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29 August 2008: AICPA statement of support for the SEC's 'roadmap' to IFRSs
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The American Institute of CPAs has issued a Statement Supporting the SEC Roadmap (PDF 41k). The roadmap "marks an important stage in what the American Institute of Certified Public Accountants believes will be the eventual move from US Generally Accepted Accounting Principles to international accounting standards for public companies." |
29 August 2008: Heads Up discusses I'roadmap' to IFRSs in the USA
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The 28 August 2008 issue of Heads Up titled On the Road to IFRSs (PDF 190k) discusses the SEC's recent decision to issue a proposed roadmap to IFRS adoption in the United States. The roadmap proposes to:
- give certain US issuers the option to use IFRSs in their financial statements filed on Form 10-K for financial years ending on or after 15 December 2009, and
- establish seven milestones that, if achieved, could lead to an SEC decision for mandatory use of IFRSs starting for financial years ending on or after 15 December 2014.
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29 August 2008: IASC Foundation publishes new IFRS taxonomy guide
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The International Accounting Standards Committee (IASC) Foundation has published IFRS Taxonomy Guide 1.00 – All you need to know about the IFRS Taxonomy as a preparer, supervisor, software developer. It can be downloaded from the IASCF Website. |
29 August 2008: Deloitte Canada Countdown IFRS transition newsletter
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Deloitte Canada has published the August 2008 issue of their Countdown IFRS transition newsletter, to provide a snapshot of where we are now as far as Canada's transition to IFRSs is concerned – both in Canada and in Deloitte. This edition of Countdown focuses on IFRS disclosure in Management Discussion and Analysis (MD&A) and the impact of the proposed definition of a Publicly Accountable Enterprise (PAE) on the following sectors:
- Profit-oriented non-publicly accountable enterprises (private enterprises)
- Not-for-profit organisations (NPOs)
- Pension plans
As always, there is also an update on current IFRS events. Click below for:
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28 August 2008: More about the SEC 'roadmap' toward IFRSs
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In a speech at the open meeting of the SEC at which the SEC agreed to propose a roadmap toward use of IFRSs by domestic SEC registrants, SEC Commissioner Elisse B Walter elaborated on several aspects of the yet-to-be-released proposal. One is that an entity that chooses voluntary early adoption will be required to include, in its financial statements, a reconciliation from IFRS figures to US GAAP. That is because of the possibility that the Commission may ultimately decide not to require or allow US issuers to use IFRSs, or may delay the starting date. Click for Commissioner Walter's Remarks (PDF 78k). Here is an excerpt:
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Most important, we have to keep in mind that no one knows for certain what the future will hold. I strongly believe that we have to prepare for the alternative that the Commission will determine not to adopt, or permit the use of, IFRS for US issuers. As the milestones presented in the Roadmap show, there are significant hurdles to overcome over the next three years in order for the Commission to determine to accept IFRS reporting from US issuers. Therefore, I strongly support the reconciliation proposal, otherwise known as Alternative Proposal B for early adoption. Under Alternative Proposal B, reconciliation would continue until further Commission action on the use of IFRS by US issuers. I believe that this reconciliation Proposal is extremely important – in order to increase comparability and help US investors transition to seeing US companies present their financials in IFRS. It is also critical to me because it gives early adopters of IFRS a way back to US GAAP if the Commission determines not to adopt the use of IFRS in 2011
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28 August 2008: SEC proposes a 'roadmap' to IFRSs for domestic US registrants
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On 27 August 2008, the US Securities and Exchange Commission voted to publish for public comment a proposed 'roadmap' that could lead to the use of International Financial Reporting Standards (IFRSs) by US issuers beginning in 2014. Currently, US issuers must use US GAAP, though foreign registrants (of which there are around 1,100 from 52 jurisdictions) may elect to use IFRSs. The proposal suggests mandatory adoption by US registrants could be phased in from 2014 to 2016 depending on company size:
- Large accelerated filers in 2014
- Accelerated filers in 2015
- Non-accelerated filers in 2016.
The proposal also would permit voluntary early adoption for a limited group of large US registrants (based on industry and size, roughly 110 companies eligible) for periods ending after 15 December 2009 (filings in 2010). However, mandatory IFRS adoption starting in 2014 would not be automatic. In 2011, the Commission would evaluate the progress of IFRSs against certain defined milestones and make a decision on whether to go ahead with adoption starting in 2014, later, or not at all. Here is the SEC Press Release (PDF 30k). The SEC has not yet posted the full text of the proposal on its website. There will be a 60-day comment period that begins when the roadmap proposal is published in the Federal Register. Financial Executives International has issued a Press Release (PDF 37k) stating that "FEI supports the SEC's decision today to propose a Roadmap for US issuers for filings of financial statements prepared in accordance with IFRS." [This story has been expanded from our original posting.]
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28 August 2008: SEC votes to update disclosure rules for foreign companies
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On 27 August 2008, the US Securities and Exchange Commission voted unanimously to update and modernise the disclosure requirements for foreign companies offering securities in US markets. Currently, there are around 1,100 foreign SEC registrants and another 700 foreign companies whose equity securities trade over-the-counter in the US without SEC registration. Click for the SEC Press Release (PDF 34k). Three sets of amendments were approved:
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Foreign issuer reporting enhancements. These will shorten the deadline for annual reports filed by foreign private issuers from six months to four months. The rule amendments also enable foreign issuers to test their eligibility to use the special forms and rules available to foreign private issuers once a year, rather than continuously; enhance the disclosures a foreign private issuer provides to investors regarding any changes in and disagreements with its auditor; and revise the annual report and registration statement forms used by foreign private issuers to improve certain disclosures provided in these forms.
