30 September 2008: We comment on the Reporting Entity discussion paper

Deloitte has submitted to the IASB a Comment Letter on the IASB's Discussion Paper on the Reporting Entity (PDF 196k): Preliminary Views on an Improved Conceptual Framework for Financial Reporting – The Reporting Entity. We agree with, and support, the majority of the proposals made by the Board in this DP. Below is an excerpt from our letter. Our past comment letters to the IASB/IASC are Here. We conceptually agree with the proposed definition for a reporting entity and support the proposal to keep the definition broad. However, we believe that the broadness of the definition should be supplemented by more discussion on why it is important to define the concept of what constitutes a reporting entity. Similarly, while we concur that control should be defined at the conceptual level and that the controlling model should be used to define entities to be included within consolidated financial statements, we suggest that the Board expands its discussion on the matter and clarifies certain aspects. One of the key aspects of the controlling model that needs to be clarified at the conceptual level is whether consolidation is appropriate when an entity (the investor) controls at the present time another entity (the investee) or whether it is appropriate when the investor has the ability to obtain control, at present, over the investee. The ambiguity is evidenced by the fact that, on the one hand, the DP defines control has 'having the ability to determine...' while on the other hand it indicates in paragraph 154 that 'the ability to take control' does not translate in having control at the present time. Finally, we agree that there is a need to allow the preparation of general purpose 'group' financial statements in certain circumstances not captured by the controlling entity model. However, we believe that the common control model fails to capture all of these circumstances and we find that the restriction on the preparation of combined financial statements contradictory to the principle of allowing for a broad definition of a reporting entity.

30 September 2008: We comment on Conceptual Framework proposals

Deloitte has submitted to the IASB a Comment Letter on the IASB's Conceptual Framework Exposure Draft (PDF 152k) – An Improved Conceptual Framework for Financial Reporting: Chapter 1 The Objective of Financial Reporting Chapter 2 Qualitative Characteristics and Constraints of Decision-useful Financial Reporting Information In our letter we express strong support for the Conceptual Framework project and for the proposals in this exposure draft. An excerpt is below. Our past comment letters to the IASB/IASC are Here. We wish to acknowledge that in our opinion, the proposed Framework as expressed in the ED has been significantly improved from the Discussion Paper phase of this project. We find the proposed Framework is now well organised and we generally agree with the notions expressed therein. More specifically, we agree with the dual focus of the expressed objective of financial reporting on both cash flow generation and management stewardship and also agree that decision useful information has several qualitative characteristics of which relevance and faithful representation are the most fundamental. However, we think that comparability, verifiability, timeliness and understandability are supporting components (not 'enhancing characteristics') that need to be present to render financial information relevant and representationally faithful. In addition, there are certain aspects of the proposed Framework which we continue to believe may be enhanced. We have included our comments on these aspects in the Appendix to this letter.... We believe that the individual chapters of the conceptual framework should not be finalised (or at least not made effective) until all of the chapters are finalised to ensure that the overall Framework forms a cohesive set of principles.

29 September 2008: We comment on EFRAG enhancement proposals

On 22 July 2008, the Supervisory Board of the European Financial Reporting Advisory Group (EFRAG) invited public comment on Proposals for Enhancing EFRAG as a way to strengthen the European contribution to the work of IASB. The proposals envision a new structure, a budget of €3 million in 2009 doubling to €6 million in 2010, and an EFRAG technical staff of 20. Deloitte has submitted a Letter of Comment on the Proposals (PDF 18k). While we support EFRAG's proposals to improve its ability to be a strong and coordinated European voice for high quality accounting standards for users in Europe, we caution that EFRAG's constitution should be clear that EFRAG is neither a standard-setter nor a replacement for the existing EU national standard-setters.

29 September 2008: Accounting provisions of US financial institutions 'bailout bill'

The Emergency Economic Stabilization Act of 2008 that is being considered by the United States Congress (the so-called financial institutions bailout bill) has as its objective: "To provide authority for the Federal Government to purchase and insure certain types of troubled assets for the purposes of providing stability to and preventing disruption in the economy and financial system and protecting taxpayers, and for other purposes". Two sections of the Draft Bill (PDF 193k) relate to fair value measurement accounting issues: Sec. 132. Authority to suspend mark-to-market accounting. "The Securities and Exchange Commission shall have the authority under the securities laws 12 (as such term is defined in section 3(a)(47) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(47)) to suspend, by rule, regulation, or order, the application of Statement Number 157 of the Financial Accounting Standards Board for any issuer (as such term is defined in section 3(a)(8) of such Act) or with respect to any class or category of transaction if the Commission determines that is necessary or appropriate in the public interest and is consistent with the protection of investors." Sec. 133. Study on mark-to-market accounting. "The Securities and Exchange Commission, in consultation with the Board [of Governors of the Federal Reserve System] and the Secretary [of the Treasury], shall conduct a study on mark-to-market accounting standards as provided in Statement Number 157 of the Financial Accounting Standards Board, as such standards are applicable to financial institutions, including depository institutions. Such a study shall consider at a minimum — (1) the effects of such accounting standards on a financial institution's balance sheet; (2) the impacts of such accounting on bank failures in 2008; (3) the impact of such standards on the quality of financial information available to investors; (4) the process used by the Financial Accounting Standards Board in developing accounting standards; (5) the advisability and feasibility of modifications to such standards; and (6) alternative accounting standards to those provided in such Statement Number 157." The SEC must submit the report to Congress within 90 days after enactment of the bill.

29 September 2008: IASCF trustees will meet 9 October 2008 in Beijing

The Trustees of the IASC Foundation, under which the IASB operates, will meet in public session at The Westin Grand Hotel, 9b Financial Street, Xicheng District, Beijing 100032, China, on 9 October 2008, 9:15am to 17:15pm. The agenda for the public session is as follows: Beijing, China, 9 October 2008 (Public Session) Opening of Meeting Report of Chairman of the Trustees Approval of the July Minutes Constitution Review 2008 – First and Second Parts Consideration of comments received to the Part I consultation document with final recommendations Consideration of Part II of the Constitution Review consultation document and approval of approach Report of the Due Process Oversight Committee Report of joint IASB-Due Process Oversight Committee meeting - 15 September 2008 Update on progress of the review of IASB working groups. Update to the IASB Due Process Handbook Report on XBRL Report of the IASB Chairman Report on progress of the Memorandum of Understanding and IASB Work Programme Response to the credit crisis and the Financial Stability Forum report Report on IFRS for Private Entities (SMEs) Relationship with the International Valuation Standards Committee (IVSC) Report of the SAC Chairman Report on Publications and Educational Activities Education plan Publications and translations strategy Update on long term funding

29 September 2008: IFRS and the insurance industry

Publicly accountable entities in Canada are required to switch to IFRSs starting in 2011 (with an option to adopt IFRSs earlier, even in 2008, with approval of the Provincial securities regulator). The transition from Canadian GAAP will be different for every company. However, particular industries will experience common themes and issues. Deloitte (Canada) has published On the Road Ahead: IFRS Top Ten Accounting Issues in Insurance Industry (PDF 437k). For the insurance industry overall, the following are likely to be the top ten recurring areas of particular significance, and likely differences from Canadian GAAP: Insurance contracts – measurement principles Product classification Insurance contracts – financial statement presentation and disclosures Insurance contracts – embedded derivatives and unbundling Insurance contracts – changes in accounting policies Impairment Financial instruments Real estate First-time adoption of IFRS Other areas including business combinations, leases, share-based payments/related parties, and employee benefits

28 September 2008: Changes to accounting practices in Brazil

Recent amendments to the Brazilian Corporate Law (Law No. 11,638) have introduced changes to accounting practices generally accepted in Brazil, effective for fiscal years beginning on or after 1 January 2008. The Law designed primarily to update accounting practices under Brazilian Corporate Law 'to enable the convergence of Brazilian accounting practices with accounting standards generally accepted in the international capital markets'. Deloitte (Brazil) has published bulletins in English and Portuguese explaining the changes: Deloitte Bulletin on Law 11,638 – English (PDF 135k) Deloitte Bulletin on Law 11,638 – Portuguese (PDF 113k)

28 September 2008: IFRS in your Pocket in Portuguese

Deloitte (Brazil) has published IFRS ao seu Alcance – IFRS in your Pocket 2007 in Portuguese (PDF 341k). This publication is a translation of the English edition with a preface added relating to the Brazilian environment. Click here for our Brazil Page. This and many other Deloitte IFRS publications can always be found Here. IFRS ao seu Alcance: Um guia de bolso para aproximar sua empresa do novo padrão contábil global Em outras regiões do mundo, como o Brasil, a Deloitte tem procurado apoiar, das mais diversas maneiras, as organizações sujeitas às regulamentações relacionadas ao IFRS. Com esse objetivo, a Deloitte elaborou, no Brasil e no mundo, uma série de conteúdos técnicos sobre o IFRS. Entre esses conteúdos, está esta publicação, 'IFRS ao seu alcance', cujo formato visa facilitar a consulta de profissionais e tomadores de decisão em suas jornadas rumo à adoção do padrão contábil internacional.

