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April

Notes from the additional April IASB meeting

06 Apr 2011

The IASB held an additional meeting in London on 6 April 2011. We've posted Deloitte observer notes from the meeting (click through for direct access to the notes for each topic):

The IASB held an additional meeting in London on 6 April 2011. We've posted Deloitte observer notes from the meeting (click through for direct access to the notes for each topic):

Wednesday, 6 April 2011 (IASB only)

The next regular IASB meeting is scheduled for 11-15 April 2011.

Click here to go to the preliminary and unofficial Notes Taken by Deloitte Observers for the entire meeting.

UK ASB publishes a report on reducing clutter in financial reports

06 Apr 2011

The Accounting Standards Board (ASB) of the United Kingdom Financial Reporting Council (FRC) has published a report Cutting Clutter: Combating clutter in annual reports.

The report follows on the from the issue of Louder than Words: Principles and Actions for Making Corporate Reports Less Complex and More Relevant, which was published in June 2009 (see our earlier story).

The report outlines recommendations and methodologies for reduced clutter under existing reporting requirements (including IFRSs):

  • A call for action to reduce barriers to reducing clutter – focusing on materiality, tackling longstanding explanatory material in printed annual reports and engaging with other stakeholders
  • Changing some of the behaviours that currently serve as barriers to cutting clutter – addressing issues such as "simply repeating disclosures made in prior years" to "fear of challenge from regulators"
  • Disclosure aids to enable preparers to tackle clutter – providing illustrative examples on governance, accounting polices and share-based payments.

In relation to materiality, the report notes the following:

IAS 1 states that "An entity need not provide a specific disclosure required by an IFRS if the information is not material." Yet it is exactly these immaterial disclosures that we observe and define as clutter. Is this message not understood or not getting through, or does it need to be refined to change the default of including everything?

One of the key reasons for including all disclosures given by interviewees was a "lack of confidence in making the judgement between disclosures that are material and those that are not." It is apparent that the lack of clarity around what materiality means from a disclosure perspective continues to be a significant barrier in both preparing and auditing financial statements.

The push to reduce the volume of disclosures in financial reports has been increasing in recent times. In response to a request from the IASB, the Institute of Chartered Accountants of Scotland (ICAS) and the New Zealand Institute of Chartered Accountants (NZICA) are working on project with the aim of reducing the volume of disclosure requirements in IFRSs (see our earlier story).

The ASB hopes that the report will stimulate debate and action on this issue, and welcomes any comments by 30 September 2011. Click for ASB press release (link to FRC website).

IASB issues near-final draft on fair value measurement

05 Apr 2011

The IASB has issued Near-Final Draft: International Financial Reporting Standard X Fair Value Measurement.

This IFRS:
  • defines fair value,
  • sets out a single IFRS framework for measuring fair value, and
  • requires disclosures about fair value measurements.

It is currently made available to its subscribers.

For more information, view our Fair Value Measurements project page.

Notes from the IFRS Foundation Trustees and Monitoring Board meetings

05 Apr 2011

The IFRS Foundation Trustees met in London on 31 March 2011. In addition, the Monitoring Board and IFRS Foundation Trustees met on 1 April 2011. We've posted Deloitte observer notes from the meetings (click through for direct access to the notes for each topic):

IFRS Foundation Trustees meeting (Thursday, 31 March 2011)

IFRS Foundation Trustees – Monitoring Board meeting (Friday, 1 April 2011)

The next scheduled meeting of the IFRS Foundation Trustees is scheduled to be held in the United States on 13-14 July 2011.

Click here to go to the preliminary and unofficial notes taken by Deloitte observers for the IFRS Foundation Trustees meeting and the IFRS Foundation Trustees - Monitoring Board meeting.

Responses to the EU consultation on country-by-country reporting

04 Apr 2011

In October 2010, the European Commission started a public consultation in order to gather stakeholders' views on country-by-country reporting by multinational companies. Country-by-country reporting is a concept that would require multinational companies to disclose financial information on their operations in third countries in their annual financial statements.

The Commission has now posted to its website the responses received and a summary report of the consultation. The report states:

The overall result of the consultation shows a rather diverse pattern of opinions (especially on questions 1 to 3), reflecting the opinions of several categories of respondents: where preparers, accountants and auditors were in general opposed to requirements to report on a country-by-country basis, users and other respondents were in favour.

