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3 July 2009: Another step toward IFRSs in Japan
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Four key Japanese accounting and business groups have jointly proposed to create an IFRS Council that would work to implement a plan for adopting IFRSs for listed companies in Japan. The plan was published in an Interim Report of the BAC. The four groups are the Accounting Standards Board of Japan and its oversight foundation; Japanese Institute of CPAs; Tokyo Stock Exchange; and Japan Business Federation (Nippon Keidanren). The IFRS Council would be responsible for identifying the various issues involved in implementation of IFRSs in Japan and for establishing overall policies and strategies. It would have the following committees:
- Strategic Committee for IASB Assuming that Japan moves towards IFRS adoption in the near future, this committee would deliberate upon a 'strategy and specific actions as to how best to influence developments of major accounting standards'.
- Education and Training Committee Establish and implement an education and training system for IFRSs mainly for accounting practitioners.
- Translation Committee Establish a system to promote an accurate Japanese translation of IFRSs.
- Committee for Separate Financial Statements Deliberate on how separate financial statements can be simplified, given the current focus on consolidated financial statements.
- Public Relations Committee Oversee communications to a wide range of stakeholders, including investors, company executives, analysts, and the media.
Click for:
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3 July 2009: Heads Up newsletter of FASB credit disclosures
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The 2 July 2009 Issue of the Heads Up Newsletter (PDF 89k) discusses FASB's 24 June 2009 exposure draft of a proposed Statement Disclosures About the Credit Quality of Financing Receivables and the Allowance for Credit Losses. The ED is in response to concerns from financial statement users that the current disclosure framework for financing receivables and the allowance for credit losses is inadequate and lacks sufficient transparency. Comments on the ED are due by 24 August 2009. Heads Up, published by the National Office Accounting Standards and Communications Group of Deloitte & Touche LLP (United States), provides in-depth summaries of recent accounting and financial reporting developments. This newsletter is published periodically as developments warrant, and is intended for a general audience of financial professionals, including CFOs, controllers, and internal audit and accounting professionals.
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3 July 2009: Chinese translation of newsletter on IFRIC 14 amendments
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Deloitte China has published the Chinese translation of the IAS Plus Update newsletter IASB Proposes Amendments to IFRIC 14:
You will find links to these and many other IFRS materials in Chinese on our China Page.
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3 July 2009: EC consults on International Standards on Auditing
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The European Commission (EC) has launched a public consultation to determine whether International Standards on Auditing (ISAs) issued by the International Auditing and Assurance Standards Board (IAASB) should be adopted in the European Union for the statutory audits of EU private entities. In the EU, the conduct of statutory audits is governed by Directive 2006/43/EC (the 'Audit Directive'). The objective of the Audit Directive is to enhance the quality of statutory audits in the European Union. The Directive empowers the Commission to adopt implementing rules at European level by regulation. Introduction of a common set of auditing standards could, therefore, be done by regulation. As part of its consideration of adopting ISAs in the EU, the EC commissioned the University of Duisburg-Essen to conduct an independent study of the costs and benefits that would result from an adoption of ISAs in the EU. The study, Evaluation of the Possible Adoption of ISAs in the EU, analyses the impact such an adoption may have on audit firms, their clients, investors and audit regulators. The study concludes that, on balance, adoption of the ISAs in the EU would result in quantitative and qualitative benefits for companies, investors and regulators and that the benefits would outweigh increases in audit costs. Click to download:
The Commission invites responses to the consultation by 15 September 2009.
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2 July 2009: IAS Plus Newsletter on credit risk
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On 18 June 2009, the IASB published a discussion paper on the role of an entity's own credit risk in liability measurement. The discussion paper (DP/2009/2 Credit Risk in Liability Measurement) is accompanied by a staff paper that describes the most common arguments for and against including credit risk in measuring liabilities. Comments are due by 1 September 2009. Deloitte's IFRS Global Office has published an IAS Plus Update Newsletter – IASB Seeks Views on the Role of Credit Risk in Liability Measurement (PDF 72k) explaining the issues in the discussion paper. Click to go to the IAS Plus Project Page. Past issues of all IAS Plus newsletters are Here.
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2 July 2009: Two new Deloitte IFRS publications in Spanish
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Deloitte (Colombia) has published the Spanish translation of the following IFRS publication:
You will find our resources in Spanish Here.