Exemption from registration. Exchange Act Rule 12g3 exempts a foreign private issuer from registering equity securities if it submits to the SEC of certain information published outside the US. The exempted securities can then trade in the US over-the-counter (OTC) market without registration. Currently, there are around 700 Such Companies (PDF 399k). The adopted rule amendments will eliminate the current written application and paper submission requirements by automatically exempting a foreign private issuer from Section 12(g) provided it meets specified conditions. As is currently the case, issuers must continue registering their securities under the Exchange Act to have them listed on a national securities exchange or traded on the OTC Bulletin Board.
Cross-border business combinations and rights offerings. The Commission approved amendments to expand and enhance the utility of the exemptions for business combination transactions, tender offers, and rights offerings and to encourage offerors and issuers to permit US security holders to participate in these transactions on the same terms as other security holders. The Commission also voted to provide interpretive guidance on several topics that come up frequently for practitioners in the cross-border area.
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27 August 2008: Technology implications of IFRS adoption for US companies
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Deloitte Consulting LLP (United States) has published a booklet that explores the technology implications associated with IFRS conversion by US companies. It discusses:
- Evaluating the potential technology impact
- How companies can prepare technology and systems changes related to IFRS adoption
- Major differences between US Generally Accepted Accounting Principles (GAAP) and IFRS differences and what it means for systems
- Key IFRS discoveries from some companies around the globe
Click to download Technology Implications of IFRS Adoption for US Companies (PDF 276k). You will find Links to Many Other IFRS Publications here. |
27 August 2008: Deloitte will sponsor IFRS 2008/09 conference
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Deloitte will be the main sponsor of IFRS 2008/9 Strategic Direction and Practical Interpretation, a conference that will be held in London on Wednesday 12 November 2008. Speakers at this annual conference include IASB Chairman Sir David Tweedie (opening keynote address and open dialogue) and Deloitte partners Ken Wild and Veronica Poole. Topics that will be covered include an analyst's view of financial reporting priorities; FSF recommendations on risk disclosures, valuations, and off balance sheet vehicles; the professional practice view of IFRSs; valuations in light of the credit crunch; the year ahead for IFRSs; implications of IFRSs for directors and auditors; complexity of standards; and IFRSs and regulation. For more information and to view the agenda go to www.iflr.com/ifrs08. |
26 August 2008: We comment on an IAASB proposal
26 August 2008: JSE requires auditors to have 800 hours IFRS training
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The Johannesburg Stock Exchange has amended its listing requirements to require all independent auditors of listed companies to have experienced IFRS specialists and to register with the JSE. Specifically, the new JSE rules:
- establish a JSE Registry for Auditors and their IFRS advisors
- require any audit firm that wishes to audit listed companies to be registered with the JSE
- require all audit firms to have at least three individual auditors within the firm registered with the JSE
- require all audit firms to have at least one IFRS advisor, either internal or external to the firm, registered with the JSE. The role of the IFRS advisor includes providing 'technical IFRS assistance and advice in support of the assurance opinion'.
- require IFRS advisors to have spent a specified number of hours on 'performing practical and interpretive IFRS consulting over the past 12 months in order to have a comprehensive working knowledge of IFRS'.
- If the IFRS advisor is a single individual, 800 hours of IFRS experience in the past 12 months is required.
- If the IFRS advisor is one of two individuals who work as part of an IFRS advisory group, each of those individuals must have spent at least 500 hours on IFRS work in the past year.
The JSE requires listed companies to follow IFRSs and requires auditors to follow International Standards on Auditing. Click for JSE Listing Requirements that Contain the New Rules (PDF 169k). Here is a link to our South Africa Page.
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25 August 2008: SEC will consider IFRS Roadmap for domestic US registrants
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At its open meeting on Wednesday 27 August 2008, the US Securities and Exchange Commission will consider whether to invite public comment on a plan ('Roadmap') by which the United States might allow domestic US registrants to use International Financial Reporting Standards (IFRSs) in their filings with the Commission instead of US Generally Accepted Accounting Principles (GAAP). Earlier this year, the SEC already began allowing foreign registrants to use IFRSs without the need to prepare a reconciliation to US GAAP data. Here is the agenda item as described in the SEC's Meeting Notice:
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The Commission will consider whether to propose a Roadmap for the potential use by US issuers for purposes of their filings with the Commission of financial statements prepared in accordance with International Financial Reporting Standards ('IFRS') as issued by the International Accounting Standards Board. As part of the Roadmap, the Commission will also consider whether to propose amendments to various rules and forms that would permit early use of IFRS by a limited number of US issuers.
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24 August 2008: Agenda for 4-5 September 2008 IFRIC meeting
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The International Financial Reporting Interpretations Committee (IFRIC) will meet at the IASB's offices in London on Thursday and Friday 4-5 September 2008. The meeting is open to the public and will be webcast. The tentative agenda is shown below.
