November

Malaysia finalises IFRS-compliant standards

22 Nov 2011

The Malaysian Accounting Standards Board (MASB) has issued a new MASB approved accounting framework, the Malaysian Financial Reporting Standards (MFRS Framework), which is a fully IFRS-compliant framework and equivalent to IFRSs.

The new MFRS Framework represents the finalisation of proposals published in June 2011.

The MFRS Framework comprises Standards as issued by the International Accounting Standards Board (IASB) that are effective on 1 January 2012. It also comprises new and revised Standards recently issued by the IASB that will be effective after 1 January 2012 such as Standards on financial instruments, consolidation, joint arrangements, fair value measurement and employee benefits, among others. The adoption of the MFRS Framework will allow Malaysian entities to be able to assert that their financial statements are in full compliance with IFRSs.

The MFRS Framework is to be applied by all Malaysian entities other than private entities for annual periods beginning on or after 1 January 2012. However, certain 'transitioning entities' (essentially those involved in agriculture and real estate construction) will be allowed to defer adoption of the new MFRS Framework for an additional one year, so that it will be mandatory for annual periods beginning on or after 1 January 2013.

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

IASB and IFAC agree to collaborate on public and private accounting standards

22 Nov 2011

The IASB and the International Federation of Accountants (IFAC) have issued a Memorandum of Understanding (MoU), agreeing to co-operate in developing private and public sector accounting standards.

This MoU was developed to ensure greater consistency in the boards' standard-setting activities. In the MoU, the boards lay out a 'communication and co-operation process' which provides information on meetings, projects, crises, programs, soliciting feedback and more.

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

Updated EFRAG 'endorsement status report'

21 Nov 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 for the Endorsement Status Report as of 18 November 2011. Currently, the following thirteen IASB pronouncements await endorsement action:

  • IFRS 9 Financial Instruments
  • IFRS 10 Consolidated Financial Statements
  • IFRS 11 Joint Arrangements
  • IFRS 12 Disclosures of Interests in Other Entities
  • IFRS 13 Fair Value Measurement
  • IAS 27 Separate Financial Statements (2011)
  • IAS 28 Investments in Associates and Joint Ventures (2011)
  • 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
  • Amendments to IAS 1 Presentation of Items of Other Comprehensive Income
  • Amendments to IAS 19 Employee Benefits
  • IFRIC 20 Stripping Costs in the Production Phase of a Surface Mine

SME Implementation Group publishes draft Q&As for comment

21 Nov 2011

The SME Implementation Group (SMEIG) has published two draft questions and answers (Q&As) on the IFRS for SMEs.

Click for access to the Q&As:

Q&As are non-mandatory guidance. Comments are due by 31 January 2012.

Latest batch of editorial corrections to IFRSs released by the IASB

21 Nov 2011

The IASB has posted to its website a new batch of Editorial Corrections to IFRSs.

This batch makes editorial corrections and changes to ED/2011/4 Investment Entities (issued August 2011), IFRS 5 Non-current Assets Held for Sale and Discontinued Operations (issued March 2004), IFRS 7 Disclosures – Transfers of Financial Assets (Amendments to IFRS 7) (issued October 2010), IFRS 9 Financial Instruments, IFRS 13 Fair Value Measurement (issued May 2011), IAS 19 Employee Benefits (issued June 2011), Bound Volume (Red Book) 2011, Bound Volume (Education) 2011, Bound Volume (Blue Book) 2012 and IFRS for SMEs (issued July 2009).

Details of the editorial corrections are available available on the IASB's website.

EFRAG draft comment letter on government loans

18 Nov 2011

The European Financial Reporting Advisory Group (EFRAG) has issued its draft comment letter on the IASB Exposure Draft ED/2011/5 'Government Loans (Proposed amendments to IFRS 1)'.

EFRAG is supportive of what the proposed amendments are trying to achieve, but it believes that the Board should limit the scope of the proposed transitional relief to entities that, under their previous GAAP, accounted for government loans as liabilities.

Comments on the letter are invited by 27 December 2011. The draft comment letter can be downloaded via the press release on EFRAG's website.

Click for our earlier story on the issuance of ED/2011/5.

New translations of IFRSs

18 Nov 2011

The IFRS Foundation has announced that translations of IFRSs 2011 into French and Spanish are now available on the IASB's website.

The files correspond to the text used for the adoption of IFRSs into law, and do not include the accompanying material such as the Bases for Conclusions and Implementation Guidance.

Please click for:

Final notes from the November IASB meeting

17 Nov 2011

The IASB's regular monthly meeting was held on 15-16 November 2011 in London, part of it a joint meeting with the FASB. We have posted Deloitte observer notes from the remaining session held on Wednesday.