27 September 2008: Report of Advisory Committee on the Auditing Profession

At its meeting yesterday, the US Treasury Department's Advisory Committee on the Auditing Profession voted to adopt its final report containing more than 30 recommendations to improve the sustainability of the public company auditing profession. Recommendations focused on three specific areas: improving accounting education and strengthening human capital; enhancing auditing firm governance, transparency, responsibility, communications, and audit quality; and increasing audit market competition and auditor choice. Several of the recommendations relate to the increasing use of IFRSs in the United States. The committee was created in May 2007 to examine key issues facing the auditing profession to encourage greater investor confidence. It was co-chaired by former US SEC Chairman Levitt and former SEC Chief Accountant Nicolaisen. Formation of the committee followed a March 2007 public conference organised by US Treasury Secretary Henry M Paulson, Jr to examine ways to improve the competitiveness of US capital markets. Conference participants identified financial reporting and investor confidence as major factor in US domestic markets' competitiveness. Click to download: Press Release (PDF 29k) Fact Sheet Summarising the Report's Recommendations (PDF 25k) Draft Final Report (PDF 1,502k) Details of Formation of the Advisory Committee

27 September 2008: Deloitte Canada Countdown IFRS transition newsletter

Deloitte Canada has released the September 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: Exposure Draft of Proposed Amendments to IFRS 1 First-time Adoption of IFRSs IFRS Project Management – A key success factor for your implementation Tips on Applying IFRS 1: A focus on first-time adoption of IFRSs The IFRS Transition Journey: Where are we now? International Round-up: Updates and News from the IASB Click below for: September 2008 Edition Countdown Newsletter - English (PDF 613k) September 2008 Edition Countdown Newsletter - French (Compte à Rebours) (PDF 726k) Background on Transition to IFRSs in Canada including past issues of Countdown.

27 September 2008: Our views on IASB's employee benefits discussion paper

Deloitte has submitted a Letter of Comment (PDF 174k) on the IASB Discussion Paper Preliminary Views on Amendments to IAS 19 Employee Benefits. In general, we express serious concerns that the proposals go beyond the changes that should be introduced via a short-term project. An excerpt from our letter is presented below. Past comment letters are Here. We recognise that accounting for employee benefits has been the subject of criticism for failing to provide a clear indication of the obligation of sponsoring entities towards their employees under long-term defined benefits plans and for the failure of IAS 19 to provide a proper model to account for certain types of plan (mainly certain cash balance plans). We share many of these concerns. However, while we appreciate the desire of the IASB to address the most pressing of these issues, we are concerned that the DP's proposals go beyond the changes that should be introduced via a short-term project. In particular, we strongly discourage the Board from proceeding with its proposal to redefine employee benefit schemes into defined benefits promises and contribution-based promises. As we explain in our detailed comments, the changes proposed would have far reaching consequences and would introduce inconsistencies in accounting for plans that are similar in substance. Further we note that contribution-based promises are not clearly defined and we are not sure we understand exactly what the measurement approach is for contribution-based promises as proposed in the DP and how it differs from other measurement approaches currently used in IFRS. Finally, while we generally support the Board's proposal to eliminate the option to defer recognition of changes in defined benefit assets and obligation, the elimination of this approach cannot be addressed without proper resolution of the issues linked to the presentation of these changes. Accordingly, we believe that the implementation of this proposal should be timed to coincide with the revised Standard dealing with the presentation of financial performance.

26 September 2008: 'The IFRS Journey in Insurance'

A new Deloitte Research publication The IFRS Journey in Insurance: A Look Beyond the Accounting Changes 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 These changes will give rise to pressure for both convergence and divergence across insurance lines, thereby adding complexity and dynamism to the market structure of the insurance industry. By taking a proactive approach to understanding the impact of IFRS implementation on key business strategies, insurers can avoid the risk of being unprepared for the industry-wide shift while seizing on emerging opportunities for differentiation from competition. Click to download The IFRS Journey in Insurance (PDF 438k).

26 September 2008: IOSCO response to subprime crisis includes accounting focus

The Technical Committee (TC) of the International Organization of Securities Commissions (IOSCO) met on 16 September to discuss current market conditions and further prioritise IOSCO's work in response to the subprime crisis. Accounting and valuation are among the following TC priorities: Greater international coordination for the oversight of credit rating agencies Safeguards for retail clients Firm risk management Prudential supervision Valuation and accounting Click for Technical Committee Press Release (PDF 133k). More credit crunch information is Here.

26 September 2008: IASB-FASB leases working group will meet

The joint IASB-FASB Leases Working Group will meet on Tuesday 7 October 2008 at the FASB's office in Norwalk, Connecticut, USA. The principal agenda item for the meeting is discussion of a staff draft of the Leases discussion paper (DP). The draft DP – which has not been approved by the FASB or the IASB – would express a preliminary view of the two Boards in favour of replacing the current lease accounting model with a new model. The current model classifies leases as finance leases or operating leases, with the former accounted for as, in substance, financed purchases of the leased asset. Under the proposed new model, a lessee would recognise as assets and liabilities all material rights and obligations arising in all lease contracts, including those rights and obligations that arise under leases currently classified as operating leases. Thus, a lessee would recognise: an asset representing its right to use the leased item for the lease term, and a liability for its obligation to pay rentals. The operating and finance lease classifications would be eliminated. The observer note for the working group meeting includes a draft of the DP. Click to Download the Observer Note from the IASB website (PDF 930k).

25 September 2008: IASB proposes amendments to first-time adoption

The IASB has issued an exposure draft of proposed amendments to IFRS 1 First-time Adoption of International Financial Reporting Standards. The amendments would provide two additional exemptions from retrospective restatement for first-time adopters of IFRSs. The proposals are aimed at ensuring that entities applying IFRSs will not face undue cost or effort in the transition process. The exposure draft proposes: to exempt companies from retrospective application of IFRSs for oil and gas assets using the full cost method and for operations subject to rate regulation. to exempt companies with existing leasing contracts accounted for in accordance with IFRIC 4 Determining whether an Arrangement contains a Lease from reassessing the classification of those contracts according to IFRSs when the same classification has previously been made in accordance with national GAAP. The exposure draft Additional Exemptions for First-time Adopters (proposed amendments to IFRS 1) may be downloaded without charge from the IASB's Website. Comment deadline is 23 January 2009. Click for Press Release (PDF 48k).

25 September 2008: IASB proposes revised definition of discontinued operations

The IASB has issued an exposure draft of proposed amendments to IFRS 5 Non-current Assets Held for Sale and Discontinued Operations. The proposals are to revise the definition of discontinued operations and require additional disclosure about components of an entity that have been disposed of or are classified as held for sale. The proposals are the result of a joint project by the IASB and the US Financial Accounting Standards Board to develop a common definition of discontinued operations and require common disclosures about them. The FASB is publishing parallel proposals to amend its standards. Click for Press Release (PDF 35k). The deadline for public comment is 23 January 2009. The ED may be downloaded without charge from IASB's Website.

25 September 2008: IASB will hold extra meeting on 2 October 2008

The IASB will hold an additional Board meeting on 2 October 2008 to discuss potential amendments to Amendments to IFRS 7 Financial Instruments: Disclosures and a revised version of the staff draft of the forthcoming exposure draft of a proposed IFRS on Consolidation. The IASB has accelerated its work on these two issues in response to the recommendations of the Financial Stability Forum. The extra meeting will enable the staff to make faster progress on those projects. 2 October 2008, London IFRS 7 Amendments – Credit Crisis Consolidation – Disclosure of Off-balance sheet risk Because the meeting has been arranged at short notice, some Board members will be taking part via video conferencing facilities. To make allowance for the different time zones involved the meeting will be held in two sessions, one in the morning and the same topics of discussion repeated in the afternoon. The morning session will take place between 09:00am and 12:00 noon (London time, GMT +1), and the afternoon session between 15:00pm and 18:00pm (London time, GMT +1). Both sessions will be open to public observation and will be webcast.

25 September 2008: New Global IFRS and Offerings Services newsletter

We have posted Deloitte's US Reporting Newsletter for Non-US Based Companies September 2008 Edition – includes news through 4 September 2008 (PDF 216k). 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.