4-5 September 2008, London
Thursday 4 September 2008 (10:00-17:30)
Friday 5 September 2008 (9:00-Noon)
- Staff Recommendations for Tentative Agenda Decision
- Customer-related intangible assets
- Restricted securities
- Application to prepaid employer's contribution reserve
- Regulatory Assets and Liabilities
- Administrative Session
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23 August 2008: PCAOB is ruled constitutional in a 2-1 court decision
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On 22 August 2008, the United States Court of Appeals for the District of Columbia Circuit released its decision in the case Free Enterprise Fund, et. al. v. Public Company Accounting Oversight Board (PCAOB). The Free Enterprise Fund had challenged the legality of the PCAOB under the US Constitution. Judge Rogers wrote the opinion for the court, with Judge Kavanaugh dissenting. Here is an excerpt from the opinion:
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We hold, first, that the Act does not encroach upon the Appointment power because, in view of the [Securities and Exchange] Commission's comprehensive control of the [Public Company Accounting Oversight] Board, Board members are subject to direction and supervision of the Commission and thus are inferior officers not required to be appointed by the President. Second, we hold that the for-cause limitations on the Commission's power to remove Board members and the President's power to remove Commissioners do not strip the President of sufficient power to influence the Board and thus do not contravene separation of powers, as that principle embraces independent agencies like the Commission and their exercise of broad authority over their subordinates. Accordingly, we affirm the grant of summary judgment to the Board and the United States.
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Click to download the Full Text of the Court Decision (PDF 252k). The decision is 92 pages in length, of which 57 pages is Judge Kavanaugh's dissenting opinion. In Judge Kavanaugh's view, the 'PCAOB's structure unconstitutionally restricts the President's appointment and removal powers'. Click for:
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22 August 2008: 'Fair Value Update' from Deloitte United States
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Since the Financial Accounting Standards Board issued SFAS 157 Fair Value Measurements and SFAS 159 The Fair Value Option for Financial Assets and Financial Liabilities, fair value measurements have gained notoriety and been the topic of many headlines in the United States due to the current credit markets turmoil. Deloitte (United States) has published a Fair Value Update Newsletter (PDF 397k) covering issues from the widespread adoption of SFAS 157 and SFAS 159. Specifically, the newsletter examines the Form 10-Q filings from 50 SEC registrants for the first quarter of 2008 and analyses their respective disclosures related to SFAS 157 and SFAS 159. The analysis includes entities from the banking, insurance, investment management, and energy industries, as well as other corporate filers. There are related resources on our Credit Crunch Page.
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22 August 2008: SEC unveils 'IDEA' replacement of EDGAR system
 
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The US Securities and Exchange Commission Chairman Christopher Cox has unveiled the successor to the agency's 1980s-era EDGAR database, which will give investors far faster and easier access to key financial information about public companies and mutual funds. Based on a completely new architecture being built from the ground up, it will at first supplement and then eventually replace the EDGAR system. The decision to replace EDGAR marks the SEC's transition from collecting forms and documents to making the information itself freely available to investors to give them better and more up-to-date financial disclosure in a form they can readily use. The new system is called IDEA, short for Interactive Data Electronic Applications. IDEA will enable investors will be able to instantly collate information from thousands of companies and forms, and create reports and analysis on the fly, in any way they choose.
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On 14 May 2008, the US Securities and Exchange Commission proposed that all registrants be required to file their data with the SEC in XBRL (interactive data) format. XBRL reporting would be required for registrants using either US GAAP or IFRSs. The transition would take three years starting in 2008. There's more information in our News Story of 16 May 2008. A few days later, the Commission proposed that more than 8,000 mutual funds trading in the US would also be required to file XBRL date (see our News Story of 26 May 2008).
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The SEC's On-Line News Release includes links to a video demonstration of IDEA.
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22 August 2008: Webcast on US GAAP and IFRS convergence
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Deloitte (United States) will present a webcast on US GAAP and IFRS Convergence: Bridging the Divide
at 2:00 PM EDT (18:00 GMT) on 3 September 2008. Host for the webcast is Ron Sonenthal, Partner, Deloitte Tax LLP. The webcast will focus on the implications of adoption of IFRSs in the United States on companies' compensation and benefits programs. Topics that will be covered include:
- Analysing possible financial statement effects of IFRS with regard to compensation and benefits programs, including executive compensation, health and welfare, and retirement programs.
- Evaluating the potential impact of IFRS accounting on the operation of your rewards programs, especially those driven by corporate financial performance.
- Assessing IT and process changes, including information gathering, reporting, and internal controls.
Click here for More Information and to Register for the Webcast. Earlier webcasts are kept Online Here.
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20 August 2008: IAS Plus newsletter on earnings per share exposure draft
16 August 2008: IAS Plus newsletter on Annual Improvements 2008
16 August 2008: Asset valuation standards in China
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The Summer 2008 issue of Valuation Notes, published by American Appraisal, includes an article on the valuation standards system in China. The article explains the roles of three key committees recently established in China by the government and the appraisal profession – the Asset Appraisal Standards Committee, the Asset Appraisal Standards Technical Committee, and the Asset Appraisal Standards Advisory Committee. Currently, there are 15 appraisal standards in China, of which 8 have been adopted since November 2007. In addition, the article identifies over 20 topics that will be addressed in new standards that are currently under development. Click to download American Appraisal Valuation Notes Summer 2008 (PDF 857k). This publication is copyright American Appraisal and is posted here with their kind permission.
