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July

Australia overlooks IFRS for SMEs in favour of 'Reduced Disclosure Requirements'

02 Jul 2010

The Australian Accounting Standards Board (AASB) has issued amendments to Australian Accounting Standards to implement a 'Tier 2' reporting framework based on 'Reduced Disclosure Requirements' (RDR) instead of implementing the IFRS for SMEs.

The RDR permits for-profit entities without 'public accountability' to elect to comply with the recognition and measurement requirements of Australian Accounting Standards (which are equivalent to IFRS for for-profit entities), but to avoid many of the disclosures required by those standards in general purpose financial statements.

Not-for-profit and certain public sector entities are also eligible to apply the RDR. Entities applying the RDR will not be able to make an explicit and unreserved statement of compliance with IFRSs, however this will still apply to for-profit entities applying standards in full ('Tier 1').

The Tier 2/RDR will apply to annual reporting periods beginning on or after 1 July 2013, but may be early adopted for annual financial reporting periods beginning on or after 1 July 2009.

A second stage of the AASB's project will consider whether the 'Tier 2' requirements should be extended to the 'non-reporting entities' under Australia's existing differential reporting regime (these entities produce limited financial statements and do not claim compliance with IFRS). Deloitte (Australia) has produced a series of Accounting Alerts tracking the progress of the AASB's project.

Extracts from the Basis for Conclusions on the AASB amendments:

The Board concluded that the IFRS for SMEs is not presently a suitable set of requirements for Tier 2 in Australia. However, the Board decided it will continue to monitor and contribute to further changes in the IFRS for SMEs and that it is open to the possibility of adopting the IFRS for SMEs in future should the changes in that Standard make it practicable in an integrated for-profit/NFP sector reporting environment.

The Board decided that Tier 2 requirements should be maintained on a continuous basis, rather than waiting for the IASB to update its IFRS for SMEs, which the IASB plans to undertake only every few years, by which time there would be an accumulation of possible changes. The AASB intends that each future Exposure Draft or Invitation to Comment involving changes to Tier 1 that includes disclosure proposals would seek comment about which disclosures should be included in Tier 2, and may include the AASB's proposed reduced disclosures.

Click for:

New Zealand debates income tax accounting under IFRS

02 Jul 2010

A recent tax law change in New Zealand has resulted in an intense debate in the country about how (the New Zealand equivalent) of IAS 12 Income Taxes should be applied, and impacts on reported profits.

The New Zealand government recently changed the tax law to deny tax deductions for certain buildings. New Zealand also does not have a capital gains tax, meaning affected buildings are outside the scope of the tax law altogether. The effect of the tax law change is resulting in many New Zealand companies recognising a deferred tax liability in respect of existing buildings, significantly impacting profits. The Accounting Standards Review Board (ASRB) and Financial Reporting Standards Board (FRSB) have jointly issued a communique discussing the changes and Deloitte (New Zealand) has published an alert discussing the changes and their accounting implications. The IASB is currently undertaking a limited scope project on IAS 12 and has tentatively decided to consider a related issue of the treatment of revalued buildings. Click for:

 

Updated EFRAG 'endorsement status report'

02 Jul 2010

The European Commission has endorsed the IASB's 29 Januar 2010 Amendments to IFRS 1: Limited Exemption from Comparative IFRS 7 Disclosures for First-time Adopters.

Consequently, 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 1 July 2010 (PDF 127k). Currently, the following five IASB pronouncements await endorsement action:
  • IFRS 9 Financial Instruments
  • Amendment to IFRIC 14 Prepayments of a Minimum Funding Requirement
  • IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments
  • Revised IAS 24 Related Party Disclosures
  • Improvements to IFRSs
You can always find the endorsement status report Here.

 

iGAAP newsletter June 2010

02 Jul 2010

Deloitte (United Kingdom) has published the June 2010 edition of their quarterly iGAAP Newsletter.

This newsletter covers the activities of the IASB and the UK Accounting Standards Board (ASB). Each issue includes updates on the activities of the IASB and the ASB, project timetables for both boards, links to new Deloitte publications, an interview of someone involved with IFRSs, and a table showing IFRSs issued but not yet effective or endorsed by the European Union. The interviewee for the June 2010 issue is Ken Wild, Deloitte's recently retired Global IFRS Leader. Click to download iGAAP Newsletter June 2010 (PDF 157k). Links to all past issues are on our United Kingdom Country Page.

 

Comprehensive summary of the IASB's project on fair value measurement

02 Jul 2010

A comprehensive project summary, prepared by the IASB staff, has been posted to the fair value measurement project page of the IASB's site.

The project summary (PDF 951k) provides the background to the IASB's fair value measurement project and explains how the IASB plans to finalise an IFRS on fair value measurement. The summary also includes a comparison of the tentative decisions reached so far in the project with the proposals in the IASB's May 2009 exposure draft Fair Value Measurement and the proposals in the US Financial Accounting Standards Board's (FASB) exposure draft of a proposed Accounting Standards Update (ASU) Amendments for Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs (link to FASB website).

