30 November 2008: Deloitte Canada IFRS transition newsletter

Deloitte Canada has published the November 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 Disclosures in Management's Discussion and Analysis (MD&A) Tax Accounting in an IFRS Environment Launch of our Countdown and IFRS Transition Survey SEC Release of the Proposed IFRS Roadmap An Update on Current IFRS events Click below for: November 2008 Edition Countdown Newsletter – English (PDF 634k) November 2008 Edition Countdown Newsletter – French (Compte à Rebours) (PDF 391k) Background on Transition to IFRSs in Canada including past issues of Countdown.

29 November 2008: Credit crunch challenges for directors

The United Kingdom Financial Reporting Council (FRC) has published two alerts to directors on the corporate reporting challenges arising from current economic conditions. Because of the global liquidity squeeze, directors and audit committees may need to spend more time planning the year-end activities, reviewing key assumptions and models used in financial reporting, and reviewing the significant accounting and disclosure judgements. In response to those challenges, the FRC has published: Challenges for Audit Committees Arising from Current Economic Conditions (PDF 205k) An Update for Directors of Listed Companies: Going Concern and Liquidity Risk (PDF 280k) The purpose of the documents is to assist directors by identifying key questions that they may wish to consider when preparing for the year-end and in meeting their responsibilities in relation to annual reports and accounts. These documents do not impose any new requirements on UK companies or their auditors. These publications are copyright by the FRC and are posted on IAS Plus with the kind permission of the FRC.

28 November 2008: Common professional qualifications

Nine of Europe's accountancy institutes have formed the Common Content Project to bring their professional qualifications closer together. One of the driving forces behind the project has been the globalisation of accounting and auditing regulation, so that a significant part of the relevant learning outcomes are IFRS/ISA based. Common Content qualifications focus on the five service areas of professional accountants: assurance and related services performance measurement and reporting strategic and business management financial management taxation and legal services The nine institutes are from France, Germany, Ireland, Italy, Netherlands, and United Kingdom. The nine institutes have recently completed a 'rigorous self-assessment process by each Institute and a detailed review by teams from other Institutes' to confirm that each Institute has met the requirements for its continued membership in the project. Click for: Announcement of Completion of Reviews (PDF 27k) Link to Common Content Project Website

28 November 2008: Four recent IFRS Insights newsletters

We have posted four recent IFRS Insights newsletters from Deloitte & Touche LLP (United States). IFRS Insights provides news on the latest developments on IFRSs, practical suggestions for companies addressing IFRSs, updates on the regulatory environment, and references to relevant tools and resources. Below are the download links and key features of the four new editions. We have Permanent Links to all IFRS Insights on our USA country page. IFRS Insights Volume 6 (November 2008) (PDF 361k) A feature about the Securities and Exchange Commission's proposed IFRS roadmap An article about IFRS and tax considerations related to share-based compensation plans A brief overview of IAS 17 Leases Preview of results from a recent IFRS poll IFRS Insights Volume 5 (October 2008) (PDF 347k) A feature about which US companies may be eligible to use IFRS An article that looks at merger and acquisition considerations for IFRS A brief overview of IFRS 3 Business Combinations A real IFRS case study IFRS Insights Volume 4 (September 2008) (PDF 910k) An update on the proposed IFRS roadmap and rule changes from the Securities and Exchange Commission An article about developing an IFRS Center of Excellence A brief overview of IFRS 2 Share-based Payment A Question & Answer section focusing on IFRS and the oil and gas industry IFRS Insights Volume 3 (August 2008) (PDF 548k) An update on convergence efforts A summary on the SEC Roundtable held on August 4, 2008 An article that explores the technology and systems implications of IFRS A brief overview of IAS 16 Property, Plant and Equipment A Question & Answer section on IFRS lessons from the European Union

28 November 2008: Financial crisis roundtable on 3 December

On 3 December 2008 in Tokyo, the IASB and FASB will jointly hold their final public roundtable on the accounting challenges posted by the current market conditions. The Boards are gathering views from constituents on the most urgent accounting issues and how to approach them. The first roundtable was held in London on 14 November 2008 (click for Our Notes from this Roundtable) and the second was at the FASB's offices on 25 November 2008. There will be two afternoon sessions at the Tokyo roundtable – the first from 13:30 - 15:30 and the second from 16:00 - 18:00. Click here to download the Agenda Papers from the IASB's website. There's a comprehensive Credit Crunch Page on IAS Plus.

28 November 2008: Reminder about upcoming comment deadline

We remind you that comments are due on 5 December 2008 on Exposure Draft: Simplifying Earnings per Share, which was issued 7 August 2008. Among other things, the proposed 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.

27 November 2008: IFRIC 17 on distributions of non-cash assets

The International Financial Reporting Interpretations Committee has issued IFRIC 17 Distributions of Non-cash Assets to Owners. IFRIC 17 Distributions of Non-cash Assets to Owners clarifies that: a dividend payable should be recognised when the dividend is appropriately authorised and is no longer at the discretion of the entity. an entity should measure the dividend payable at the fair value of the net assets to be distributed. an entity should recognise the difference between the dividend paid and the carrying amount of the net assets distributed in profit or loss. an entity to provide additional disclosures if the net assets being held for distribution to owners meet the definition of a discontinued operation. IFRIC 17: applies to pro rata distributions of non-cash assets except for common control transactions. is to be applied prospectively is effective for annual periods beginning on or after 1 July 2009. Earlier application is permitted. Click for the Press Release (PDF 51k).

27 November 2008: Revised IAS 39 reclassification amendments

The has issued an updated version of the recent Reclassification Amendments to IAS 39 Financial Instruments: Recognition and Measurement and IFRS 7 Financial Instruments: Disclosures (issued on 13 October 2008) to clarify the effective date of the amendments. Following publication of the amendments, and in response to requests, the IASB subsequently clarified the effective date requirements at its meeting in October, as follows: Any reclassification made on or after 1 November 2008 takes effect from the date of reclassification. However, any reclassification before 1 November 2008 can take effect from 1 July 2008 or a subsequent date. A reclassification cannot be applied retrospectively before 1 July 2008. The clarification was published in the October issue of IASB Update and on IAS Plus, and it has now been incorporated in the revised version of the amendments, which can be downloaded from the IASB's Website.

26 November 2008: Half of PCAOB audit firms are non-US based

As of 31 October 2008, there were 1,866 public accounting firms registered with the PCAOB, including 879 firms that are based outside the United States. By law, registered firms with more than 100 public company audit clients must be inspected annually; firms with fewer public company audit clients must be inspected at least once every three years. This information is included in the PCAOB's Announcement (PDF 17k) of its approved budget for 2009 of $157.6 million.

26 November 2008: Highlights of SEC mark-to-market roundtable

On 21 November 2008, the US SEC hosted its second and the final roundtable on fair value or mark-to-market (MtM) accounting. The SEC's study of MtM accounting is mandated by the Emergency Economic Stabilization Act of 2008. The roundtable focussed on challenges of MtM accounting and potential improvements to accounting standards. The roundtable consisted of investors, issuers, auditors, and others with experience in MtM accounting. Here are preliminary and unofficial notes taken by Deloitte observers at the Roundtable: The general consensus of the panel The general consensus of the panel was that fair value accounting under Statement 1571 is not the root cause of the current market turmoil. Panelists indicated that regulators should look beyond Statement 157 to address some of the issues prevalent in practice today, such as changing the regulatory capital requirements. In addition, the panelists voiced strong support for independent standard setting, noting that the process needs to be free from any political or regulatory intervention. Three main themes from the discussion Impairment guidance The panelists agreed that standard setters should revisit other-than-temporary impairment guidance. Several suggestions were made, including (1) to align the guidance for impairment of investments in debt securities (Statement 1152) with the guidance for loan impairments (Statement 1143) and (2) to segregate impairment loss between credit and other changes in fair value. Panelists from the investor and auditor community suggested a model in which credit loss on debt securities would be recognised currently in income, and other changes in the fair value of the instrument (the plug) would be recognized in other comprehensive income. The credit loss would be calculated on the basis of changes in expected cash flows in a manner similar to the Statement 114 model. Several panelists from the preparer community suggested that the investments should be carried at amortised cost so that only losses associated with credit are recognised and the fair value of the instrument is disclosed in the notes to the financial statements on a quarterly basis. They indicated that recognising liquidity losses in other comprehensive income distorts equity, which affects regulatory capital requirements. Additional disclosures Panelists agreed on the need for (1) more comprehensive disclosures that may include forward-looking information (such as sensitivity analysis) and (2) detailed discussion of techniques and inputs used by management to estimate fair value. Certain panelists suggested that additional disclosure requirements should be provided by regulators or standard setters before year-end financial reporting. Presentation Panelists agreed that improved income statement presentation of fair value measurements would enhance the transparency and usability of financial statements by the investor community and that the FASB should consider improving financial statement presentation as part of a long-term project. 1FASB Statement No. 157 Fair Value Measurements 2FASB Statement No. 115 Accounting for Certain Investments in Debt and Equity Securities 3FASB Statement No. 114 Accounting by Creditors for Impairment of a Loan

26 November 2008: Report of 6 November 2008 ARC meeting

The Summary Report of the 6 November 2008 Meeting (PDF 39k) of the EC Accounting Regulatory Committee has been released. At that meeting, among other things, the ARC voted to recommend that the following pronouncements be endorsed for use in the EU: Amendments to IFRS 1 and IAS 27: Cost of an Investment in a Subsidiary, Jointly Controlled Entity or Associate Amendments to IAS 32 and IAS 1: Puttable Financial Instruments and Obligations Arising on Liquidation Annual Improvements to IFRSs IFRIC 12: Service Concession Arrangements. However, ARC's recommendation is IFRIC 12 should be mandatory in Europe starting in 2010. The IASB's effective date for IFRIC 12 was annual periods beginning on or after 1 January 2008 (see our News Story of 8 November 2008

26 November 2008: SEC Chief Accountant will step down

US SEC Chief Accountant Conrad Hewitt has announced that he is leaving that position in January 2009. He has been Chief Accountant for two-and-a-half years. Click for SEC News Release (PDF 36k).

25 November 2008: IASB releases restructured version of IFRS 1

The IASB has released a restructured version of IFRS 1 First-time Adoption of International Financial Reporting Standards. IFRS 1 was first issued in June 2003, and since then it has been amended frequently. As a result, the IFRS became more complex and less clear. In 2007, therefore, the Board proposed, as part of its annual improvements project, to change IFRS 1 to make it easier for the reader to understand and to design it to better accommodate future changes. The new version of IFRS 1 just issued retains the substance of the previous version, but within a changed structure. It replaces the previous version and is effective for entities applying IFRSs for the first time for annual periods beginning on or after 1 January 2009. Earlier application is permitted. Subscribers can download it from the IASB's Website.

25 November 2008: 'El tránsito hacia los IFRS en seguros'

Deloitte (Colombia) has published El tránsito hacia los IFRS en seguros: Una mirada más allá de los cambios en contabilidad. This is the Spanish language translation of The IFRS Journey in Insurance: A Look Beyond the Accounting Changes. This report examines the implications of the use of IFRSs in the insurance industry across the globe. The report notes that, in some markets, IFRSs will likely contribute to substantial changes in: Insurance product design, price and offerings Investment strategy Risk management practices Securitisation Merger and acquisition (M&A) activity Click to download El tránsito hacia los IFRS en seguros (PDF 247k). Our other Spanish language resources are Here.