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2 July 2009: Heads Up newsletter on IASB fair value proposals
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The 30 June 2009 Issue of the Heads Up Newsletter (PDF 92k) discusses the IASB's recently issued exposure draft (ED) Fair Value Measurement. The ED, whose guidance is intended to be equivalent to that in FASB Statement No 157 Fair Value Measurements under US GAAP, defines fair value and explains how to determine it, but does not introduce any new or revised requirements regarding which items should be measured or disclosed at fair value. Heads Up, published by the National Office Accounting Standards and Communications Group of Deloitte & Touche LLP (United States), provides in-depth summaries of recent accounting and financial reporting developments. This newsletter is published periodically as developments warrant, and is intended for a general audience of financial professionals, including CFOs, controllers, and internal audit and accounting professionals.
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2 July 2009: Deloitte Canada Countdown IFRS transition newsletters
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Deloitte Canada has published the June 2009 issue of their Countdown IFRS transition newsletter, to discuss practical issues Canadian companies are facing in IFRS transition as well as to provide an update on recent IFRS events. Articles in this issue include:
- Using Technology to Manage Accounting and Control Changes Driven by IFRS Changeover
- 'The Real Deal' – real issues and solutions on IFRS transition relating to dual year reporting and reconciliation requirements in 2011
- Private Enterprise Strategy – IFRS or Private Company GAAP
- Deloitte Publications and Events and How to Access Them
- An Update on Current IFRS events – including various important EDs and Discussion Papers
Click below for:
You will find more information about financial reporting in Canada on our Canada Page.
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2 July 2009: Improvements proposed to public sector standards
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The International Public Sector Accounting Standards Board (IPSASB) of the International Federation of Accountants has launched an improvements project with the release of Exposure Draft (ED) 42 Improvements to IPSASs. This ED is the first of a proposed series of annual improvements to the IPSASs and is modeled on the successful annual improvements program developed by the International Accounting Standards Board (IASB). The proposed amendments in the ED are related primarily to the recognition, measurement, or disclosure requirements but do not represent substantive revisions to the content of existing standards. They reflect changes made by the IASB to related International Financial Reporting Standards. Comments on ED 42 are requested by 30 September 2009. The ED may be downloaded Here.
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30 June 2009: We have updated our IASB agenda project timetable
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We have updated our IASB Agenda Project Summary and Timetable to reflect the IASB's decisions on its work plan and other public announcements of its project plans. The timetable calls for publication by the IASB of 18 consultation documents and 28 final pronouncements between now and the end of 2011, as follows:
- 3 discussion papers
- 15 exposure drafts
- 25 final IFRSs
- 1 final guidance document
- 2 final Conceptual Framework chapters
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30 June 2009: Webcasts on IAS 39 – expected loss model
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On Friday 3 July 2009 and again on Monday 6 July 2009, the IASB will host two live webcasts to keep interested parties up to date on progress of the IASB's comprehensive project to replace IAS 39. The webcasts will focus on the Board's recently published Request for Information on the feasibility of an expected loss model. The webcasts will include presentations by two IASB project staff people followed by a Q&A session where registered participants can send in questions for the IASB staff to answer. Each webcast, including the question and answer session, is expected to last around one hour. Details of the webcasts:
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29 June 2009: McCreevy comments on accounting and financial crisis
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Charlie McCreevy, the EU Commissioner for Internal Market and Services, spoke on issues relating to the economic and financial crisis before the Institute of Chartered Accountants in Ireland in Dublin on 26 June 2009. Click to Download Mr McCreevy's Remarks (PDF 56k). His comments on accounting included the following:
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As you all know, the role of accounting rules has become the subject of heated debate. But we remain convinced that the international standard-setting system is the best way forward. And this is not solely an EU view. It is also the view of the G-20. Accounting rules did not cause the crisis but it is fair to ask did they amplify it? We need to look at what has happened and see if the rules need to be adjusted so as to strengthen financial stability. I am pleased that at last the IASB plans to complete its fundamental revision of IAS 39 by the end of this year. This is an ambitious agenda for such a complex standard. I know there are many financial institutions in the EU who will want to have the revision of the impairment rules in place for the year end accounts. ECOFIN ministers have conveyed their intentions in this regard.
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29 June 2009: Agenda for 9 July 2009 IFRIC meeting
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The International Financial Reporting Interpretations Committee (IFRIC) will meet at the IASB's offices in London on Thursday 9 July 2009 (one day only) 10:00am to 16:30pm. The meeting is open to the public and will be webcast. The tentative agenda is shown below.