 

PCAOB to discuss impact of IASB-FASB projects on audits

02 Jul 2010

The United States Public Company Accounting Oversight Board (PCAOB) has announced a meeting of its Standing Advisory Group (SAG) will be held on Thursday, 15 July 2010. The meeting will include a presentation on projects of the FASB and IASB relating to potentially significant accounting changes affecting US GAAP and IFRS.

The SAG discussion will focus on the potential impact of these changes upon auditors of public companies. Click for:

 

EU formally adopts amendments to IFRS 1 and IFRS 7

01 Jul 2010

The European Union has published the Commission Regulation (EC) No 574/2010 (Amendment to IFRS 1 Limited Exemption from Comparative IFRS 7 Disclosure for First-time Adopters and Amendment to IFRS 7 Financial Instruments: Disclosures) endorsing the amendments adopted by the IASB on 29 January 2010.

Last week the European Union published the Commission Regulation (EC) No 550/2010 (Amendments to IFRS 1 Additional Exemptions for First-time Adopters) endorsing the amendments adopted by the IASB on 23 July 2009. Thus currently only five IASB pronouncements await endorsement action.

New name and web address for the IASC Foundation

01 Jul 2010

The IASC Foundation has formally changed its name to the IFRS Foundation with effect from 1 July 2010. The change represents the next step in a process to simplify the names in use across the organisation announced following the conclusion of the Constitutional Review in 2010.

The International Financial Reporting Interpretations Committee (IFRIC) and the Standards Advisory Council (SAC) have already been renamed as the IFRS Interpretations Committee and the IFRS Advisory Council, respectively. The name of the International Accounting Standards Board (IASB) will remain unchanged. The IASB's website has been changed to coincide with the name change and is now www.ifrs.org. In addition, IFRS Foundation and IASB email addresses will end in '@ifrs.org'. We have updated the links on our pages to reflect the new addresses. (The old iasb.org webpages and email addresses will be rerouted to ifrs.org from 1 July 2010 and so will continue to work.) Click for IASC announcement. See also our IFRS Foundation page.

 

iGAAP 2010 Financial Instruments: IAS 32, IAS 39, IFRS 7 and IFRS 9 Explained

01 Jul 2010

Deloitte (United Kingdom) has developed iGAAP 2010 Financial Instruments: IAS 32, IAS 39, IFRS 7 and IFRS 9 Explained (Sixth Edition), which has been published by LexisNexis. This publication is the authoritative guide for financial instruments accounting under IFRSs.

The 2010 edition continues to include many practical examples, comparisons with US GAAP, an IFRS 7 disclosure checklist and model disclosures. The new edition also includes guidance on the IASB's new standard on financial assets, IFRS 9 Financial Instruments, as well as Interpretations and relevant IASB activities up to and including 31 March 2010. iGAAP 2010 Financial Instruments: IAS 32, IAS 39, IFRS 7 and IFRS 9 Explained (Sixth Edition) (1,139 pages, June 2010) can be purchased through www.lexisnexis.co.uk/deloitte. You will find a permanent link to this and many other Deloitte IFRS publications on our IFRS Publications Page.

 

Webcast on convergence and FASB financial instruments proposals

01 Jul 2010

On 16 July 2010, Deloitte (United States) will host a live webcast discussing IASB-FASB convergence and the FASB's proposals for accounting for financial instruments.

Discussion topics will include:
  • projects included in the memorandum of understanding between the FASB and the IASB
  • proposed changes to the accounting for loans, debt and equity securities, and other financial assets and financial liabilities
  • FASB's various exposure drafts.
The IASB is asking constituents to submit comment letters on the FASB financial instruments proposals and will use that feedback when it considers how to reconcile any differences between IFRS requirements and US GAAP. There is no charge to participate in the webcast, but registration is required.

 

  • Webcast Topic: FASB/IASB: A Convergence Update and Deeper Dive Into the FASB's Financial Instruments Proposals
  • Date and Time: Friday, 16 July 2010, 2:00-3:30pm US Eastern time
  • More Information and Registration: Click Here
  • IAS Plus Resources: IASB Agenda and Timetable, Financial Instruments

 

 

IASB and FASB post staff draft of proposed financial statement presentation standard

01 Jul 2010

The IASB and the US FASB posted to their websites a staff draft of a proposed standard on their joint project to develop a standard on financial statement presentation. The draft reflects the cumulative, tentative decisions made by the boards concluding with their joint meeting in April 2010. However, work on the project is continuing, and the proposals are subject to change before the boards decide to publish an exposure draft for public comment.

Before finalising and publishing the exposure draft, the boards will engage in further outreach and analysis. These activities will focus primarily on two issues: (1) the perceived benefits and costs of the proposals, and (2) the implications of the proposals for financial reporting by financial institutions. The boards are not formally inviting comments on the this staff draft; however, they welcome input from interested parties. The boards expect to publish an exposure draft for public comment in early 2011. Link to IAS Plus Project Page.

 

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