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15 August 2008: Update of our IASC-IASB chronology
15 August 2008: Update on the US SEC and IFRSs
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In a recent address to the American Bar Association's Committee on Federal Regulation of Securities, John W White, Director of the Division of Corporation Finance of the US Securities and Exchange Commission presented an update on the activities of his Division and the Commission. A portion of his comments focussed on IFRSs. Click to Download Mr White's Remarks (PDF 143k). Here is an excerpt:
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We put out a concept release on this last August, and held two roundtables in December, at which we received a great deal of very thoughtful input. Back in February, Chairman Cox asked that Corp Fin and the Office of the Chief Accountant formally propose to the Commission a 'roadmap' laying out a schedule, with appropriate milestones on which the schedule will be conditioned, for continuing the US's progress in moving to accept IFRS in this country. We have a large team actively working on this project, and even held another roundtable on the topic last Monday, August 4, at which we received yet more helpful information from members of the public. So hopefully we will be prepared to make a recommendation soon. But as always, remember my disclaimer.
In anticipating all of this, I would suggest that you keep the following in mind:
- We are headed toward a single set of high quality, globally accepted accounting standards – there is general agreement that having a single set of high quality, globally accepted accounting standards will benefit the capital markets generally including investors, as financial statements of global issuers become more comparable on a cross-border basis.
- The choices are US GAAP and IFRS.
- Over 100 countries require or accept IFRS.
- So, IFRS is where the future is (not US GAAP).
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14 August 2008: Discussing an IFRS changeover plan in the MD&A
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As part of their programme to provide guidance to clients and others on Canada's transition to IFRSs, Deloitte (Canada) has published How to Monitor a Sea Change: Discussing Your IFRS Changeover Plan in the MD&A. This booklet discusses the contents of a changeover plan and how to explain the plan in a company's 'Management Discussion and Analysis'. A sample changeover plan is included. Click to download English and French versions:
There is much more information about Canada's transition to IFRSs on our Canada Page and on Deloitte Canada's IFRS Transition Page.
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14 August 2008: IFRS and the mining industry
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Publicly accountable entities in Canada are required to switch to IFRSs starting in 2011 (with an option to adopt IFRSs earlier, even in 2008, with approval of the Provincial securities regulator). The transition from Canadian GAAP will be different for every company. However, particular industries will experience common themes and issues. Deloitte (Canada) has published IFRS and the Mining Industry: Top Ten Accounting Issues for Canadian Issuers in both English and French:
This publication provides Deloitte's viewpoints on the following IFRS changeover issues in the mining industry:
- Impairment
- Mineral resources and property, plant and equipment
- Provisions and asset retirement obligations (including decommissioning and restoration costs)
- Business combinations, consolidation, and special purpose entities
- Joint ventures
- Borrowing costs
- Foreign currency
- Financial instruments
- Income taxes
- First-time adoption of IFRSs
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14 August 2008: Heads Up discusses IASB/FASB earnings per share proposals
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The latest issue of Heads Up titled A Common Denominator:
FASB and IASB Issue Exposure Documents on EPS (PDF 155k) is now available. It discusses the exposure documents issued Last Week by the FASB and IASB reflecting efforts by the boards to converge the guidance on earnings per share in US GAAP and International Financial Reporting Standards and to clarify and simplify this guidance.
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13 August 2008: Stay Tuned Online – IFRS and UK GAAP updates
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The Deloitte London IFRS Centre of Excellence is running a series of hour-long Internet-based financial reporting updates, aimed at helping finance teams keep up to speed with IFRS and other financial reporting issues. Each update lasts no more than an hour, and sessions are held three times a year, approximately at the end of March, July and November. We intend to make a recording of each session available on IAS Plus for a period of at least four months from the date of the presentation. The third in the series was held recently.
The topics covered in the July 2008 Stay Tuned Online IFRS and UK GAAP Update were:
- IFRIC 15 Agreements for the Construction of Real Estate and IFRIC 16 Hedges of a Net Investment in a Foreign Operation
- Update on implementation of the Companies Act 2006
- Latest Financial Reporting Review Panel developments
- The impact of Improvements to IFRSs issued in May 2008
To access the recording Click Here. There's a permanent link on our UK Country Page.
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13 August 2008: CRMPG-III report on containing systemic risk
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The Counterparty Risk Management Policy Group III (a group of senior officials from a number of major financial institutions) has published a report titled Containing Systemic Risk: The Road to Reform. The Report sets out an integrated framework of private initiatives that will complement official oversight to help contain systemic risk. The Policy Group focused on four key areas, which it deemed the most important and timely and were the areas in which the Policy Group believed it could make the greatest contribution. Those areas include:
- Reconsideration of the standards for consolidation under US GAAP of entities currently off-balance sheet coming on-balance sheet.
- Measures to better understand and manage high-risk financial instruments.
- Significant enhancements to risk monitoring and management.
- A series of sweeping measures to enhance the resiliency of financial markets generally and the credit markets in particular, with a special emphasis on OTC derivatives and credit default swaps.
The report also highlights important emerging issues that will require close attention in the period ahead. Accounting recommendations begin on page 18. Click to Download the Report (PDF 606k). We have added it to our Credit Crunch Page.
An excerpt from the accounting recommendations:
II-1. The Policy Group endorses, in principle, the direction of the changes to the US GAAP consolidation rules provided that the changes are (1) principles-based, (2) convergent with International Financial Reporting Standards, and (3) accompanied by suitable disclosure and transition rules regarding regulatory capital which will provide flexibility in the implementation of these rules over a reasonable period of time.
II-2. The Policy Group recommends adoption of a single, principles-based global
consolidation framework that is based on control and the ability to benefit from
that control. The analysis of whether an entity (the investor) has a controlling
interest in another entity (the investee) should be based on:
- the investor's power over the investee, including the ability to make decisions that determine the success of the investee;
- the degree of investor exposure to the risks and rewards of the investee, including through guarantees, commitments and all other explicit and implicit arrangements between the two entities; and
- the design and sponsorship of the investee, including the degree to which the activities of the investee expose the investor to commercial, legal, regulatory and reputational risks.