[...]

However, a detailed analysis shows that the industry most directly concerned – the extractive industry, in particular oil and gas – expressed in general a constructive view as they consider this to be conducive to improving domestic accountability and governance in resource-rich countries.

In March 2011, the Competitiveness (Internal Market, Industry, Research and Space) Council of the European Union had also come to the conclusion that country-by-country reporting by mining and oil and gas companies will help tackling the challenges on raw materials and in commodity markets.
Click for:

Deloitte publications update

02 Apr 2011

The following Deloitte publications are now available:

Global publications

Deloitte (Australia)

  • What's new in financial reporting for June 2011 – a guide to new and revised accounting pronouncements and other financial reporting considerations for the June 2011 reporting season
  • Monthly Roundup (March 2011) – a summary of financial reporting developments during March 2011, including discussion of the revised IASB work plan, proposed guidance on additional financial information from the Australian Securities & Investments Commission (ASIC) and the UK/NZ study on reducing IFRS disclosures
  • Extracting Value Issue 11 – an update on the IASB's leasing project for resources companies

Deloitte (United States)

  • Toward greener pastures: How to leverage sustainability initiatives for finance transformation (PDF 132k) – identifies six key areas in which sustainability initiatives can trigger finance transformation and ways that those triggers can create opportunities to improve reporting, transparency, and business performance, as well as mitigate business risk
  • Webcast — New FASB-IASB Lease Accounting Standard: How Should You Prepare? – being held on Thursday 7 April 2011, this webcast is tailored for the real estate industry and will discuss an overview of the proposed standard on leases, reactions from industry executives and expected implementation issues (registration)

 

Deloitte issues comment letter on the supplement to exposure draft on amortised cost and impairment

01 Apr 2011

Deloitte's IFRS Global Office has submitted a letter of comment on Supplement to Exposure Draft ED/2009/12 'Amortised Cost and Impairment'.

The comment letter expresses Deloitte's views on the IASB and FASB's development of a more operational expected loss model. The following is an excerpt from the letter:

We are generally supportive of an approach that recognises lifetime expected credit losses for performing assets ('the good book') on a time proportional basis with a minimum floor and recognises immediately lifetime expected credit losses for assets that are identified as non-performing ('the bad book') in full…However, we are not supportive of the inclusion of a ‘higher of' test based on an assessment of credit losses expected in the ‘foreseeable future' for assets in the good book.

Click to Download our Comment Letter (PDF 115k). All of our past comment letters are here.

IAASB issues annual report

01 Apr 2011

The International Auditing and Assurance Standards Board (IAASB) has released its 2010 annual report.

The report highlights the IAASB's ongoing work to promote the adoption and implementation of its clarified International Standards on Auditing (ISAs), and the issuance of a number of proposals in areas where there is demand for new and innovative assurance and related services other than audits of financial statements.

Click for IAASB press release (link to IFAC website).

Updated EFRAG 'endorsement status report'

01 Apr 2011

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 16 March 2011 (PDF 126k). Currently, the following four IASB pronouncements await endorsement action:
  • IFRS 9 Financial Instruments
  • Amendments to IFRS 7 Financial Instruments: Disclosures
  • Amendments to IAS 12 Deferred tax: Recovery of Underlying Assets
  • Amendments to IFRS 1 Severe Hyperinflation and Removal of Fixed Dates for First-Time Adopters

 

Agenda for April IASB-FASB special meeting on 6 April 2011

01 Apr 2011

The IASB and FASB are holding a special joint meeting in London on 6 April 2011.

You can access the agenda on our 6 April special joint meeting page.  We will also post Deloitte observer notes on this page as they are available.

AICPA introduces course in IFRS

01 Apr 2011

The American Institute of Certified Public Accountants (AICPA) has introduced a new course of study leading to a 'Certificate of Educational Achievement in International Financial Reporting Standards'.

The AICPA supports the goal of one set of high-quality, globally accepted accounting standards and promotes a smooth transition from U.S. Generally Accepted Accounting Principles to IFRS for public companies. The U.S. Securities and Exchange Commission (SEC) is yet to make a decision on the adoption of IFRS.

Click for AICPA press release (link to AICPA website).

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