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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.

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New reporting guide and checklist from Deloitte Brazil

28 Jan 2009

Deloitte Brazil has published the 2008 edition of its Annual Guide for Financial Statements.

The Portuguese language guide, titled Demonstrações financeiras – Orientações referentes ao exercício de 2008, addresses the principal issues in preparing 2008 financial statements of Brazilian companies. The guide highlights the key changes to Brazilian GAAP in the past year. There are also updates on on-going convergence efforts with IFRSs and new statutory accounting changes brought about by Law 11.638/07. The guide includes discussion about the latest pronouncements issued by the Brazilian Committee on Accounting Pronouncements (Comitê de Pronunciamento Contábil, or CPC) during 2008, making it one of the most up-to-date references in Brazil. Deloitte Brazil has also published a companion 2008 financial statement checklist. Click for:

Mexico's CNBV issues rules on IFRS adoption

28 Jan 2009

On 27 January 2009, the Mexican Banking and Securities Commission (Comisión Nacional Bancaria y de Valores, or CNBV) issued modifications to the securities and exchange laws (Disposiciones de Carácter General Aplicables a las Emisoras de Valores y a Otros Participantes del Mercado de Valores, or Circular Única de Emisoras) to adopt IFRSs by listed companies.

The adoption is mandatory for listed companies in 2012 with early adoption permitted as early as 2008. Also, such financial statements will have to be audited under International Standards on Auditing instead of Mexican Auditing Standards.

An exception to the above is provided for financial institutions.

Mexican Financial Reporting Standards, developed by the Consejo Mexicano para la Investigación y Desarrollo de Normas de Información Financiera (CINIF), will continue to be required for non-listed Mexican entities. CINIF continues with its programme for converging Mexican standards with IFRSs.

EU proposes funding for IASCF, PIOB, and EFRAG

27 Jan 2009

The European Commission has issued proposals that would strengthen the financial supervisory structure in Europe and provide an allocation of the EU Budget to provide direct funding of the IASCF, IFAC's Public Interest Oversight Board (PIOB) and the European Financial Reporting Advisory Group (EFRAG) – all private-sector bodies involved in the setting of accounting and auditing standards.

Under the new rules, the three committees that supervise, respectively, the securities, banking and insurance sectors – CESR, CEBS, and CEIOPS – will benefit from a 'clearer operational framework and more efficient decision-making processes', as well as enhanced funding. The proposal for financial support, which totals €36.2 million, now goes to the Council and the European Parliament for joint decision.

Under the proposals:

  • The IASCF would receive €5 million a year for three years 2011, 2012, 2013
  • EFRAG would receive €3 million a year for four years 2010-2013
  • The PIOB would receive €300 thousand a year for four years 2010-2013
  • CESR, CEBS, and CEIOPS would receive €2 million a year for four years 2010-2013

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Updated comparisons of IFRSs and Canadian GAAP

24 Jan 2009

The Accounting Standards Board (AcSB) of Canada has adopted a strategy to replace Canadian standards with International Financial Reporting Standards (IFRSs) for publicly accountable enterprises by 1 January 2011. Other enterprises may also elect to adopt IFRSs.

To assist those affected by this strategy in becoming familiar with differences between Canadian standards and IFRSs, the AcSB staff has prepared an unofficial comparison between the more significant aspects of IFRSs and Canadian standards as of 31 July 2008. The comparison also identifies the currently active standard-setting projects of the IASB, FASB, and AcSB and comments on the extent to which the work in process is expected to eliminate existing differences:


We comment on proposed amendments to IFRS 1

24 Jan 2009

Deloitte has submitted a Letter of Comment on the IASB's exposure draft of Additional Exemptions for First Time Adopters – Proposed amendments to IFRS 1.

We are generally supportive of the proposed amendments in the ED. We agree with the Board that there are potential challenges for jurisdictions adopting IFRS in the near future which might be alleviated by the proposed exemptions. In particular, we agree that the proposed exemptions should help to limit undue cost and difficulty for certain first time adopters.

We do, however, believe that the amendments relating to oil and gas and rate-regulated entities could be improved. In particular, we would encourage the Board to consider providing more reasoning in the Basis for Conclusions to the Standard to explain what factors were considered to be important in deciding to issue an exemption that allows only certain entities to utilise previous cost amounts as deemed cost on the date of transition, but not others.

All of our past letters of comment are Here.

Notes from day 5 of the IASB's January meeting

24 Jan 2009

The International Accounting Standards Board held its January 2009 meeting at its offices in London on Monday to Friday, 19-23 January 2009.

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

Notes from day 4 of the IASB's January meeting

24 Jan 2009

The International Accounting Standards Board is holding its January 2009 meeting at its offices in London on Monday to Friday, 19-23 January 2009.

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

IAASB staff alert on going concern

24 Jan 2009

The unexpected severity, speed, and consequences of the credit crisis present unique challenges for management and auditors in assessing an entity's ability to continue as a going concern. To help auditors, management, and those charged with governance in addressing those challenges, the staff of the International Auditing and Assurance Standards Board (IAASB) has released a new practice alert entitled Audit Considerations in Respect of Going Concern in the Current Economic Environment.

The alert highlights areas in International Standard on Auditing (ISA) 570 Going Concern, as well as other ISAs, that are particularly relevant in the current economic environment and provides additional guidance for auditors in evaluating management's use of the going concern assumption. It also raises awareness of issues surrounding liquidity and credit risk that may create new uncertainties for entities or exacerbate those already existing. Click for:


Correction list for hyphenation

These words serve as exceptions. Once entered, they are only hyphenated at the specified hyphenation points. Each word should be on a separate line.