December

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New issue of the IASB's Investor Perspectives

11 Dec 2010

In April 2010, the Trustees of the IFRS Foundation and the IASB launched a programme to enhance investors' participation in the development of International Financial Reporting Standards (IFRSs).

One of the enhancements is a newsletter for investors. Board members Stephen Cooper, Patrick Finnegan and Patricia McConnell publish timely updates on financial reporting matters. For the new issue of the Investor Perspectives they have been joined by Paul Pacter, IASB member and former webmaster of IAS Plus:

All Investor Perspectives are archived on the IASB's website.

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IFRS for SMEs adopted in another three countries

10 Dec 2010

The IFRS for SMEs, the first set of international accounting requirements developed specifically for small and medium-sized entities, has been adopted in three countries in Central and South America.

The IFRS for SMEs, the first set of international accounting requirements developed specifically for small and medium-sized entities, has been adopted in three countries in Central and South America.

Chile Chile. The Chilean Government has agreed to require the IFRS for SMEs for all entities that are not publicly accountable starting in 2013. Formal announcement of the details will be published shortly. Click here to visit our Chile country page.
Guatemala Guatemala. The Guatemalan Institute of Public Accountants and Auditors has approved the adoption of the IFRS for SMEs for fiscal years beginning on or after of 1 January 2011. Click here to visit our Guatemala country page.
Venezuela Venezuela. The Federation of Certified Public Accountants of Venezuela has approved the adoption of the IFRS for SMEs for fiscal years beginning on or after of 1 January 2011. Early adoption is permitted from 2010. Large unlisted companies that, since 2008, have been required to use full IFRSs may switch to the IFRS for SMEs or keep their financial statements under full IFRSs. Click here to visit our Venezuela country page.
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Deadline reminder – ED on Leases

10 Dec 2010

We remind you that comments on the Exposure Draft Leases are due on 15 December 2010.

The proposals in the ED would result in a consistent approach to lease accounting for both lessees and lessors – a 'right-of-use' approach.

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Updated agenda for the December 2010 IASB meeting

10 Dec 2010

The IASB has made additional revisions to its agenda for its monthly meeting being held in London from 13 to 17 December 2010. The asset and liability offsetting discussion and the discussion on impairment have been swapped with each other.

Impairment will now be discussed on Thursday morning and offsetting on Tuesday afternoon. In addition, changes were made to the start times for Tuesday's sessions. Click here to view the updated agenda.
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Deloitte IFRS Podcast on financial instruments: hedge accounting exposure draft

09 Dec 2010

We've released a podcast where Andrew Spooner, lead IFRS financial instruments partner, and Kush Patel, senior manager and recent IASB Practice Fellow, discuss the IASB's exposure draft on hedge accounting.

They discuss the key changes that are proposed and provide an insight into the likely effect they will have in practice. The discussion is chaired by Robert Bruce. The podcast is available for download here (35:18 mins 33 mb) or via iTunes; it is one of a series that will be posted to IAS Plus. All podcasts of the series are available here.

 

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United States SEC to consider hybrid model for IFRS adoption?

09 Dec 2010

Paul A. Beswick (Deputy Chief Accountant, United States Securities Exchange Commission) has revealed a possible approach for adoption of IFRS in the United States. Providing his personal views while speaking at the AICPA National Conference in Washington, D.C., Mr Beswick coined the term 'condorsement' to refer to a possible hybrid model to adopting IFRSs in the United States.

An extract from the published text of the speech is reproduced below:

"... While I am a supporter of the objective of a single set of high-quality accounting standards in concept, I have not reached a conclusion on whether, and how, the U.S. capital markets should move to IFRS.

So what would be a reasonable approach for the U.S.? In our October update we highlighted that the majority of jurisdictions are following either a convergence or an endorsement approach. In my opinion, if the U.S. were to move to IFRS, somewhere in between could be the right approach. I will call it a "condorsement" approach....

So how would this approach work? Well, to begin, U.S. GAAP would continue to exist. The IASB and the FASB would finish the major projects in their MOU. The FASB would not begin work on any major new projects in the normal course. Rather, a new set of priorities would be established where the FASB would work to converge existing U.S. GAAP to IFRS over a period of time for standards that are not on the IASB's agenda.

At the same time, the FASB would have a process where they would consider new standards issued by the IASB for incorporation into U.S. GAAP and then integrate such standards into the U.S. codification. The ideal would be to incorporate such standards as issued by the IASB without modification. However, criteria would need to be established for FASB's consideration of endorsing or incorporating standards...

