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28 February 2009: 10 IASB pronouncements await EU endorsement
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The European Financial Reporting Advisory Group (EFRAG) has updated its report showing the status of endorsement, under the EU Accounting Regulation, of each IFRS, including standards, interpretations, and amendments. Click to download the Endorsement Status Report as of 9 February 2009 (PDF 110k). Currently, there are 10 IASB pronouncements are awaiting European Commission endorsement for use in Europe, as follows:
Standards
- IFRS 1 First-time Adoption of IFRS – Restructured standard (2008)
- IFRS 3 Business Combinations (2008)
Interpretations
- IFRIC 12 Service Concession Arrangements
- IFRIC 15 Agreements for the Construction of Real Estate
- IFRIC 16 Hedges of a Net Investment in a Foreign Operation
- IFRIC 17 Distributions of Non-cash Assets to Owners
- IFRIC 18 Transfers of Assets from Customers
Amendments
- IAS 27 Consolidated and Separate Financial Statements (2008)
- IAS 39 Amendments for Eligible Hedged Items
- IAS 39 Amendments for Reclassification of Financial Assets
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28 February 2009: Deloitte Canada IFRS transition newsletter
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Deloitte Canada has published the February 2009 issue of their Countdown IFRS transition newsletter, to discuss practical issues Canadian companies are facing in IFRS transition as well as to provide an update on recent IFRS events. Articles in this issue include:
- Looking back on Australia's IFRS conversion
- An overview of the Public Sector Accounting Standards Board's Invitation to Comment relating to the application of IFRSs to the Public Sector
- 'The Real Deal' – real issues and solutions on IFRS transition relating to property, plant and equipment
- Deloitte publications and events and how to access them
- An Update on Current IFRS events – including various important Exposure Drafts or Discussion Papers
Click below for:
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26 February 2009: EC would cut accounting burden for micros
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The European Commission has sent to the European Parliament and the Council of Ministers a proposal to exempt 'micro entities' from the accounting and financial reporting requirements of the 4th Company Law Directive. Micro entities are the smallest companies. For this proposal they have to meet two of the three following criteria:
- A balance sheet total of not more than €500.000;
- A net turnover of not more than €1.000.000;
- Not more than ten as average number of employees during the financial year.
Currently, the Accounting Directives require around 5.4 million limited liability companies in Europe to prepare financial statements and, in many cases, have them audited. The Commission's proposal acknowledges that the Accounting Directives 'have led to improved financial reporting environment in the EU'. At the same time, though, the Commission has concluded that the Directives impose a burden on micro entities that can be reduced. Under the Commission's prpoposal, EU Member States would decide whether to retain the requirements of the Accounting Directives for micro entities or to exempt micro entities from them. Of course, apart from the Directives, EU Member States generally have their own national financial reporting requirements. The proposal would not affect those. Member States could keep their existing requirements or design simplified rules for micros. Click for:
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26 February 2009: EC strengthens supervisors and standard-setters
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The European Commission has adopted measures to strengthen the supervisory framework for EU financial markets and to provide funding for bodies involved in financial reporting standards at the EU and international levels, including the IASB.
Strengthening CESR, CEBS, CEIOPS
Under the new rules, the three committees that supervise the securities, banking, and insurance sectors will benefit from a clearer operational framework and more efficient decision-making processes. The committees are
The Commission's action contains a non-exhaustive list of tasks that the Committees are expected to perform and introduces qualified majority voting when consensus cannot be reached. Measures adopted by the three Committees remain non-binding. However, member states that do not follow those measures must be prepared to present the reasons for this choice.
Funding IASB/IASCF, EFRAG, PIOB, and CESR, CEBS, CEIOPS
The Commission is proposing that the three committees, as well as the following three bodies involved in the standard-setting process for financial reporting and auditing at both EU and international level, should be provided with financial support from the EU budget:
Total funding of the six groups would amount to €36.2 million over the period 1 January 2010 until 31 December 2013, as follows:
| Recipient | 2010 | 2011 | 2012 | 2013 | Total |
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| IASCF/IASB | €0 | €5,000 | €5,000 | €5,000 | €15,000 |
| EFRAG | €3,000 | €3,000 | €3,000 | €3,000 | €12,000 |
| PIOB | €300 | €300 | €300 | €300 | €1,200 |
| CESR, CEBS, CEIOPS Combined | €2,000 | €2,000 | €2,000 | €2,000 | €8,000 |
The funding proposal now passes to the Council and the European Parliament for consideration.