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12 August 2008: Deloitte UK study on interim management statements
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Deloitte & Touche (United Kingdom) has published First Impressions: The First Year's Interim Management Statements. This publication considers how UK listed companies have implemented the new requirements for a twice-yearly interim management statement (IMS) in the first year of compliance with the UK Disclosure and Transparency Rules (DTR) (which is based on the European Transparency Obligations Directive). In particular, it surveys interim management statements of UK listed companies (including separate consideration of investment trusts), reviews compliance with the new rules, and contains illustrative and real life example IMSs as well as an IMS disclosure checklist. Click to download:
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12 August 2008: Deloitte letter to SEC on interactive data proposal
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On 14 May 2008, the US Securities and Exchange Commission proposed that all registrants be required to file their data with the SEC in XBRL (interactive data) format. XBRL reporting would be required for registrants using either US GAAP or IFRSs. The transition would take three years starting in 2008. There's more information in our News Story of 16 May 2008. A few days later, the Commission proposed that more than 8,000 mutual funds trading in the US would also be required to file XBRL date (see our News Story of 26 May 2008). Deloitte & Touche LLP (United States) has submitted a comment letter on the SEC's first proposal. Overall, we support the Commission's interactive data initiative. Our letter makes a number of suggestions that, we believe, will ensure successful implementation of the proposed rule.
Among the points made in our letter:
- Updated preparer guidance. The Commission should update the EDGAR Filer Manual to provide additional guidance on tagging information in the footnotes and financial statements, and this update should be exposed for public comment sufficiently in advance of the proposed adoption dates.
- Maintenance, support, and updating of taxonomies. The Commission should expose for comment its plan for ensuring that the XBRL taxonomies remain current as well as its planned mechanism for communicating such updates to preparers and interactive data users.
- Validation software considerations. The Commission plans 'to use validation software to check interactive data for compliance with many of the applicable technical requirements'. The Commission should release its validation criteria for public comment sufficiently in advance of the first phase-in dates under the rule to enable preparers and users to understand the extent of the procedures performed by the software and the expectations of the Commission.
- Monitoring during the phase-in period. The Commission should specify (1) the criteria that it will use during the early phase-in periods to assess the success of the implementation and (2) how it will determine whether additional adjustments will be necessary for the later phase-in periods.
- Assurance issues during the phase-in period. The PCAOB and the Commission should work with the auditing profession to revise the standard report of the independent registered public accountant to explicitly refer to the financial statements filed in Item 8 of the registrant's Form 10-K and perhaps to include a statement that assurance has not been provided on the interactive data. The Commission also should develop specific guidance on how the auditor should report if a registrant voluntarily elects to obtain assurance on its interactive data.
- Clarifying the extent of auditor liability. Our letter offers a number of suggestions for clarifying auditor liability with respect to interactive data.
- Early adoption of the proposal. The Commission should clarify how a registrant in one of the later phase-in groups could early-adopt the proposal.
- Interactive data and financial statement requirements. The proposed rule currently would apply only to registration statements, annual reports on Forms 10-K or 20-F, quarterly reports on Form 10-Q, and transition reports. The Commission should clarify whether a registrant should file interactive data for Forms 8-K that update financial statements.
- Need for assurance after the phase-in period. Throughout the phase-in period, the Commission should seek feedback from financial statement users regarding (1) whether their primary source of information for investing decisions is financial statements filed in the traditional format or as interactive data and (2) whether they believe assurance is needed for the interactive data.
- Coordination with IFRS initiatives. The Commission has issued a concept release on allowing US issuers to prepare financial statements in accordance with International Financial Reporting Standards. The Commission should ensure that any rulemaking associated with that concept release remains aligned with its XBRL rulemaking efforts.
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12 August 2008: Updated IFAC education pronouncements
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IFAC's International Accounting Education Standards Board (IAESB) has released amended versions of its International Education Standards (IESs) and related education pronouncements. The amendments result in more consistent use of terminology throughout the standards and more clearly describe the role of the IAESB and its standard-setting process. The amended documents (all of which were initially published 2003-2006) are:
- Framework for International Education Pronouncements,
- Introduction to International Education Standards, and
- International Education Standards 1-8.
IESs express the benchmarks that IFAC member bodies are expected to meet in the preparation and continual development of professional accountants. Because the changes are editorial in nature, the IAESB did not undertake public consultation. In addition to these editorial amendments, the IAESB has commenced a project to substantively revise the Framework and the Introduction. As part of that project, the IAESB will seek public comments on changes to those documents.
The amended versions of IESs 1-8, the Framework and the Introduction can be downloaded without charge from the IFAC Online Bookstore. Click for Press Release (PDF 35k).
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11 August 2008: Taiwan convergence project plan update
9 August 2008: Minutes of ARC meeting 11 July 2008
8 August 2008: IASC Foundation publishes new IFRS taxonomy module manager
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The International Accounting Standards Committee (IASC) Foundation has released a new IFRS Taxonomy Module Manager (ITMM). ITMM is an add-on for the IFRS Taxonomy 2008. It offers taxonomy users such features as:
- The ability to combine taxonomy files with one another
- An entry point that combines, for example:
- Consolidated statement of financial position, by order of liquidity
- Consolidated income statement, by function of expense
- Consolidated statement of cash flows, using the direct method
- An interactive graphical interface that guides the user through the selection of the necessary IFRS modules
- An entry point (in the form of a schema or empty instance document) that is the starting point for entity-specific extension or direct filing
- Ability to navigate across the IFRSs as well as the structure of financial statements
- A normal mode for first-time users, and advanced settings (together with expert mode) for experienced users
Click here to Access ITMM on the IASCF website.