Agenda for the IFRIC Meeting
Thursday, 9 July 2009 |
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- Introduction
- Review of Tentative Agenda Decisions published in May IFRIC Update
- IFRS 3 Business Combinations – Acquisition-related costs in a business combination
- IFRS 3 Business Combinations – Earlier application of revised IFRS 3
- IAS 7 Statement of Cash Flows – Determination of cash equivalents
- IAS 27 Consolidated and Separate Financial Statements – Transaction costs for non-controlling interests
- IAS 28 Investments in Associates – Potential effect of IFRS 3 (as revised in 2008) and IAS 27 (as amended in 2008) on equity method accounting
- IAS 28 Investments in Associates – Venture capital consolidations and partial use of fair value through profit or loss
- IAS 28 Investments in Associates – Impairment of investments in associates
- IAS 39 Financial Instruments: Recognition and Measurement – Hedging using more than one derivative as the hedging instrument
- IAS 39 Financial Instruments: Recognition and Measurement – Meaning of 'significant or prolonged'
- IFRIC 12 Service Concession Arrangements – Scope of IFRIC 12
- Review of Tentative Agenda Decisions published in March IFRIC Update
- IFRIC 18 Transfers of Assets from Customers – Applicability to the customer
- IAS 34 Interim Financial Reporting – Interim fair value disclosures
- IAS 38 Intangible Assets – Compliance costs for REACH
- Staff Recommendations for Tentative Agenda Decisions
- IFRS 2 Share based payment – Non-vesting condition or non-market based vesting condition when condition is not within the control of the entity or employee
- IFRS 3 Business Combinations – Measurement of NCI
- IFRS 3 Business Combinations – Un-replaced and voluntary replaced share-based payment awards
- IFRS 5 Non-current Assets Held for Sale and Discontinued Operations – Writedown of a disposal group
- IAS 23 Borrowing Costs – Meaning of 'general borrowings'
- IAS 32 Financial Instruments: Presentation – Debt to equity swap
- Administrative Session – IFRIC work in progress
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28 June 2009: Consolidation and derecognition roundtables
The IASB is holding a series of roundtable discussions with constituents focusing on its recent proposals in ED 10 Consolidation and ED/2009/3 Derecognition. Roundtables have been held in North America and Asia. The European roundtables were held in London on 15 and 16 June 2009, in conjunction with the regular meeting of the IASB. Presented below are the preliminary and unofficial notes taken by Deloitte observers at the roundtables.
Notes from the Consolidation and Derecognition Roundtables
15 and 16 June 2009, London
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Monday 15 June 2009 – Derecognition
Participants expressed a preference for the approach put forward in the Alternative View to the Exposure Draft rather than the preferred approach that was described by the ED, with most participants raising concerns about the consequences of adopting the preferred approach. In particular, several participants proposed a more explicit risk and rewards filter in the process of derecognition as they felt that underlying risk and rewards exposures may be otherwise lost.
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Alternative approach supported by five IASB Board Members, as described in the exposure draft
Under the alternative approach, when the rights to identified cash flows are transferred, the transferor derecognises the previously recognised asset and recognises all the rights and obligations either retained or obtained in the transfer transaction. For example, forward contracts, puts, calls, guarantees or disproportionate involvement with respect to transferred cash flows would not result in failed sales or result in the recognition of a liability for the proceeds received. Any involvement would be recognised and measured at the date of transfer at fair value. The objective would be to recognise any rights and obligations associated with a transferred asset as if those rights and obligations related to an asset that had not
previously been owned.
Under the alternative approach, a transferor could be required to apply the same disclosure guidance as proposed by the amendment to IFRS 7. The proposed amendment to IFRS 7 would provide adequate information to enable users to evaluate the nature of and risks associated with the transferor's continuing involvement in derecognised financial assets. The full exposure (including the nature, timing, ranking, amount and uncertainty of any obligations or cash outflows relating to the entity's continuing involvement in a transferred asset and the details
about those assets) would be provided in one note (disclosure). Hence, the proposed disclosures would provide clear information both on the allocation of risks and on their potential impact on the financial condition of the transferor.
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One participant expressed his concern that in the current period of economic crisi,s the Board had opted for an approach that could lead to more derecognition of financial instruments when the market is expected the opposite development. Some participants suggested that recognition criteria that incorporated the overall risk exposure on the balance sheet rather than disclosing it in the notes would be preferable for users of the financial statements. Concern was also expressed about the different criteria for transferors and transferees in the ED and how those could be reconciled.
The discussion continued regarding the continuing involvement filter in the derecognition criteria. Several ideas were floated; one participant seemed to object to the introduction of a model that has inherent exceptions built in itself (that is, call options). Participants also notified that a kind of de minimis threshold for continuing involvement would be needed in order to avoid practical issues on application.
