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IFRIC (International Financial Reporting Interpretations Committee) (blue) Image

IFRIC Interpretation on scope of IFRS 2

12 Jan 2006

The International Financial Reporting Interpretations Committee (IFRIC) has issued a final Interpretation – IFRIC 8 'Scope of IFRS 2'.

IFRIC 8 clarifies that IFRS 2 Share-based Payment applies to arrangements where an entity makes share-based payments for apparently nil or inadequate consideration.

IFRIC 8 explains that, if the identifiable consideration given appears to be less than the fair value of the equity instruments granted or liability incurred, this situation typically indicates that other consideration has been or will be received. IFRS 2 therefore applies.

IFRIC 8 is effective for annual periods beginning on or after 1 May 2006. Earlier application is encouraged. Click for Press Release (PDF 59k).


IFRIC (International Financial Reporting Interpretations Committee) (blue) Image

IFRIC draft on interim financial reporting and impairment

12 Jan 2006

The International Financial Reporting Interpretations Committee (IFRIC) has released for public comment a draft Interpretation D18 'Interim Financial Reporting and Impairment'.

The proposed Interpretation would clarify the interaction between IAS 34 Interim Financial Reporting and two other standards, IAS 36 Impairment of Assets and IAS 39 Financial Instruments: Recognition and Measurement, and the effect of that interaction on subsequent interim and annual financial statements.

The proposed Interpretation clarifies that an entity cannot reverse an impairment loss recognised in a previous interim period in respect of goodwill, an investment in an equity instrument or a financial asset carried at cost.

Click for Press Release (PDF 53k).


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EU bank regulators develop IFRS reporting framework

12 Jan 2006

The Committee of European Banking Supervisors (CEBS) has published guidelines establishing a standardised Framework for Consolidated Financial Reporting (FINREP) for credit institutions operating in the EU.

FINREP is designed for credit institutions that use International Financial Reporting Standards (IFRSs) for their published financial statements, and that have to provide similar information in the periodic 'prudential reports' they are required to submit to their supervisory authorities. "The introduction of international accounting and reporting standards provides an opportunity to converge and ultimately harmonise prudential reporting in Europe." The framework is not intended to cover all aspects of IFRSs; rather it focuses on information that is important or relevant for prudential purposes. FINREP is intended to enable credit institutions to use the same standardised data formats and data definitions for prudential reporting in all countries where the framework will be applied. CEBS advises the European Commission on banking policy issues, promotes convergence of supervisory practise across European Union, and fosters consistent application of EC banking legislation. Click to download:
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Compliance with IFRSs in Australia and New Zealand

12 Jan 2006

Both Australia and New Zealand have been adopting 'equivalents' of IFRSs as their national financial reporting framework.

While audit reports will refer to Australian or New Zealand Equivalents of IFRSs, those standards are intended to result in financial statements that are fully IFRS compliant. Both countries have adopted paragraph 14 of IAS 1, which requires that:

An entity whose financial statements comply with IFRSs shall make an explicit and unreserved statement of such compliance in the notes. Financial statements shall not be described as complying with IFRSs unless they comply with all the requirements of IFRSs.

The consolidated accounts of Australian and New Zealand entities that use their IFRS equivalents will include such an explicit and unreserved statement of IFRS compliance in the notes. Therefore, in our Table Summarising Global Use of IFRSs Australia and New Zealand are identified as 'IFRSs Required for All Domestic Listed Companies'.
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Changes to financial reporting framework in Singapore

12 Jan 2006

In 2002, the Singapore government created the Council on Corporate Disclosure and Governance (CCDG) as the accounting standard setter for all companies incorporated in Singapore.

Since then, each year Deloitte & Touche (Singapore) has published a booklet about the recent Changes to The Financial Reporting Framework in Singapore. We have just posted the 2005 edition:

CCDG has now issued a set of accounting standards and interpretations that are almost identical to the current set of IFRSs, though some differences remain. You will find a list of those differences on our Singapore Page.

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Canada approves plan for convergence with IFRSs

11 Jan 2006

Canada's Accounting Standards Board (AcSB) has ratified a new Strategic Plan for the Direction of Accounting Standards that will significantly affect the way financial reporting will be carried out in Canada in the future.

The AcSB will pursue separate strategies for three major categories of reporting entities: public companies, private businesses and not-for-profit organisations.