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7 August 2008: IASB proposes improvements to 8 IFRSs
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The IASB has issued an exposure draft (ED) of proposed amendments to eight International Financial Reporting
Standards (IFRSs) as part of its 2008 Annual Improvements Project. Most of the proposals would be effective for annual periods beginning on or after 1 January 2010, with earlier adoption permitted. However, the proposed effective date for those amendments arising from the revised IFRS 3 Business Combinations is 1 July 2009 (in line with the effective date of that standard and related changes to IAS 27 Consolidated and Separate Financial Statements). The IFRSs and topics covered by the proposed amendments are:
| IFRS | Subject of amendment |
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| IFRS 2 Share-based Payment | Scope of IFRS 2 and revised IFRS 3 |
| IFRS 5 Non-current Assets Held for Sale and Discontinued Operations | Disclosures of non-current assets (or disposal groups) classified as held for sale or discontinued operations |
| IFRS 8 Operating Segments | Disclosure of information about segment assets |
| IAS 7 Statement of Cash Flows | Classification of expenditures on unrecognised assets |
| IAS 18 Revenue | Determining whether an entity is acting as a principal or as an agent |
| IAS 36 Impairment of Assets | Unit of accounting for goodwill impairment test |
| IAS 38 Intangible Assets | Additional consequential amendments arising from revised IFRS 3
Measuring the fair value of an intangible asset acquired in a business combination |
| IAS 39 Financial Instruments: Recognition and Measurement |
Scope exemption for business combination contracts
Application of the fair value option
Cash flow hedge accounting
Bifurcation of an embedded foreign currency derivative |
The IASB requests comments on the ED draft by 7 November 2008. Click for IASB Press Release (PDF 49k).
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7 August 2008: IASB proposes to amend IAS 33 Earnings per Share
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The IASB has proposed to amend IAS 33 Earnings per Share (EPS) to simplify the calculation of EPS and to converge the international standard and US GAAP. The proposal is set out in an exposure draft (ED) titled Simplifying Earnings per Share. Comments are requested by 5 December 2008. Concurrently, the US Financial Accounting Standards Board has proposed to amend its EPS standard, SFAS 128 Earnings per Share. The IASB's proposal, if adopted, would supersede the version of IAS 33 issued in 2003 and amended in 2007 by IAS 1.
Among other things, the revisions to IAS 33 would:
- Provide a clear principle to determine which shares and other instruments should be included in the EPS calculation. Under that principle, the weighted average number of ordinary shares includes only those instruments that give their holder the right to share currently in profit or loss of the period.
- Clarify the EPS calculation for particular instruments, such as contracts to sell or repurchase an entity's own shares and participating instruments. The ED treats those contracts as if the entity had already repurchased the shares. Therefore, the entity would exclude those shares from the denominator of the EPS calculation.
- Amend the calculation of diluted EPS for participating instruments and two-class ordinary shares. If a convertible financial instrument would have a more dilutive effect if conversion is assumed, then the entity would assume the more dilutive treatment for diluted EPS.
- Simplify the EPS calculation for instruments that are accounted for at fair value through profit or loss. For such instruments (including the derivative component of a compound financial instrument), an entity would not adjust the numerator or denominator of the diluted EPS calculation.
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Click for IASB Press Release (PDF 48k).
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7 August 2008: IFRSs for US companies – planning for adoption
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As full acceptance of IFRS in the United States nears, developing a plan around IFRS implementation is becoming increasingly important for companies to effectively position themselves for the future. To help companies better understand the impact a move to IFRS will have on organisations, Deloitte has released the publication International Financial Reporting Standards for US Companies: Planning for Adoption. This publication provides an overview of key IFRS considerations, includes practical steps for US executives, and addresses key questions for US companies, including:
- How can company leaders – especially in finance – begin to plan properly for tomorrow's IFRS world?
- What impact will a transition to IFRS have on technical accounting, tax, process and statutory reporting, technology infrastructure, and organisational issues?
- What about timing considerations for IFRS conversion activities?
Download the Publication (PDF 1,843k) to learn more.
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7 August 2008: Report on implementation of EU statutory audit directive
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The European Commission has published a report on where the 27 Member States stand with their implementation of the May 2006 Statutory Audit Directive, which had to be transposed into national law by 29 June 2008. Twelve Member States have completed the entire implementation of the Directive. Most of the other Member States have transposed major parts of the Directive but are still missing some important provisions. Click for:
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7 August 2008: EC defers registration of non-EU audit firms from 30 countries
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The European Commission has granted a transitional period for the registration requirements for audit firms from 30 non-EU countries. Those firms may continue their audit activities regarding non-EU companies listed on European markets without registering until 1 July 2010. However, transition will only be granted if the non-EU audit firms comply with the minimum information requirements necessary for investors in Europe. Audit firms from non-EU countries that do not fall under the transitional regime will be subject to full registration and oversight by the competent EU Member State. Click for Press Release (PDF 94k).