24 September 2008: Prabhakar Kalavacherla appointed to the IASB

The Trustees of the International Accounting Standards Committee Foundation have announced the appointment of Prabhakar Kalavacherla ('PK') to the International Accounting Standards Board. Mr Kalavacherla will join the IASB as a full time member on 1 January 2009 for the period ending on 30 June 2013. Mr. Kalavacherla, born in India, is a partner at KPMG LLP serving both as reviewing partner for IFRS financial statements and filings with the US Securities and Exchange Commission. He has worked extensively in India and in Europe and has specialised in technology and biotechnology. Mr Kalavacherla is a member of both the Institute of Chartered Accountants of India and the American Institute of CPAs. Click here for Press Release (PDF 181k).

23 September 2008: New comparison of IFRSs and US GAAP

Deloitte's IFRS Global Office has published a new IFRSs and US GAAP – A Pocket Comparison (PDF 378k, 76 pages) as of 30 June 2008. Since the previous edition of this guide (March 2007), the IASB has issued substantially revised versions of IFRS 3 Business Combinations, IAS 1 Presentation of Financial Statements, and IAS 27 Consolidated and Separate Financial Statements. In addition, IFRS 8 Operating Segments (which replaces IAS 14 Segment Reporting) was issued in November 2006. These new and revised Standards will not be effective until 2009. However, to provide the best guide to differences between IFRSs and US GAAP on an ongoing basis, the comparison table reflects the changes to these Standards and, in the case of IFRS 3 and IAS 27, the equivalent changes in US GAAP. Throughout the guide, we have also adopted the general terminology changes arising from IAS 1(2007). While this 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. The significance of the differences enumerated in this publication – and others not included – will vary with respect to individual entities depending on such factors as the nature of the entity's operations, the industry in which it operates, and the accounting policy choices it has made. We are pleased to grant permission for accounting educators and students to make copies for educational purposes. There are permanent links to this and many other Deloitte IFRS publications on our Publications Page. There's also a link on our United States Page.

23 September 2008: G7 statement on global financial market turmoil

The Group of Seven Finance Ministers and Central Bank Governors released the following statement on global financial market turmoil. Among other things, the statement urged more effective regulation. The G7 said: "We remain committed to full and rapid implementation of the Financial Stability Forum (FSF) recommendations to enhance the resilience of the global financial system for the longer term. We look forward to the FSF report this fall on progress made in strengthening prudential supervision and regulation, improving firms' risk management practices, enhancing disclosure and transparency, and strengthening accounting frameworks." Click to Download the G7 Statement (PDF 85k). Here is the link to our complete Credit Crunch Page.

23 September 2008: Heads Up on proposed changes to US consolidation model

The latest issue of Heads Up is now available. It discusses three exposure documents issued last week by the FASB proposing amendments to the derecognition guidance in Statement 140 and the consolidation model in Interpretation 46(R). The proposals would, among other things, eliminate 'qualifying special purpose entities' (QSPEs), modify the consolidation model in Interpretation 46(R), and expand the related required disclosures. The exposure drafts reflect the Board's response to the increased scrutiny by SEC, Congress, and financial statement users on the accounting and disclosures required by Statement 140 and Interpretation 46(R) in the wake of the recent deterioration in the global credit markets. Click to download the 22 September 2008 Heads Up (PDF 202k).

22 September 2008: Agenda project pages updated for September meeting

We have updated the following agenda project pages to reflect the discussions and decisions at the 16-19 September 2008 meeting of the International Accounting Standards Board. Amendment to IFRS 1 – Transitional Issues Faced by Jurisdictions Expected to Adopt IFRSs in Coming Years Annual Improvements 2009 Consolidation (updated for roundtable) Extractive Industries Fair Value Measurements IFRS 7 Amendments – Credit Crisis (new project page) Insurance Contracts Issues Relating to IFRS 2 Share-based Payment (new project page) Liabilities and Equity IFRS for Private Entities (formerly IFRS for SMEs) Related Party Disclosures Revenue Recognition

20 September 2008: Notes from day 4 of September 2008 IASB meeting

The International Accounting Standards Board held its September 2008 meeting at the IASB's offices, 30 Cannon Street, London on Tuesday to Friday 16-19 September 2008. The meeting was open to public observation and was webcast. Click here to go to the preliminary and unofficial Notes Taken by Deloitte Observers at the meeting.

20 September 2008: Our views on IASB's financial instruments discussion paper

Deloitte has submitted a Letter of Comment (PDF 243k) on the IASB's Discussion Paper Reducing Complexity in Reporting Financial Instruments. In general, we express serious reservations about the possible approaches examined in the Discussion Paper. As an alternative, our letter sets out an approach that, whilst still incorporating a mixed measurement attribute model, we believe would represent a significant improvement over the current guidance in IFRSs. Below are excerpts from our letter. Past comment letters are Here. We welcome the IASB's efforts to improve financial reporting for financial instruments. We believe that current guidance under IFRS is complex and requires significant improvements to reduce the inherent complexity. However, to meet the goal of improving reporting for financial instruments by reducing complexity it is important that complexity is properly defined and that any change made to existing Standards should not result in a mere shift of complexity from one constituent to another. In addition, the DP fails to address important areas, notably scope and derecognition, of financial instruments accounting that also fall outside the IASB's other concurrent projects or, where they are within existing projects, these would be completed only with a significant time lag to the financial instruments project. We believe that guidance on these issues influences the assessments made on the proposals of the DP. Furthermore, we do not agree with the implicit assumption of the DP that full fair value accounting would be the ultimate improvement to financial instruments accounting. We believe such a conclusion would be premature at this point. We believe that at the moment, amending existing Standards, possibly over a longer period, would be a feasible way to improve financial instruments accounting significantly for all constituents without undue costs or efforts.

19 September 2008: Notes from day 3 of September 2008 IASB meeting

The International Accounting Standards Board held its September 2008 meeting at the IASB's offices, 30 Cannon Street, London on Tuesday to Friday 16-19 September 2008. The meeting was open to public observation and was webcast. Click here to go to the preliminary and unofficial Notes Taken by Deloitte Observers at the meeting.

19 September 2008: Our views on the IASCF constitution review proposals

Deloitte has submitted a Letter of Comment (PDF 176k) on the IASCF Discussion Document Review of the IASC Foundation Constitution: Public Accountability and the Composition of the IASB: Proposals for Change. Below are excerpts from our letter. Past comment letters are Here. We believe that in a number of areas the need for urgent action has meant that the Trustees may not have developed fully the detailed operations of the revised structure, or at least have not articulated these clearly in the proposals. Consequently, they are potentially ambiguous. Monitoring group: We support the creation of a monitoring group as a way of creating a direct link between the IASC Foundation and very senior levels of official institutions with a legitimate interest in accounting standard-setting and transparency in financial reporting. However, the role of the monitoring group should be more clearly defined than it is in the discussion document. IASB size and composition: With respect to the proposals affecting the IASB directly, we are not inclined to support increasing the size of the IASB from 14 to 16 members, but are willing to support such an increase to accommodate more part-time members. We do not believe that the Trustees have presented a convincing case to increase the size of the IASB and are concerned that the current size of 14 members is at the extreme upper end of operational efficiency. Nor do we support the introduction of any geographical formulation, quotas or other such limits.

19 September 2008: CFA Institute advocates 'IFRS convergence'
CFA Institute, the global association of investment professionals, has identified six initiatives from the final report of the SEC's Advisory Committee on Improvements to Financial Reporting (CIFiR) that it will focus on to further advance the investor perspective. One of them is IFRS convergence. Click for the CFA Institute Press Release (PDF 42k).

19 September 2008: Heads Up on credit derivatives and financial guarantees

Deloitte & Touche LLP (United States) has published an issue of Heads Up discussing the FASB's recently issued Staff Position No. FAS 133-1 and FIN 45-4, which amend and enhance the disclosure requirements for sellers of credit derivatives and financial guarantees. The new disclosures must be provided for reporting periods (annual or interim) ending after 15 November 2008. Click to download the 18 September 2008 Heads Up (PDF 106k).