25 November 2008: iGAAP Financial Reporting in Malaysia

Deloitte Malaysia has published iGAAP Financial Reporting in Malaysia – a practical and comprehensive guide on financial reporting under IFRS in Malaysia. This book has: Highlights of and discussions on Malaysia-specific requirements compared to IFRS Practical examples and illustrative applications of IFRS Guidance on the practical issues encountered by users and preparers of IFRS financial statements Suggestions and discussions on the areas in the standards where formal guidance is ambiguous Commentaries and updates on development up to August 2008 of IFRS and Interpretations as of December 31, 2007 as discussed in the book iGAAP Financial reporting in Malaysia (ISBN-13 978-981-4228-56-5 and ISBN-10 981-4228-56-7) is published by CCH Asia Pte Limited and may be ordered from the CCH Malaysia Website.

25 November 2008: Global IFRS and Offerings Services newsletter

We have posted Deloitte's US Reporting Newsletter for Non-US Based Companies October 2008 Edition – includes news through 5 November 2008 (PDF 147k). The newsletter is developed by Deloitte's Global IFRS and Offerings Services (GIOS) team – Deloitte practitioners assisting non-US companies and non-US practice office engagement teams in applying US GAAP and IFRSs and in complying with the SEC's financial reporting rules. The GIOS Newsletter is an update on relevant GAAP, regulatory, and other matters, webcasts, and publications, with hyperlinks to source material. Past GIOS Newsletters are Here. In this issue of the GIOS newsletter: IFRS Matters SEC Issues Proposed Roadmap for Use of IFRS by US Issuers IASB Reveals Steps in Response to Credit Crisis FASB and IASB Issue Discussion Paper on Financial Statement Presentation IASB Permits Reclassification of Certain Financial Instruments IASB Proposes Amendments to Financial Instrument Disclosure Requirements IASB Issued Educational Guidance on Fair value Measurements Regulatory Matters SEC Clarifies Guidance on Impairment of Perpetual Preferred Securities SEC Comments on Executive Compensation Disclosures SEC Holds Roundtable on Transparent Disclosures SEC Begins Study of Mark-to-Market Accounting US GAAP Matters FASB's Valuation Resource Group Discusses Nine Fair Value Topics PCAOB Matters PCAOB Proposes Seven Auditing Standards on Risk Assessment Other Matters FASB and IASB Announce Joint Response on Credit Crisis

25 November 2008: IASCF appoints two new Trustees

The International Accounting Standards Committee Foundation (IASCF), oversight body of the IASB, has appointed two new Trustees to renewable three-year terms effective 1 January 2009: Clemens Boersig, Chairman of the Supervisory Board, Deutsche Bank AG, Germany Noriaki Shimazaki, Executive Vice President, Sumitomo Corporation, Japan. The appointments fill vacancies that will arise at the end of the year when Max Dietrich Kley and Junichi Ujiie retire as Trustees. The Trustees expect to announce a successor from the investment community for David Shedlarz, a retiring US-based Trustee, in due course. Six current Trustees have been reappointed for a second three-year term: Marvin Cheung, Sam DiPiazza, Robert Glauber, Liu Zhongli, Sir Bryan Nicholson, and Mohandas Pai. Click for IASCF Press Release (PDF 72k).

24 November 2008: FASB will issue new F/Y 2008 disclosures

The US Financial Accounting Standards Board (FASB) has announced plans to issue a final FASB Staff Position (FSP) on FAS 140-e and FASB Interpretation (FIN) 46(R)-e Disclosures about Transfers of Financial Assets and Interests in Variable Interest Entities by 15 December 2008. The FSP will increase disclosure requirements for public companies for reporting periods that end after 15 December 2008 (that is, including calendar year 2008). Click for Press Release (PDF 17k).

23 November 2008: Agenda project pages updated for November meeting

We have updated the following agenda project pages to reflect the discussions and decisions at the 18-21 November 2008 meeting of the International Accounting Standards Board. Conceptual Framework Phase C – Measurement Conceptual Framework Phase D – Reporting Entity Consolidation Derecognition of Financial Instruments Fair Value Measurements Financial Instruments – Comprehensive Project Financial Instruments with Characteristics of Equity (Liabilities and Equity) IFRIC D23 – Non-cash Distributions to Owners Leases Post-employment Benefits including Pensions IFRS for Private Entities (formerly IFRS for SMEs) Related Party Disclosures

22 November 2008: Notes from day 4 of the IASB meeting

The International Accounting Standards Board held its November 2008 meeting at the IASB's offices, 30 Cannon Street, London on Tuesday to Friday 18-21 November 2008. Click here to go to the preliminary and unofficial Notes Taken by Deloitte Observers at the Meeting.

21 November 2008: Notes from day 3 of the IASB meeting

The International Accounting Standards Board held its November 2008 meeting at the IASB's offices, 30 Cannon Street, London on Tuesday to Friday 18-21 November 2008. Click here to go to the preliminary and unofficial Notes Taken by Deloitte Observers at the Meeting.

20 November 2008: Notes from day 2 of the IASB meeting

The International Accounting Standards Board held its November 2008 meeting at the IASB's offices, 30 Cannon Street, London on Tuesday to Friday 18-21 November 2008. Click here to go to the preliminary and unofficial Notes Taken by Deloitte Observers at the Meeting.

20 November 2008: Chairman Cox speaks on IFRS in United States

US SEC Chairman Christopher Cox spoke on The Future of International Standards and Cooperation In Light of the Credit Crisis (PDF 45k) at the FEI 2008 Current Financial Reporting Issues Conference in New York on 18 November 2008. Among other things, Chairman Cox discussed the principles that are critical to the success of IFRSs as 'a uniter of the world's capital markets and a powerful tool for investors everywhere': First, the standards must be crafted in the interest of investors. That has to be their overarching purpose. The second principle for the success of IFRS is that the standard setting process must be transparent. That is essential not only to maintain investor confidence, but to ensure the integrity and quality of the standards. Third, the standard setter must be independent. The standard setter must also be accountable. All of the stakeholders themselves must participate in the standard setting process in order to ensure the continued success of IFRS. Chairman Cox also noted: The fact that today, two-thirds of American investors own securities of foreign companies means that the SEC has an abiding interest in ensuring that IFRS are truly high quality and consistently applied across jurisdictions. Whatever the future of IFRS for US issuers, retail and institutional investors alike in our country are relying upon IFRS today.

20 November 2008: Research report on intangibles

The Australian Accounting Standards Board (AASB) has published Initial Accounting for Internally Generated Intangible Assets, a discussion paper addressing the inconsistent accounting treatments for intangible. The discussion paper, authored by staff of the AASB, with the encouragement and support of the group of National Standard Setters (NSS), represents a significant step toward encouraging the International Accounting Standards Board to review its existing accounting standards relating to intangible assets. Currently, accounting standards treat intangible assets acquired as part of a business acquisition differently from the same kind of intangible assets that are internally generated. Comments on this paper are requested by 15 May 2009. The AASB intends that comments received on the paper will provide valuable input into any future work on intangible assets that the IASB might initiate. In December 2007, the IASB rejected an agenda proposal on intangibles. Click for: Discussion Paper (PDF 677k) – it is copyrighted by the Commonwealth of Australia and posted here with permission AASB Press Release (PDF 32k) A key conclusion of the intangibles research report: From a technical conceptual perspective, internally generated intangible assets should be required to be initially measured at fair value to enhance the decision-usefulness of financial reports. An option to adopt cost as an alternative to fair value should not be allowed. On balance, we also think that this view can be justified on practical grounds. However, we acknowledge the views of some against our conclusion. Accordingly, before our conclusion is considered for implementation, we think that further investigation of the perceived practical impediments is warranted.

19 November 2008: Two IAS Plus newsletters in Spanish

Deloitte (Colombia) has published Spanish translations of the following two English language IAS Plus Special Edition newsletters: Amendments to IAS 39 and IFRS 7 – reclassification of financial assets (PDF 193k) Proposed amendments regarding discontinued operations (PDF 95k) Las ediciones especiales de IAS Plus Octubre 2008, en español, así: Enmiendas a IAS 39 y IFRS 7 – reclasificación de activos financieros (PDF 26k) Enmiendas propuestas relacionadas con operaciones descontinuadas (PDF 24k)

19 November 2008: Notes from day 1 of the IASB meeting

The International Accounting Standards Board held its November 2008 meeting at the IASB's offices, 30 Cannon Street, London on Tuesday to Friday 18-21 November 2008. Click here to go to the preliminary and unofficial Notes Taken by Deloitte Observers at the Meeting.

18 November 2008: New valuation standards board is appointed

Over the past year, the overall structure for establishing International Valuation Standards (IVS) has been reorganised. Within the new structure – known as the International Valuation Standards Council (IVSC) – the International Valuation Standards Board (IVSB) is the new body that sets the standards for how to perform and report on valuations. The IVSB replaces the outgoing IVSC Standards Board. A second body in the new structure is the International Valuation Professional Board (IVPB). The IVPB's responsibilities are to promote the profession generally and to benchmark educational and professional standards for valuation. The members of the new IVSB and IVPB have just been appointed. Also, the outgoing standards board has prepared a transition memo to advise the new board of the status of its current projects and to make recommendations as to future projects and activities, including liaison with the IASB. Click for: Press Release Announcing the IVSB and IVPB Appointments (PDF 22k) Transition Memo from the Outgoing Board (PDF 110k) IVSC Page on IAS Plus

18 November 2008: Heads Up on US SEC IFRS Roadmap

Deloitte (United States) has published a special issue of the Heads Up newsletter discussing the SEC's proposed IFRS Roadmap. The roadmap outlines certain milestones that, if achieved, could lead to mandatory transition to IFRSs in the United States starting in financial years ending on or after 15 December 2014. The roadmap also contains proposed rule changes that would give certain US issuers the early option to use IFRSs in financial statements for financial years ending on or after 15 December 2009. Click to Download the Heads Up Newsletter (PDF 150k). The proposed roadmap outlines seven milestones Milestones 1-4 discuss issues that need to be addressed before mandatory adoption of IFRSs: 1. Improvements in accounting standards. 2. Accountability and funding of the International Accounting Standards Committee Foundation. 3. Improvement in the ability to use interactive data for IFRS reporting. 4. Education and training on IFRSs in the United States. Milestones 5-7 discuss the transition plan for the mandatory use of IFRSs: 5. Limited early use by eligible entities – This milestone would give roughly 110 US issuers the option of using IFRSs for financial years ending on or after 15 December 2009. 6. Anticipated timing of future rule making by the SEC – On the basis of the progress made on milestones 1-4 and experience gained from milestone 5, the SEC will determine in 2011 whether to require mandatory adoption of IFRSs for all US issuers. Potentially, the option to use IFRSs could also be expanded to other issuers before 2014. 7. Implementation of mandatory use – The roadmap raises many questions, including whether the transition to IFRSs should be phased in. According to the roadmap, large accelerated filers would be required to file IFRS financial statements for financial years ending on or after 15 December 2014, then accelerated filers in 2015, and nonaccelerated filers in 2016.