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6 August 2008: SEC holds fourth roundtable on IFRSs
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Deloitte & Touche LLP (United States) has published a Heads Up newsletter summarising the discussions at the SEC's fourth roundtable on IFRSs, held on 4 August 2008. Topics covered at the roundtable included panelists' experience with using IFRSs and US GAAP during the current financial crisis, the best way to develop stronger standards, and the direction of convergence efforts between the two sets of standards. Click to Download the Heads Up Newsletter (PDF 114k).
Key Messages from the SEC Roundtable Participants:
- IFRSs have held up quite well in the face of recent market turmoil. Some panelists believed that IFRSs outperformed US GAAP in many areas, such as off-balance-sheet transactions involving special-purpose entities, and have resulted in more robust, transparent disclosures.
- Improvement is needed to the fair value reporting requirements under both IFRSs and US GAAP. Some panelists specifically pointed to the requirement under FASB Statement 157 Fair Value Measurements for an entity to consider its own credit standing when determining the fair value of its liabilities, and the resulting effect on the income statement.
- Improving revenue recognition guidance under IFRSs should be a priority for standard setters.
- Consistent application of accounting standards and financial statement presentation are important to investors.
- The transition to IFRSs gives companies the opportunity to reassess their accounting policies and disclosures to ensure that their accounting reflects the true economics of the transactions and that their financial statements are sufficiently transparent.
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6 August 2008: Accounting Roundup – July 2008
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We have posted the July 2008 Edition of Accounting Roundup (PDF 357k) published by Deloitte & Touche LLP (USA). Topics covered in this issue include:
SEC Developments
- SEC Amends Filing Process for Self-Regulatory Organizations
- SEC Proposes Reforms to Credit Rating Process
- SEC Issues Report on Examination of Credit Rating Agencies
- SEC Advisory Committee Releases Draft Final Report
- SEC Holds Roundtable on Fair Value
- SEC and Federal Reserve Board Sign Memorandum of Understanding
AICPA Developments
- AICPA, ACFE, and IIA Join Forces to Issue New Fraud Guidelines
PCAOB Developments
- PCAOB Adopts New Auditor Registration Rule
GASB Developments
- GASB Proposes Guidance on Postemployment Benefits
International Developments
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- IASB Issues Additional Guidance on Hedge Accounting
- IFRIC Issues Interpretation on Construction of Real Estate
- IFRIC Issues Interpretation on Hedges of a Net Investment in a Foreign Operation
- IFAC Reissues Auditing Standard on Related Parties
- IFAC Issues Proposal on Code of Ethics for Accountants
- IASC Foundation Issues Discussion Document on Constitution Review
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Other Developments
- GAO and PCIE Issue Revised Financial Audit Manual
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You will find past issues of Accounting Roundup Here.
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6 August 2008: Spanish translation of Global IFRS and Offerings Services newsletter
5 August 2008: IFRS resources for accounting educators
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The American Accounting Association is holding its 2008 annual meeting this week in Anaheim, California. Over 3,000 people are attending. At a session titled IFRS Is Here, and What to Do about It, Prof Stephen Zeff of Rice University and Paul Pacter representing the IASB (also IAS Plus webmaster) presented some ideas for introducing IFRSs into university accounting curricula. As part of that presentation, they prepared a detailed list of IFRS resources available to accounting educators from a variety of sources, most without charge, many with hyperlinks to source documents. Click to download:
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5 August 2008: Malaysian GAAP will converge with IFRSs by 2012
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The Malaysian Financial Reporting Foundation and Malaysian Accounting Standards Board have issued a statement about their plans to bring Malaysian GAAP into 'full convergence with International Financial Reporting Standards' by 1 January 2012. To facilitate a phased changeover to IFRSs, the effective date for applying FRS 139 Financial Instruments: Recognition and Measurement (Malaysia's equivalent of IAS 39) will be 1 January 2010. By 2012, all approved accounting standards applicable to publicly listed companies, their subsidiaries, and other publicly accountable entities will converge fully with IFRSs. Private entities in Malaysia that are currently applying Malaysia's Private Entity Reporting Standards will be permitted to continue to do so. Non-Malaysian companies listed on the Malaysian Stock Exchange are currently permitted to use IFRSs, and the three such companies do use IFRSs. Click for Press Release (PDF 40k).
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4 August 2008: Three IAS Plus newsletters in Spanish
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Deloitte (Colombia) has published Spanish language translations of three recent IAS Plus newsletters – the July 2008 quarterly newsletter and special edition newsletters on IFRIC 15 and IFRIC 16:
Aquí están Nuestros Recursos en Español (our Spanish resources).
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4 August 2008: Newsletter about proposed German 'accounting reform' legislation
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In May, the German Government approved a draft 'accounting reform' bill – known as the Act to Modernise the Accounting Law – that is expected to bring about significant changes in how entities report under German GAAP in their individual accounts. Goals of the reform are:
- deregulation and cost reduction, particularly for small and medium-sized entities,
- improving the annual financial statements drawn up under commercial law by removing some of the options that were added on the transformation of the EU's Accounting Directives into German law in the mid-1980s, and
- bringing German GAAP closer to IFRSs.
However, the reform is not intended to simply copy the provisions of either full IFRSs or the upcoming IFRS for Private Entities. On the contrary, the German Government envisages a revised Commercial Code to be workable alternative to either of those IFRS frameworks that balances the costs to entities preparing accounts with the information needs of the users of individual financial statements. The bill is a proposal that is still being debated in Parliament and is not yet finalised, so changes may occur. The Government expects adoption of a final version some time towards the end of 2008. Deloitte Germany has prepared an English language version of their Praxis-Forum Newsletter that summarises the proposed changes (PDF 316k, 23 pages).