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Click for:
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26 February 2009: EC guidance on impaired assets of European banks
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The European Commission has published a Communication with guidance on the treatment of impaired assets in the EU banking sector. While the guidance covers measurement and disclosure of impairment, it also encompasses management of impaired assets, including state aid and relief schemes, The guidance is based on a number of principles:
- Full transparency and disclosure of impairments, which has to be done prior to government intervention.
- Coordinated approach to the identification of assets eligible for asset relief measures through development of eligible categories of assets.
- Coordinated approach to valuation of assets ex-ante, based on common principles such as valuation based on real economic value (rather than market value), implemented by independent experts and certified by bank supervisors. This valuation is for the purpose of providing government aid to banks (for instance, troubled asset purchase or insurance programmes). The Communication does not appear to address financial reporting issues.
- Validation by the Commission of the valuation of the assets, in the framework of the State aid procedures on the basis of uniform assessment criteria.
- Adequate burden-sharing of the costs related to impaired asset between the shareholders, the creditors and the State.
- Adequate remuneration for the State, at least equivalent to the remuneration of State capital
- Coverage of the losses incurred from the valuation of the assets at real-economic-value by the bank benefiting from the scheme.
- Aligning incentives for banks to participate in asset relief with public policy objectives, through an enrolment window limited to six months during which the banks would be able to come forward with impaired assets.
- Management of assets subject to relief so as to avoid conflicts of interests.
- Appropriate restructuring including measures to remedy competition distortion, following a case by case assessment and taking into account the total aid received through recapitalisation, guarantees or asset relief, with a view to the long-term viability and normal functioning of the European banking industry.
Click for:
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26 February 2009: Financial Crisis Advisory Group will meet 5 March
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The joint IASB-FASB Financial Crisis Advisory Group (FCAG) will hold its third meeting on Thursday 5 March 2009 from 9:15am to 3:15pm EST at Baruch College, Newman Conference Center, 151 East 25th Street, 7th Floor, New York, NY 10010 USA. The meeting will be open to public observation and will be webcast. Main agenda items are as follows (there's More Information on FASB's website):
- Part I: Further Exploring Matters Discussed at February 13th Meeting:
- Display of through-the-cycle provisioning in general purpose financial statements
- Possible approaches to improvement and simplification of accounting and reporting of financial instruments
- Part II: Fair Value, continued:
- Is it appropriate and useful to report gains (or losses) from fair value changes in a reporting entity's own indebtedness? Why or why not?
- What additional guidance, if any, is needed in the area of determining fair value?
- Part III: Off-Balance Sheet Items:
- What are the best ways to bring about useful information regarding securitizations and other structured entities?
- Assuming that a consolidation/de-recognition approach is used, what principles should determine whether a securitization or other structured entity is included in the balance sheet of a sponsoring entity?
- Part IV: Standard-Setter Governance and Due Process:
- How (and by whom) should oversight be exercised over accounting standard-setters on a national (or international) basis in order to ensure appropriate independence, accountability, and transparency in the standard-setting process?
- What criteria should accounting standard-setters consider in balancing the need for resolving an 'emergency issue' on a timely basis and the need for active engagement from constituents through due process?
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The IASB and FASB established the FCAG in response to the recent global financial crisis. Its purpose is to advise the boards about the role of accounting during the crisis and potential changes. Preliminary and unofficial notes taken by Deloitte observers at the first two FCAG meetings can be found here:
The FCAG will meet again on Monday 20 April 2009 in London at the Crowne Plaza Hotel London-The City, 19 New Bridge Street, London.
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25 February 2009: Notes from Standards Advisory Council meeting day 2
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The Standards Advisory Council (SAC) held a two-day meeting with the IASB in London on 23 and 24 February 2009. The SAC provides a forum for the IASB to consult a wide range of interested parties affected by the IASB's work. On 19 February 2009, the IASCF Trustees announced the members of the SAC for the three years 2009-2011 (see our News Story of 19 February 2009). A significant change from the previous SAC structure is that members represent organisations rather than serving as individuals. This is the first meeting under SAC's new chairman, Paul Cherry. Click here to go to the preliminary and unofficial Notes Taken by Deloitte Observers at the SAC meeting.