17 November 2008: Notes from the IASB-FASB financial crisis roundtable in London

In response to the challenges caused by the current market conditions the IASB and the FASB have decided to hold a series of roundtables to gather views from constituents on the most urgent accounting issues and how to approach them. The first roundtable was held in London on 14 November 2008. The second will be at the FASB's office in Norwalk, CT USA, on 25 November 2008. The final roundtable will be on 3 December 2008 at the offices of the Accounting Standards Board of Japan in Tokyo. Presented below are the preliminary and unofficial notes taken by Deloitte observers at the London roundtable. Notes from the IASB-FASB Global Financial Crisis Roundtable London 14 November 2008 The London roundtable was divided into two 2.5 hour sessions. IASB Board Member John Smith chaired both sessions. The 44 participants were drawn from a wide range of constituents. It was noted that all next steps, in response to calls from constituents, will be considered jointly by IASB and FASB and following due process and, therefore, no decisions were taken at these roundtable meetings. For the roundtable in London the following topics were discussed based on submissions from participants received: Impairment of financial assets Reclassification of financial instruments designated under the fair value option Fair value measurement Disclosures Other issues Impairment of financial assets The chairman introduced the topic highlighting that the guidance for impairment both regarding triggers and measurement is different in IFRS and US GAAP. Much of the discussion focussed on the different impairment models that exist in IFRS and US GAAP, particularly for impairment of debt instruments. Many participants believe there should be convergence. They commented most frequently on the differences between loan loss impairment for a debt instrument measured at amortised cost compared to one measured at fair value as an available-for-sale (AFS) investment. Recent market events had resulted in the latter being recognised at an amount significantly lower than if it has been measured under an amortised cost model due to the current market's assessment of credit and liquidity risk compared to an impairment that would have been recognised had the impairment been calculated using the original effective interest rate. Some participants put forward the idea that impairment of an AFS debt instrument should be recognised on the same basis as if the asset was measured at amortised cost. If that is done, differences due to liquidity risk or credit risk in excess of the incurred loss model would be recognised in other comprehensive income, rather than currently recognised in profit or loss. This led to a broader question about what impairment in income is meant to represent – loss of recoverable cash flows or loss in fair value. Some participants raised a number of interpretative issues with the current model of impairing AFS debt instruments. Specifically, if an AFS debt instrument is impaired, are further declines in fair value considered as further impairments, or does this depend on whether further fair value declines are derived from movements in the risk-free rate as opposed to further declines in credit quality, or whether further declines in fair value are impairment losses only if there are further impairment triggers? There was feedback from user groups as to whether impairment losses based on the incurred loss concept were useful even if the loss recognised in profit or loss is based on fair value. Some participants noted that fair value is a good predictor of real cash losses. It was also highlighted while there is a difference between impairment and fair value volatility, markets are usually better than individuals in predicting the performance of an instrument. There was discussion of whether for equity securities an impairment loss should be allowed to be reversed through profit or loss – currently it is not. Some argued that as the trigger event is a significant or prolonged decline in fair value below cost, then should this trigger event no longer apply, the impairment should be reversed through profit or loss. The Boards will consider whether amendments to the existing measurement guidance for impairment is needed, or alternatively whether further disclosure in the short term could be introduced to align the different impairment approaches. The chairman noted that the challenges resulting from the current guidance are rooted in the fact that there are different measurement classification categories within IFRS and US GAAP. Aligning the classification categories would address many of these issues. Many of the participants agreed with this conclusion. Reclassification of financial instruments designated under the fair value option The roundtable then discussed the use of the fair value option and possible reclassifications out of this designation. Some participants sympathised with revising the conditions for invoking the fair value option to achieve convergence with US GAAP (that is, so the fair value option under IFRS is unrestricted) and widening the fair value option for certain arrangements over non-financial items not currently in IAS 39. Others proposed allowing reclassification out of the fair value option in case where conditions for invoking the fair value option are no longer met. Participants holding this view felt this was appropriate in the case of an accounting mismatch that existed when the fair value option was invoked which no longer applied, for example: where financial assets were matching insurance liabilities and the continuation of the fair value option created more of an accounting mismatch, or when the fair value option was used instead of fair value hedge accounting and the mismatch failed due to changes in fair value of the assets due to credit and prepayment risk, or when the entity ceased to manage the financial instruments on a fair value basis due to difficulties in establishing fair value in the current markets. Concern was raised that to allow an entity to reclassify in such circumstances would require further rules as what would be a permitted reclassification. Fair value measurement Regarding how to determine fair value, it was noted there was a recent submission to the IFRIC on how to include liquidity spreads in valuation when the market is no longer active. While many participants agreed that determining fair value is more challenging in inactive markets, it is not appropriate to normalise values or use liquidity spreads that do not reflect a current market participant's view of spreads. It was noted the view expressed in the IFRIC submission was not in accordance with IAS 39. Others referred to the work done by the IASB Experts Advisory Panel and that this guidance should indeed be authoritative (and not voluntary as it is at the moment). The roundtable participants discussed the procyclical effects of fair value accounting. There seemed to be agreement that it is not the purpose of financial reporting to report 'regulatory numbers' that avoid overly positive or negative market movements. It was noted that within the European Union, ECOFIN has established a working group to analyse the roots of procyclicality and that Bob Herz (FASB chairman) and Sir David Tweedie (IASB chairman) would be on a Financial Stability Forum working party looking at procyclicality. Disclosures The chairman introduced this topic by presenting the various projects on the boards' agendas on the topic of disclosures. User groups were concerned that the IAS 39 amendment on reclassifications of financial assets issued in October 2008 only amended IFRS 7, which only deals with disclosure in annual accounts. User groups stated that there are widely different variations in the amount of disclosure in interim financial statements for entities that reclassified financial assets in Q3 and proposed that the additional disclosures included in IFRS 7 should be required in interims. Other issues The roundtable discussed the issue of accounting for synthetic Collateralised Debt Obligation (CDO) structures. Many speakers highlighted that there is a divergence between IFRS and US GAAP as to whether credit-related embedded derivatives require separation or not in the instance when the instrument is not fair valued through profit or loss. It was noted that both the IASB and FASB would consider this issue. It was noted that clarification is needed on whether embedded derivatives need to be assessed if an entity reclassified an asset out of fair value through profit or loss as a result of the IAS 39 amendment issued last month. Some IASB Board members noted that the IAS 39 amendment was not intended not to require assessment of embedded derivatives. Participants noted that IAS 39/IFRIC 9 was not as clear as it could be in this respect. Staff from the IASB indicated that this would be addressed in the future, and the chairman stated that should the IASB issue a clarification it would most likely state that assessment of embedded derivatives would be required at the date of reclassification and it would be applied retrospectively. One participant noted that the IASB and FASB projects on derecognition and consolidation did not seem to be aligned, and a request was made that they should be. The chairman asked participants if there were other issues the boards should address. No participant raised other issues. This summary is based on notes taken by observers at the Roundtable and should not be regarded as an official or final summary.

17 November 2008: What's new in financial reporting for Dec. 2008?

Deloitte (Australia) has published What's New in Financial Reporting for December 2008? (PDF 172k). This publication provides a high level overview of new and revised financial reporting requirements that need to be considered for periods ending on 31 December 2008. Entities can use this listing to perform a quick check that all the new financial reporting requirements have been fully considered as part of their December 2008 reporting close process. The information was last updated on 30 October 2008 for developments to that date. Deloitte (Australia) will update this Information On-line if any significant developments occur in the period to 31 March 2009. The information is organised as follows: overview of the big picture issues for financial reporting at December 2008 tables of new and revised accounting pronouncements, categorised as follows: IFRS-equivalent Standards and guidance domestic Standards amending Standards Interpretations pronouncements approved by the IASB/IFRIC where an equivalent pronouncement has not been issued by the AASB Corporations Act 2001 developments other developments

16 November 2008: Report of the G20 Summit

The meeting of the G20 Heads of State and leaders of the World Bank, the International Monetary Fund, the United Nations, and the Financial Stability Forum has concluded. The participants published a Declaration of the Summit on Financial Markets and the World Economy (PDF 50k). The Declaration sets out both immediate actions (by 31 March 2009) and medium-term actions that should be taken to strengthen the global economy and reform the world's financial markets. The leaders agreed on a set of common principles for market reforms, including the following principle for strengthening transparency and accountability: We will strengthen financial market transparency, including by enhancing required disclosure on complex financial products and ensuring complete and accurate disclosure by firms of their financial conditions. Incentives should be aligned to avoid excessive risk-taking. The excerpts below are the recommendations most directly related to the IASB and IFRSs. Strengthening Transparency and Accountability Immediate Actions by March 31, 2009: The key global accounting standards bodies should work to enhance guidance for valuation of securities, also taking into account the valuation of complex, illiquid products, especially during times of stress. Accounting standard setters should significantly advance their work to address weaknesses in accounting and disclosure standards for off-balance sheet vehicles. Regulators and accounting standard setters should enhance the required disclosure of complex financial instruments by firms to market participants. With a view toward promoting financial stability, the governance of the international accounting standard setting body should be further enhanced, including by undertaking a review of its membership, in particular in order to ensure transparency, accountability, and an appropriate relationship between this independent body and the relevant authorities. Private sector bodies that have already developed best practices for private pools of capital and/or hedge funds should bring forward proposals for a set of unified best practices. Finance Ministers should assess the adequacy of these proposals, drawing upon the analysis of regulators, the expanded FSF, and other relevant bodies. Medium-term actions: The key global accounting standards bodies should work intensively toward the objective of creating a single high-quality global standard. Regulators, supervisors, and accounting standard setters, as appropriate, should work with each other and the private sector on an ongoing basis to ensure consistent application and enforcement of high-quality accounting standards. Financial institutions should provide enhanced risk disclosures in their reporting and disclose all losses on an ongoing basis, consistent with international best practice, as appropriate. Regulators should work to ensure that a financial institution's financial statements include a complete, accurate, and timely picture of the firm's activities (including off-balance sheet activities) and are reported on a consistent and regular basis. Reinforcing International Cooperation Medium-term actions: Authorities, drawing especially on the work of regulators, should collect information on areas where convergence in regulatory practices such as accounting standards, auditing, and deposit insurance is making progress, is in need of accelerated progress, or where there may be potential for progress.

16 November 2008: Mexico plans move to IFRSs in 2012

On 11 November 2008, the Mexican Banking and Securities Commission (Comisión Nacional Bancaria y de Valores, or CNBV) announced that all companies listed on the Mexican Stock Exchange will be required to use IFRSs starting in 2012. Listed companies will have the option to use IFRSs earlier – even as early as 2008 – subject to requirements that will be established by the CNBV. Mexican Financial Reporting Standards, developed by the Consejo Mexicano para la Investigación y Desarrollo de Normas de Información Financiera (CINIF), will continue to be required for non-listed Mexican entities. CINIF has stated that it will continue its programme for converging Mexican standards with IFRSs. Click for: CNBV Press Release (PDF 39k, in Spanish). CNBV Press Release (PDF 70k, in English). CINIF Press Release (PDF 35k, in Spanish).