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3 August 2008: EFRAG report – 14 IASB pronouncements await EU endorsement
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The European Financial Reporting Advisory Group (EFRAG) has updated its report showing the status of endorsement, under the EU Accounting Regulation, of each IFRS, including standards, interpretations, and amendments. Click to download the Endorsement Status Report as of 1 August 2008 (PDF 44k). Currently, there are 14 IASB pronouncements that have not yet been endorsed for use in Europe, as follows:
- IFRS 1 and IAS 27 Cost of an Investment in a Subsidiary, Jointly-Controlled Entity, or Associate
- IFRS 2 Share-based Payment: Vesting Conditions and Cancellations
- IFRS 3 Business Combinations (2008)
- IAS 1 Presentation of Financial Statements (revised September 2007)
- IAS 23 Borrowing Costs (revised March 2007)
- IAS 27 Consolidated and Separate Financial Statements (2008)
- IAS 32 and IAS 1 Amendments for Puttable Instruments and Obligations Arising on Liquidation
- IAS 39 Amendments for Eligible Hedged Items
- IFRIC 12 Service Concession Arrangements
- IFRIC 13 Customer Loyalty Programmes
- IFRIC 14 IAS 19 – The Limit on a Defined Benefit Asset, Minimum Funding Requirements, and their Interaction
- IFRIC 15 Agreements for the Construction of Real Estate
- IFRIC 16 Hedges of a Net Investment in a Foreign Operation
- Improvements to IFRSs – 2007 (affects various standards)
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3 August 2008: Final report of the SEC's financial reporting advisory committee
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The US SEC's Advisory Committee on Improvements to Financial Reporting (ACIFR) has published its final report of recommendations to increase the usefulness of financial information to investors, while reducing the complexity of the financial reporting system to investors, preparers, and auditors. The report sets out 25 recommendations that the ACIFR believes could be implemented by the Commission, the Financial Accounting Standards Board (FASB), the Public Company Accounting Oversight Board (PCAOB), or their respective staff, as appropriate, without legislation. The Committee's proposals to improve financial reporting are categorised into five main areas:
- Increasing the usefulness of information in SEC reports
- Enhancing the accounting standards-setting process
- Improving the substantive design of new accounting standards
- Delineating authoritative interpretive guidance
- Clarifying guidance on financial restatements and accounting judgments
Click to download:
Examples of some of the proposals relating to the design of accounting standards and the process for setting standards include:
- Fair value reporting. The SEC should recommend that the FASB be judicious in issuing new standards and interpretations that expand the use of fair value in areas where it is not already required until (a) FASB completes a measurement framework to systematically assign measurement attributes to different types of business activities and (b) the SEC, FASB, and others develop and implement a plan to strengthen the infrastructure that supports fair value reporting.
- Financial statement presentation. The SEC should recommend that the FASB consider (a) aggregating financial statements by meaningful categories of business activities, such as the operating, investing, and financing sections and (b) developing a practical means for reconciling the statements of income and cash flows by major classes of measurement attributes.
- Disclosure. Integrate existing SEC and FASB disclosure requirements into a cohesive whole based on consistent objectives and principles.
- Disclosure of risks and judgements. Require disclosure of the principal assumptions, estimates, and sensitivity analyses that may impact a company's business, as well as a qualitative discussion of the key risks and uncertainties that could significantly change these amounts over time.
- Recognition. Recognition guidance in US GAAP should be based on a presumption that bright lines should not exist.
- General vs industry accounting standards. US GAAP should be presumptively based on business activities, rather than industries. Industry-specific standards should be rare.
- Accounting policy choices. US GAAP should be based on a presumption that formally promulgated alternative accounting policies should not exist. US GAAP should be based on a presumption that similar activities should be accounted for in a similar manner.
- Scope of standards. US GAAP should be scoped with sufficient precision to minimize the use of scope exceptions.
- Investor involvement in standards. Add more investor representation to the FASB and the Financial Accounting Foundation.
- Financial Reporting Forum (FRF). Create a Financial Reporting Forum (FRF) that includes key constituents from the preparer, auditor, and investor and other user communities, to meet with representatives from the SEC, the FASB, and the PCAOB to discuss pressures in the financial reporting system overall, both immediate and long-term, and how individual constituents are meeting these challenges. This may require the FASB to re-evaluate the roles and composition of its advisory groups or agenda committees.
- Interpretations. FASB should be the single US standards-setter for all authoritative accounting standards and interpretive implementation guidance for US GAAP. The SEC should issue only registrant-specific guidance.
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2 August 2008: Guía Rápida NIC/NIIF 2008 (Spanish IFRSs in your Pocket 2008)
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Deloitte (Spain) has published Guía Rápida NIC/NIIF 2008 (PDF 554k, 114 pages, July 2008) – a Spanish translation of IFRSs in your Pocket 2008, updated up through 30 June 2008. It includes forewords from Manuel Arranz (Deloitte Spain IFRS Leader); a description of the IASB structure; an IASC/IASB chronology; use of IFRSs around the world; summaries of all IFRSs including Interpretations up through 30 June 2008; brief summaries of IASB agenda projects; and more.
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1 August 2008: Two IAS Plus Newsletters on Conceptual Framework
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Deloitte's IFRS Global Office has published two Special Edition IAS Plus newsletters on Conceptual Framework documents recently issued by the IASB for public comment. The newsletters are:
You will find all of our Past IAS Plus Newsletters Here. Also, you can sign up for Free Subscription by Email.
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