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24 February 2009: Mutual recognition of audit oversight
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Charlie McCreevy, the EU Commissioner for the Internal Market and Services, has issued a Statement (PDF 17k) expressing concern that the United States has not yet agreed to a system of mutual recognition of national oversight of the auditing profession. An excerpt:
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The EU's aim has always been to move towards full reliance on the audit inspections of the public oversight bodies in these third countries. In practice, this would mean that audit firms from these countries would no longer have to be inspected by European public oversight bodies, as we in the EU could rely on the audit inspections that were carried out by their counterparts in these countries. In return, of course, EU oversight bodies would expect the same treatment for EU audit firms. Putting in place this model of cooperation would go a long way towards restoring the confidence of investors. But of course, it has to be based upon mutual trust.
Whilst some of our trading partners, notably Canada and Japan, seem to be open towards such an agenda, the same is not true for the United States. As things stand at the moment, the EU will commit itself to facilitate United States' inspections but we currently have no guarantee that the United States will do the same for us. This is not good for the confidence of our investors here in the EU. Nor does it send the right signal for the EU's own oversight bodies which we here in the EU have worked hard to put in place.
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24 February 2009: Notes from Standards Advisory Council meeting day 1
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The Standards Advisory Council (SAC) held a two-day meeting with the IASB in London on 23 and 24 February 2009. The SAC provides a forum for the IASB to consult a wide range of interested parties affected by the IASB's work. On 19 February 2009, the IASCF Trustees announced the members of the SAC for the three years 2009-2011 (see our News Story of 19 February 2009). A significant change from the previous SAC structure is that members represent organisations rather than serving as individuals. This is the first meeting under SAC's new chairman, Paul Cherry. Click here to go to the preliminary and unofficial Notes Taken by Deloitte Observers at the SAC meeting.
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24 February 2009: First meeting of Monitoring Board is 1 April 2009
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The first meeting of the new IASC Foundation (IASCF) Monitoring Board will take place in London on Wednesday 1 April 2009, in conjunction with the meeting of the IASCF Trustees, which is scheduled for 1-2 April 2009 in London. The meeting will be open to public observation. In January 2009, the Trustees amended the IASCF Constitution to create the Monitoring Board to serve as a mechanism for formal interaction between capital markets authorities and the IASCF. This will help enable capital market authorities that allow or require the use of IFRS in their jurisdictions to effectively discharge their mandates relating to investor protection, market integrity, and capital formation. Initial members of the Monitoring Board will be the relevant leaders of:
- The European Commission
- The Japanese Financial Services Agency
- The US Securities and Exchange Commission
- The Emerging Markets Committee of IOSCO, and
- The Technical Committee of IOSCO
The chairman of the Basel Committee on Banking Supervision will be a non-voting observer. Click for More Info about the Monitoring Board.
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23 February 2009: US private companies strongly favour IFRS
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A new Deloitte poll suggests that a significant number of American private companies would like a single set of globally accepted financial reporting standards for non-public entities. More than 40 percent of 1,700 finance professionals, mostly from private companies, responded to a set of polling questions during a Deloitte webcast by stating that their companies would take positive action when the IASB completes its project on private entity reporting. Almost 14 percent said they will consider adopting IASB's new standard in the near term, while 26 percent reported they will assess the costs and benefits of adoption. Nearly 85 percent found something appealing about the project, including more than 33 percent that liked having a simplified, self-contained set of accounting standards that are appropriate for private entities. Close to 30 percent believed these standards will reduce their financial reporting burden, and just over 21 percent cited better comparability for users of private company financial information. The Deloitte webcast, International Financial Reporting Standards: Why Private Companies Should Take Note, can be replayed at www.deloitte.com/us/pcwebcast128". Click for Deloitte News Release (PDF 24k).
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23 February 2009: Three IFRS publications from Deloitte Brazil
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Deloitte (Brazil) has published three IFRS publications in Portuguese. Brazil will require IFRS consolidated financial statements for all listed companies and all banks, both domestic and foreign owned, starting with years ending 31 December 2010. The three new Brazilian IFRS publications are:
There are permanent links to these publicaitons on our Brazil Page.
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22 February 2009: NASBA asks SEC to drop 'Roadmap' to IFRSs
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The National Association of State Boards of Accountancy (NASBA) has asked the US Securities and Exchange Commission to withdraw its proposal for a Roadmap for use of IFRSs by all US companies registered with the SEC. Instead, NASBA believes that the Commission should encourage covergence of US GAAP and IFRSs.