16 November 2008: Updated summary of IFRIC agenda rejections

We have updated our Summary of Issues Not Added to IFRIC's Agenda to reflect the IFRIC's final decisions at its November 2008 meeting not to add the following topics to its agenda. Our summary now includes nearly 140 issues: IAS 39 – Valuation of restricted securities IFRIC 14 – Stable workforce assumption

15 November 2008: National standard setters communique to IASB

Twenty members of the National Standard Setters Group (NSS) have sent a communique to the IASB and the IASCF Trustees expressing support for the IASB's efforts to achieve true global financial reporting standards. The NSS members mention the Request by the European Commission asking the IASB to amend or interpret IAS 39 to ensure that three specific matters are addressed in time for year-end 2008 financial reports. The NSS members state that: It is important that the IASB follows appropriate due process. While appropriate due process should allow constituents ample time to consider and comment on any changes, it may be, in these extraordinary times, that due process will need to be shortened. Should this be the case we stand ready to assist the IASB to achieve the most effective due process possible. For instance we could stimulate debate among our national constituents, hold round tables on the technical issues involved and act as focal points for comments. We urge those adopting international financial reporting standards to accept the decisions of the IASB if they are made with adequate due process and deliberation, taking into account the impacts on markets and the economy. Click for Communique to the IASB (PDF 18k). The twenty signatories to the Communique are: Ian Mackintosh, Chairman, Accounting Standards Board, UK Amarjit Chopra, Chairman, Accounting Standards Board, India Chungwoo Suh, Chairman, Korean Accounting Standards Board Conrad C. Chang, Chairman, Taiwan Financial Accounting Standards Committee Paul F, Winklemann, Chairman, Financial Reporting Standards Committee, Hong Kong Bruce Porter, Acting Chairman, Australian Accounting Standards Board Jean-Francois LePetit, Chairman, French Accounting Standards Board Alex Watson, Chairman, Accounting Practices Committee, South Africa Paul Cherry, Chair, Canadian Accounting Standards Board Anders Ullberg, Chairman, The Swedish Financial Reporting Board Stig Enevoldsen, Chairman, European Financial Reporting Advisory Group Massimo Tezzon, Secretary General, Organismo Italiano Contabilita Hans de Munnick, Chair, Dutch Accounting Standards Board C.P.C. Felipe Perez Cervantes, President, Mexican Accounting Standards Board Joanna Perry, Chairman, Financial Reporting Standards Board, New Zealand Asad Ali Shah, President, Institute of Chartered Accountants of Pakistan Ikuo Nishkawa, Chairman, Accounting Standards Board of Japan Liesel Knorr, President, German Accounting Standards Board Erland Kvaal, Chairman, Norwegian Accounting Standards Board Gerhard Prachner, Chairman, Austrian Accounting Standards Board

15 November 2008: SEC invites comment on IFRS 'roadmap' for USA

The US Securities and Exchange Commission has published for comment its proposed Roadmap for the Potential Use of Financial Statements Prepared in Accordance with International Financial Reporting Standards by US Issuers. Comments on the 165-page proposal are due 19 February 2009. The Roadmap sets forth several milestones that, if achieved, could lead to the required use of IFRS by US issuers in 2014. The milestones include: Improvements in accounting standards based on the latest IASB-FASB MOU (the commission cites revenue recognition and financial statement presentation as two projects that, when completed should 'improve financial reporting significantly') Accountability and funding of the IASC Foundation Improvement in the ability to use interactive data for IFRS reporting As part of the Roadmap, the Commission is proposing to permit early use of IFRS by a limited number of US issuers where this would enhance the comparability of financial information to investors. Only an issuer whose industry uses IFRS as the basis of financial reporting more than any other set of standards would be eligible to elect to use IFRS, beginning with filings in 2010. Click to download SEC's Proposed IFRS Roadmap (PDF 419k). TABLE OF CONTENTS OF THE SEC'S PROPOSED IFRS ROADMAP I. OVERVIEW II. THE ROLE OF IFRS IN THE US CAPITAL MARKETS A. The Promise of Global Accounting Standards 1. The Global Nature of Today's Capital Markets 2. Potential for IFRS as the Global Accounting Standard B. Past Policy Considerations Regarding IFRS III. A PROPOSED ROADMAP TO IFRS REPORTING BY US ISSUERS A. Milestones to be Achieved Leading to the Use of IFRS by US Issuers 1. Improvements in Accounting Standards 2. Accountability and Funding of the IASC Foundation 3. Improvement in the Ability to Use Interactive Data for IFRS Reporting 4. Education and Training 5. Limited Early Use of IFRS Where This Would Enhance Comparability for US Investors 6. Anticipated Timing of Future Rulemaking by the Commission 7. Implementation of the Mandatory Use of IFRS B. Other Areas of Consideration 1. The Roles of Financial Information 2. Accounting Systems, Controls and Procedures 3. Auditing 4. Considerations of IFRS and the IASB's Standard Setting Process a. State of IFRS b. Relationship to the Accounting Standard Setting Process IV. PROPOSAL FOR THE LIMITED EARLY USE OF IFRS WHERE THIS WOULD ENHANCE COMPARABILITY FOR US INVESTORS A. Eligibility Requirements B. Staff Letter of No Objection to the Use of IFRS C. Transition D. Alternative Proposals for US GAAP Information 1. Proposal A - Reconciled Information Pursuant to IFRS 1 2. Proposal B - Supplemental US GAAP Information 3. Discussion of Proposals A and B V. DISCUSSION OF PROPOSED AMENDMENTS A. The Use of IFRS Financial Statements in Commission Filings by Eligible Issuers 1. Proposed Amendments to Rule 4-01 of Regulation S-X 2. Proposed Definition of 'IFRS Issuer' B. Application 1. Article 13 of Regulation S-X 2. Proposed Clarifying Amendments with Respect to References to IFRS as Issued by the IASB C. Proposed Amendments to Item 10(e) of Regulation S-K and Regulation G D. Related Disclosure and Financial Reporting Issues 1. Selected Financial Data 2. Market-Risk and the Safe Harbor Provisions 3. Disclosure of First-Time Adoption of IFRS in Form 10-K 4. Other Considerations Relating to IFRS and US GAAP Guidance E. Financial Statements of Other Entities under Regulation S-X 1. Application of the Amendments to Rules 3-05, 3-09 and 3-14 a. Significance Testing b. Separate Historical Financial Statements of Another Entity Provided under Rule 3-05, 3-09 or 3-14 2. Financial Statements Provided under Rule 3-10 3. Financial Statements Provided under Rule 3-16 F. Pro Forma Financial Statements Provided under Article 11 G. Industry Specific Matters 1. Disclosure Pursuant to Industry Guides 2. Disclosure from Oil and Gas Companies under FAS 69 H. Application of the Proposed Amendments to Other Forms, Rules and Schedules 1. Application of Proposed Amendments to Exempt Offerings 2. References to FASB Pronouncements in Form 8-K 3. Application of IFRS to Tender Offer and Going-Private Rules VI. GENERAL REQUEST FOR COMMENTS VII. PAPERWORK REDUCTION ACT A. Background B. Burden and Cost Estimates Related to the Proposed Amendments C. Request for Comment VIII. COST-BENEFIT ANALYSIS A. Proposal for Early Use of IFRS by US Issuers 1. Expected Benefits 2. Expected Costs B. Proposal A: Reconciled Information Pursuant to IFRS 1 1. Expected Benefits 2. Expected Costs C. Proposal B: Supplemental US GAAP Information 1. Expected Benefits 2. Expected Costs IX. REGULATORY FLEXIBILITY ACT CERTIFICATION X. CONSIDERATION OF IMPACT ON THE ECONOMY, BURDEN ON COMPETITION AND PROMOTION OF EFFICIENCY, COMPETITION AND CAPITAL FORMATION XI. PROPOSED AMENDMENTS TO THE CODIFICATION OF FINANCIAL REPORTING POLICIES XII. STATUTORY BASIS AND TEXT OF PROPOSED AMENDMENTS

15 November 2008: SEC plans 'mark-to-market' roundtable

The US Securities and Exchange Commission will hold its second roundtable on 'mark-to-market' accounting on 21 November 2008 at 9:30 am ET at its offices in Washington. This roundtable, along with the previous one hosted on 29 October 2008, will provide input to the SEC as part of a Congressionally mandated study pursuant to the Emergency Economic Stabilization Act of 2008. This roundtable will consist of a single panel, which will focus on potential improvements to the current accounting model and implications of possible changes. Click for Press Release (PDF 27k).

15 November 2008: Co-chairs of IASB-FASB crisis advisory group

Hans Hoogervorst, Chairman of the Netherlands Authority for the Financial Markets (AFM, the Dutch securities regulator) and Harvey Goldschmid, former Commissioner of the United States Securities and Exchange Commission, have agreed to co-chair the high-level advisory group formed jointly by the IASB and the FASB to consider financial reporting issues arising from the global economic crisis. Click for Press Release (PDF 51k).

15 November 2008: EITF Snapshot for November 2008

We have posted the November 2008 edition of EITF Snapshot (PDF 146k) summarising the 13 November 2008 meeting of FASB's Emerging Issues Task Force. EITF Snapshot, published by Deloitte & Touche LLP (USA), enables readers to identify relevant topics and to understand quickly the meeting's outcome. Past issues can be downloaded Here. This EITF Snapshot covers the following issues discussed by the EITF at the meeting: Issue 08-1 Revenue Arrangements With Multiple Deliverables – Consensus-for-exposure Issue 08-9 Milestone Method of Revenue Recognition – Tentative conclusion reached Issue 08-6 Equity Method Investment Accounting Considerations – Final consensus Issue 08-7 Accounting for Defensive Intangible Assets – Final consensus Issue 08-8 Accounting for an Instrument (or an Embedded Feature) With a Settlement Amount That Is Based on the Stock of an Entity's Consolidated Subsidiary – Final consensus Issue 08-10 Selected Statement 160 Implementation Questions – Consensus-for-exposure Initial EITF consensuses (known as 'consensuses-for-exposure') are exposed for a comment period after ratification by the FASB. At its first scheduled meeting after the comment period, the EITF considers comments received and, as warranted, affirms its consensuses-for-exposure as final consensuses. Those consensuses are then provided to the Board for final ratification.

15 November 2008: UK groups reaffirm their support for the IASB

A group of constituents of the IASB from the United Kingdom has published a Letter in the Financial Times (PDF 12k) urging that the European Commission continue to support the IASB as Europe's accounting standard setter and not to reject or change any IASB standards. The signatories represent UK preparers, auditors, and users of accounts and include Ken Wild, head of Deloitte's IFRS Global Office. Copies of the letter were sent to the European Commission and the IASB. The EU has the ability not to accept international standards for use in Europe, or to change them. We strongly believe that these powers should only be used in the most exceptional circumstances and that the present situation does not justify their use. We would not support another carve-out. IFRS is becoming the world's global accounting standard, and the EU has played a very important part in this convergence. If Europe in any way adopts its own version of IFRS, we not only lose the advantages of global comparability, we also risk detaching ourselves from this global movement and sacrificing our position of influence for one on the sidelines, just at a point when the global economy needs strong leadership in all areas, including accounting. 15 November 2008: FAF letter to President Bush on standard setting In a letter to US President George W Bush in advance of the upcoming G20 summit meeting, the Financial Accounting Foundation has urged the President to support independent accounting standard setting and open due process that is 'free from political interference'. Click to download The FAF Letter to President Bush (PDF 1,616k). Here is an excerpt: We understand that current issues relating to international accounting standards will be discussed at this meeting as part of a comprehensive examination of the global financial crisis. The FAF believes that the complex task of setting accounting standards is best done by the experts who comprise the FASB and the International Accounting Standards Board (IASB). We believe the integrity and independence of the accounting standard setting process is of critical importance to investors worldwide. We support the joint commitment of the FASB and the IASB to work in unison to develop and implement a consistent response to global financial reporting issues emanating from the current financial crisis. 14 November 2008: Webcast on income taxes and IFRSs Deloitte (United States) has organised a webcast on Income Tax Implications of Converting from US GAAP to IFRSs – It's Not Just About Accounting. Monday, November 24, 2008 2:00 pm - 3:00 pm EST (19:00 GMT) Host: Rita Benassi, Partner - Deloitte Tax LLP Many tax executives are grappling with the tax accounting considerations of converting from US GAAP to IFRSs but haven't given much thought to other tax-related issues. The webcast will discuss: Global tax planning that considers how each foreign jurisdiction has or will adopt IFRSs. US-centric complexities of converting to IFRSs, including accounting methods, state tax issues, and potential challenges of reporting earnings and profits of foreign subsidiaries. Tax operational considerations, such as professional development, data collection, and software. Learn what converting to IFRSs entails beyond tax accounting and how your company can smooth the transition. Click here for Information about the Webcast including a link for registration.