The panel continued with the discussion on the practical ability test for derecognition of financial instruments. Most participants agreed with the thrust of the proposal, nonetheless, most raised the practical issues. In particular concerns were raised that different parties can interpret the criteria in a different way depending to whom the transfer is being made and that how would be derecognition applied in case further transfer is regulatory restricted. Moreover, as one participant pointed out, there is a potential inconsistency with ED 10 as you may have come to a conclusion that no consolidation is required but in the same time to fail the derecognition test.
Much attention in the discussion was paid to the alternative model which was included in the ED. Many participants thought that it would provide a better reflections of economic reality, but on the other hand felt that the alternative approach had not been developed sufficiently in the ED to enable them to endorse it. One participant expressed his concerns that the alternative model, albeit being more conceptually pure, will be even less understandable to the users of financial statements. Particular concerns were raised in relation to recording a gain on derecognition when only a part of and instrument is being derecognised without changing the nature of it.
Overall, many participants raised concerns about the speed of the project as well as perceived lack of coordination with FASB, that could lead to further lack of convergence with US GAAP. The staff noted that the speed of the project is determined by the current economic environment and in particular demands from governments and regulators. The staff noted the risk that unless quick solution is found regulators may impose their own rules.
Many participants expressed concerns about the proposed disclosures. There was general agreement that a new framework for disclosures was needed: one that would make them more principle-based as opposed to the current practices, under which they are treated as a mandatory checklist containing both minimum and maximum disclosure requirements. In particular, the potential usefulness of the disclosures to some entities was questioned. Participants thought that in some instances disclosures of financial instruments derecognised (or not recognised on the balance sheet in the first place) could be more useful than detailed disclosures of derecognitions that failed the proposed criteria.
Monday and Tuesday 15 and 16 June 2009 – Consolidation
In the discussion on ED 10 on consolidation, participants expressed support for the general principles of the proposal (that is, the IAS 27/SIC-12 model). Most agreed that control requiring elements of power and return is the right basis for consolidation. However, some participants noted that final clarification will be required in the standard to make it both practical and operational.
A majority of participants agreed that involvement of the entity in design of an entity does not constitute control in itself but is a useful indicator of existence of control.
Regarding the question of contingent power the panel noted that more clarification on the matter is required in the standard or/and in the guidance. Many participants pointed out the difference in application for operative entities as opposed to SPEs. Most participants agreed that it would be unhelpful if the standard were to contain the definition from US GAAP that 'power is the ability to direct the activities of an entity that most significantly affects the returns' and further clarification would be required.
When discussing disclosure the panel noted the same observations as during the derecognition session. In particular some participants were concerned with inadequate disclosures about risk. Nonetheless there was agreement that this would require the overhaul of the disclosure requirements, especially revision of IFRS 7 requirements and development of a new disclosure framework.
On 16 June, the roundtables continued with a separate consolidation session.
In general, participants supported the proposed control model, with control being defined as requiring both power and returns element. Some participants, nonetheless preferred the current definition of control as described in SIC-12 as these definitions are likely to be clear and are widely understood in practice. Much of the attention in the discussion was paid to the role of risk and returns in the analysis, with most of the participants supporting the notion that the more the reporting entity is exposed to risk and rewards, the more likely it is that it also has the power to direct the activities of that entity. Many participants however raised their concerns with regards to the application of this model to structured entities and investment vehicles. Some participants asked the staff to incorporate a link between returns and power in the standard. In general, the participants expressed the need for careful redrafting of the text in order to make it more clear, concise and unambiguous.
Specific attention was paid to the notion of control with less than a majority of voting rights. There was a significant discussion between the participants reflecting the different jurisdiction from which these participants come from as well as different legal and cultural conditions.
There were mixed views about when options would give the holder control. Most participants agreed that options are important for the overall assessment of the need for consolidation, but they expressed concerns about how the ED was drafted. In particular, some participants thought the notion of a currently exercisable option worth exploring but they reiterated the need for further guidance. Overall, the conclusion was that greater clarity is needed in this area.
Discussion of agency relationships and dual roles showed that there was a lot of divergence in practice as well as in opinions about how these issues should be settled. In particular the discussion centred on removal rights as being one of the indicators of agency relationship; and dual roles where the proposed guidance was seen to be ambiguous. The participants asked the IASB to clarify these questions.