  • For public companies, the AcSB's objective is to move to a single set of globally accepted high-quality standards. The AcSB has concluded that this objective is best accomplished by converging Canadian GAAP with International Financial Reporting Standards (IFRSs) over a transitional period. Australia and the European Union have already adopted IFRS and other countries have convergence programs underway. The AcSB will develop and publish a detailed implementation plan for achieving convergence later this year. The AcSB expects that the transition period will take approximately five years, but the precise timing will depend on many factors, and will be continuously monitored throughout the process. At the end of that period, Canadian GAAP will cease to exist as a separate, distinct basis of financial reporting for public companies.
  • For private businesses, the AcSB has begun, as a matter of urgency, a comprehensive examination of their financial reporting needs and will determine the most appropriate model for meeting those needs.
  • For not-for-profit organisations, the AcSB will continue to apply those elements of GAAP for profit-oriented enterprises that are applicable to their circumstances, and develop other standards dealing with the special circumstances of the not-for-profit sector.

The AcSB recognizes that some Canadian public companies that have significant market followings in the United States might prefer to use US GAAP. The Canadian Securities Administrators already permit those Canadian public companies that are SEC registrants to use US GAAP instead of Canadian GAAP.

The AcSB expects to publish a final version of its strategic plan by 31 March 2006.

Click to view the Strategic Plan for the Direction of Accounting Standards (PDF 139k).

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Accounting Roundup for December 2005 posted

11 Jan 2006

We have posted the (PDF 277k) published by Deloitte & Touche LLP (USA).

Topics covered in this issue include:

  • FASB developments, including final FSPs on (a) fully benefit-responsive investment contracts and (b) concentrations of credit risk in loan products; and a proposed FSP on amortisation and impairment of acquired renewable intangible assets.
  • GASB developments, including an Implementation Guide to Statement 44 on the Statistical Section.
  • AICPA developments, including TPAs on application of SOP 03-3 on acquired loans and debt securities; SAS 102 and SSAE 13 on defining professional requirements; SAS 103 on audit documentation; and the AICPA's 2005 Annual Conference on SEC and PCAOB Developments.
  • SEC developments, including amendment to accelerated filer definition and filing deadlines; an update of the SEC's Current Accounting and Disclosure Issues document; a proposed rule on internet availability of proxy materials; proposed amendments to the tender offer best-price rule; a proposed rule to ease delisting by foreign private issuers; and a request for comments on PCAOB Auditing Standard 4 on Reporting on Elimination of a Material Weakness.
  • International developments, including amendment to IAS 21 on net investments in foreign operations; updated IASB guidance on implementing IFRS 4 Insurance Contracts; and summaries of recent IASB and IFRIC meetings.
You will find past issues of Accounting Roundup Here.
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SEC will consider disclosure amendments

10 Jan 2006

At its meeting on 17 January 2006, the US Securities and Exchange Commission will consider whether to propose amendments to the disclosure requirements for executive and director compensation, related party transactions, director independence and other corporate governance matters, and securities ownership of officers and directors.

The Commission will also consider whether to propose amendments to require most of the disclosure in proxy and information statements to be provided in plain English. Click for (PDF 67k). The meeting will be Webcast.
IFRIC (International Financial Reporting Interpretations Committee) (blue) Image

Item added to IFRIC 12-13 January 2006 agenda

10 Jan 2006

One additional item has been added to the agenda of the 12-13 January 2006 IFRIC meeting that we had posted in our News Story of 6 January 2006: A recommendation by the Agenda Committee regarding IFRS 3 Business Combinations – Puts held by minority interests, which will be discussed on 13 January.

We modified the earlier news story.
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FEI top 10 financial reporting issues for 2006

10 Jan 2006

Financial Executives International has compiled a list of the Top 10 Financial Reporting Challenges for 2006.

While the list is written primarily in a US reporting context, nearly all of the challenges on the list relate to the IASB as well, and the FEI commentary expressly refers to the IASB in its descriptions of several of them:

  • Stock Options – SFAS 123 and IFRS 2.
  • Uncertain Tax Positions – FASB has proposed that a tax position recognised on the tax return must be probable of being sustained under audit prior to recognition in the financial statements, and the company must assume that it will be reviewed by the taxing authorities. IASB-FASB Income Tax Convergence Project.
  • Business Combinations – joint IASB-FASB Project.
  • Fair Value Measurements (FVM) – In January 2006, the FASB will discuss certain issues raised by external reviewers on the working draft of the final FVM Statement and the timing of the final FVM Statement. IASB is expected to Invite Comment on FASB's final standard.
  • Materiality – Expected SEC Staff Accounting Bulletin that would provide guidance to companies on quantifying misstatements and assessing materiality from both a balance sheet and income statement perspective.
  • XBRL – an IFRS Taxonomy has been developed.
  • Earnings Per Share – FASB international convergence project.
  • Conceptual Framework – joint IASB-FASB Project.
  • Complexity – "concern and growing frustration over the complexity in current standard-setting".
  • Pension Accounting – FASB project in response to the SEC's Off Balance Sheet study.

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