14 November 2008: President Bush: accounting must show 'true value'

In a Speech on Financial Markets and the World Economy (PDF 67k) yesterday in New York, US President George W Bush said that the purpose of tomorrow's meeting of the G20 Heads of State is to address the current crisis, and to lay the foundation for reforms that will help prevent a similar crisis in the future. President Bush said that discussions among the Heads of State and leaders of the World Bank, the International Monetary Fund, the United Nations, and the Financial Stability Forum will focus on five key objectives: understanding the causes of the global crisis, reviewing the effectiveness of our responses thus far, developing principles for reforming our financial and regulatory systems, launching a specific action plan to implement those principles, and reaffirming our conviction that free market principles offer the surest path to lasting prosperity. President Bush said, 'While reforms in the financial sector are essential, the long-term solution to today's problems is sustained economic growth. And the surest path to that growth is free markets and free people.' He specifically cited the need of accounting standards for financial instruments that tell investors their 'true value': One vital principle of reform is that our nations must make our financial markets more transparent. For example, we should consider improving accounting rules for securities, so that investors around the world can understand the true value of the assets they purchase.

13 November 2008: IFRSs y US GAAP: Una comparación de bolsillo

Deloitte & Touche Ltda. (Colombia) has published IFRSs y US GAAP: Una comparación de bolsillo 2008 (PDF 327k). This is the Spanish translation of IFRSs and US GAAP: A Pocket Comparison (2008). This guide compares IFRSs and US GAAP as of 30 June 2008. While this 76-page comparison is comprehensive, it does not attempt to capture all of the differences that exist or that may be material to a particular entity's financial statements. Our focus is on differences that are commonly found in practice. We are pleased to grant permission for accounting educators and students to make copies for educational purposes. This and other Spanish resources are on our Pagina de Recursos en Español.

13 November 2008: Accounting by sovereign wealth funds

Deloitte Touche Tohmatsu has published Minding the GAPP: Sovereign Wealth, Transparency, and the 'Santiago Principles' (PDF 2,720k). This booklet explains the generally accepted principles and practices (GAPP) for Sovereign Wealth Funds (SWFs) that were agreed to by an International Working Group of SWFs in September 2008. SWFs are special-purpose investment funds owned by a national government to hold, manage, or administer assets to achieve financial objectives. Assets under management by SWFs globally have recently been estimated at $3.6 trillion, and some sources forecast that this could grow to as much as $9 trillion by 2012. Two of the new GAPP principles relate to financial reporting and auditing: GAPP 11. Principle An annual report and accompanying financial statements on the SWF's operations and performance should be prepared in a timely fashion and in accordance with recognized international or national accounting standards in a consistent manner. GAPP 12. Principle The SWF's operations and financial statements should be audited annually in accordance with recognized international or national auditing standards in a consistent manner.

13 November 2008: Agenda for G20 summit will include accounting

A press briefing on the upcoming G20 Summit on Financial Markets and the World Economy, to be hosted by US President George W Bush, was conducted by Daniel Price, Assistant to the President for International Economic Affairs, and David McCormick, US Under Secretary of the Treasury: Mr Price provided an overview of the structure of the summit and 'what some of our objectives are and how we think it will go'. Secretary McCormick then reviewed 'a number of those areas where we believe there is sufficient common ground that leaders may be in a position to take some near-term decisions and some near-term actions'. Among the areas Secretary McCormick touched on were global accounting standards and financial reporting by financial institutions. Click to download the Full Text of the Press Briefing (PDF 63k). Here is an excerpt about global accounting standards and financial reporting: Global accounting standards Within those four areas that Dan laid out – transparency and accountability, sound regulation, integrity in our financial markets, and international cooperation – there are a number of topics that leaders might touch on. One under the area of transparency and accountability would be global accounting standards. This has been an area that's gotten a lot of attention, and by creating a more aligned and ultimately convergence of global accounting standards, that reduces a huge burden on businesses and ensures a level playing field in terms of how we measure the performance of different businesses. Financial reporting by financial institutions There's been a lot of discussion up until this point about the complexity and the opaqueness of some of the products, the financial services products that have been developed. So the role of regulators in enhancing the transparency of those complex products will certainly be an area that I suspect will be touched on, and then the importance of financial reporting, and financial reporting in a way that captures all the activity under a financial institution, both on balance sheet and off balance sheet activity. These are the kinds of themes that we would expect to be touched on under the broader heading of transparency and accountability. Click here for Comprehensive Credit Crunch Information (64 items).

13 November 2008: IOSCO letter to G20 Heads of State

The International Organization of Securities Commissions (IOSCO) has sent a letter to the G20 Heads of State as input to their upcoming discussions in Washington on 15 November. The letter reviews IOSCO's work toward high quality global securities regulation, noting that one of the four main areas in which IOSCO has focussed its work is 'international financial reporting standards and the accountability of the standard setter to the community of national authorities responsible for reporting by public companies'. Attached to the letter is a Statement by IOSCO Regarding Accounting Standards and Governance. Click to Download IOSCO's Letter to the G20 (PDF 98k). Below is an excerpt from the statement on accounting standards. IOSCO also supports the development and use of robust, internationally accepted, and consistently applied financial reporting standards. To achieve such standards, the standard setting process must be accountable and subject to appropriate consultation. In this regard, IOSCO strongly supports International Financial Reporting Standards (IFRS) as developed by the International Accounting Standards Board (IASB). The job of developing and maintaining high quality standards that provide transparency to investors relies to a critical extent on independent accounting standards setters, including the IASB. Standard setters will be best able to produce high quality standards if they are able to exercise independent judgment, relying on their skills, experience and due process, without undue political pressure and taking into account the views of all stakeholders. In this light, IOSCO stands ready as a community of capital market authorities to support accounting standards setters in their roles. At the same time, IOSCO members are those with direct responsibility for protecting investors in our markets. To fulfill this duty, IOSCO members must have a means of ensuring that accounting standard setters are working in the best interests of investors. IFRS is being used in more and more jurisdictions around the world. It is critical for securities regulators that allow or require the use of IFRS in their jurisdictions (or are considering doing so) to maintain a balance between protecting the independence and integrity of the IASB as the standard setter for IFRS, while ensuring that the IASB is accountable for producing standards in the best interests of investors.

13 November 2008: Newsletter on financial statement presentation DP

Deloitte's IFRS Global Office has published a special edition of our IAS Plus Newsletter explaining the Joint IASB-FASB Discussion Paper (DP) on Financial Statement Presentation (PDF 208k). The DP was published on 16 October 2008, with comments requested by 14 April 2009. The DP sets out the two Boards' preliminary views on how best to portray assets, liabilities, income, expense, cash flows, and related information in financial statements. It is not about how those items are recognised or measured. You will find all Past IAS Plus Newsletters Here. You can sign up for Free Subscription by Email.

13 November 2008: IASCF Trustees letter to G20 Heads of State

The Trustees of the IASC Foundation (IASCF) have sent a letter to participants at the upcoming G20 Meeting on 15 November in Washington, DC. The letter, which was signed by IASCF Chairman Gerrit Zalm, informs the leaders of G20 countries of the role that the IASB is playing in addressing issues emanating from the credit crisis, and outlines steps being taken to enhance the public accountability of the IASCF. The Trustees wrote the letter because issues of accounting standards and the credit crisis and the governance of the IASB may be on the meeting's agenda. Click to Download the Trustees' Letter to the G20 (PDF 416k). Here is an excerpt: Most of the world's developed and emerging economies – including nearly all of the G20 members – have made commitments to IFRSs. The IASB has been actively engaged in promoting common standards over the world and in particular in ensuring convergence among major economies. The success so far achieved should not be compromised by actions that would weaken the independence of the standard-setting process.... My fellow Trustees and I understand the extraordinary circumstances facing policymakers today. Our organisation is committed to acting in an urgent and responsible manner to help restore confidence in financial markets. Broad international adoption of IFRSs, combined with the actions described above, means that the IASB is helping to ensure a globally consistent response on financial reporting issues. We urge the G20 nations to support our efforts in a manner that reinforces the IASB's efforts and the organisation's independence.

13 November 2008: G20 finance ministers favour global standards

The G20 Finance Ministers and Central Bank Governors met in Sao Paulo, Brazil, on 8-9 November 2008. The meeting focussed primarily on the causes of and policy responses to the global financial crisis, as prelude to the upcoming G20 Heads of State meeting in Washington on 15 November. The Final Communique (PDF 84k) of the meeting mentioned accounting as follows: "We also agreed that financial institutions should have common accounting standards".

12 November 2008: No political interference in accounting standards

The International Corporate Governance Network has issued a Public Statement on the Global Financial Crisis (PDF 62k). The statement, released ahead of the 15 November 2008 international summit on the crisis, calls on the leaders involved to include strengthened corporate governance as part of a package of measures aimed at restoring confidence to markets. ICGN members are largely institutional investors who collectively represent funds under management in excess of US$15 trillion. The ICGN statement expressly rejects any political interference in setting accounting standards: Accounting standards: There must be no political interference in setting accounting standards. The fair value approach has been blamed for encouraging pro-cyclicality. Investors generally support fair value that delivers a picture of what is actually happening. There are some challenges to address, but abandoning this approach would damage confidence in financial reporting. It is important to recognise that there is a difference between fair value used for reporting and fair value used to measure the need for regulatory capital. Accounting standards also need to be clearer about when off-balance sheet business should be reported.

12 November 2008: iGAAP 2008: IFRS for Canada

Deloitte & Touche LLP (Canada) has developed iGAAP 2008: IFRS for Canada, which has been published by CCH. It is a comprehensive reference book on the convergence of Canadian GAAP with IFRS. It is essential reading for accounting professionals, as well as others who need to understand the implications of Canada's IFRS conversion on their organisation. Written for Canadians by Canadian practitioners, the book provides a roadmap to help companies understand how to effectively transition from Canadian GAAP to IFRS. It can be purchased through www.cch.ca/product.aspx?WebID=2424.

12 November 2008: Heads Up on presentation discussion paper
Deloitte (United States) has published a special issue of the Heads Up newsletter discussing the joint IASB-FASB Discussion Paper (DP) on financial statement presentation. The goal of the project is to create a standard that requires entities to organise financial statements in a manner that clearly communicates an integrated financial picture of the entity. Click to Download the Heads Up Newsletter (PDF 143k).

11 November 2008: ARC recommends delayed use of IFRIC 12 in EU

The European Commission's Accounting Regulatory Committee met on 6 November 2008. While the official summary record of the meeting has not yet been posted on the EC website, observers at the meeting have indicated that the ARC reached the following decision with respect to IFRIC 12 Service Concession Arrangements: The European Commission should endorse IFRIC 12 for mandatory use in Europe starting in 2010. The IASB's effective date for IFRIC 12 was annual periods beginning on or after 1 January 2008. More specifically, the ARC recommended that IFRIC 12 should be mandatory for an EU company's first financial year that begins after formal endorsement by the Commission. If endorsement happens, as expected, in January 2009, that would mean that IFRIC 12 would be effective in Europe in 2010. The ARC recommended that early application be permitted.