The discussion continued with the notion of control in structured entities and investment vehicles. The participants agreed with the proposal that design of the entity in itself does not constitute control. Some participants proposed that the Board should incorporate the exposure to the variability of returns to the notion of control. In general, the participants supported the proposal that operational and structured entities shall be covers by a single guidance and encouraged the staff to explore further clarification of outstanding issues.
Regarding disclosures, the participants agreed that some of the proposed disclosures are too prescriptive and burdensome as they encourage the checklist mentality to be applied in process of preparation of financial statements. Many participants expressed their concern that important data might be lost in the voluminous disclosures prescribed. In particular, they supported the inclusion of the disclosures on risk and off-balance sheet exposures in IFRS 7 rather then in the new consolidation standard. Nonetheless, they in general appreciated enhanced disclosures as required by regulators and analysts.
Finally, the IASB staff stated that they would like to stick with the proposed timetable and issue the standard by the end of 2009. The FASB member who was attending the roundtable stated that the FASB plans to expose the final IASB standard for discussion once issued. It would then forward any improvements that it incorporates in US GAAP to the IASB for consideration.
This summary is based on notes taken by observers at the roundtables and should not be regarded as an official or final summary.
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28 June 2009: IASCF Trustees and Monitoring Board will meet
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The Trustees of the IASC Foundation, under which the IASB operates, will meet on 6-8 July 2009 at the Intercontinental Amstel Hotel in Amsterdam, The Netherlands. The meeting on 6 July 2009 is with the IASCF Monitoring Board and is open to public observation. The Trustees meeting on 7 July 2009 is also open to public observation. Presented below is the agenda for the public portion of the meeting.
Monday 6 July 2009 - Meeting with the Monitoring Board (14:30-18:00h)
- Introduction and opening remarks
- IASB's response to the financial crisis
- Second part of the IASC Foundation Constitution Review and other governance matters
- IASC Foundation financing arrangements
- Regulatory update on IFRS adoption and IFRS related issues
Tuesday 7 July 2009 (10:45-18:00h)
- Introduction and opening remarks
- IASB's response to the financial crisis
- Review of IASB's work programme
- Constitution Review, Part II
- Report of the Due Process Oversight Committee
- Report of the SAC Chairman
- Review of financial requirements and funding update
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28 June 2009: FASB Chairman Herz speaks to National Press Club
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US FASB Chairman Robert H Herz spoke before the National Press Club in Washington on 26 June 2009. His presentation was titled History Doesn't Repeat Itself, People Repeat History – Front-Line Thoughts and Observations on Creating a Sounder Financial System (PDF 59k). Among the points he made:
- Accounting and the financial crisis. "One very welcome development arising from the financial crisis is that a much broader constituency is calling for greater transparency as a necessary ingredient for recovery and the rebuilding of investor and public confidence. Included in this has been the need to improve and strengthen certain accounting and reporting standards. While accounting did not cause the crisis and accounting will not end it, it did reveal a number of areas requiring improvement in standards and overall transparency."
- Politicisation of accounting standards setting. "Unfortunately, there have been certain major companies – including ones that subsequently failed and had to be rescued by the government – and industry trade groups that have sought political intervention into accounting standard setting. While that is their right, and while we certainly welcome active dialogue with lawmakers, politicisation of accounting standard setting by special interests risks undermining public confidence in the integrity of financial reporting. The investing public expects and deserves unbiased and transparent financial information that is not skewed to favor particular transactions, companies or industries."
- Transparency. "Transparency is not just a buzz word or a cliché. It is a fundamental and absolutely essential attribute of sound financial markets. Relevant, trustworthy, and timely information is the oxygen of financial markets. Depriving markets of such information – or polluting the information – can have very adverse consequences."
- Regulatory reform. "Some of the most difficult accounting and reporting issues emanating from the financial crisis stem, at least in part, from the lack of proper regulation and risk management, unsound lending and securitisation practices, and the absence of proper market infrastructures around the 'dark markets' for structured credit products and derivatives."
- Capital markets reporting versus prudential regulatory reporting. "Our focus as accounting standard setters is on the communication of relevant, transparent, and unbiased financial information on corporate performance and financial condition to investors and the capital markets. That information is aimed at facilitating informed investment decisions and is essential to effective allocation of capital across the economy. The transparency provided by external financial reports also contributes to financial stability by reducing the level of uncertainty in the system. On the other hand, the very important focus of bank regulators is on the safety and soundness of individual financial institutions, protection of customer deposits, and on the overall stability of the financial system. Given our different missions and focus, it is not surprising that we would sometimes have different perspectives on particular accounting and reporting matters affecting financial institutions."