NASBA is the association of the 55 government boards of accountancy in US states and territories. The individual boards examine candidates and license CPAs. NASBA itself administers an International Qualification Examination (IQEX) for non-US candidates seeking a receiprocal US CPA designation.
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22 February 2009: IFRS conversion - banking and capital markets
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As acceptance of IFRSs in the United States becomes closer, more banks and capital markets institutions are asking key questions: How does IFRS affect my institution? What events would influence my institution's pace of IFRS adoption? What obstacles might we need to consider? The Path to IFRS Conversion – Considerations for the Banking and Capital Markets Industry (PDF 267k), from Deloitte United States, addresses these issues and includes useful sections on:
- Understanding the implications of IFRS for the banking and capital markets industry for accounting and finance, systems, and tax
- Reviewing key differences between IFRSs and US GAAP
- Evaluating approaches to IFRS conversion
- Developing an IFRS road map
- IFRS lessons from the European experience
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22 February 2009: Agenda for 5 March 2009 IFRIC meeting
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The International Financial Reporting Interpretations Committee (IFRIC) will meet at the IASB's offices in London on Thursday 5 March 2009 (one day only) 10:00am to 17:00pm. The meeting is open to the public and will be webcast. The tentative agenda is shown below.
Agenda for the IFRIC Meeting
Thursday, 5 March 2009 |
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- Introduction, including minutes of November 2008 meeting
- Update on IFRIC projects since November 2008 meeting
- IFRIC 9 - Reclassifications amendment
- IFRIC 9 - Amendment arising from IFRS 3 (revised 2008)
- IFRIC 14 - Asset ceiling
- IFRIC 16 - Restriction on the entity that can hold hedging instruments amendment
- IFRIC 18 - IASB Board approval and issuance
- Compliance Costs for REACH (European Commission Regulation Concerning the
Registration, Evaluation, Authorisation and Restriction of Chemicals)
- Review of Tentative Agenda Decisions published in November IFRIC Update
- IFRS 3 - Customer-related intangible assets
- IAS 28 - Potential effect of IFRS 3 (as revised in 2008) and IAS 27 (as amended in 2008) on equity method accounting
- IAS 32 - Classification of puttable and perpetual instruments
- IAS 37 and IAS 38 - Regulatory assets and liabilities
- IAS 39 - Derecognition of financial assets
- IAS 39 - Fair Value Measurement of Financial Instruments in Inactive Markets
- Staff Recommendations for Tentative Agenda Decisions
- IAS 7 - Determination of cash equivalents
- IAS 12 - Classification of tonnage taxes
- IAS 16 - Disclosure of idle assets and construction in progress
- IAS 28 - Venture capital consolidations and partial use of fair value through profit or loss
- IAS 39 - Participation rights and calculation of the effective interest rate
- IAS 39 - Classification of failed loan syndications
- IAS 41 - Discount rate assumptions used in fair value calculations
- IFRIC 14 - Voluntary prepaid contributions under a minimum funding requirement
- IAS 38 - Accounting for sales costs
- Administrative Session
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21 February 2009: Agenda project pages are updated
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We have updated the following agenda project pages to reflect the discussions and decisions at the IASB's February 2009 Board meeting:
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21 February 2009: IFRIC 18 newsletter in Chinese
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Deloitte (China) has published the Chinese language translation of the IAS Plus Update newsletter on IFRIC 18 Transfers of Assets from Customers:
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20 February 2009: Notes from day 4 of IASB February 2009 meeting
20 February 2009: IFRS considerations for the shipping industry
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The Path to IFRS: Considerations for the Shipping Industry (PDF 1,106k), from Deloitte (United States), includes sections on:
- Understanding the implications of IFRS for the shipping industry
- A business case for IFRS
- Key accounting differences between IFRS and US Generally Accepted Accounting Principles (GAAP) for the shipping industry
- Evaluating approaches to IFRS conversion
- Developing an IFRS road map
- IFRS lessons from the European experience
- Key action steps for shipping industry executives
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20 February 2009: IFRS in the aerospace and defense industry
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IFRS in the Aerospace and Defense Industry (PDF 226k), a publication of Deloitte (United States) provides practical industry insights on IFRS and includes useful sections on:
- Understanding the implications of IFRS (in accounting and beyond) for the aerospace and defense industry
- Key technical accounting differences between IFRS and US Generally Accepted Accounting Principles
- Evaluating approaches to IFRS conversion
- Developing an IFRS roadmap
- IFRS lessons from the European experience
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20 February 2009: Notes from day 3 of IASB February 2009 meeting
19 February 2009: New Standards Advisory Council membership
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The Trustees of the IASC Foundation have announced the membership of the reconstituted Standards Advisory Council (SAC) for the three years ending on 31 December 2011. The SAC provides a forum for the IASB to consult a wide range of interested parties affected by the IASB's work. The SAC meets three times a year and advises the IASB on issues including the IASB's agenda and work programme. The first meeting of the new SAC will be on 23 and 24 February in London (click for Agenda). The Trustees also announced two vice-chairmen to serve alongside Paul Cherry, the recently appointed SAC chairman: Charles Macek and Patrice Marteau. The new SAC membership is below (and permanently on our Advisory Council Page). A significant change from the previous SAC structure is that members represent organisations rather than serving as individuals. Click for Press Release (PDF 190k).