11 November 2008: EU heads of state urge reform of IASB

The heads of state or government of the EU member countries met in Brussels on 7 November 2008 to discuss a coordinated EU response to the credit crisis. The meeting was also, in part, preparation for the upcoming Meeting of the G20 heads of state in Washington on 15 November. In their Report of the EU Leaders' Meeting (PDF 101k), the leaders reaffirmed their resolve to 'devise long-term ways of reforming the international financial system'. The leaders also agreed that Europe should introduce a set of 'principles on which to build a new international financial system' for discussion at the upcoming G20 meeting. The principles are: No financial institution, no market segment and no jurisdiction must escape proportionate and adequate regulation or at least oversight The new international financial system must be based on principles of accountability and transparency. The new international financial system must allow risks to be assessed so as to prevent crises. Give the IMF a central role in a more efficient financial architecture. Relating to principle 2 above, the EU leaders said: 2. The new international financial system must be based on principles of accountability and transparency. Transparency of financial transactions must be ensured by means of a more comprehensive information system, which no longer omits vast swathes of financial activity from auditable, certifiable accounts. Arrangements conducive to excessive risk-taking must be overhauled, particularly debt securitisation procedures and pay policy. Both prudential and accounting standards applicable to financial institutions will have to be revised to ensure that they do not contribute to creating speculative bubbles in periods of growth and make the crisis worse at times of economic downturn. Standards bodies, in particular in the area of accountancy, will have to be reformed to allow a genuine dialogue with all the parties concerned, in particular prudential authorities. The EU leaders also urged that the G20 adopt 'adopt the principle of convergence of accounting standards and review the application in the financial sector of the fair value rule in order to improve its consistency with prudential rules'.

10 November 2008: IFRIC agenda pages are updated

We have updated the following IFRIC agenda issues pages to reflect the discussions and decisions at the meeting of the International Financial Reporting Interpretations Committee on 6 November 2008: IAS 18 Revenue Recognition – Customer Contributions IAS 38 – REACH (EC Regulation Concerning the Registration, Evaluation, Authorisation and Restriction of Chemicals) Customer-Related Intangible Assets IFRIC 14 – Voluntary Prepaid Contributions under a Minimum Funding Requirement (new agenda project page)

10 November 2008: Simplifying the IFRS for Private Entities

We have posted an article by Paul Pacter, the IASB's Director of Standards for Private Entities (who is also webmaster of IAS Plus) about Simplifying the IFRS for Private Entities (PDF 226k). Paul's article, which was published in Financial Executive magazine November 2008 issue, reviews the decisions made by the IASB in the past six months to further simplify the IFRS for Private Entities. Those decisions are based on the Board's consideration of: the 162 letters of comment on the exposure draft the results of field tests of the ED by 116 small companies recommendations of the IASB's Working Group on the project further staff research since publication of the ED The article also identifies the remaining steps for completion of the standard and comments on the possibility of using the standard in the United States. The article is copyright by Financial Executives International, and we have posted it on IAS Plus with their kind permission.

9 November 2008: EC working party on derivatives begins its work

The European Commission's Working Party on Derivatives held its first meeting on 5 November 2008. The goal of the group is to develop, by the end of this year, a plan for the centralised clearing of credit default swaps (CDS) across the EU. While the group will focus primarily on market operation and regulation, it intends also to focus on 'how to ensure adequate information and supervision by regulators'. The group is composed of representatives from the industry and many European regulators. Click for Meeting Report (PDF 67k).

9 November 2008: Our views on the Annual Improvements ED

Deloitte has submitted to the IASB a Comment Letter on the IASB's Exposure Draft of Proposed Improvements to IFRSs 2008 (PDF 175k). We welcome and support the IASB's continuing improvements process as a way of dealing with certain amendments to IFRSs in an efficient and effective manner. And we are supportive of most of the proposals in the ED. Our letter takes issue with three of the proposals, as noted in the box below. Our past comment letters to the IASB/IASC are Here. The three improvements with which we have some concerns are the following: We do not agree with the proposal in IAS 7 Statement of Cash Flows for basing the classification of expenditures as cash flows from investing activities on recognition of an asset in the statement of financial position and believe this has significant impact for certain entities and industries. We believe that the question of classification of cash flows in the statement of cash flows would be better addressed in the IASB's project on financial statement presentation. In addition, we believe the proposed guidance in IAS 18 Revenue on determining whether an entity is acting as a principal or as an agent does not establish a principle underlying the list of indicators provided and hence, will not resolve many of the issues that arise in practice. Finally, we believe the proposed change of guidance in IAS 39 Financial Instruments: Recognition and Measurement for determining whether a non-financial contract contains a separable embedded foreign currency derivative could be improved. We acknowledge that determining whether such embedded derivatives require separation has proved problematic in practice and therefore the requirement does need improvement. However, we do not believe the current proposed wording will establish the necessary clarity. We have provided an alternative wording that uses the indicators provided in the proposed Basis for Conclusions which we believe would make the amendment clear and operational.

8 November 2008: Notes from the November 2008 IFRIC meeting

The International Financial Reporting Interpretations Committee (IFRIC) met at the IASB's offices in London on Thursday 6 November 2008. Presented below are the preliminary and unofficial notes taken by Deloitte observers at the meeting. Among IFRIC's key decisions were the following: The IFRIC approved an Interpretation based on D24 Customer Contributions; A potential topic on REACH costs was referred to the staff for more work, principally to identify an underlying principle; Tentative agenda items issued in September were finalised; A proposal for an Interpretation on the effects of rate regulation was tentatively rejected; the topic will not be referred to the IASB. Notes from the IFRIC Meeting 6 November 2008 Introduction The minutes of the September 2008 IFRIC meeting were approved. D24 Customer Contributions (Transfers of Assets from Customers) The IFRIC approved an Interpretation based on that exposed in D24 Customer Contributions. Title The IFRIC agreed that the title of the Interpretation should be changed to refer to 'transfers' of assets from customers. This is because, in many jurisdictions, 'contributions' are non-reciprocal transactions. The transaction being addressed by this Interpretation is a reciprocal transaction. Consensus Control of an asset Much of the discussion centred on whether an asset can be recognised by the recipient. The IFRIC was presented with wording revised since the Observer Notes were released. The revised wording concentrates on the definition of an asset in the IASB Framework. The IFRIC concluded that references to IAS 17 and IFRIC 4 were confusing and detracted from the issue being articulated in D24: who controls the asset transferred? The IFRIC noted that paragraph 49(a) of the IASB Framework states that an asset is a resource 'controlled by the entity as a result of past events and from which future economic benefits are expected to flow to the entity.' The IFRIC thought that a key indicator of control of an item of property, plant and equipment would be that the entity is responsible for the repair, maintenance, upgrade and replacement of the item transferred. The IFRIC agreed that if an item of property, plant and equipment received by a service provider meets the definition of an asset, it should be recognised as an asset by the recipient at its transfer date fair value. Accounting for the credit The IFRIC agreed that, should the item of property, plant and equipment meet the definition of an asset of the recipient, the credit side of the recognition entry would be a component of revenue. IFRIC members suggested that the Interpretation should clarify use of the term 'the customer.' Currently, the drafting has been simplified so that 'customer' includes both the entity transferring the item of property, plant and equipment and the entity receiving on-going services through the item transferred. IFRIC members noted that, in many cases, the entity transferring the item of property, plant and equipment will have no further association with the item and that using one term to describe two or more parties might cause more confusion than it was intended to avoid. Much of the discussion centred on whether that revenue was earned as the result of a single or multiple element transaction. If there was a multiple element transaction, some portion of the revenue would be deferred and amortised over the related service period. However, if there was a single element transaction immediate recognition of revenue would be required. The IFRIC requested that the Interpretation clarify that what the customer receives (e.g. when an office building is connected to the power grid) is the ongoing access to the distribution network, not the goods or services provided by that network. The goods and services (e.g. electrical power) are usually the subject of a separate transaction between the distributor and the customer. Only when connection to the distribution network is bundled with a preferential rate for the future supply of services would the transaction be treated as a multiple element transaction and unbundled in to its constituent elements. IFRIC members were concerned that some of the terminology confused this intention, especially in situations in which the distributor had a statutory obligation to supply to all customers connected to its distribution network. The IFRIC agreed that the Interpretation should be clarified to avoid the inference that an obligation would be created by a connexion to a distribution network. Effective date and transition The IFRIC agreed that the Interpretation should be effective three months after it is issued. The transition provisions caused more discussion, with some IFRIC members favouring some degree of retrospective application. However, there were others who expressed reservations about this approach on practicability grounds and because of the use of hindsight in determining fair value. The IFRIC agreed that the Interpretation should apply to transfers of assets within the scope of the Interpretation occurring on or after the effective date (i.e., prospective application only). Re-exposure The IFRIC discussed whether re-exposure was necessary. Although there have been some significant changes to the consensus, the IFRIC agreed with the staff analysis of the IFRIC's criteria for re-exposure that re-exposure was not necessary. However, the IFRIC staff agreed that they would publicise the post-approval steps to a greater extent than usual, which would delay the issuance of the Interpretation until January 2009 (see next steps, below). Approval Subject to drafting, the IFRIC approved the Interpretation, with one member dissenting. Next steps In response to requests from IFRIC members, the IFRIC staff agreed to: Highlight the release of the 'near-final draft' of the Interpretation on the IASB's Website (in mid-December 2008) for longer than normal. Although this document would not represent an Invitation to Comment, any comments received would be considered by the IFRIC in January 2009. Refer the Interpretation to the IASB for approval in January 2009 (rather than December 2008). Compliance Costs for REACH (European Commission Regulation Concerning the Registration, Evaluation, Authorisation and Restriction of Chemicals) The staff introduced a paper on accounting for costs incurred to comply with the requirements of the European Regulation concerning the Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH). The IFRIC in July 2008 tentatively agreed to add the issue to its agenda and asked the staff to provide additional analysis on the basis of broader principles. The purpose of this session was to make a decision whether the item meets the IFRIC's criteria for adding it to the agenda in the light of the analysis provided by the staff. The staff continued to introduce the background and regulation mechanisms of REACH noting that entities that have to comply with the regulation would regularly incur significant costs, particularly in connection with the technical dossier and safety tests required by the regulation. This was confirmed by some of the IFRIC members. The staff noted that there is no specific guidance in IFRSs that would address schemes like REACH. The key accounting issues identified were: Should a provision for expected REACH costs be recognised? Should REACH costs be expensed or capitalised as an intangible asset? Regarding the first issue it was noted that there was general consensus amongst constituents that expected REACH costs should not be provided for. On the second issue the IFRIC had a discussion over how to distinguish between REACH costs and other costs of compliance if one would go down a capitalisation route. Again, it was confirmed that the costs are generally significant (ranging between 50.000 to 1 million per substance), leading entities to gather in consortia to share costs. Another IFRIC member noted that the first couple of years will be particularly significant when companies have to register existing substances. Many IFRIC members asked whether there was a distinguishing feature of REACH costs compared to general compliance costs and whether such a feature could be used for developing a wider principle for a wider range of situations. One IFRIC member noted that one such feature could be that the registration is specific to the contract. Members acknowledged that a wide range of such regulation schemes existed across the globe. The Chairman reminded the IFRIC that addressing a jurisdictional matter without an underlying principle would lead to further submissions that could not be turned down because they are jurisdiction-specific. There was some uncertainty around the table about the mechanism of REACH when a substance was actually registered. Some believed other market participants could then use the substance without further costs. Others opposed to this. The staff was asked to follow up on this. The IFRIC then turned to the question on how to proceed with this issue. Some wanted to expand the scope of the issue others tried to narrow it down with the intent to find a consensus on a timely basis. It was agreed that any narrow scope should be 'natural' and not artificial. The staff was asked to bring this issue back and find characteristics based on the REACH scheme that would be a starting point for the scope of a potential project. It was also asked to look at cost-sharing agreements in consortia and also whether an asset exists. Customer-related Intangible Assets At the last IFRIC meeting it was agreed to tentatively add to the agenda a project on accounting for customer-related intangible assets with regard to the contractual/non-contractual notion. This session aimed to identify a scope for a possible interpretation. The staff began to talk the IFRIC through the agenda paper. The staff highlighted that the issue arises in practice when determining the meaning of 'non-contractual' customer relationship and the link to contractual customer relationship. The IFRIC discussed at length the question what would be subsumed under both notions and whether the approach taken in IFRS 3 (Revised) – ie, separating from goodwill any non-contractual customer relationship that is separable). The IFRIC finally agreed to refer this issue to the Board with a recommendation to remove the distinction in IFRS 3 (Revised) and IAS 38 between contractual and non-contractual customer relationships. Review of Tentative Agenda Decisions published in September 2008 IFRIC Update IAS 39: – Restricted securities The IFRIC confirmed the wording of the tentative agenda decision published in the September IFRIC Update. IFRIC 14 - Stable workforce assumption The IFRIC confirmed its decision not to take the issue originally submitted on its agenda. On a different issue identified by the staff during the deliberations of the submission the staff acknowledged that this issue causes problems in cases where an entity voluntarily prepays contributions under a minimum funding requirement, but proposed to address this issue in the upcoming ED/Standard on employee benefits accounting as a result of the IASB's discussion paper on this area. One IFRIC member noted that this would not happen before 2011 and highlighted that the numbers produced would be wrong and IFRIC would confirm this, but not fix it. This member was sympathetic to address this issue before any improved Standard on pension accounting. Most IFRIC members shared this view. Finally, it was decided to propose an amendment to IFRIC 14 with regard to paragraph 22 of the agenda to resolve the issue described above. Staff Recommendations for Tentative Agenda Decision Regulatory assets and liabilities The staff presented the IFRIC with its recommendation on regulatory assets and liabilities based on the background information research it undertook. The staff's proposal was not to add the item to the IFRIC's agenda, but to refer it to the Board with a recommendation to add it to the agenda. It was acknowledged that this issue was of particular relevance for jurisdictions moving towards IFRS that, under local GAAP, recognised regulatory assets and liabilities. The IFRIC had some discussion on whether such assets and liabilities exist at all or only in very rare circumstances. Some IFRIC members had strong views on this issue. It was noted that the ability to charge favourable prices in the future does not create an asset as their realisation depended on future revenues; nor does the requirement to charge a lower price in the future create a liability (unless the contract is made onerous thereby). Many IFRIC members disagreed with the staff analysis while agreeing with the staff's recommendation not to add the item to the agenda. It was noted that this issue can be addressed using existing Standards, but there was no divergence in practice under IFRS as such items are only rarely recognised by entities using IFRS. Ultimately, the IFRIC agreed by a majority vote tentatively not to add the item to the agenda and not to recommend that the item be referred to the IASB. IAS 32 – Classification of puttable and perpetual instruments The staff presented the IFRIC with a submission on the revised version of IAS 32 Financial Instruments: Presentation. The submission asked whether an entity can have more than one class of equity instruments under the revised Standard where one class is a puttable instrument. The scenario described in the submission assumed a perpetual instrument meeting the definition of an equity instrument in IAS 32 and a puttable instrument that would be a deemed equity instrument under the amended provisions. The staff brought forward two possible views: Perpetual instruments classified as equity do not prohibit an entity from classifying puttable instruments as equity provided the criteria in IAS 32.16A/B are met Perpetual instruments classified as equity prohibit puttable instruments from being classified as equity at the same time since the criterion in IAS 32.16A(c) is not met. There was consensus around the IFRIC that the first view was in line with the Standard. It was agreed that the agenda decision as drafted should clearly that the existence of more than one class of equity is possible under IAS 32. IAS 28 Associates – Potential effect of IFRS 3 and IAS 27 (as revised in 2008) on equity method accounting The staff noted that the FASB's Emerging Issues Task Force (EITF) added EITF Issue No. 08-6 Equity Method Investment Accounting Considerations to its agenda. This draft EITF addresses several potential issues arising from the issue of the revised business combination standards (these are in large parts converged between US GAAP and IFRS). Four issues are addressed: How the initial carrying value of an equity method investment should be determined How an impairment assessment of an underlying indefinite-lived intangible asset of an equity method investment should be performed How an equity method investee's issuance of shares should be accounted for How to account for a change in an investment from the equity method to the cost method. The IFRIC had some discussion in principle over the equity method of accounting and issues arising from its application. With regard to the four issues the EITF had identified the IFRIC agreed that the staff should come back with further analysis on the issues of determining the initial carrying amount of an equity method investment and how an equity method investee's issuance of shares should be accounted for. For the remaining two issues the IFRIC will issue a tentative agenda decision not to take them on the agenda. IAS 39 – Derecognition The IFRIC decided to remove this item from its agenda in the light of the IASB's project on the topic. Fair Value Measurement of Financial Instruments in Inactive Markets – Determining the Discount Rate This was a late entry. The submission specifically asked the IFRIC to address the issue at the November IFRIC meeting as it related to the current market conditions. The IFRIC coordinator informed the IFRIC that the submitter published the submission on its website and hence, normal rules of confidentiality were not relevant. It was noted that the approach presented in the submission was, according to the submission, broadly agreed with by non-accounting standard setting authorities in the jurisdiction the issue had arisen. The submission was seeking for IFRIC's input on determining the components of a discount rate to be used to determine fair value using a discounted cash flow approach for instruments where markets are considered inactive. In particular, two specific components were identified and a possible approach to that proposed: credit and liquidity spreads that are not observable in a market. The staff noted that it was clear that any guidance would be more like implementation guidance and that IFRIC generally does not add items to the agenda where the output would be implementation guidance. In addition, it was highlighted that the Board has several activities on its agenda in relation to determining fair value. One IFRIC member noted that the proposed agenda decision wording was not strong enough in the light of the possibility of being interpreted as implicit consent to the proposed approach. This member proposed to be explicit that the agenda decision should be clear that this approach is not acceptable. It was also noted that the IASB's Expert Advisory Panel has published guidance on this, which was generally considered useful albeit not authoritative and that the agenda decision should refer to the output of the panel published recently. The IFRIC agreed not to add the item to the agenda, but to change the wording of the tentative agenda decision to: Make explicit reference to the final report of the IASB's Expert Advisory Panel Make clear that the approach presented was not consistent with the measurement objective and the guidance in IAS 39. Administrative Session – IFRIC work in progress The IFRIC coordinator debriefed the IFRIC on the current status of the work in progress. This summary is based on notes taken by observers at the IFRIC meeting and should not be regarded as an official or final summary.

