The survey focuses on whether and how users of financial statements adjust for offsetting of financial instruments.

This project was added to the agenda at the June IASB-FASB meeting in response to stakeholder concerns (including those of the Basel Committee on Banking Supervision and the Financial Stability Board) about differences between IFRS and US-GAAP standards on balance sheet netting of derivative contracts and other financial instruments that can result in material differences in financial reporting by financial institutions.

The questionnaire is targeted at users of financial statements, requesting feedback in areas such as:

• Which of gross or net values of financial asset and liability positions, and in particular derivatives, is useful for financial statement analysis
• Whether gross or net values should be presented on the face of the statement of financial position (balance sheet)
• When offsetting (netting) should be permitted (conditional or unconditional rights, different types of risk).

 

The deadline to complete the questionnaire is 20 August 2010. The questionnaire can be accessed through the IASB website. More information on the project is available in our Financial Instruments - Balance Sheet Offsetting project page.

In Kosovo, the Law requires all corporations (except "small corporations"), publicly-owned enterprises, and socially-owned enterprises to prepare their financial statements in conformity with Kosovo Accounting Standards (KAS) or IFRS. Banks and insurance companies are required to prepare financial statements in compliance with IFRS and the accounting requirements set forth by the Banking and Payments Authority of Kosovo (BPK). However, since no mechanism currently exists for enforcing compliance with accounting and financial reporting requirements there is widespread non-compliance with both IFRS and KAS.

EITF Snapshot (PDF 130k), published by Deloitte & Touche LLP (USA), enables readers to identify relevant topics and to understand quickly the meeting's outcome. Past issues can be downloaded Here.

Below is an excerpt from the letter (PDF 82k):

...We agree with the view expressed in the Discussion Paper that the use of a market-based measure is not justifiable on cost-benefit grounds and is not supported by industry participants, analysts and other users of the financial statements. We agree with the project team's recommendation with respect to the definitions of reserves and resources to be used in any IFRS on extractive activities and the need for common definitions for all extractive activities within the scope of any future IFRS. However, we believe that it is important that the definitions ultimately chosen are accepted by industry and consistent across all jurisdictions to avoid the need for multiple reserve and resource determinations and reconciliations. Therefore, we urge the Board to cooperate closely with national standard-setters, securities markets regulators and industry bodies to ensure acceptance and consistency in definitions. In our view, the Discussion Paper does not articulate clearly the nature of the asset arising from extractive activities. Further research is required to determine the nature of the asset(s) and the justification for capitalising subsequent expenditures within the context of the Conceptual Framework. We also believe that further research is necessary to develop an appropriate impairment model for such assets. We agree with the overall disclosure objectives proposed by the Discussion Paper, provided that those objectives do not lead to a requirement to disclose fair values. However, we have significant concerns about the nature and extent of the disclosures proposed, in particular the level of disaggregation required, the need for sensitivity analyses and the cost of preparing the proposed disclosures.

All of our past letters of comment to the IASB are Here.

 

Deloitte Brazil has published Brazilian editions of IFRS for SMEs in your Pocket (PDF 360k) and 2009 Model financial statements (PDF 406k), both in Portuguese.

The IFRS for SMEs is particularly relevant in Brazil mainly after the signature of the Memorandum of Understanding among the IASB, Brazilian Federal Council of Accounting (CFC) and the Brazilian Accounting Pronouncements Committee (CPC) in January 2010, during a visit of Sir. David Tweedie (IASB Chairman) to Brazil.

In December 2009, the Brazilian Accounting Pronouncements Committee (CPC) adopted a Portuguese version of the IFRS for SMEs as an option for SMEs in Brazil. By Resolution 1255 of 2009, the CPC's SME standard was endorsed by the Brazilian Federal Accounting Council (CFC), the national professional body.

Click for:

• IFRS para PMEs ao seu alcance 2010 (IFRS for SMEs in Your Pocket in Portuguese, 84 pages, PDF 360k)
• Normas Internacionais de Relatório Financeiro - Modelo de demonstrações financeiras para 2009 (2009 Model financial statements in Portuguese, 124 pages, PDF 1,270k)
• IFRS for SMEs in Your Pocket (Global Edition, English, PDF 406k)
• Model financial statements and checklists
• Our Brazil country page
• Our IFRS for SMEs page.

 

The first meeting of the Joint Working Group was held in Tokyo, Japan from 26-28 July 2010.

At the meeting, a Memorandum of Understanding was signed which primarily focuses on:

• An exchange of views on legal and regulatory and other issues arising out of application of or convergence with IFRSs and exploring the possibilities of mutual cooperation
• Addressing critical issues relating to application of, or convergence with, IFRSs and reaching consensus through a process of consultation mutually agreed to
• Fostering a strong and cohesive profession by providing leadership on emerging issues, coordinating with global, other regional, intra-regional organisations, member bodies and associates to achieve appropriate strategic objectives.

The next meeting of the group will be held in India in 2011. Click for:

• Accounting Standards Board of Japan (ASBJ) press release Inauguration of India-Japan Dialogue (PDF 41k)
• Our India country page
• Our Japan country page.

The ED proposes fundamental changes to the financial reporting of insurance companies applying IFRS, with a goal of making it more consistent and transparent than it has been so far.

Excerpts from the press release:

"Given the increased adoption of IFRS worldwide, it is no exaggeration to suggest that this proposed accounting standard would have a global impact and could fundamentally change the way insurance companies measure, report, and evaluate performance of their insurance contracts," said Joel Osnoss, Global IFRS Leader, Clients & Markets, Deloitte Touche Tohmatsu. Francesco Nagari, Global IFRS Insurance Leader at Deloitte United Kingdom, commented: "The publication of the Exposure Draft is a landmark stage in the IASB's 13-year project to develop a consistent standard for insurance accounting and will have a significant impact on insurers across the world. Under the proposed IFRS, all insurance contracts, both life and non-life, will be measured using the same building blocks based on discounted probability-weighted best estimate cash flows."

Click for:

• Press release Deloitte on the publication of the IASB Exposure Draft of the new International Reporting Standard for Insurance Contracts
• Our Insurance contracts project summary.

This edition focuses on:

• Beyond the audit committee: What boards do (and do not) need to know about IFRS
• The Real Deal – the focus this month is on Discontinued Operations
• An update on international standard setting activities

Click here to download the July 2010 edition of Countdown (PDF 439k). A French translation is available (PDF 1,491k). Click here to visit our Canada country page

The IASB considered four alternatives of how to move forward with the project:

• a "fast-tracked" standard,
• an interim solution for pending initial adopters of IFRS while later considering a longer term solution,
• an amendment to IFRS 1 to permit the continued use of previous national GAAP for rate regulated activities for first time adopters, or
• continue with the existing project under its current timeframe.

The IASB finally agreed to continue its current project under the existing timeframe without amending IFRS 1.