| SAC Chairman and Vice-Chairmen |
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SAC Chairman:
- Paul Cherry, Chairman, Canadian Accounting Standards Board (retiring March 2009)
SAC Vice-Chairmen:
- Charles Macek Non-Executive Director, Telstra and Wesfarmers, Former Chairman, Australian Financial Reporting Council
- Patrice Marteau Chairman, ACTEO; Chairman, Accounting Committee, Business Europe
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| Organisation | Individual | Title |
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| Brazilian Association of Listed Companies (ABRASCA) | Geraldo Toffanello | Accounting Director, GERDAU Group |
| Associated Chambers of Commerce of India/The Stock Exchange, Mumbai (BSE) | Narendra Sarda | Chairman, Deloitte Haskins & Sells |
| Association of British Insurers/Investment Management Association (IMA) | Liz Murrall | Director of Corporate Governance and Reporting, IMA |
| Basel Committee on Banking Supervision | Sylvie Matherat | Director, Financial Stability Directorate, Banque de France |
| BDO International | Andrew Buchanan | IFRS Technical Partner |
| CFA Institute | Dane Mott | Executive Director, JP Morgan Securities Inc |
| Committee of European Securities Regulators | Richard Thorpe | Head of Capital Adequacy Policy Department and Accounting and Auditing Sector, UK Financial Services Authority |
| Corporate Reporting Users' Forum (International) | Norbert Barth | Head of European Chemical Sector Research, WestLB |
| Council of Institutional Investors (USA) | Gail Hanson | Deputy Executive Director, State of Wisconsin Investment Board |
| Deloitte | Joel Osnoss | Partner-in-Charge of Global IFRS and Offerings Services |
| Ernst & Young | Leo van der Tas | Global Technical Director, IFRS |
| European Central Bank | Mauro Grande | Director, Financial Stability and Supervision, European Central Bank |
| European Financial Reporting Advisory Group (EFRAG) | Stig Enevoldsen | Chairman, Technical Expert Group, EFRAG |
| European Insurance and Reinsurance Federation (CEA) | Jacques Le Douit | Accounting Research and Development Director AXA |
| European Issuers/European Round Table of Industrialists | Christoph Hutten | Chief Accounting Officer, SVP SAP AG |
| Federation Internationale des Experts-Comptables Francophone | Benoit Atangana Onana | Senior Partner and General Manager, African Consulting Enterprise |
| Financial Executives International (Canada) | Karyn Brooks | SVP and Controller, Bell Canada Enterprises |
| Financial Executives International (US) | Jamie Miller | Vice President and Controller General Electric Company |
| Grant Thornton | April Mackenzie | Global Head of Public Policy |
| Group of 100 (Australia) | Judith Downes | Chief Financial Officer, Alumina Limited |
| Group of European national standard-setters (France, Germany, Italy, and UK) | Piero di Salvo, Italy (for 2009) | Rotating annually among the standard-setters of France, Germany, Italy, UK |
| Group of North American Insurance Enterprises | Jerry de St. Paer | Executive Chairman GNAIE – Group of North American Insurance Enterprises |
| Hong Kong Institute of Certified Public Accountants | P M Kam | Group Financial Controller, Jardine Matheson Ltd |
| Institute of International Finance | Will Widdowson | Head of Group Accounting Policy and Group SOX Officer, UBS AG |
| International Association for Accounting Education & Research | Hollis Ashbaugh Skaife | Associate Professor of Accounting Wisconsin School of Business |
| International Actuarial Association | Francis Ruygt | Deputy Chief Insurance Risk Officer and Group Actuary, ING Group |
| International Association of Insurance Supervisors | Henning Goebel | Economic Advisor, Federal Financial Supervisory Authority |
| International Corporate Governance Network | Gerben Everts | Compliance Officer, APG Investments |
| International Federation of Accountants | James Sylph | Executive Director, Professional Standards |
| International Monetary Fund | Kenneth Sullivan | Senior Financial Sector Expert |
| International Organization of Securities Commissions (IOSCO) | One member each from a developed and emerging economy:
Developed economy:
Rotating between Sophie Baranger, Director of Accounting and Finance Division, AMF, France; Christoph Ernst, Head of Accounting and Auditing Law Division, Federal Ministry of Justice, Germany
Emerging economy:
To be confirmed |
| Investment Company Institute (USA) | Donald J. Boteler | Vice President, Operations |
| Investors' Technical Advisory Committee (USA) | Neri Bukspan | Chief Quality Officer and Chief Accountant, Standard & Poor's |
| Korea Accounting Standards Board | Chanhong Kim | Vice Chairman |