7 November 2008: German Institute opposes EU IFRS suspension

The Institut der Wirtschaftsprufer (the IDW, which is the German professional institute of registered auditors) has written to EU Commissioner for Internal Markets Charlie McCreevy strongly urging that the European Commission oppose any political move to seek a partial or full suspension of any IFRSs. In anticipation of the G20 Summit Meeting in Washington on 15 November 2008, the EU will have a summit of EU leaders today. The IDW is concerned that at both the EU summit and then the G20 summit, there will be political pressure on national leaders to discuss, and possibly make decisions on, technical accounting standards issues that should be addressed by the IASB. Click to Download the IDW Letter (PDF 395k). Here is an excerpt: The enclosed article from the Financial Times newspaper dated November 3, 2008 infers that the French Government intends, given the current crisis experienced in financial markets, to propose that the application of International Financial Reporting Standards in the European Union be debated at the forthcoming EU summit on November 7, 2008. We have not been able to establish the accuracy of this reported information. However, we have heard, from more than one source, of rumours that the French government may be intending to seek a partial or even full suspension of specific requirements of the Regulation (EC) No 1606/2002 of the European Parliament and of the Council of 19 July 2002 on the application of international accounting standards (lAS Regulation). Such a move would mean that companies listed on the European stock markets would no longer be required to fully apply IFRS. We would like to request you to ensure that the EU Commission resists any attempts to introduce such measures, were they to be put forward. The original aim of the lAS Regulation, to require financial reporting by companies listed on capital markets in Europe to be transparent and to be internationally accepted, as a measure to ensure the competitiveness of the capital markets in Europe, remains just as valid today. The complexity of the interrelationships between capital markets globally means that it is essential that capital market participants receive consistent information, to facilitate meaningful comparison, and thus it is essential that unified financial reporting principles be applied.

7 November 2008: IASB and FASB announce two more roundtables

The IASB and FASB have Announced (PDF 127k) the dates and locations of two additional public roundtable discussions to identify financial reporting issues highlighted by the global financial crisis. We Previously Reported that the first one will be held in London on 14 November 2008. The roundtables are intended to help the boards identify any accounting issues that may require the urgent and immediate attention. Here are details of the roundtables: Date Local Time Roundtable Location 14 November 2008 Sessions at 10:30 and 13:30 Holborn Bars, 138-142 Holborn, London EC1N 2NQ UK 25 November 2008 Afternoon FASB Office, 401 Merritt 7, Norwalk, Connecticut 06856-5116 USA 3 December 2008 Afternoon Office of the Accounting Standards Board of Japan, Fukoku Seimei Building 20F, 2-2, Uchisaiwaicho 2-chome, Chiyoda-ku, Tokyo 100-0011, Japan We have quite a bit of information about the credit crisis and accounting issues Here.

7 November 2008: Pakistan moving toward IFRS in 2009

The Securities and Exchange Commission of Pakistan (SECP) and the Institute of Chartered Accountants of Pakistan (ICAP) have agreed, in principle, to 'take urgent necessary steps so as to ensure full compliance with IFRS, as far as the financial statements of the listed companies (other than banks and financial institutions) are concerned', for the year ending 31 December 2009. The ICAP President's Communication (PDF 33k) of 13 October 2008 states that, for this purpose, only two IFRSs – IFRS 1 and IFRS 4 – remain to be legally adopted, and some changes are required in an Ordinance.

7 November 2008: Reminder – comment deadline on Improvements ED

We remind you that comments are due today on the Exposure Draft of Proposed Improvements to IFRSs (2008), which was issued 7 August 2008.

7 November 2008: Agenda for November 2008 IASB meeting

The International Accounting Standards Board will hold its November 2008 meeting at the IASB's offices, 30 Cannon Street, London on Tuesday to Friday 18-21 November 2008. The meeting is open to public observation and will be webcast. The tentative agenda is shown below. The Board will also meet with the Standards Advisory Council (SAC) on Thursday and Friday 13-14 November 2008, at the Renaissance Chancery Court Hotel in London. The SAC meeting will be open to public observation. See our Earlier News Item below for the agenda for the SAC meeting. 18-21 November 2008, London Tuesday 18 November 2008 (afternoon only) Conceptual Framework Phase C – Measurement Conceptual Framework Phase D – Reporting Entity Wednesday 19 November 2008 IFRIC Update Transition and Effective Date of IFRIC Interpretation 15 Ratification of IFRIC 17 Distributions of Non-cash Assets to Owners Post-employment Benefits – initial discussion of responses to discussion paper Related Party Disclosures– sweep issues arising from re-exposure ballot draft Financial Instruments – Comprehensive Project Agenda proposal Upcoming IASB-FASB roundtables Derecognition Thursday 20 November 2008 IFRS for Private Entities (formerly IFRS for SMEs) – Recognition, Measurement, and Presentation Fair Value Measurements Financial Instruments with Characteristics of Equity (Liabilities and Equity) Leases Friday 21 November 2008 (morning only) Consolidation Standards Advisory Council Update Sweep issues from this meeting, if any

6 November 2008: EC adopts consolidated text of EU-IFRSs

On 3 November 2008, the European Commission adopted the consolidated text of all International Financial Reporting Standards in force in the European Union (EU). The consolidated version puts together all IFRS endorsed to date – that is, those endorsed from 29 September 2003 to 15 October 2008. This action does not encompass the entire current body of IFRSs, because 14 IASB pronouncements still Remain to be Endorsed for use in the EU, and the EU has made some modifications of IAS 39. Also, EC adoption does not include the implementation guidance and bases for conclusions that the IASB issues with its Standards. The EC's new consolidated text will be available in all official EU languages. All cross-references have been updated, and the translations have been reviewed and 'overhauled'. Formally, the adoption of the consolidated text was done by Regulation (EC) No 1004/2008. Click for: EC Press Release (PDF 84k) Consolidated Text of IFRSs as Endorsed by the EC (PDF 1,966k) More Information on EC Website

6 November 2008: EC statement on IASB FV measurement guidance

On 5 November 2008, the European Commission issued a Statement (PDF 86k) welcoming the guidance on fair value measurements recently issued by the IASB. The Commission statement said: The European Commission welcomes the guidance on the application of fair value measurement when markets become inactive published by the International Accounting Standards Board (IASB) on 31 October 2008. The Commission considers that the IASB's position is fully consistent with the joint statement issued by the 3 European committees of supervisors and with similar guidance recently issued by the relevant US bodies.