- Global accounting standards. "Recognising the potential benefits that could result from having a single set of high-quality accounting standards across the global capital markets, we have devoted substantial time and effort in recent years to working with the International Accounting Standards Board on jointly improving and converging our respective standards through developing common standards in major areas and eliminating differences between our standards. At the same time, we also strive to take care of business at home by responding on a timely basis to reporting issues in our system. Riding these two horses is not always easy and sometimes requires timely actions in terms of improving US GAAP in an area while also working on longer term global solutions with the IASB in the same area."
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26 June 2009: PCAOB will defer inspections of some non-US audit firms
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The US Public Company Accounting Oversight Board has adopted an amendment to a rule on the timing of certain inspections of registered non-US public accounting firms. The amendment gives the Board the ability to postpone, for up to three years, the first inspection of any foreign registered public accounting firm that the Board is otherwise required to conduct before the end of 2009 and that is in a jurisdiction in which the Board has not conducted an inspection prior to 2009. The delay gives the PCAOB the ability to conduct these inspections cooperatively with the Board's non-US counterparts. Click for PCAOB Press Release (PDF 39k). The text of the amended rule is available On the PCAOB's Website.
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26 June 2009: IAS Plus Newsletter on proposed amendments to IFRIC 14
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On 28 May 2009, the IASB published an exposure draft of proposed amendments to IFRIC 14 IAS 19 – The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction. The proposed amendments are aimed at correcting an unintended consequence of IFRIC 14, which is that technically, in some circumstances, entities are not permitted to recognise as an asset some prepayments for minimum funding contributions. The ED proposes to correct the problem. Comments on the ED are due 27 July 2009.
Deloitte's IFRS Global Office has published an IAS Plus Update Newsletter Explaining the Proposed Amendments to IFRIC 14 (PDF 73k). Past issues of all IAS Plus newsletters are Here.
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25 June 2009: IASB invites comments on expected loss model
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The IASB has published a Request for Information on the feasibility of using an expected loss model for the impairment of financial assets. Impairment is one of the issues that the IASB is addressing in the second phase of its Comprehensive Review of IAS 39.
- Incurred loss model. The current model in IAS 39 requires an entity to account for credit losses in financial assets only if an event (or a combination of events) has occurred that has a negative effect on future cash flows and that effect can be reliably estimated (this is known as the incurred loss model). A feature of that model is that an entity is not permitted to consider the effects of future expected losses. The financial crisis has highlighted this as an area of concern.
- Expected loss model. At the request of the G20 leaders and others, the IASB is examining the expected loss model as an alternative. The expected loss model requires an entity to make an ongoing assessment of expected credit losses, which may require earlier recognition of credit losses. Proponents argue that this would better reflect the way that financial assets are priced and the way some companies manage their business.
The IASB invites responses to its Request for Information by 1 September 2009. Click for:
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25 June 2009: Two CEBS reports on European bank disclosures
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The Committee of European Banking Supervisors (CEBS) has published two reports assessing banks' disclosures (a) in their 2008 audited annual reports on activities and exposures affected by the financial crisis and (b) under Basel Committee Pillar 3 (market discipline).
- Assessment of 2008 annual report disclosures. The analysis covers 23 large banks with cross-border activities. CEBS found 'a significant increase of disclosures compared to the previous analyses.... At the same time CEBS identifies a number of areas within the CEBS good practices – mostly in the context of accounting-related disclosures – where disclosures could be further improved, including disclosures on fair value measurement and related methodologies'. CEBS intends to develop a set of high-level disclosure principles to help banks prepare disclosures covering areas or activities that warrant particular attention or that are under stress.
- Assessment of 2008 Pillar 3 disclosures. CEBS analysed the Pillar 3 disclosures provided by 25 banks relating to a bank's risk profile and capital adequacy. CEBS found that 'banks have notably enhanced the level of quantitative and qualitative information regarding credit risk and securitisation activities; however there are specific areas where further improvements could be made':
- the composition and characteristics of own funds
- the back testing information for credit risk and market risk
- the quantitative information on credit risk mitigations and counterparty credit risk
- the granularity of information on securitisations
Click to download:
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25 June 2009: Two new Deloitte IFRS publications in Spanish
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Deloitte (Colombia) has published the Spanish translation of the following IFRS publication:
You will find our resources in Spanish Here.
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25 June 2009: Insurance working group meets next week
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The IASB's Insurance Working Group will meet on Monday and Tuesday 29 and 30 June 2009 at the Guoman Tower Hotel (Tower 1 Suite), St Katharine's Way, London. The meeting is open to public observation. The agenda is shown below. Agenda papers are Here.
