April

Audit alert on significant or unusual transactions

08 Apr 2010

The US Public Company Accounting Oversight Board (PCAOB) has issued a Staff Audit Practice Alert to remind auditors of public companies about their responsibilities to assess and respond to the risk of material misstatement of the financial statements due to error or fraud posed by significant unusual transactions.

Staff Audit Practice Alert No. 5 Auditor Considerations Regarding Significant Unusual Transactions compiles relevant requirements from existing PCAOB auditing standards regarding significant unusual transactions and groups them into the following categories:
  • Identifying and assessing risks of material misstatement
  • Responding to risks of material misstatement
  • Consulting others
  • Evaluating financial statement presentation and disclosure
  • Communicating with audit committees
  • Reviewing interim financial information
Click to download PCAOB Staff Audit Practice Alert No. 5 (PDF 144k).

 

SEC seeks details on transfers of financial assets

07 Apr 2010

In March 2010, the Division of Corporation Finance sent a letter to certain public companies requesting information about repurchase agreements, securities lending transactions, or other transactions involving the transfer of financial assets with an obligation to repurchase the transferred assets.

An illustrative letter is available on the SEC's Website (or click here for the SEC Announcement (PDF 31k)).

 

IAASB consults on strategic direction and work plan

07 Apr 2010

The International Auditing and Assurance Standards Board (IAASB) is conducting an online questionnaire survey on its strategic direction and related work program for 2012-2014. The questionnaire is the first stage of an 18-month consultation process.

The results of the questionnaire will be used to develop a formal Consultation Paper, to be issued in December 2010, outlining the IAASB's strategic focus and the potential projects that might best support this focus. The questionnaire takes no more than 30 minutes to complete. Responses are requested by 14 May 2010.

 

Oil & Gas IFRS training workshop

07 Apr 2010

Deloitte (United States) will conduct a two-day training workshop titled Oil & Gas IFRS in Houston on 16-17 June 2010. This educational program, which is open to the public, will explore the potential implications of IFRSs for the oil and gas industry, including the IASB's recent Discussion Paper on Extractive Activities (see news story immediately below).

The keynote speaker will be Glenn Brady, the IASB's project manager on its extractive activities project. Details:
  • Date/Time: Wednesday and Thursday 16-17 June 2010, 8:30am to 5:30pm daily
  • Location: Omni Houston Hotel, Four Riverway, Houston, Texas 77056 USA, phone +1 713 871 8181
  • Fees:
    • US$1,200 per individual until 1 May 2010
    • US$1,500 per individual on or after 2 May 2010
  • Registration Information: Click Here

IASB issues Extractive Activities discussion paper

06 Apr 2010

The IASB has published a Discussion Paper (DP) Extractive Activities setting out the results of an international research project on a possible future International Financial Reporting Standard for extractive activities.

Extractive activities are the activities undertaken by entities when searching for, and ultimately extracting, minerals, oil or natural gas. The activities involve the following four phases:
  • Exploration: the search for deposits of minerals or oil and gas
  • Evaluation: assessing the quantity and quality and viability of the deposits found and the economic viability of their extraction
  • Development: undertaking works to access the deposit and to construct the infrastructure necessary to extract the minerals or oil and gas
  • Production: the extraction of the minerals or oil and gas from those deposits
The area of extractive industries poses some very specific challenges resulting from the uncertainties that are faced by entities pursuing extractive activities: for instance assessing the quantities that may be found and the costs involved in accessing and extracting the resources. A research team comprising members of the Australian, Canadian, Norwegian, and South African accounting standard-setters analysed and discussed accounting for extractive activities with a wide range of stakeholders to identify a possible approach for an IFRS. The DP contains the views of the project team – it does not represent the views of the Board. The DP addresses the following four questions:
  • How to estimate and classify the quantities of minerals or oil and gas discovered
  • How to account for minerals or oil and gas properties
  • How minerals or oil and gas properties should be measured
  • What information about extractive activities should be disclosed
After considering the responses received on the DP, the Board will decide whether to add the project to its active agenda. Comments are requested by 30 July 2010. Click for Discussion Paper on the IASB website. One of the authors is Aase Lundgaard, a partner in Deloitte Norway. Click for IAS Plus Project Page.