19 September 2008: FASB chairman's views–lessons learned from the credit crisis

In a speech to a broad group of financial executives at a forum on structured finance in New York, US Financial Accounting Standards Board Chairman Robert H Herz spoke about Lessons Learned, Relearned, and Relearned Again from the Credit Crisis – Accounting and Beyond. Click to Download Mr Herz's Remarks (PDF 53k). Here are some excerpts. IAS Plus has lots more on the credit crisis on our Credit Crunch Page. So, here's my list of some of the key lessons to be learned and, in some cases relearned, as well as some important questions that I feel need to be asked: Remember the risks Liquidity matters The double edged sword of leverage 'Out of sight, out of mind' 'Buyer beware' Accounting has consequences—but, can we handle the truth? Mind the exceptions Good reporting requires both sound standards and faithful application of those standards Fair value – villain or savior? Sound markets require a proper infrastructure Fundamental changes may be needed in our capital markets and financial services industry Global problems demand global solutions Perverse incentives lead to perverse outcomes Each crisis brings many challenges, but also many opportunities for change and improvement Regarding the use of fair value measurements for financial instruments, Mr Herz said: To be sure, there is no question that implementing fair value in illiquid markets can be challenging and difficult and there are important questions to be asked. Does it lead, reflect, or lag reality? Are there genuine concerns over procyclicality ? These are important questions and issues; but I would ask, what is the alternative? Not to try to be truthful about the current value of your assets, to use original cost or some other smoothed value that ignores current market conditions? Yet, in some cases, that is what some people have asked us to do – suspend the bad news for a while, until things get better. That is what Japan tried to do rather unsuccessfully for over a decade. Investors have been clear: they want to see the current fair values of a company's financial assets. They believe it is the appropriate method of accounting for such items, and they generally applaud the added transparency provided by the new disclosures under FAS 157 (and indeed would like some additional disclosures like ranges and sensitivities).

19 September 2008: CEBS advice to EC on liquidity risk management

The Committee of European Banking Supervisors has submitted to the European Commission the second part of its advice on liquidity risk management. The advice consists of an analysis of specific issues listed by the Commission and challenges not currently addressed in the EEA and includes 30 recommendations, as follows: CEBS's 30 recommendations on liquidity risk management are principles-based and subject to an overarching principle of proportionality. The first 18 recommendations are targeted at credit institutions and investment firms established in the European Union to ensure that adequate liquidity risk management for both normal and stressed times is in place. In particular this should build on diversification of funding sources, appropriate liquidity buffers, robust stress tests and regularly tested contingency funding plans. CEBS's last 12 recommendations target liquidity risk supervision. Supervisors should consider whether their requirements could be supplemented or replaced by internal methodologies developed by institutions, based on a thorough prior supervisory assessment. Enhanced coordination between supervisors should be pursued, notably through active use of colleges or through delegation of tasks. Click to download: CEBS Advice on Liquidity Risk Management (PDF 581k) Press Release (PDF 16k)

18 September 2008: Deloitte notes from consolidation roundtable
On 17 September 2008, the IASB conducted a public roundtable on the issues in its current project on Consolidation. The roundtable was conducted in two sessions. The IASB made available on its website two documents – a staff draft of an exposure draft and discussion notes raising 15 questions to which roundtable participants were invited to respond. We have posted the preliminary and unofficial Notes Taken by Deloitte Observers at the Roundtable (PDF 37k). The notes include links to download the two documents from the IASB's website. The 15 questions were as follows:

18 September 2008: Challenges of adopting global standards in the US

In a speech earlier this week before a university group, Bill Gradison, a member of the US Public Company Accounting Oversight Board (PCAOB) addressed the implications and challenges of adopting global accounting and auditing standards in the United States. Click to Download Mr Gradison's Speech (PDF 155k). Here is an excerpt: Tonight I want to touch on the implications of this new reality with special attention to the impact on the Public Company Accounting Oversight Board. The current state of play involves two sets of accounting standards: GAAP and IFRS (with its numerous local variations), and three sets of auditing standards, each of which is in a state of flux: the ISAs toward which many non-US jurisdictions seem to be moving, the ASB standards which apply to non-issuers in the United States (and are conceptually 'ISAs plus'), and the PCAOB standards for issuers.... Nor are regulators untouched by these challenges. Currently 873 non-US firms are registered with the PCAOB and about 250 firms in 51 countries are subject currently to periodic inspections, which is to say they audit issuers. Now that foreign private issuers no longer need to reconcile their financial statements to GAAP, PCAOB inspectors will be reviewing audits based on IFRS alone. As a result, PCAOB is developing a robust training program which eventually will involve most of its divisions. But initially we will focus on making sure that our international inspectors are conversant with IFRS.

18 September 2008: 14 IAS Plus Special Edition Newsletters available in Chinese

Deloitte China has translated the following 14 IAS Plus Special Edition Newsletters into Chinese. Download links are on a new page on the Deloitte China CAS Plus Website. August 2008 Special Edition Exposure Draft on Earnings per Share August 2008 Special Edition – IASB Releases Omnibus Exposure Draft of Annual Improvements for 2008 July 2008 Special Edition – Exposure Draft on Conceptual Framework Objective and Qualitative Characteristics July 2008 Special Edition – Discussion Paper on Reporting Entity July 2008 Special Edition – IAS 39: Eligible Hedged Items July 2008 Special Edition – IFRIC 16: IFRIC Issues Interpretation on Net Investment Hedging July 2008 Special Edition – IFRIC 15: Accounting for Agreements for the Construction of Real Estate May 2008 Special Edition – Amendments to IFRS 1 and IAS 27 on Cost of Investments in Subsidiaries, Associates, and Jointly Controlled Entities May 2008 Special Edition – Improvements to IFRSs 2008 January 2008 Special Edition – Business Combinations: IASB revises IFRS 3 and IAS 27 September 2007 Special Edition on IAS 1 (Rev) – Revised Standard on Presentation of Financial Statements June 2007 Special Edition – IFRIC 13 Customer Loyalty Programmes December 2006 Special Edition – IFRS 8 Operating Segments December 2006 Special Edition – IFRIC 12 Service Concession Arrangements

18 September 2008: SEC letter on fair value measurements

On 28 March 2008, the US SEC's Division of Corporation Finance sent a letter to certain financial institutions concerning additional disclosure considerations in Management's Discussion and Analysis (MD&A) regarding fair value for their upcoming filings on Form 10-Q. While the letter was sent only to financial institutions, the SEC staff indicated that the letter 'can be applicable to any company'. Details are on our Credit Crunch Page, including a link to a Deloitte Financial Reporting Alert (PDF 57k) about the letter. On 16 September 2008, the SEC issued an Addendum to the 28 March 2008 Letter (PDF 49k) identifying additional disclosure issues related to fair value measurements that companies may wish to consider in preparing their MD&A. The additional issues are the result of the SEC's reviews and the public roundtables that took place over the summer.

18 September 2008: Webcast–What does the SEC's IFRS activity mean for you?

The SEC's recent meeting around IFRS has sparked important questions from financial executives of US companies – especially as it involves proposed rulemaking that would allow certain US issuers a choice of preparing financial statements using either IFRS or US GAAP. What do financial executives need to know about this proposed rulemaking and how should they respond? On 19 September 2008, at 2:00 PM EDT (18:00 GMT), Deloitte United States will present a webcast to discuss: A background on the development and use of IFRS The SEC's proposed roadmap, including the timeline for adoption of IFRS by US issuers The proposed rule on allowing some companies an option to use IFRS, including which companies would be eligible. What this means for companies regarding financial reporting considerations and the broader implications of adopting IFRS. Robert Uhl, Partner, Deloitte & Touche LLP, will host the webcast. Click here for More Information and Registration.

18 September 2008: Global tax implications of IFRSs

The Deloitte (United States) Center for Corporate Governance has published Global Tax Implications of International Financial Reporting Standards (PDF 540k). This Deloitte report underscores the need for US tax departments to watch closely the transition toward IFRSs occurring in other countries as well as in the United States and to understand the potential implications in each country in which they operate. Please visit the Center for Corporate Governance Website for many other resources.

18 September 2008: Is your firm ready for the shift to IFRSs in the USA?

The Deloitte (United States) Center for Corporate Governance has published a Hot Topics briefing note Is Your Firm Ready for the Shift? What the Future Holds (PDF 85k). With a mandatory movement to IFRS seeming likely, it is critical that companies are aware of, and prepared for, the changes this entails, not just from a reporting standpoint but also with regard to its effects on boards and the investor community. This article highlights the roadmap outlined by the SEC and examines the strategic implications for the key players involved. Please visit the Center for Corporate Governance Website for many other resources.

18 September 2008: Notes from day 2 of September 2008 IASB meeting

The International Accounting Standards Board held its September 2008 meeting at the IASB's offices, 30 Cannon Street, London on Tuesday to Friday 16-19 September 2008. The meeting was open to public observation and was webcast. Click here to go to the preliminary and unofficial Notes Taken by Deloitte Observers at the meeting.

17 September 2008: Notes from day 1 of September 2008 IASB meeting

The International Accounting Standards Board held its September 2008 meeting at the IASB's offices, 30 Cannon Street, London on Tuesday to Friday 16-19 September 2008. The meeting was open to public observation and was webcast. Click here to go to the preliminary and unofficial Notes Taken by Deloitte Observers at the meeting.

