20-23 May 2008, London

Tuesday 20 May 2008 (Afternoon only)

• Emissions Trading Schemes
• Amendment to IAS 39: Exposures Qualifying for Hedge Accounting
• Earnings per Share
• IFRIC Update

Wednesday 21 May 2008

• Annual Improvements Project – 2008
• Revenue Recognition – Deliberation and decision on two alternative measurement approaches (current exit price and customer consideration) for the proposed revenue recognition model.

Thursday 22 May 2008 (Afternoon only)

• Liabilities – Amendments to IAS 37 (was part of Business Combinations project)
• IFRS 1 First-time Adoption of IFRSs – Transitional Issues:
  • Derecognition of financial assets and financial liabilities,
  • Property, plant and equipment with embedded elements of cost that would not be included in accordance with IFRSs, such as those held by entities subject to rate-regulation
  • Accounting for related party transactions.

Friday 23 May 2008 (Morning only)

• IFRS for Small and Medium-sized Entities (SMEs)

• Fair value measurement provides an appropriate accounting base for financial instruments held for trading purposes or otherwise managed on a fair value basis. However, full fair value measurement of financial instruments would overstate the extent to which instruments are held for trading or managed on a fair value basis within the business and the extent to which deep and liquid markets exist. These are highly significant factors in determining the relevance of fair value in financial reporting.
• A mixed measurement model provides investors with better information for evaluating financial institutions. It requires fair value measurement for assets and liabilities managed on a fair value basis and recognizes that not all financial instruments – let alone non-financial assets and liabilities – are managed on a fair value basis or are even capable of reliable fair value measurement. Where an entity does not manage instruments on a fair value basis, amortised cost is the more appropriate way to estimate future cash flows. Fair value information is already disclosed in footnotes, which are an integral part of financial statements and is a more suitable format for providing the information to investors.
• Reality is more complex than can be communicated in a fair value model. Relevant performance reporting will never be achieved if the framework for financial reporting sticks rigidly to either an amortised cost model or a fair value model. A mixed measurement model represents a principles-based approach to measurement by acknowledging the fact that different entities may follow different business models. Instead of the IASB determining that one approach offers a superior model to that of others, the aim should be for the accounting standards to accommodate the various business models and circumstances in which financial instruments are used. As widely recognized at the IASB Roundtables on measurement, a mixed model is more likely to result in useful reporting.

In order to maintain the current high acceptance of IFRSs in the EU, it is important that stakeholders feel that the work programme of the IASB is addressing the right issues and that future standards/interpretations will provide suitable accounting solutions. Some stakeholders have expressed doubts about some of the accounting projects currently being prepared by the IASB. It is therefore crucial that EU institutions, Member States and stakeholders become involved in the standard-setting process as early as possible, as this enhances the quality of the work and increases the legitimacy and acceptance of future standards/interpretations. The way the IASB undertakes impact assessment in future will also be monitored carefully.

FASB Developments

• FASB Issues FSP Affecting Companies Emerging From Bankruptcy
• FASB Issues Guidance on Intangible Assets Subject to Renewal or Extension
• FASB Codification Updated for SEC Content
• FASB Updates Statement 133 Implementation Guidance
• FAF and FASB to Host Global Accounting Standards Forum
• FASB and China Accounting Standards Committee Sign Memorandum of Understanding
• Considerations of Credit Risk in Fair Value Hedge Effectiveness Assessments

• SEC Adopts Amendments to Form S-11
• SEC Launches Web Page to Facilitate Mutual Fund Comparisons
• Why You Need to Know About XBRL

• PCAOB Adopts New Independence and Ethics Rules
• PCAOB Announces 2008 Forums on Auditing in the Small Business Environment

• GASB Proposes Changes to Concepts Statement 2
• GASB Adds Three New Projects to Agenda

• IASC Foundation Constitution Review

The customer suitability report considers how supervisors and regulated firms across the banking, securities, and insurance sectors deal with risks posed by the sale of unsuitable retail financial products. The Joint Forum reviewed both the disclosure of information to retail investors and requirements on firms to determine whether recommended investment products are suitable for such investors. The report focuses exclusively on requirements related to retail customers and products with a significant investment component. The Joint Forum evaluated investment-based or investment-linked insurance products, but not those insurance contracts that insure only against risk.

Accounting Convergence: Following up on the accounting 'roadmap' work, in late 2007, the SEC decided to abolish the requirement for reconciliation to US GAAP for foreign companies using IFRS as issued by the International Accounting Standards Board and solicited comment on the possibility of allowing domestic companies to file using IFRS. Noting the report published by the EC Services earlier this month that US GAAP meets the criteria established for recognition as 'equivalent' to IFRS, we look forward to a formal decision confirming this finding. We fully expect this to happen this year. It bears underscoring that this work, along with efforts to converge global accounting standards and strengthen international accounting governance, offers the prospect for firms to use one set of financial statements for their global activities, with all of the attendant benefits in terms of reduced costs and greater efficiencies. This is a hugely positive achievement, and the SEC and EU deserve tremendous praise for their hard work in past in bringing these efforts toward fruition.