In any case let me reiterate that all I have done is I've outlined an idea."

Mr Beswick also discussed the costs of a "big bang" approach to adopting a new accounting framework (such as IFRS), the impacts on various categories of companies and the need for the IASB and FASB to focus on producing high-quality accounting standards as opposed to meeting deadlines. The full text of the published speech can be found here (link to SEC website).

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IASB publishes exposure draft on hedge accounting

09 Dec 2010

The International Accounting Standards Board (IASB) has published for public comment an exposure draft on the accounting for hedging activities.

The exposure draft proposes requirements designed to enable companies to better reflect their risk management activities in their financial statements, and, in turn, help investors to understand the effect of those activities on future cash flows.

The proposed model is principle-based, and is designed to more closely align hedge accounting with risk management activities undertaken by companies when hedging their financial and non-financial risk exposures.

Summary of the ED proposals

  • A new hedge accounting model which combines a management view that aims to use information produced internally for risk management purposes and an accounting view that seeks to address risk management issue of the timing of recognition of gains and losses
  • Look only at whether a risk component can be identified and measured, as opposed to determining what can be hedged by type of item (financial or non-financial)
  • Base qualification for hedge accounting on how entities design hedges for risk management purposes and permit hedging relationships to be adjusted without necessarily stopping and potentially restarting hedge accounting
  • Treat the time value premium of a purchased option as a cost of hedging, which will be presented in other comprehensive income (OCI)
  • Extending the use of hedge accounting to net positions (to improve the link to risk management)
  • A comprehensive set of new disclosures that focus on the risks being hedged, how those risks are being managed and the effect of hedging those risks upon the primary financial statements

The exposure draft forms part of the IASB's overall project to replace IAS 39 Financial Instruments: Recognition and Measurement, and when its proposals are confirmed they will be incorporated into IFRS 9 Financial Instruments. The exposure draft does not include consideration of portfolio macro hedge accounting which the IASB will continue to discuss.

The exposure draft ED/2010/13 Hedge Accounting is open for comment until 9 March 2011. The IASB intends to finalise and issue the proposals during the first half of 2011.

Click for:

 

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Updated agenda for the December 2010 IASB meeting

08 Dec 2010

The IASB has substantially revised its agenda for its monthly meeting for December 2010 being held at the IASB offices in London from 13 to 17 December 2010. Meeting times and topics have been amended and a short meeting will now be held on Thursday.

Click here to view revised agenda.

 

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2011 IFRS 'Blue Book' now available

08 Dec 2010

Further to our story on 22 November 2010, the IFRS Foundation has published the 2011 IFRS Consolidated without early application.

This volume (nicknamed the 'Blue Book') contains all official pronouncements that are mandatory on 1 January 2011. It does not include IFRSs with an effective date after 1 January 2011. The Blue Book sells for £60 plus shipping (academic, developing country, and volume discounts apply). The publication can be purchased through the IASB web store.

 

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PCAOB staff comments at AICPA National Conference

08 Dec 2010

Further to our story yesterday about the United States SEC comments at a recent AICPA National Conference, the Public Company Accounting Oversight Board (PCAOB) has also now released transcripts of speeches made by its staff at the conference.

Martin Baumann (Chief Auditor) spoke on the current audit environment, standard setting activities and the impact of the FASB/IASB convergence projects. An extract from the published text of his speech is reproduced below:

"... My office has been closely monitoring the FASB/IASB convergence projects and, in many cases, have held discussions with the FASB and the SEC. We've also had substantive discussions at the last two meetings of our Standing Advisory Group regarding the pace, volume and nature of changes being proposed to the U.S. accounting framework... the SAG discussions expressed concern about the pace, volume and nature of accounting change and the potential audit implications.

Our SAG has also advised us to consider new auditing standards that may be necessary in light of the changes in the accounting framework, so that we don't see any slippage in audit quality and, therefore, in the reliability of financial reports.

I want to fully acknowledge the efforts of the FASB/IASB and SEC in pursuing the goal of a single set of high quality standards. But for all of us in standards-setting, we're at a crossroad and the direction we each take has great significance for the future."

Daniel L. Goelzer (Acting Chairman) also spoke on recent PCAOB achievements and on certain aspects of the PCAOB agenda for 2011, including broker-dealer audits, foreign inspections and the auditor's reporting model.

Click for our earlier story on the AICPA National Conference.

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