17 September 2008: IASB posts draft report of valuation experts

The IASB has invited comment on the draft report of its expert advisory panel on valuing financial instruments when markets are no longer active. The report explores the practices that the experts use for measuring and disclosing such financial instruments. The IASB has invited comment on the draft report by 3 October 2008. When this document is finalised, the IASB intends to publish it as helpful guidance in making fair value estimates under the requirements of IFRSs. Click to Download the Draft Report from IASB's Website. Two excerpts from the draft report: Measurement: In inactive markets, entities measure the fair value of financial instruments by considering all relevant market information that is available. A thorough understanding of the instrument subject to valuation is necessary in order to identify relevant available information. Information to be considered includes prices from recent transactions in the same or similar instruments, quotes from brokers and pricing services, indices and other inputs to model-based valuation techniques. Entities use this information to measure fair value by assessing the available information and applying it as appropriate. Disclosure: It is important that entities help users of financial statements understand the techniques used and the judgements made in measuring fair value (although it is not the purpose of the disclosure to allow recalculation of fair values). Providing enhanced and detailed disclosures about the fair value of instruments that are of particular interest to users helps entities meet that objective. The instruments of particular interest will change over time as market conditions change and are likely to include those that are the focus of internal management reporting and are receiving external market interest.

16 September: IFRSs in your Pocket 2008 in German

Deloitte (Germany) has published IFRS im Überblick 2008 (PDF 1,795k), the German language version of IFRSs in Your Pocket 2008. This 134-page guide includes information about: IASB structure and contact details. IASB due process. Use of IFRSs around the world, including updates on Europe, Asia, USA, and Canada. Summaries of each IASB Standard (through 31 July 2008). Background and current status of all current IASB projects. IASC and IASB chronology. Update on IFRS-US GAAP convergence. Other useful IASB-related information. You will find Links to our Many Other IFRS Publications here.

16 September 2008: Heads Up on updated FASB-IASB MoU

On 11 September 2008, the International Accounting Standards Board (IASB) and the US Financial Accounting Standards Board (FASB) jointly published an update of their 2006 Memorandum of Understanding (MoU). The MoU describes the priorities and milestones related to the two boards' completion of major joint projects by 2011. Deloitte & Touche LLP (United States) has published the 16 September 2008 edition of the Heads Up Newsletter (PDF 158k) discussing the updated MoU. An excerpt: There are two reasons why it is important to complete the projects by 2011. First, a number of countries, such as Canada, India, Japan, and Korea, have announced plans to adopt or converge with IFRSs beginning in 2011. If the projects are completed by 2011, those countries will avoid having to adopt new standards shortly after making the transition to IFRSs. Second, in accordance with its proposed IFRS Roadmap, the SEC will determine in 2011 whether to require mandatory adoption of IFRSs for all US issuers starting in 2014. In doing so, it will evaluate the progress of the various milestones included in that roadmap, one of which is improvements to IFRSs.

16 September 2008: Three FASB derecognition exposure drafts

As part of its response to the 'credit crunch', the US Financial Accounting Standards Board has issued three separate but related exposure drafts (EDs) for public comment. The proposed FASB Statements Accounting for Transfers of Financial Assets and Amendments to FASB Interpretation No. 46(R) address amendments to FASB Statement No. 140 Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities, and to FASB Interpretation No. 46 (revised December 2003) Consolidation of Variable Interest Entities. Proposed FASB Staff Position FAS 140-e and FIN 46 (R)-e Disclosures about Transfers of Financial Assets and Interests in Variable Interest Entities addresses related disclosure requirements for public entities. Click for Press Release (PDF 16k). The proposals are available on FASB's Website.

15 September 2008: Deloitte's 7th annual fair value pricing survey

Deloitte LLP United States's 7th Annual Fair Value Pricing Survey (PDF 439k) has found that mutual funds are converging around certain universal fair value measurement practices. More than 50 fund managers representing more than 2,700 funds with assets under management exceeding $3.5 trillion participated in the survey. This is Deloitte's seventh survey on the valuation practices and industry policies and procedures used by asset managers. We have seen valuation practices evolve into a mature set of practices, policies, and procedures that continue to be refined as the range and complexity of investment types expand and the investment valuation tools improve. Specific 2008 findings include: Seventy-four percent of those surveyed indicated that they have made changes to their valuation policies and procedures. Sixty-three percent reported that FAS 157 has impacted their valuation policies and procedures. Thirty-seven percent have added internal controls over valuation as a result of the credit crisis. When obtaining broker quotes, more than 50 percent of participants seek more than one quote for fixed-income securities. Greater than 75 percent noted that they are asking pricing services and brokers specific questions designed to understand the inputs and processes behind daily prices provided to mutual funds.

14 September 2008: Update on EU response to financial market turmoil

Charlie McCreevy, European Commissioner for Internal Market, presented a report on Financial Turmoil: Latest Developments on Policy Response to the Committee on Economic and Monetary Affairs of the European Parliament on 10 September 2008. He commented, among other things, on activities of the IASB in this regard. Click to download Commissioner McCreevy's Remarks (PDF 78k). Here are excerpts: The turmoil has exposed a chronic lack of private sector discipline and competence and some weaknesses in the global financial regulatory framework. We must strengthen market and institutional resilience. This is what the ECOFIN Roadmap of October 2007 is designed to do.... The upgrading of valuation methods, in particular with respect to the valuation of illiquid assets. Work is being led by the Basle Committee and the International Accounting Standards Board (IASB), who have established a panel on fair valuation. Advice is expected by the end of the third quarter of 2008. The IASB is also working on off-balance sheet items with the key question being: when should an entity be brought onto another entity's balance sheet? The input received in these meetings will help the IASB in shaping its forthcoming proposals on reviewing consolidation rules under IFRS. Deliverables are expected in 2009. Proper due process must be carried out. I believe we need to look hard at issues such as dynamic provisioning* – and how to account for prudential reserves built up by banks to buffer for bad times. It should not have escaped people's attention that banks in Spain were better placed to withstand the turmoil because they had not yet adopted the relevant IFRS Standard. There is a lesson there that needs to be drawn.... On accounting, SEC Chairman Cox has unveiled a roadmap where US companies would switch from US GAAP to IFRS by 2014. Unthinkable only two years ago! A dramatic signal indeed. Following the EU's lead, the US is indicating it also wants to choose global standards. One set, in sight, at last. And of course we need to strengthen the governance of the IASB. That is why we are working hard with some of our major counterparts to install new, strengthened oversight mechanisms. *IAS Plus comment: Dynamic provisioning refers to loan loss provisions measured on the basis of expected future losses rather than incurred losses.

14 September 2008: Summary of issues not added to IFRIC agenda is updated

We have updated our Summary of Issues Not Added to IFRIC's Agenda to reflect the IFRIC's final decisions at its September 2008 meeting not to add the following topics to its agenda. Our summary now includes over 135 issues: IAS 17 Leases – Time pattern of the user's benefit IAS 18 Revenue/IAS 39 Financial Instruments: Recognition and Measurement – Accounting for trailing commissions IAS 32 Financial Instruments: Presentation – Transaction costs to be deducted from equity

13 September 2008: New FASB disclosures about credit derivatives and guarantees

The US Financial Accounting Standards Board has issued FASB Staff Position (FSP) No. 133-1 and FIN 45-4 Disclosures about Credit Derivatives and Certain Guarantees. The FSP is intended to improve disclosures about credit derivatives by requiring more information about the potential adverse effects of changes in credit risk on the financial position, financial performance, and cash flows of the sellers of credit derivatives. It applies to sellers of credit derivatives, including credit derivatives embedded in hybrid instruments. The new disclosures are effective for reporting periods (annual or interim) ending after 15 November 2008. Click for FASB Press Release (PDF 22k). You can Download the FSP Without Charge (PDF 49k) from FASB's website. Here is the link to the IAS Plus Credit Crunch Page.

13 September 2008: EITF Snapshot for September 2008

We have posted the September 2008 edition of EITF Snapshot (PDF 177k) summarising the 10 September 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 Recognition for a Single Unit of Accounting – tentative conclusion reached Issue 08-5 Issuer's Accounting for Liabilities Measured at Fair Value With a Third-Party Guarantee – final consensus Issue 08-6 Equity Method Investment Accounting Considerations – consensus-for-exposure Issue 08-7 Accounting for Defensive Intangible Assets – consensus-for-exposure 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 – 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

11 September 2008: IASB and FASB update their 'Memorandum of Understanding'

The International Accounting Standards Board (IASB) and the US Financial Accounting Standards Board (FASB) have published an update of their 2006 Memorandum of Understanding (MoU). The update: reports on the progress they have made since 2006, and sets goals for completing their major joint projects by 2011. From the IASB's perspective, MoU projects that will be completed by 2011 include: Consolidations Derecognition Fair Value Measurements Financial Statement Presentation Income taxes Leases Liabilities and Equity Distinction Post-employment Benefits, Including Pensions Revenue Recognition The updated MoU also mentions the Conceptual Framework projects but does not identify specific goals for 2011. Click for Press Release (155k), which includes the updated text of the MoU. The two boards will hold their next joint meeting on 20 and 21 October at FASB's offices in Norwalk, Connecticut.