Click through for direct access to the notes:

Wednesday, 16 November 2011 (other sessions)

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

SEC releases reports on IFRS in practice and US GAAP-IFRS differences

17 Nov 2011

The staff of the United States Securities and Exchange Commission (SEC) have released two additional Staff Papers as part of the SEC's work plan for the consideration of incorporating IFRSs into the Financial Reporting System for U.S. Issuers.

Analysis of IFRS in Practice

The first paper, An analysis of IFRS in Practice, presents the Staff's observations regarding the application of IFRS in practice, based on an analysis of the most recent annual consolidated financial statements of 183 companies across 36 industries which prepare financial statements in accordance with IFRSs. The companies were selected from the Fortune Global 500 (the top 500 companies by revenue) and represented all those which prepared financial statements in accordance with IFRS in English. The 183 companies were domiciled in 22 countries, with the majority (approx 80%) being domiciled in the European Union, but with China and Australia also being represented with more than five companies.

The Staff Paper summarises the research as follows:

The Staff found that company financial statements generally appeared to comply with IFRS requirements. This observation, however, should be considered in light of the following two themes that emerged from the Staff’s analysis:
  • First, across topical areas, the transparency and clarity of the financial statements in the sample could be enhanced. For example, some companies did not provide accounting policy disclosures in certain areas that appeared to be relevant to them. Also, many companies did not appear to provide sufficient detail or clarity in their accounting policy disclosures to support an investor’s understanding of the financial statements, including in areas they determined as having the most significant impact on the amounts recognized in the financial statements... In some cases, the disclosures (or lack thereof) also raised questions as to whether the company’s accounting complied with IFRS....
  • Second, diversity in the application of IFRS presented challenges to the comparability of financial statements across countries and industries. This diversity can be attributed to a variety of factors. In some cases, diversity appeared to be driven by the standards themselves, either due to explicit options permitted by IFRS or the absence of IFRS guidance in certain areas. In other cases, diversity resulted from what appeared to be noncompliance with IFRS... While country guidance and carryover tendencies may promote comparability within a country, they may diminish comparability on a global level.

IFRS - U.S. GAAP comparison

A second paper, A Comparison of U.S. GAAP and IFRS, to provide an assessment of whether there is "sufficient development and application of IFRS for the U.S. domestic reporting system" by inventorying areas in which IFRS does not provide guidance or where it provides less guidance than U.S. GAAP. The Staff reviewed U.S. GAAP accounting requirements and compared those requirements to equivalent or corresponding IFRS requirements, as applicable. The Staff omitted from its review any U.S. GAAP requirements and the IFRS equivalents that are subject to the ongoing joint standard-setting efforts either through the Memorandum of Understanding (MoU) joint standard-setting projects of the FASB and the IASB, or other areas where the FASB and IASB had agreed to work together.

The second Staff Paper notes the staff "generally noted that U.S. GAAP contains more detailed, specific requirements than IFRS" and notes the following fundamental differences between U.S. GAAP and IFRS:

  • IFRS contains broad principles to account for transactions across industries, with limited specific guidance and stated exceptions to the general guidance
  • Fundamental differences exist between the FASB and IASB conceptual frameworks, including their level of authority and the definition and recognition of assets and liabilities

The Staff Paper then provides a broad comparison of the requirements of U.S. GAAP and IFRS, highlighting notable differences. The report notes it does "not include an analysis of the impact that those differences, individually or collectively, may have on the quality of IFRS."

Click for:

Deloitte comment letter on agenda consultation

17 Nov 2011

Deloitte's IFRS Global Office has submitted a letter of comment to the International Accounting Standards Board (IASB) on its Request for Views on its Agenda Consultation 2011.

In the comment letter, we agree with the agenda and highlight several key points in the Board's strategic direction:

We agree with the Board that, as an immediate priority, it must dedicate all necessary resources to completion of the projects on revenue from contracts with customers, leases, insurance contracts and financial instruments. Given the scale of these four projects, a realistic allocation of significant resources to other projects can be made only once these priority projects have been substantially completed.

The continued development and refinement of the Conceptual Framework for Financial Reporting (2010) is critical to provide a clear set of principles to underpin individual standards. The Framework should, however, remain a ‘living document’ to be assessed as new standards are developed. In this way, the Framework can evolve as the global financial reporting environment changes.

The development of a clear framework for disclosures in financial statements is critical and urgent. This should be undertaken separately from, and with more urgency than, any project on presentation.

Click for our Comment Letter on Request for Views on its Agenda Consultation 2011.

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