If adopted, the proposals would supersede IAS 11 Construction Contracts and IAS 18 Revenue and related interpretations. The core principle proposed in the ED would require an entity to recognise revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration that it expects to receive in exchange for those goods or services. To apply that principle, an entity would:

• Identify the contract(s) with a customer. Normally each revenue transaction is a single contract, but sometimes the elements of a multiple-element contract must be accounted for separately or, less commonly, two contracts are combined.
• Identify the separate performance obligations in the contract. If an entity promises to provide more than one good or service, it would account for each promised good or service as a separate performance obligation only if the good or service is distinct – that is, it is or could be sold separately.
• Determine the transaction price. Transaction price is the probability-weighted amount of consideration that an entity expects to receive. This would take into account collectibility, the time value of money, the fair value of noncash consideration, and consideration payable to a customer.
• Allocate the transaction price to the separate performance obligations in proportion to the standalone selling prices of the goods or services underlying each performance obligation.
• Recognise revenue when the entity satisfies each performance obligation by transferring the promised good or service to the customer. A contract for the development of an asset (for example, construction, manufacturing, and customized software) would result in continuous revenue recognition only if the customer controls the asset as it is developed.

The ED also specifies the accounting for contract costs. Costs of obtaining a contract are charged to expense when incurred. If the costs incurred in fulfilling a contract are not eligible for capitalisation in accordance with other standards (for example, IAS 2 Inventories), an entity would recognise an asset only if those costs:

• relate directly to a contract (or a specific contract under negotiation);
• generate or enhance resources of the entity that will be used in satisfying performance obligations in the future; and
• are expected to be recovered.

For many companies the new approach will not change the amount or timing of revenue recognition. However, in some cases there could be a significant impact. For example, the standard would require separate up-front recognition of revenue from providing a mobile phone that is bundled, without a separate charge, as part of a contract for mobile phone services. Comment deadline on the ED Revenue from Contracts with Customers is 22 October 2010. Click for IASB Press Release (PDF 116k). Link to IAS Plus Project Page.

 

This issue is titled Almost There... and focuses on the discussions the joint IASB-FASB meetings in May and early June 2010. The expected publication date of the Exposure Draft is July 2010. Click to download Issue 15 of the Insurance Accounting Newsletter (PDF 113k). There are permanent links all issues of the newsletter on IAS Plus Insurance Project Page.

 

Discussion topics will include:

• an update on the main outcomes of the Expert Advisory Panel on impairment of financial assets measured at amortised cost and next steps in the impairment phase,
• an update on the hedge accounting phase, and
• a general update on timing for the project.

There is no charge to participate in the webcast, but registration is required. Participants will have an opportunity to submit written questions during the webcast.

Webcast Topic: The IASB's project to replace IAS 39 Date and Time: Tuesday, 6 July 2010, 10:00-11:00am London time, and again at 15:00-16:00pm London time More Information and Registration on IASB Website: Click Here IAS Plus Project Page: Financial Instruments

 

The SFRS for Small Entities would be a reporting option for entities in Singapore that have no public accountability and satisfy certain criteria.

"The ASC believes that the adoption of the IFRS for SMEs would benefit the smaller entities in Singapore by reducing undue financial reporting burden arising from the considerable number of recognition and measurement bases and detailed disclosures requirements."

Click to download ASC's Statement of Intent (PDF 258k). The ASC requests comments by 18 August 2010.

Eligibility to use the IFRS for SMEs in Singapore: An entity is eligible to use the SFRS for Small Entities if: (I) it is not publicly accountable; and (II) it qualifies as a small entity by virtue of it satisfying two out of the three threshold criteria as prescribed by the ASC. (I) An entity is deemed to be publicly accountable if: Its debt or equity instruments are traded in a public market or it is in the process of issuing such instruments for trading in a public market (such as a domestic or foreign stock exchange or an over-the-counter market, including local and regional markets), or It is a deposit-taking entity and/or holds assets in a fiduciary capacity for a broad group of outsiders as one of its primary businesses. This is typically the case for banks, insurance companies, securities brokers/dealers, mutual funds and investment banks, or It is a public company defined under the Singapore Companies Act, or It is a charity defined under the Charities Act, or It is a credit society defined under the Co-operative Societies Act or a society deemed to be a credit society under the Co-operative Societies (Amendment) Act 2008. (II) An entity qualifies as a small entity if it satisfies two of the following three criteria (determined on a consolidated basis): Total annual revenue of not more than S$10 mil; Total gross assets of not more than S$10 mil; and Number of employees not more than 50.

 

We post these regularly on our IAS Plus Insurance Project Page. Deloitte (Germany) is translating some of these newsletters into German. The latest is:

• Versicherungsbilanzierung 9: Sicherer, aber langsamer Fortschritt (PDF 364k)
• Translation of UK Issue 14: Steady, If Slow Progress (PDF 112k)

All of the earlier insurance newsletters available in German are on our Germany Country Page.

 

Each part is approximately one hour long. The presentation reviews the requirements in each of the 35 sections of the IFRS for SMEs and highlights differences with full IFRSs. To view the webcast presentations:

• Part 1: Overview of IFRS for SMEs
• Part 2: Overview of IFRS for SMEs

These presentations together are one of the 20 training modules used in the IASB's train-the-trainers workshops for the IFRS for SMEs. For more information about the workshops or to download all of the presentations Click Here.

The agenda for that portion of the meeting is:

• Report of the IASB Chairman
• Report of the IFRS Advisory Council Chairman
• Report of the Due Process Oversight Committee
• Discussion of Strategy Review

 

You can access the agenda on our June 2010 special joint IASB-FASB meeting page. We will also post Deloitte observer notes on this page as they are available.

PCAOB rules on annual reporting became effective on 31 December 2009 and, therefore, all firms registered with the Board on 31 March 2010, must file an annual report on Form 2 by 30 June 2010. Click to download PCAOB Staff Q&A on Form 2 (PDF 191k).

 

• Balance Sheet Offsetting (new project page created)
• Insurance Contracts
• Leases
• Liabilities - IAS 37