10 September 2008: IPSASB proposes that public sector expense borrowing costs

The International Public Sector Accounting Standards Board (IPSASB) has issued an exposure draft proposing changes to IPSAS 5 Borrowing Costs. If adopted, the revised IPSAS 5 would require that public sector entities expense all borrowing costs with one exception. There would be an option to capitalise borrowing costs relating to funds borrowed specifically to acquire, construct, or produce a qualifying asset. The IPSASB acknowledges that this is a departure from IAS 23 (revised 2007) Borrowing Cost, which requires capitalisation of both general and specific borrowing costs relating to qualifying assets starting in 2009. Click for IPSASB Press Release (PDF 36k). Comment deadline on the proposal is 7 January 2009. The press release has a hyperlink for downloading the ED.

10 September 2008: FASB Webcast on fair value measurements

The US Financial Accounting Standards Board will host a webcast on fair value measurements on 29 September 2008 at 11:00 AM US Eastern Daylight Time. Panelists Leslie Seidman, Jim Kroeker, Don Charles, and Tony Sondhi will discuss current issues relating to application of FASB Statement 157 Fair Value Measurements. Moderated by FASB Technical Director Russ Golden, the panelists will discuss common application and implementation activities on measuring assets and liabilities under Statement 157. The IASB has an Agenda Project on FV Measurements and has published a 'wrap-around Discussion Paper' inviting comments on FAS 157. Click here for More Info and Webcast Registration.

9 September 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 4-5 September 2008: IAS 27 Consolidation – Non-cash Distributions IAS 18 Revenue Recognition – Customer Contributions IAS 38 – Regulatory Assets and Liabilities Customer-Related Intangible Assets

7 September 2008: Adopción del valor razonable (fair value adoption)

Deloitte (Colombia) has prepared Adopción del valor razonable - Actualización Desarrollos y observaciones a partir de la adopción amplia del SFAS 157 y del SFAS 159, the Spanish version of Fair Value Adoption – An Update: Developments and observations from the widespread adoption of SFAS 157 and SFAS 150, published by Deloitte (United States). Click to download: Adopción del valor razonable (PDF 706k). Fair Value Adoption (English Language version) (PDF 397k). Our Spanish language resources are Here.

7 September 2008: CEBS to hold workshop on valuation

The Committee of European Banking Supervisors (CEBS) will hold an open workshop in London on 23 September 2008 from 14:00 to 16:30 to discuss the findings of its Report on Issues Regarding the Valuation of Complex and Illiquid Financial Instruments (PDF 228k) published on 18 June 2008. This workshop will provide an opportunity for banks and other interested parties to express their views on the issues raised by CEBS and to discuss ways of addressing them. There is more information on the CEBS Website.