 

Accounting Roundup – first quarter 2010 review

06 Apr 2010

We have posted Accounting Roundup: First Quarter in Review–2010, prepared by the Accounting Standards and Communications Group of Deloitte LLP (USA).

This newsletter provides brief descriptions of pronouncements affecting accounting, financial reporting, and corporate governance issued during 1Q-2010 by standard setters and regulators including FASB, EITF, AICPA, SEC, FASAB, PCAOB, GASB, IASB, IFRIC, and IAASB. This quarterly review consists of articles, adapted as necessary, from issues of Accounting Roundup published in January and February 2010, as well as new articles for the month of March. There's also information about upcoming Dbriefs Webcasts. You will find past issues Here. International and IFRS-related developments covered in this edition of Accounting Roundup include:
  • IASB Reexposes Proposals for the Measurement of Liabilities in IAS 37
  • FASB and IASB Publish Exposure Draft on Reporting Entity Concept for the Conceptual Framework
  • SEC Publishes Work Plan for Moving Forward With IFRSs for U.S. Issuers
  • IASC Foundation Proposes IFRS Taxonomy 2010
  • New Members Appointed to the IASB
  • FCAG Issues Letter to G-20 on IASB and FASB Progress
  • IASB Issues Limited Exemption Amendment to IFRS 1
Click to view Accounting Roundup — First quarter in review — 2010 (PDF 427k; 47 pages).

 

Indian IFRS update

05 Apr 2010

Consolidated financial results may be submitted to the SEBI using IFRSs

The Securities Exchange Board of India (SEBI) has provided an option to listed entities having subsidiaries to submit their consolidated financial results either in accordance with the accounting standards specified in section 211(3C) of the Companies Act, 1956, or in accordance with IFRS (with required reconciliations). Submission of separate financial results to the stock exchanges will continue to be in accordance with Indian GAAP.

AICPA IFRS for SMEs-US GAAP Comparison Tool

03 Apr 2010

The American Institute of CPAs (AICPA) staff have developed an IFRS for SMEs–US GAAP Comparison Tool, which is being added to collaboratively by those who use the tool.

AICPA technical staff monitor and review the additions. Here is the AICPA's description:

The purpose of this Wiki is to provide a detailed and comprehensive comparison of the International Accounting Standards Board's International Financial Reporting Standard for Small-and Medium-Sized Entities ('IFRS for SMEs') with corresponding requirements of United States generally accepted accounting principles ('US GAAP'). But this is more than just a comparison resource, it is a Wiki. That means it is a collaborative, ongoing work in progress for anyone to contribute and use.

This Wiki is intended to be a rich resource. The AICPA Accounting Standards team decided to introduce the comparison resource during its development stage to help you learn and to learn ourselves about the similarities and differences between IFRS for SMEs and US GAAP. Anyone preparing financial statements under IFRS for SMEs in the United States and anyone interested in the differences between the two sets of accounting standards will find this comparison resource valuable.

The comparison resource will cover all sections of IFRS for SMEs. Disclosure requirements of the IFRS for SMEs sections are excluded. As the AICPA completes sections, it will add the information to the Wiki. The AICPA Accounting standards team welcomes anyone with an interest in and knowledge of IFRS for SMEs and US GAAP to read the Wiki and contribute.

Inasmuch as this Resource is a work-in-progress, the completeness and accuracy of the content varies from section to section. True to the wiki platform, the AICPA looks to AICPA members and the accounting profession to complete, correct, and improve upon the work begun by the Accounting Standards team. Sources of authoritative literature should be consulted when preparing or reporting upon financial statements.

As more fully explained [on the Wiki website], contributions to the Wiki will be monitored and reviewed by AICPA technical staff. It is expected that after all sections of the comparison resource are introduced and exposed for review and editing, the resource will be maintained and updated periodically by the AICPA.

Click here to access the AICPA IFRS for SMEs – US GAAP Comparison Tool (http://wiki.ifrs.com/)

IFAC 2010 Handbooks available

03 Apr 2010

The International Federation of Accountants (IFAC) has published two Handbooks for 2010:

  • 2010 Handbook of International Quality Control, Auditing, Review, Other Assurance, and Related Services Pronouncements. This includes the International Auditing and Assurance Standards Board's (IAASB) complete set of clarified International Standards on Auditing (ISAs) and International Standard on Quality Control (ISQC) 1 now in effect. It also includes the IAASB's standards on review, other assurance, and related services, a glossary, and a preface to the international standards.
  • 2010 Handbook of the Code of Ethics for Professional Accountants. This book contains the revised Code of Ethics for Professional Accountants, which becomes effective on 1 January 2011, with early adoption permitted.

