IASB from May 2009. Mr Engstrom joined the Board in May 2004.


IASB webcast on revenue recognition paper

29 Jan 2009

Twice on 3 February 2009, the IASB will hold live web presentations explaining the joint IASB-FASB discussion paper on revenue recognition published in December 2008. The discussion paper is open for public comment until 19 June 2009. The webcasts will allow listeners to submit questions to the presenters.

The IASB has announced that these webcasts are postponed to 10 February 2009 'due to unforeseeable circumstances'.
They are free of charge. Details:


Newsletter on IASB's revenue discussion paper

29 Jan 2009

Deloitte's IFRS Global Office has published an IAS Plus Update Newsletter Discussion Paper Proposes New Basis for Revenue Recognition.

On 19 December 2008, the IASB and FASB jointly published a discussion paper (DP) that proposes a single, contract-based revenue recognition model. The model would apply broadly to contracts with customers, although contracts in the areas of financial instruments, insurance, and leasing may be excluded. Under the proposed model, revenue would be recognised on the basis of increases in an entity's net position in a contract with a customer.

With regard to recognition of revenue, the DP states: In the proposed model, revenue is recognised when a contract asset increases or a contract liability decreases (or some combination of the two). That occurs when an entity performs by satisfying an obligation in the contract.

With regard to measurement of revenue, the DP states: The boards propose that performance obligations initially should be measured at the transaction price – the customer's promised consideration. If a contract comprises more than one performance obligation, an entity would allocate the transaction price to the performance obligations on the basis of the relative stand-alone selling prices of the goods and services underlying those performance obligations.

Subsequent measurement of the performance obligations should depict the decrease in the entity's obligation to transfer goods and services to the customer. When a performance obligation is satisfied, the amount of revenue recognised is the amount of the transaction price that was allocated to the satisfied performance obligation at contract inception. Consequently, the total amount of revenue that an entity recognises over the life of the contract is equal to the transaction price.

Comment deadline is 19 June 2009.

Click for: IAS Plus Update Newsletter Discussion Paper Proposes New Basis for Revenue Recognition

Links to Past IAS Plus Newsletters.

IFRIC 18 on 'customer contributions'

29 Jan 2009

The International Financial Reporting Interpretations Committee has issued IFRIC Interpretation 18 'Transfers of Assets from Customers'.

This Interpretation is particularly relevant for the utility sector. It clarifies the requirements of IFRSs for agreements in which an entity receives from a customer an item of property, plant, and equipment that the entity must then use either to connect the customer to a network or to provide the customer with ongoing access to a supply of goods or services (such as a supply of electricity, gas or water).

IFRIC 18 addresses:

  • The circumstances in which the definition of an asset under the IASB Framework is met
  • Recognition of the asset and the measurement of its cost on initial recognition
  • Identification of the entity's obligation to provide one or more separately identifiable services in exchange for the transferred asset
  • Recognition of revenue when the service obligation(s) is/are performed
  • Accounting when the customer transfers cash to acquire an asset instead of transferring a physical asset.

IFRIC 18 must be applied prospectively to transfers of assets from customers received on or after 1 July 2009. Earlier application is permitted provided the valuations and other information needed to apply to the Interpretation to past transfers were obtained at the time those transfers were made.

Click for:


IAESB proposes international education framework

29 Jan 2009

IFAC's International Accounting Education Standards Board (IAESB) has invited comments on proposed revisions to the Framework for International Education Standards, which sets out the concepts that underlie the IAESB's International Education Standards (IESs).

The proposed framework consists of two parts:
  • Part One explains the educational concepts of competence, initial professional development, continuing professional development, and measurement of the effectiveness of learning and development, which will be used by the IAESB when developing the IESs; and
  • Part Two describes the nature of the IESs as well as the related IAESB pronouncements and IFAC member body obligations.
The framework is targeted primarily to IFAC member bodies that have direct or indirect responsibility for the learning and development of their members and students. It is, however, also relevant to a wide range of stakeholders, including accounting faculties at universities, employers of professional accountants, professional accountants, and prospective professional accountants. Comments are due 30 April 2009. During the comment period, you can download the proposal on IFAC's Exposure Draft Page.


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