7 September 2008: Notes from the September 2008 IFRIC meeting

The International Financial Reporting Interpretations Committee (IFRIC) met at the IASB's offices in London on Thursday 4 September and Friday 5 September 2008. Presented below are the preliminary and unofficial notes taken by Deloitte observers at the meeting. Among other things, the IFRIC decided to: Approve a final Interpretation on Distributions of Non-cash Assets to Owners Add to its agenda a project on Customer-Related Intangible Assets Notes from the IFRIC Meeting 4-5 September 2008 Thursday 4 September 2008 Introduction The Chairman opened the IFRIC meeting by introducing a new IFRIC member, Joanna Perry from New Zealand. IFRIC D23 Distributions of Non-cash Assets to Owners Approve drafting changes decided at the July IFRIC meeting The staff explained the various changes made to the draft Interpretation in response to comments received both from constituents and IFRIC members. Some IFRIC members noted that the examples on the scope should be clearer and that the reporting entity should be, for the avoidance of doubt, a publicly listed company. It was agreed that the staff will rework (and possibly expand) the Illustrative Examples. On that note, it was confirmed that the final Interpretation would create a difference with US GAAP. Regarding measurement of the dividend payable, the IFRIC discussed whether the Interpretation should prescribe the measurement attribute for the dividend liability. One member noted that difficulties arise when the dividend is neither a financial instrument in scope of IAS 39 nor an IAS 37 liability, as there is no general Standard on liabilities, so the sole reference would be the Framework. The redraft defined fair value of the assets distributed as the measurement attribute. Responding to comments by members, the staff agreed to change the words to state that the dividend payable is measured by reference to the fair value of the assets to be distributed (as stated in the original draft). It was noted that the reason IFRIC referred to fair value was to ensure that all non-cash distributions are measured consistently. The staff noted that it has expanded the rationale in the Basis for Conclusions explaining why the difference between the carrying amount of the asset to be distributed and the dividend payable (if any) is recognised in profit or loss – rather than in equity. One IFRIC member proposed to keep the alternative view of equity treatment in the Basis for Conclusions. The Chairman reminded the IFRIC that final Interpretations usually do not contain alternative views and that any alternative included must be accompanied with reasons it had been rejected. On the drafting changes made on the basis of other decisions made in the July IFRIC meeting, the members had a short debate on whether to require presenting the difference between the carrying amount of the asset to be distributed and the dividend payable (if any) as a separate item of profit or loss, because IAS 1.85 would already require separate presentation of material items. It was argued that this would increase discipline in presentation and avoid grouping such transactions with other gains from disposals. The redraft also reflected the decision made by IFRIC to amend IFRS 5 to scope in non-cash distributions. The amendments to IFRS 5 would introduce guidance that would require entities to include the probability of shareholders' approval to the distribution in assessing the high probability of the transaction occurring, which is a requirement for IFRS 5 to apply. It was agreed that this guidance was also considered useful for 'normal' IFRS 5 transactions and that the IFRIC should recommend to the Board to include such guidance for other disposals covered by IFRS 5. Discussion of the issue of the accounting mismatch The IFRIC discussed this issue briefly. It was agreed that the accounting mismatch (asset to be distributed generally at cost, dividend payable by reference to fair value of that asset) is similar to other mismatches that occur frequently in IFRSs due to different measurement attributes applied. It was agreed not to ask the Board to allow upward measurement of the asset to be distributed above its cost and to keep the requirements as set out in the draft Interpretation. However, it was agreed to draft the Basis for Conclusions carefully to explain the rationale behind this conclusion. Approve the staff proposal regarding minor issues The staff explained that it would not discuss the minor issues unless IFRIC members wished to discuss particular issues. One member agreed with one comment made regarding the situation where the fair value of the dividend payable cannot be determined reliably. It was agreed to amend the Basis for Conclusions to make clear the rationale of IFRIC on its conclusion. Another IFRIC member agreed with a comment made on one of the illustrative examples. It was agreed to amend or delete the example. Consider re-exposure As the redraft of the Interpretation does not differ significantly from the original Draft Interpretation, IFRIC agreed that re-exposure was not required. Approving the Interpretation The staff then asked the IFRIC whether it approved the consensus reached in D23. The IFRIC confirmed the consensus with four dissenting votes. IFRIC D24 Customer Contributions The staff presented the IFRIC with a revised draft of D24 Customer Contributions that was aimed to reflect input collected at the July IFRIC meeting. The staff began with recognition and measurement of the contributed asset. It was noted that the redraft aims to simplify deciding whether the contributed asset should be recognised by the receiving entity and that it should determine whether it controls the asset and if it is a lease in accordance with IAS 17 or IFRIC 4. The IFRIC had a lengthy debate on this topic. Some members noted that this is not the main issue to be addressed by the Interpretation and that it is the credit, that is revenue, of the journal entry that was not clear. The Chairman highlighted that before a credit is a debit (that is the asset to be recognised). Other members wanted more indicators on asset recognition and said that sole reference to IFRIC 4 is not sufficient. The IFRIC Coordinator responded that sole reference to IFRIC 4 was not intended. The staff needed an indication whether to cut back the guidance or expand it. It was also noted by IFRIC members that the final Interpretation should not introduce new guidance on control and that people might get confused over the references to the leasing guidance in IFRS. One IFRIC member noted that some transactions might indeed be linked transactions. The Chairman then summarised the discussion and asked the staff to include more guidance in the Interpretation, but try to keep it simple. The staff then turned to the question how the credit should be accounted for, especially, whether the IFRIC agreed to the guidance on identifying separate components of the transaction (that is, are connecting the customer to the network and on-going access to a supply separate components). The IFRIC, again, had a lengthy discussion on this topic with no clear direction. Much of the discussion centred around whether and what amount to recognise immediately and what amount should be deferred. One member thought of the examples as being too simplistic. Others wondered whether this guidance could be applied by analogy. The Chairman stated that if the principles identified are good, this would be appropriate. Another member highlighted that in case the obligation is legal, it is a non-issue. Others were concerned about the practical implications and difficulties of splitting up the revenue stream and recognising some revenue up front and some over time. It was also noted that the guidance might lead to up front revenue recognition where it is not desirable. The Chairman asked the IFRIC whether to provide guidance on these issues subject to drafting changes. The IFRIC seemed to agree. The staff then asked for further questions on the drafting of the interpretation. One IFRIC member asked the staff to be clear in the Basis for Conclusions on what issues IFRIC wanted to address. Also, it was noted that depending on the final guidance provided on adoption some transitional relief should be provided. The IFRIC Coordinator also proposed to add an example of asset contribution in a non-regulated activity. The Chairman asked the staff to prepare a revised draft including a Basis for Conclusions and bring back any issues. Although the agenda papers included a question on disclosures this was not discussed at this meeting. Review of Tentative Agenda Decisions published in July IFRIC Update The staff asked the IFRIC to confirm the tentative agenda decisions published in the July IFRIC Update in the light of comments received. Recognition of Lease Expense under an Operating Lease The IFRIC agreed to keep the original wording of the tentative agenda decision and remove the proposed reference to the right to use the leased asset. The Agenda Decision was confirmed. Accounting for Trailing Commissions The IFRIC discussed in length the comments received on this tentative agenda decision. There seemed to be agreement around the table that the Agenda Decision as currently drafted did not answer the question asked in the submission. Furthermore, it was agreed that the difficulty of identifying whether future services must be rendered does not only arise from contractual obligations, but also from implicit obligations. Some members acknowledged that the reason IFRIC could not find a consensus on this issue was because the relevant Standards IAS 32 and IAS 18 have different underlying concepts. IAS 18 incorporated a reliability threshold, something that IAS 32 would not require. The IFRIC reconfirmed the decision not to take the item on the agenda. However, it was agreed that the wording would be amended and circulated, and if IFRIC members cannot agree on the wording, it will be brought back to the next meeting. Also, it will be considered whether re-exposing would be required. Transaction Costs Deducted from Equity The IFRIC discussed this issue in length, especially on the issue whether the agenda decision would 'interpret' the requirements in IAS 32.37 and .38 too narrowly. It was highlighted that the decision whether transaction costs relate to a equity transaction require judgement in some instances – something that the agenda decision did not include. The Chairman stated that practice interpreted the guidance too widely resulting in too many costs deducted from equity. Finally, it was decided to redraft the Agenda Decision to include judgement. Administrative Session The IFRIC Coordinator asked for questions on IFRIC work in progress. It was noted that two items still await further progress: accounting for REACH cost (as tentatively added to the agenda in July 2008) and derecognition. Regarding the first topic it was highlighted that national standard-setters expressed their will to support the IFRIC and that this is currently being coordinated. On the second topic, the IFRIC Coordinator highlighted that there will be a proposal at the next meeting to remove it permanently from IFRIC's agenda as the IASB has accelerated its own derecognition project. This closed the public part of this session. Friday 5 September 2008 (morning only) Staff Recommendations for Tentative Agenda Decision Customer-Related Intangible Assets The IFRIC considered a request to add an item to its agenda to provide guidance on the circumstances in which a non-contractual customer relationship arises in a business combination. The submission noted that IFRS 3 (Revised 2008) requires an acquirer to recognise the identifiable intangible assets of the acquiree separately from goodwill. An intangible asset is identifiable if it meets either the contractual-legal criterion or the separability criterion. Customer-related intangible assets might be either contractual or non-contractual. Contractual customer relationships are always recognised separately from goodwill as they meet the contractual-legal criterion. However, non-contractual customer relationships are recognised separately from goodwill only if they meet the separability criterion. Consequently, determining whether a relationship is contractual is critical to identifying and measuring both separately recognised customer relationship intangible assets and goodwill. The IFRIC Coordinator recommended that this item be added to the agenda – not necessarily to develop an Interpretation but to explore whether IFRS 3 or IAS 38 need clarification or improvement. After a short discussion, the IFRIC agreed to this approach. Valuation of Restricted Securities The IFRIC considered a request to add an item to its agenda to provide guidance on whether a discount must be applied to the quoted market price when establishing the fair value of a security quoted in an active market when there is a contractual, governmental or other legally enforceable restriction that prevents the sale of the security for a specified period. The submission restricted its request for guidance to those instruments for which the restriction was specific to the current holder of the security, suggesting that there was diversity in practice. Examples include various participants in initial public offerings, such as underwriters or venture capital investors, who are prohibited from selling securities they hold or receive as part of the IPO for a specified period. The IFRIC decided not to add this item to its agenda. In doing so, it noted that the issue is addressed specifically in the Application Guidance of IAS 39, which states that the market price of a security traded in an active market should not be adjusted for restrictions specific to the current holder. Consequently, the staff does not expect diversity in practice. With respect to securities traded in inactive markets, the IASB has an ongoing project on measurement issues with respect to inactive markets, whose work is well advanced and which will address such issues. Consequently, the IFRIC would likely be unable to complete its due process with respect to securities traded in an inactive project before the IASB completed its own project. A Tentative Agenda Decision will be issued in the forthcoming issue of IFRIC Update. IAS 19 and IFRIC 14 – Stable workforce assumption The IFRIC considered a request to address an issue arising from IFRIC 14 IAS 19–The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction. IAS 19 limits the asset that an entity can recognise for a surplus in a defined benefit pension plan to the economic benefit available to the entity from both refunds from the plan and reductions in future contributions to the plan. IFRIC 14 gives guidance on how to determine that amount. The issue raised in the request related to the economic benefit available in the form of reductions in future contributions when there is a minimum funding requirement. IFRIC 14 requires the economic benefit available as reductions in future contributions to be the present value of: the future service cost to the entity for each year less the estimated minimum funding contributions required in respect of the future accrual of benefits in that year. In determining the future service cost, IFRIC 14 requires the entity to assume a stable workforce unless the entity is demonstrably committed to make a reduction in the number of employees covered by the plan. The IFRIC agreed not to add this item to its agenda. The effect of the timing of voluntary contributions described in the request was not a new issue, and is an inherent part of the asset ceiling. The only question was whether the determination of the economic benefit available from reductions in future contributions was appropriate. The IFRIC discussed this at length when developing IFRIC 14, and the request provided no new information on this point that was not considered at the time. A Tentative Agenda Decision will be issued in the forthcoming issue of IFRIC Update. In analysing the issue submitted, the staff identified another potential issue, dealing with the demographic assumptions of a 'stable workforce'. They will explore these issues further and report to the IFRIC at a later meeting. Regulatory Assets and Liabilities The IFRIC held an educational session devoted to accounting for the effects of rate regulation in the context of reporting under IFRS. Although many rate-regulated entities already report using IFRS, several jurisdictions considering or already committed to adopting IFRS have local GAAP requirements that are different to IFRS. Preparers in those jurisdictions, in Europe and North America, have raised questions about the appropriate application of IFRS in their situations. The IFRIC held a wide-ranging and interesting debate, but it did seem that their initial point of view was that non-IFRS accounting treatments, such as those in FAS 71 Accounting for the Effects of Certain Types of Regulation, were not consistent with IFRS. Although that conclusion might be uncomfortable, there was little to suggest that it was an incorrect analysis of the issue. IFRIC members noted that similar issues had be addressed in the development of IFRIC 12 Service Concession Arrangements but had not led to assets and liabilities being recognised in the financial statements that did not meet the IASB Framework definitions of those items. During the discussion, an observer noted that there were some similarities between 'cost-plus' contract accounting (IAS 11) and rate-regulated activities. However, it was noted that the critical difference between the two was that the IAS 11 relationship was a contractual right to recover the 'plus' bit, something that was usually absent in rate-regulated utilities. The IFRIC staff will continue its data gathering and analysis of issues and will return to a subsequent meeting with an agenda proposal. This summary is based on notes taken by observers at the IFRIC meeting and should not be regarded as an official or final summary.

6 September 2008: Accounting Roundup – August 2008

We have posted the August 2008 Edition of Accounting Roundup (PDF 382k) published by Deloitte & Touche LLP (USA). Topics covered in this issue include: FASB Developments FASB Issues Guidance on Endowments FASB Issues Revised Exposure Draft on Earnings per Share FASB Updates Codification for Business Combinations Topics SEC Developments SEC Approves Foreign Private Issuer Rule Amendments SEC Approves PCAOB's New Rules on Independence and Ethics SEC Issues Guidance on the Use of Corporate websites SEC Proposes a Roadmap to the Use of IFRSs SEC Announces Replacement of EDGAR SEC Holds Fourth Roundtable on IFRSs GASB Developments GASB Proposes Guidance on Voluntary Reporting of SEA Performance International Development IASB Issues Proposed Amendments to IAS 33 on Earnings per Share IASB Issues Proposed Amendments to Eight IFRSs You will find past issues of Accounting Roundup Here.