Insurance Working Group Agenda
29-30 June 2009, London |
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Monday 29 June (10:00 to 17:00)
- Introduction
- Overview of papers for this meeting
- Project planning
- Update on other relevant projects
- IASB and FASB Work Plan
- Update on Financial Instruments
- Users' input
- Measurement
- Overview
- Measurement - tabular comparison of the candidates
- Measurement - key issues on measurement
- Measurement - measurement approaches for insurance contracts
- Measurement - the IAS 37 model for insurance contracts
- Measurement - Current exit price
Tuesday 30 June (09:00 to 16:00)
- Measurement (continued)
- Presentation and Disclosure
- Update on IAA activities
- Acquisition costs
- Field tests
- Next steps and wrap up
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24 June 2009: Chinese translation of newsletter on fair value measurement
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Deloitte China has published the Chinese translation of the IAS Plus Update newsletter Exposure Draft Proposes Expanded Guidance on Fair Value Measurement:
You will find links to these and many other IFRS materials in Chinese on our China Page.
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24 June 2009: We comment on 13 IFRIC tentative agenda decisions
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Deloitte has submitted comments on 13 IFRIC tentative decisions not to add an item to its agenda. In all cases, we agree with IFRIC's proposed decision. In the following two cases we make additional comments or recommendations to the IFRIC staff about how best to explain the reasons for the decision:
- Meaning of significant and prolonged for the purpose of assessing impairment of financial instruments.
- Impairment of an investment in an associate.
Click to download a ZIP File of Our Letters (ZIP 1,384k).
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24 June 2009: IFRS Questions and Answers in Chinese: Volumes 2 and 3
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Deloitte & Touche in Taiwan has published the second and third books of a three-volume series IFRS Questions and Answers in Chinese:
- Volume 2 (220 pages) covers IAS 1, IAS 7, IAS 8, IAS 21, IAS 23, IAS 19, IAS 26, IAS 16, IAS 40, IAS 36 and IFRS 8.
- Volume 3 (296 pages) covers IAS 11, IAS 17, IAS 24, IAS 33, IAS 34, IAS 41, IFRS 4, IAS 32, IAS 39, IFRS 7, IFRIC 12, IAS 37, IAS 10 and IFRS 1.
- Volume 1 (214 pages) was released in February 2009 (see our Taiwan Page). It covers IFRS 2, IFRS 3, IFRS 5, IAS 2, IAS 12, IAS 18, IAS 20, IAS 27, IAS 28, IAS 31, and IAS 38.
In explaining each Standard, the books include a few examples and condensed analysis of GAAP difference between IFRSs and Republic of China GAAP. You can purchase the books by email to  or On Line (Chinese). The Deloitte Taiwan website has a page with More Information on each of the books.
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24 June 2009: iGAAP 2009 Financial Instruments: IAS 32, IAS 39 and IFRS 7 Explained
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Deloitte LLP (United Kingdom) has developed iGAAP 2009 Financial Instruments: IAS 32, IAS 39 and IFRS 7 Explained (Fifth Edition), which has been published by LexisNexis. This publication is the authoritative guide for financial instruments accounting under IFRSs. The 2009 edition expands last year's edition with further interpretations, examples, discussions from the IASB and the IFRIC, and updates on comparisons of IFRSs with US GAAP for financial instruments. It includes updated and extensive guidance on reclassifications, fair valuation in illiquid markets, and the recent amendment to IFRS 7 Improving Disclosures about Financial Instruments. It also includes extracts from 2008 annual reports illustrating the application of IFRS 7. iGAAP 2009 Financial Instruments: IAS 32, IAS 39 and IFRS 7 Explained (Fifth Edition) (992 pages, June 2009) can be purchased through www.lexisnexis.co.uk/deloitte. You will find a permanent link to this and many other Deloitte IFRS publications on our IFRS Publications Page.
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23 June 2009: Analyst Representative Group will meet 24 June
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The IASB will meet with the Analyst Representative Group on Wednesday, 24 June 2009, 9:30am to 4:30pm at the IASB Offices, 30 Cannon Street, London. The meeting is open to public observation. Topics on the agenda are:
- Work plan update
- Financial statement presentation
- Cash flows
- Derecognition
- Financial instruments
- Revenue recognition
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23 June 2009: IASB proposes guidance on 'management commentary'
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The IASB has issued an exposure draft (ED) of proposed non-mandatory guidance for preparing and presenting a 'management commentary' – sometimes called 'management's discussion and analysis' or 'operating and financial review'. In a management commentary, which normally accompanies but is not part of the financial statements, management explains how the entity's financial position, financial performance and cash flows relate to management's objectives and its strategies for achieving those objectives. The proposals in the ED draw on international best practice in the preparation and presentation of management commentary. The IASB believes that providing non-mandatory guidance will improve the consistency and the comparability of management commentary across jurisdictions. The ED Management Commentary is open for comment until 1 March 2010. Click for IASB Press Release (PDF 97k). Here is the IAS Plus Project Page.