| KPMG | Mark Vaessen | Head of IFRS, KPMG Europe LLP |
| Ministry of Finance, People's Republic of China, China Accounting Standards Committee | Liu Yuting | Director-General, CASC |
| Nippon Keidanren (Japan) | Shozo Yoneya | Corporate Auditor, Itochu Corporation |
| PricewaterhouseCoopers | Richard Keys | Leader – Global Accounting Consulting Services |
| Securities Analysts Association of Japan | Sei-Ichi Kaneko | Executive Vice President and Member of the Board |
| South Africa Accounting Practices Board | Moses Kgosana | Chairman |
| World Bank | Charles McDonough | Deputy Controller and Director of Accounting |
Observer organisations:
- European Commission
- Japan Financial Services Agency
- US Securities and Exchange Commission
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19 February 2009: Notes from day 2 of IASB February 2009 meeting
18 February 2009: FASB begins two fair value measurement projects
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The US Financial Accounting Standards Board (FASB) has added to its agenda two projects intended to improve:
- the application guidance used to determine fair values and
- disclosure of fair value estimates.
The projects were added in response to recommendations contained in the Securities and Exchange Commission's recent study on mark-to-market accounting, as well as input provided by the FASB's Valuation Resource Group. Click for Press Release (PDF 80k).
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18 February 2009: Ecuador will phase in IFRSs starting 2010
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Pursuant to Resolution No. 08.G.DSC (PDF 67k) issued by the Superintendent of Companies, Ecuador will require IFRSs for all companies, phased in as follows:
- Starting 1 January 2010: All companies subject to the regulations of the stock market and all external auditors.
- Starting 1 January 2011: All companies with assets greater than US$ 4,000,000 at 31 December 2007; holding companies and consolidated groups; state-owned entities; and foreign-invested entities.
- Starting 1 January 2012: All other companies.
These dates replace a requirement, adopted in 2007, for all companies to begin using IFRSs in 2008. Our Ecuador country page is Here.
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18 February 2009: Accounting implications of the credit crisis
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At a conference in Dubai on 15 February 2009, Syed Asad Ali Shah, President of the Institute of Chartered Accountants of Pakistan and a partner in Deloitte (Pakistan), made a presentation on Global Financial Crisis – Accounting and Audit Considerations. Mr Shah discusses the origin of the crisis, current state, complex financial instruments, impact on the global economy, changes in standards, dealing with the crisis, and accounting and audit considerations. Click to Download Mr Shah's Presentation (PDF 299k).
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18 February 2009: Notes from day 1 of IASB February 2009 meeting
18 February 2009: Two Deloitte IFRS newsletters in Spanish
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Deloitte (Colombia) has published the Spanish translations of the following two IAS Plus Update newsletters:
Newsletter on Proposed Amendments to IFRIC 9 and IFRIC 16
Newsletter on ED 10 Consolidation
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17 February 2009: Analyst Representative Group will meet 25 February
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The IASB will meet with the Analyst Representative Group on 25 February 2009, 9:00am to 4:30pm at the IASB Offices, 30 Cannon Street, London. The meeting is open to public observation. Topics on the agenda are:
- Current reporting issues
- Earnings per share: Next steps following the ED
- Post-employment benefits: Improvements to disclosures
- Revenue recognition: Overview of changes to current practice proposed in the December 2008 DP
- Update on work programme
- Financial statement presentation: Direct method cash flows and the reconciliation statement plus overall impressions of the DP
- Emission rights: Consideration of alternative accounting models
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17 February 2009: Agenda for 23-24 February 2009 SAC meeting
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The International Accounting Standards Board will meet with the Standards Advisory Council (SAC) on Monday and Tuesday, 23 and 24 February 2009, at the Renaissance Chancery Court Hotel in London. The meeting will be open to public observation all day Monday and Tuesday morning. The agenda is presented below.