6 November 2008: Two weeks of IASB-related meetings begin
There are many IASB-organised meetings coming up in the next two weeks. We thought IAS Plus visitors might find a recap useful:

6 November 2008: Agenda for 13-14 November 2008 SAC meeting

The International Accounting Standards Board will meet with the Standards Advisory Council (SAC) on Thursday and Friday 13-14 November 2008, at the Renaissance Chancery Court Hotel in London. The meeting will be open to public observation. The agenda is presented below. Standards Advisory Council Meeting Agenda 13-14 November 2008, London Thursday 13 November 2008 SAC Chairman Update IASB Work program and MoU Agenda proposals Financial Instruments Rate regulated activities The credit crisis Reclassification Illiquid market expert panel Fair value measurement disclosures IFRS 7 review Consolidation Derecognition Public roundtables and consultative group Conceptual framework Friday 14 November 2008 (Morning Only) Implementation activities IFRIC Annual improvements Australian post-implementation experience Session with Trustees Constitution Review IFRS for Private Entities

5 November 2008: IASCF XBRL Advisory Council meeting

The XBRL Advisory Council of the IASC Foundation will meet on 11 November 2008 at the IASB's offices in London. The agenda includes discussion of the XBRL taxonomies for IFRSs and the IFRS for Private Entities. For more information and an agenda click Here.

5 November 2008: IFRS in tourism, hospitality and leisure industries

Deloitte (United States) has published IFRS in Tourism, Hospitality and Leisure: More Than Just Accounting. This report provides practical industry insights on IFRS and includes useful sections on: Challenges and opportunities facing hospitality companies The potential implications of IFRS relating to human resources, regulatory, tax, treasury, contract management, accounting and technology issues Evaluating approaches to IFRS conversion Planning for IFRS adoption Click to download IFRS in Tourism, Hospitality and Leisure (PDF 535k). You will find links to a wide range of Deloitte IFRS Publications Here.

5 November 2008: Revised agenda for upcoming IFRIC meeting

The Agenda for the IFRIC Meeting on 6 November 2008 has been revised to add an additional staff recommendation for a tentative agenda decision: Fair Value Measurement of Financial Instruments in Inactive Markets – Determining the Discount Rate.

5 November 2008: Accounting Roundup – October 2008

We have posted the October 2008 Edition of Accounting Roundup (PDF 363k, 31 pages) published by Deloitte & Touche LLP (USA). Topics covered in this issue include: FASB Developments FASB Issues Guidance on Measuring Fair Value of Financial Assets in an Inactive Market FASB Issues Exposure Draft on Subsequent Events FASB Issues Exposure Draft on Going Concern FASB and IASB Issue Discussion Paper on Financial Statement Presentation FASB Decides to Propose FSP to Delay Effective Date for Interpretation 48 (Uncertain Tax Positions) for Private Entities FASB and IASB Announce Joint Response to Credit Crisis FASB's Valuation Resource Group Discusses Nine Fair Value Topics AICPA Developments AICPA Issues SAS on Communicating Internal-Control-Related Matters AICPA Issues SSAE on Integrated Audits of Nonpublic Companies AICPA Issues Exposure Draft on Conducting an Audit in Accordance With GAAS SEC Developments SEC Extends Comment Period for Proposed Rule Redefining Annuity Contracts SEC Issues Letter Clarifying Impairment Guidance on Perpetual Preferred Securities SEC Comments on Executive Compensation Disclosures SEC Holds Roundtable on Transparent Disclosures SEC Begins Study of Mark-to-Market Accounting PCAOB Developments PCAOB Proposes Seven Auditing Standards on Risk Assessment PCAOB Discusses Accomplishments in 2008 and Priorities for 2009 FASAB Developments FASAB Issues Standard on Reporting Gains and Losses Attributable to Changes in Pension Obligation Assumptions International Developments IASB Issues Amendments Permitting Reclassification of Financial Instruments IASB Proposes Amendments to Financial Instrument Disclosure Requirements IASB Reveals Steps in Response to Credit Crisis IAASB Issues Seven Revised International Standards on Auditing IAASB Issues Practice Alert on Auditing Fair Value IFAC Provides View Regarding International Standards on Auditing SMEs Other Developments Considerations Regarding the Emergency Economic Stabilization Act of 2008 You will find past issues of Accounting Roundup Here.

4 November 2008: IASB governance proposed for G20 meeting agenda

Leaders of the G-20 countries, which include the world's richest nations and biggest emerging economies, will meet in Washington on 15 November 2008 to discuss the global financial crisis, with a goal of agreeing on specific steps that should be taken in response. Reuters and others have reported that the EU finance ministers have requested that the agenda for the meeting address, among other matters, the governance of the IASB. Here is an excerpt from the Reuters Report that lists the action steps recommended by the EU finance ministers: Reconsider accounting and prudential standards to improve their mutual consistency, and how financial stability could be better incorporated into the mandate of standard setters like the International Accounting Standards Board. The IASB has already agreed to ease the impact of fair-value accounting rules on banks after pressure from EU leaders. The G-20 members, which together account for 90 percent of the world economy, are Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, South Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, the United Kingdom, the United States, and the European Union. The Managing Director of the International Monetary Fund, the President of the World Bank, the United Nations Secretary-General, and the Chairman of the Financial Stability Forum have also been invited to participate in the 15 November 2008 meeting.

3 November 2008: IASB and FASB plan roundtables on the financial crisis

The IASB and the US Financial Accounting Standards Board have announced that the first of three public roundtable discussions to identify financial reporting issues highlighted by the global financial crisis will be held in London on 14 November 2008. The roundtables will provide an opportunity for the two boards to hear input from a wide range of stakeholders including users and preparers of financial statements, governments, regulators, and others. The roundtables are intended to help the boards identify any accounting issues that may require the urgent and immediate attention. Dates for the second and third roundtables, to be held in Norwalk, CT USA and Tokyo, will be announced shortly. Click for IASB Press Release (PDF 158k).

3 November 2008: We ask FASB to wait for converged answers

Deloitte & Touche LLP (United States) has submitted to the FASB two comment letters urging FASB not to proceed with the following proposed amendments to two FASB pronouncements – FAS 140 on derecognition and FIN 46(R) on consolidation – but, rather, to wait for completion of the joint FASB-IASB projects on the two topics: The Proposed FASB Statement Accounting for Transfers of Financial Assets – an amendment of FASB Statement No. 140 would change FASB's current derecognition model. The Proposed FASB Statement Amendments to FASB Interpretation No. 46(R) would change FASB's current consolidation model. Here is an extract from the FAS 140 (derecognition) letter. The same point is made in the other letter: Rather than issuing this proposed Statement as a final standard, the FASB should work with the IASB to develop a common derecognition model that can be applied by all entities reporting under either US GAAP or IFRSs. Currently, the two boards are expected to issue joint final standards by 2010. Therefore, if the FASB were to issue this proposed Statement as a final standard, US registrants would have to apply three different derecognition models within a short time frame, resulting in operational challenges for preparers. Because derecognition and consolidation are inextricably linked, we also strongly encourage the FASB and IASB to concurrently develop a common consolidation principle. The derecognition and consolidation principles should be conceptually consistent, based on the concept of control, and consistent with the definitions of an asset and a liability being developed in the joint conceptual framework. We believe that such consistent principles are fundamental to more faithfully representing the assets and liabilities of a reporting entity. Click to download: Deloitte Letter on FAS 140 Amendment (Derecognition) (PDF 233k) Deloitte Letter on FIN 46R Amendment (Consolidation) (PDF 246k)

2 November 2008: Analyst Representative Group meeting

The IASB will meet with the Analyst Representative Group on 12 November 2008 09:00-17:00h at the IASB Offices, 30 Cannon Street, London. The meeting is open to public observation. Topics on the agenda are: AGENDA FOR THE ANALYST REPRESENTATIVE GROUP MEETING 12 November 2008, London IASB Work Plan and Activities The credit crisis ED IFRS 7 – disclosures re liquidity risk and fair value measurement guidance hierarchy Impairment of Available for Sale financial instruments Illiquid market expert panel Public consultation processes Future IASB activity Fair value measurement Consolidation – impending exposure draft Recognition principles Disclosures Derecognition Proposed model IASB interactions and consultations Summary

2 November 2008: Agenda for Insurance Working Group meeting

The IASB's Insurance Working Group will meet on 10 and 11 November 2008 at the Hesperia London Victoria Hotel (Tate Gallery, mezzanine floor) in London. The meeting is open to public observation (registration required). The agenda is below. Insurance – 10-11 November 2008, London 10 November 2008 Introduction Overview of papers for this meeting Project planning Update on other relevant projects IASB Work Plan IASB's response to the credit crisis Measurement approaches – overview Candidate measurement approaches Candidate measurement approaches – tabular comparison Overview of responses from the comment letters Candidate measurement approaches – example User needs 11 November 2008 Financial Statement Presentation Changes in insurance liabilities Discount rate Field testing Next steps and wrap up

1 November 2008: Newsletter on proposed improvements to IFRS 7

Deloitte's IFRS Global Office has published a special edition of our IAS Plus Newsletter explaining the IASB's Proposals to Improve Disclosures about Financial Instruments (IFRS 7) (PDF 202k). The proposals are set out in an Exposure Draft of proposed amendments to IFRS 7 Financial Instruments: Disclosures. The proposals form part of the IASB's response to the credit crisis and follow recommendations of the Financial Stability Forum, which had the support of the Group of Seven (G-7) Finance Ministers. The proposals also reflect discussions by the IASB's Expert Advisory Panel on measuring and disclosing fair values of financial instruments when markets are no longer active. The ED, titled Improving Disclosures about Financial Instruments, may be downloaded without charge from the IASB's Website. The comment letter deadline is 15 December 2008 with a proposed effective date of 1 July 2009. You will find all Past IAS Plus Newsletters Here. You can sign up for Free Subscription by Email.

1 November 2008: IASB publishes fair value guidance
The IASB has published educational guidance on the application of fair value measurement when markets become inactive. The guidance consists of a summary document prepared by IASB staff and the final report of the expert advisory panel established to consider the issue:

• IASB Press Release (PDF 167k)
• Expert Advisory Panel Report (download from IASB website, PDF 665k)
• IASB Staff Summary Document (download from IASB website, PDF 130k)
• IAS Plus Credit Crunch Page – 60 links to further information

1 November 2008: Perspective on accounting standards in Germany

In a presentation at the London School of Economics on 28 October 2008, Liesel Knorr, president of the German Accounting Standards Board, described the structure and activity of her organisation. She also outlined Germany's accounting professional, legal, and regulatory environment and the accounting issues that are currently important in Germany. With permission, we have posted Ms Knorr's Presentation (PDF 69k).