News

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AICPA calls for 3 to 5 year timeline for IFRSs in US

18 Jun 2008

Barry C Melancon, president and CEO of the American Institute of Certified Public Accountants, speaking at a forum of accounting and finance authorities on international accounting, called for a reasonable and clear-cut time frame of three to five years for the US accounting profession to adopt International Financial Reporting Standards.

Click for AICPA News Release (PDF 48k).

 

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Notes from the first day of the June 2008 IASB meeting

18 Jun 2008

The IASB held its June 2008 meeting at its offices, 30 Cannon Street, London, on 17-20 June 2008.

Click here to go to the Preliminary and Unofficial Notes Taken by Deloitte Observers at the meeting.

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EC 'effect studies' on IFRIC 14 and IAS 1

18 Jun 2008

The European Commission has published 'effect studies' of the impact of two IASB pronouncements awaiting endorsement for use in Europe:

The Commission's effect studies relied, in turn, on effect studies undertaken by EFRAG. The Commission Services (EC staff) concluded that both pronouncements will have positive cost-benefits effects and that they should, therefore, be endorsed in the EU without delay.

 

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Heads Up on IASB-FASB conceptual framework proposals

18 Jun 2008

On 29 May 2008, the IASB and the FASB jointly published similar consultative documents on two of the eight phases of their joint project to develop an improved conceptual framework.

The framework will provide a foundation for developing future accounting standards. The two consultative documents are:
  • Exposure Draft: Chapters 1 and 2 of the Conceptual Framework (Objective and Qualitative Characteristics). Exposure Draft (ED). Chapters 1 and 2 of the framework (Objective and Qualitative Characteristics). This ED addresses the objective of financial reporting, the qualitative characteristics of information provided by financial reporting, and constraints on the provision of that information. The draft reflects the boards' updated proposals in the light of comments received on an initial consultation document published in July 2006.
  • Discussion Paper: Preliminary Views - The Reporting Entity. This publication sets out the boards' preliminary views on the reporting entity concept and related issues. Although the reporting entity concept determines some important aspects of financial reporting, the boards' existing frameworks do not address it specifically.
Deloitte & Touche LLP (USA) has published a Heads Up Newsletter (PDF 112k) describing the proposals.

 

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We disagree with IFRIC's draft decision on effective interest rate

17 Jun 2008

In a letter to IFRIC, Deloitte Touche Tohmatsu disagree with the IFRIC's tentative decision not to take onto the IFRIC's agenda a request for an interpretation on the application of the effective interest rate (EIR) method.

Click for our Letter to IFRIC (PDF 136k). Here is an excerpt:

In summary, we believe the tentative agenda decision wording does not provide sufficient clarity and that additional interpretive guidance is needed. We believe there are three important interpretative issues that need to be addressed:

  • (i) how to apply the effective interest rate to debt instruments with a market-based reset;
  • (ii) when should an entity apply AG7 compared to AG8; and
  • (iii) for inflation linked debt, is it possible to analogise with IAS 29 in the case when an entity is not applying that standard.
The application of the EIR is critical in determining the balance sheet carrying amount and the impact on profit or loss for debt instruments held at amortised cost, as well as the income recognition for those debt instruments classified as available-for-sale. The EIR has widespread application for both vanilla and complex debt instruments, yet the standard is not clear as to how the EIR method applies for instruments with variable cash flows.
Our past comment letters to IASB, IFRIC, IASC, and SIC are Here.

 

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New jurisdiction page for Iraq – IFRSs required

17 Jun 2008

We have created a new Jurisdiction Page for Iraq.

Under the Iraq securities markets law, all companies listed for trading on the Iraq Stock Exchange are required to publish financial statements that are prepared in accordance with International Financial Reporting Standards. Those statements must be audited in accordance with International Standards on Auditing. Further, the Iraq banking law (administered by the Central Bank of Iraq) requires all banks to publish IFRS financial statements. We have updated our table of Use of IFRSs by Jurisdiction.

 

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G8 Ministers urge swift IASB action on SPEs and valuation

16 Jun 2008

The Finance Ministers of the G8 countries met on 14 June 2008 in Osaka, Japan, in preparation for the Summit of the G8 Heads of State and Government to be held 7-9 July 2008 in Hokkaido-Toyako.