The handbooks can be downloaded free of charge in PDF format or purchased in print from IFAC's Publications and Resources site: web.ifac.org/publications.

Notes from Monitoring Board meeting

02 Apr 2010

The IFRS Foundation Monitoring Board met with the Trustees of the IFRS Foundation at the IASB's offices in London on 1 April 2010. Presented below are the preliminary and unofficial notes taken by Deloitte observers at the meeting. The Monitoring Board met the IASC Foundation Trustees in London.

Meeting of the IFRS Foundation Monitoring Board, 1 April 2010, London
All Monitoring Board members were present, except for the Chairman of the IOSCO Emerging Markets Committee (Guillermo Larrain). However, Greg Tanzer, the IOSCO Secretary-General, represented him. The Meeting was chaired by Hans Hoogervorst, Vice-Chairman of the IOSCO Technical Committee.

The meeting was relatively brief, taking just over an hour of the 2.5 hours allocated.

IASCF governance and independence

Michel Barnier, the European Internal markets Commissioner, reiterated the EC's support for IFRSs as the only realistic option for a single set of globally-accepted, high-quality financial reporting standards. However, there are continuing concerns in Europe over the governance of the IFRS Foundation and its accountability to public authorities and the IASB's engagement with investors and prudential supervisors. Mr Barnier was challenged on both points by the Foundation's Chairman, who noted that the Monitoring Board was put in place specifically to provide the engagement with public authorities, and its membership had been determined in consultation with the European Commission. In addition, in the past 12-18 months, the IASB had greatly expanded its outreach and investor/user engagement. Finally, on all major projects, the IASB would (as it had on IFRS 3) undertake impact assessments and produce feedback statements (summarising the results of the IASB's due process and redeliberations).

Consistency of application and enforcement

Mary Shapiro, Chairman of the US Securities and Exchange Commission, noted that IOSCO was heavily involved in efforts to promote comparability and consistency of application and enforcement of IFRSs. It was, necessarily, an ongoing and iterative process. Her comments were supported by Mr Tanzer and Ethiopis Tafara (US SEC) who noted that IOSCO is sharing information among its members (including the Committee of European Securities Regulators in the EU). This information sharing was designed to identify enforcement issues and application problems, with the view to making more informed enforcement decisions. In addition, the US SEC had bilateral relations with a number of IFRS jurisdictions through which they exchanged information with the aim of avoiding contradictory enforcement positions.

The Chairman of the Japanese Financial Services Agency called for IFRIC to be more active, issue more Interpretations and be more specific about the reasons why it does not take items to its agenda.

IASCF funding

On funding for the IASCF, Mr Barnier noted that it was very important that all IFRS jurisdictions make 'realistic contributions' towards funding the IASCF. He agreed to enter into bilateral discussions with the IASCF Chairman on the level of EU funding, but noted that both the European Council and the European Parliament had to agree the budget and be satisfied that all conditions for EU funding had been met on an annual basis. Ms Shapiro stated that the SEC was working hard to find both short-term and long-term funding solutions for the US-based contributions to the IASB. She noted that financial independence is one of the SEC's milestones for accepting IFRSs for US domestic issuers, and the SEC recognises its own role in helping the IASCF to achieve that.

Post-2011 Strategic planning

The Monitoring Board will look at how it operates, how it exercises its oversight functions of the IASCF, and how it conducts its business generally. It felt that, until all members had signed the Memorandum of Understanding, it had been premature to do this exercise.

The greater demands of emerging and transition economies in the post-2011 activities of the IASB were noted, both by an IASB Trustee and by Greg Tanzer on behalf of IOSCO.

IASB stakeholder engagement

The Monitoring Board noted the enhanced outreach activities of the IASB in the past 12-18 months with approval and hoped that sufficient funding could be secured such that those efforts could be maintained or enhanced further.

This summary is based on notes taken by observers at the Monitoring Board meeting and should not be regarded as an official or final summary.

 

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