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23 June 2009: IASB webcasts on fair value measurement ED
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On Tuesday 30 June 2009, the IASB will host two live webcasts to introduce its 28 May 2009 exposure draft Fair Value Measurement. The ED proposes guidance on how fair value should be measured where it is required by existing standards. It does not propose to extend the use of fair value measurements in any way. It would add disclosure requirements about how fair values were determined. The proposed definition of fair value (FV) is identical to the definition in US FASB Statement 157, and the supporting guidance is also largely consistent with US GAAP. Comment deadline is 28 September 2009. The webcasts will include presentations followed by a Q&A session where registered participants can send in questions for the IASB staff to answer. Each webcast, including the question and answer session, is expected to last around one hour. Details of the webcasts:
- Webcast Topic: Exposure Draft on Fair Value Measurement
- Date: Tuesday, 30 June 2009
- Times: 9:30am (London time) and again at 3:30pm (London time)
- Presenters: Stephen Cooper, Member of the Board; Hilary Eastman, Project Manager; and Henri Venter, Assistant Project Manager,
- Project Page on IASB Website – with links to register for the webcast
- Project Page on IAS Plus
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23 June 2009: IASCF publishes its 2008 annual report
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The International Accounting Standards Committee Foundation (IASCF), under which the IASB operates, has published its annual report for 2008. The report includes a comprehensive account of the activities of the IASCF and the IASB during 2008, as well as audited financial statements and details on the funding of the organisation. Here is the link to
Download from the IASB's Website.
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22 June 2009: IASCF plans round-tables for Constitution Review Part Two
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The Trustees of the IASC Foundation have today announced the following dates for public round-table discussions relating to the second part of the 2009 Constitution Review:
- London, 9 September 2009
- New York, 6 October 2009
- Tokyo, 21 October 2009
The purpose of the round-table discussions is to provide another way, in addition to the formal comment processes, to seek a range of views from interested parties about possible changes to the IASC Foundation's Constitution. The IASC Foundation will post the relevant discussion document at a later date. Part One of the constitution review, concluded in January 2009, resulted in formation of an IASCF Monitoring Board and expansion of the IASB from 14 to 16 members. Issues being addressed in Part Two of the review include:
- whether the section of the constitution dealing with governance of the Foundation, which now mentions only the IASCF, should also refer to the new Monitoring Board adopted under part 1 of the Constitution Review
- geographical mix of Trustees
- effectiveness of Trustee oversight activities
- funding arrangements
- the IASB's agenda-setting procedures
- the IASB's existing due process procedures
- the possible need for 'fast track' due process procedures
- principles-based approach to standards
- whether the IASB should set standards for not-for-profit entities and the public sector
- procedures and composition of the Standards Advisory Council
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22 June 2009: Deloitte podcast – move toward IFRSs in the US
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The global financial crisis is having an enormous impact on the effort to standardize accounting rules worldwide. Political pressure on the IASB and on the US Financial Accounting Standards Board is encouraging both bodies to publish one-off changes to accounting rules that may show short-term action in the face of economic downturn but are likely to make it harder to bring the two systems into conformity. A recent Deloitte podcast features Jeffrey K Willemain, DTT Global Managing Partner – Regulatory & Risk, as he addresses the following questions:
- What are some of the pressures facing the two accounting bodies?
- How do accounting rules differ in the US and Europe?
- Where do emerging markets and the BRIC (Brazil, Russia, India, and China) countries stand in the debate?
- Will the US eventually sign on to International Financial Accounting Standards?
- How will the new administration in Washington influence the debate on accounting standards?
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"In some respects, the United States is all alone.... The rest of the world is not adopting US GAAP so the United States will need to convert over time. We will get there. I'm convinced of that."
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Click to Access the Podcast.
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22 June 2009: Agenda project pages updated
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We have updated the following pages on IAS Plus to reflect the discussions and decisions at the IASB's regular June 2009 meeting and the two special meetings on 1 June and 5 June 2009:
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Click for Earlier June News.
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