The Communique released by the Finance Ministers (PDF 21k) at the conclusion of the meeting addressed a wide range of issues, including the world economy, commodity prices, climate change, development, and abuses of the financial system. With regard to financial reporting, the communique said:

We call on the IASB to accelerate its reviews of accounting issues around off-balance sheet entities and valuation in illiquid markets.

Our comprehensive 'credit crunch' page is Here.

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SEC to consider use of IFRSs by domestic US registrants in IQ 2008

15 Jun 2008

In a speech at a conference sponsored by the Chartered Financial Analysts Institute, US Securities and Exchange Commission Chairman Christopher Cox announced that the SEC expects to propose rules, some time in the third quarter of 2008, concerning the use of International Financial Reporting Standards by domestic US SEC registrants.

Chairman Cox made that comment in an address titled Disclosure from the User's Perspective (PDF 74k). He also announced the Commission's plans to modernise its oil and gas accounting and disclosure requirements, and he enumerated a wide range of issues that the SEC will be considering in the next several months. Here are two excerpts from Chairman Cox's remarks:

Use of IFRSs in the United States The support that you've shown for the implementation of interactive data reporting not only in the United States but around the world has been matched by your consistent support for the international convergence of accounting standards, in particular US GAAP and IFRS. You have been supportive of our decision to eliminate the reconciliation to US GAAP for financial statements prepared using IFRS, and you have offered helpful insights on our Concept Release on whether, and under what circumstances, US issuers should be allowed to prepare their financial statements using IFRS. That's a vitally important topic the Commission is scheduled to take up in the form of a proposed rulemaking later this summer.

Oil and gas reserve accounting and disclosure Early this summer, we also expect to propose amendments to our oil and gas reserve accounting and disclosure requirements, to reflect technological changes in the substantiation of proven reserves.

 

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Boletines IAS Plus – ediciones especiales en español

15 Jun 2008

Deloitte (Colombia) has published Spanish language editions of the recent IAS Plus newsletters on improvements to IFRSs and on amendments to IFRS 1 and IAS 27:

Aquí están Nuestros Recursos en Español (our Spanish resources).

 

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FASB forum and webcast on global standards 16 June 2008

15 Jun 2008

As an initial step toward the creation of a national plan for transition to IFRSs, the US Financial Accounting Standards Board, and its parent the Financial Accounting Foundation, will host a forum High-Quality Global Accounting Standards: Issues and Implications for US Financial Reporting on 16 June 2008, 9:00am to 4:00pm US EDT.

The forum will be held in New York City. It will consist of a panel discussion between FASB board members and invited representatives of users of financial statements, small and large companies both public and private, auditors, regulators, educators, and others representing facets of the US economy likely to be affected by a move from US Generally Accepted Accounting Principles to IFRSs. The stated goals of the forum are:
  1. to open the dialogue with our constituents about whether and how to move the US financial reporting system to IFRS, and
  2. to define the next steps in the process. A list of potential key issues to discuss includes the following:
Click for FASB Announcement with hyperlinks for more information (PDF 53k). The forum will be webcast. Click here for Webcast Details.

A list of potential key issues to discuss includes the following:

  • Should IFRS and US GAAP ultimately converge?
  • If so, how?
  • If so, when?
  • If so, for whom? Public companies, 'publicly accountable entities', private companies, not-for-profits?
  • If so, how will IFRS be interpreted across borders? What role will the SEC, PCAOB, and the international audit firms have in interpreting IFRS? Do the interpretations have to be the same across borders?
  • How would we prepare the US for the cultural shift to IFRS? Can the US cope with significantly less implementation guidance?
  • How do we assure constituents that their views will be heard and their ongoing needs will be met by an international standard setter?
  • Once converged, should there be only one standard setter?
  • What is the future role of the FASB?
  • Would US GAAP go away? What happens to the SEC guidance on financial reporting?
  • What are the implications for XBRL and the US GAAP Codification?
  • How would we mobilize the educational community to begin teaching IFRS?
  • How and when will the CPA exam change?
  • What are the banking and other regulatory issues that need to be addressed? Do US tax policies and other federal or state laws that interact with US GAAP need to be amended?
  • What other major issues should be considered?
  • What are the next steps in the process?

 

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