6 September 2008: Agenda for September 2008 IASB meeting

The International Accounting Standards Board will hold its September 2008 meeting at the IASB's offices, 30 Cannon Street, London on Tuesday to Friday 16-19 September 2008. The meeting is open to public observation and will be webcast. The tentative agenda is shown below. The Board will also host a meeting of World Accounting Standard Setters (WSS) on Thursday and Friday 11-12 September 2008, at the Renaissance Chancery Court Hotel in London. The WSS meeting will be open to public observation. See our news item below for the agenda for the WSS meeting. 16-19 September 2008, London Tuesday 16 September 2008 Credit Crisis: Proposed amendments to disclosure requirements Discussion of proposed improvements to disclosure requirements in relation to liquidity risk, fair value measurement, and off-balance sheet vehicles Amendment to IFRS 2 - Group Cash-settled Share-based Payment Arrangements IFRIC Update Annual Improvements 2008 Amendment to IFRS 1 - Transitional Issues Faced by Jurisdictions Expected to Adopt IFRSs in Coming Years Revenue Recognition Wednesday 17 September 2008 (Morning Only) IFRS for Private Entities (formerly IFRS for SMEs) – Recognition, Measurement, and Presentation Liabilities and Equity – Education Session on European cooperatives Thursday 18 September 2008 IFRS 2 Share-based Payment Fair Value Measurements Related Party Disclosures – State-controlled Entities and the Definition of a Related Party Insurance Contracts Friday 19 September 2008 Extractive Industries IFRS for Private Entities (formerly IFRS for SMEs) – Disclosure Fair Value Measurements – Expert Advisory Panel on Valuing Financial Instruments in Inactive Markets: Update Sweep issues from this meeting, if any

5 September 2008: Financial instruments with characteristics of equity

Deloitte has submitted a Letter of Comment (PDF 277k) on the IASB's Discussion Paper: Financial Instruments with Characteristics of Equity. We strongly support development of a standard addressing how to distinguish between liabilities and equity. We do not support any of the three approaches outlined in the Discussion Paper, but we believe that the basic ownership approach is a suitable starting point. Below is an excerpt from our letter. Past comment letters are Here. Because of the pervasiveness of these issues, we strongly encourage the IASB, jointly with the FASB, to develop a new classification approach. Given the high degree of interdependence between this project and the joint projects on financial statement presentation and the conceptual framework, we recommend that these projects be closely coordinated. In addition, because the classification and measurement of certain instruments under the basic ownership approach would be a significant change to - and present more variability in - the statements of position and performance, the effects of these changes on regulatory guidance should be studied further, particularly when regulatory guidance is globally promulgated. While each of the three classification approaches outlined in the Discussion Paper addresses some of the problems with existing accounting literature, we do not support any of these approaches in their current form. As more fully discussed in the attachment to this comment letter, we believe that each approach currently has a number of fundamental conceptual and operational deficiencies that need to be addressed before it can be an effective classification principle. Although the basic ownership approach in its current design has certain fundamental deficiencies, we believe that approach – appropriately modified – is a suitable starting point for a project to improve and simplify IAS 32.1 In the Appendix, we propose certain modifications to the basic ownership approach that we believe are necessary to create an effective conceptual classification principle and to make the basic ownership approach operational and useful to financial statement users.

4 September 2008: IASB will meet with World Standard Setters 11-12 September

The International Accounting Standards Board will hold its annual meeting with accounting standard setters from all over the globe on 11-12 September 2008 at the Renaissance Chancery Court Hotel, 252 High Holborn, London. The meeting is open to public observation but will not be webcast. Board member Warren McGregor will chair the two-day event. The agenda is shown below.

11-12 September 2008, London Thursday 11 September 2008 (09:30-17:30) 9:30 Welcome, Sir David Tweedie, IASB Chairman 10:00 Consolidation 13:30 IFRS implementation 16:30 Implementation Update: IFRIC and Annual Improvements Friday 12 September 2008 (09:00-16:00) 9:00 IASB Planning and Priorities 10:00 Implementing the [proposed] IFRS for Private Entities: The South African Experience 11:15 Option 1 - IFRS for Private Entities 11:15 Option 2 - Project Sessions: Choose 1 of: Liabilities and equity Reducing complexity in reporting financial instruments Presentation of financial statements Revenue recognition 14:00 Option 1 - IFRSs: Technical Update and Q&A 14:00 Option 2 - Project Sessions: Choose 1 of: Liabilities and equity Reducing complexity in reporting financial instruments Presentation of financial statements Revenue recognition 15:45 Concluding comments

4 September 2008: Japan CPAs support IFRSs for listed companies

The Japanese Institute of Certified Public Accountants has announced that it supports allowing listed companies in Japan to use International Financial Reporting Standards. This marks a significant change of policy for the JICPA, which previously had favoured maintaining separate Japanese accounting standards for listed companies and converging those standards with IFRSs. The JICPA said that the US SEC's Proposal to phase in IFRSs for public companies in the United States triggered its change of position. The new policy can be found in a news release on the JICPA Website in Japanese (not yet on their English pages).

3 September 2008: Spanish translation of Deloitte (USA) 2008 IFRS Survey

Deloitte (Colombia) has prepared Encuesta IFRS 2008: ¿Dónde nos encontramos hoy?, a Spanish translation of 2008 IFRS Survey – Where Are We Today?, originally published in English by Deloitte & Touche LLP (United States). This report discusses the results of approximately 200 responses by US-company senior finance professionals to Deloitte's 2008 survey on IFRSs. The primary goal of the survey was to ascertain US companies' level of awareness about and interest in IFRSs. One interesting finding was that 30% of the respondents said that, if given the choice now, they would consider adopting IFRSs. Click to download: Encuesta IFRS 2008: ¿Dónde nos encontramos hoy? (PDF 1,260k). 2008 IFRS Survey – Where Are We Today? (PDF 850k).

3 September 2008: Reminder - Webcast on US GAAP/IFRS on 3 September

Deloitte (United States) will present a webcast on US GAAP and IFRS Convergence: Bridging the Divide at 2:00 PM EDT (18:00 GMT) on 3 September 2008. The webcast will focus on the implications of adoption of IFRSs in the United States on companies' compensation and benefits programs. Click here for More Information and to Register for the Webcast. Earlier webcasts are kept Online Here.

2 September 2008: Two new IAS Plus newsletters in Chinese

Deloitte (China) has published two special edition IAS Plus Newsletters in Chinese on recently issued exposure drafts . Download links are below and on our China Page. The newsletters are translations of the English language versions, which can be found Here. Newsletter on Annual Improvements 2008 Exposure Draft (PDF 156k) Newsletter on Earnings per Share Exposure Draft (PDF 142k) Our CAS Plus Website has more information in Chinese.

2 September 2008: Five new IFRS publications in Spanish

Deloitte (Colombia) has published the following five IFRS publications in Spanish: Boletín IAS Plus Agosto 2008 Mejoramientos Anuales para el 2008 (IAS Plus Newsletter: Annual Improvements) (PDF 161k) Boletín IAS Plus Agosto 2008 El Denominador Común (IAS Plus Newsletter: Earnings per Share) (PDF 141k) Por qué usted necesita saber acerca de XBRL (Why You Need to Know About XBRL) (PDF 375k) Planeación para la adopción de los IFRS (IFRS for US 'Planning for IFRS Adoption') (PDF 404k) Boletín de presentación de reportes en los Estados Unidos para compañías que no tienen sede en los Estados Unidos (US Reporting Newsletter for Non-US Based Companies) (PDF 362k) You will find permanent links to these and other Spanish language IFRS publications on our Spanish Resources Page.

1 September 2008: Reminder about six comment deadlines in September

We remind you that comments are due in September 2008 on four IASB Discussion Papers, one IASB exposure draft, and the IASCF's Constitution proposals. Details are in the table below: Comment Document Deadline Discussion Paper: Financial Instruments with Characteristics of Equity 5 Sept 2008 Discussion Paper: Reducing Complexity in Reporting Financial Instruments 19 Sept 2008 Review of the Constitution: Public Accountability and the Composition of the IASB – Proposals for Change 20 Sept 2008 Discussion Paper: Preliminary Views on Amendments to IAS 19 Employee Benefits 26 Sept 2008 Exposure Draft: An improved Conceptual Framework for Financial Reporting: Objective of Financial Reporting and Qualitative Characteristics and Constraints 29 Sept 2008 Discussion Paper: Preliminary Views on the Reporting Entity Concept 29 Sept 2008