Standards Advisory Council Meeting Agenda
23-24 February 2009, London |
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Monday 23 February 2009
- Opening remarks
- Orientation – To provide SAC members with an overview of the IASB and IASCF structures so that SAC members are familiar with the context in which the SAC will operate.
- SAC Mandate
- IASB Work Plan
- Financial Statement Presentation
Tuesday 24 February 2009 (morning only)
- Global Financial Crisis
- Response to G20, FSF and other bodies
- Report on initial Financial Crisis Advisory Group meetings
- Constitutional Review Part 2
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17 February 2009: Newsletter on IFRIC 18
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Deloitte's IFRS Global Office has published an IAS Plus Update Newsletter – Guidance Issued on Accounting for Transfers of Assets from Customers (PDF 107k). The newsletter explains IFRIC 18 Transfers of Assets from Customers, which was published on 29 January 2009 and will be effective for transfers received received from customers on or after 1 July 2009.
- The basic principle of IFRIC 18 is that when the item of property, plant and equipment transferred from a customer meets the definition of an asset under the IASB Framework from the perspective of the recipient, the recipient must recognise the asset in its financial statements. If the customer continues to control the transferred item, the asset definition would not be met even if ownership of the asset is transferred to the utility or other recipient entity.
- The deemed cost of that asset is its fair value on the date of the transfer.
- The timing of the recognition of the revenue arising from the transfer will depend on the separately identifiable services included in the agreement.
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Past issues of all IAS Plus newsletters are Here.
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16 February 2009: Require IFRSs for Japanese listed companies?
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The Japan Financial Services Agency (FSA – the securities regulator) has launched a public consultation on Application of International Financial Reporting Standards (IFRS) in Japan. The official consultation document – known as the Draft Interim Report of the Business Accounting Council – is, of course, in Japanese. However, the FSA has released a provisional and unofficial English Translation of the Draft Interim Report (PDF 100k). In the FSA Press Release (PDF 31k) announcing the consultation, the FSA said that the following are the key points of the Draft Interim Report:
- The use of IFRS on a voluntary basis could be permitted, for instance, from the fiscal year ending March 31, 2010, for the consolidated financial statements of certain listed companies. However, the decision needs to be made after assessing various factors.
- On the other hand, the decision regarding the mandatory use of IFRS could be made around, say, 2012. However, this timing could be moved either forward or back depending on various factors and the situation of the implementation of the use of IFRS on a voluntary basis.
Contents of the Draft Interim Report:
- I. International Developments in Accounting Standards
1. Progress in Convergence of Accounting Standards
2. Developments in Other Countries toward IFRS Application
- II. The Direction for Japanese GAAP
1. The Need for Continuing Convergence of Japanese GAAP
2. Issues Concerning the Application of IFRS in Japan and the Required Approach
- (1) Basic concept regarding the application of IFRS by Japanese companies
- (2) Issues Concerning the Application of IFRS
- (3) Optional Application of IFRS
- (4) Considerations for Future Mandatory Application
- III. Toward Future Action
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On page 15, the Draft Interim Report states that Japan will consider 'carve-outs' from IFRSs:
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Nevertheless, because of the grave importance of accounting standards as the yardstick for assessing financial statements, with punitive action under law taken in case of violation, there may be cases in which Japan must suspend application of the parts of IFRS developed by the IASB that are found seriously inappropriate and cannot be recognized as accounting standards
'that are generally fair and just' in Japan.
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The deadline for comments is 6 April 2009.
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16 February 2009: IFRSs required for all companies in Mongolia
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We have created a new country page for the Republic of Mongolia and have updated our Table Reporting Use of IFRSs by Jurisdiction to reflect our understanding of the requirements in Mongolia, as follows:
- Accounting standards. Mongolian Accounting Law requires that any business entity or organisation operating within Mongolia, including both for-profit and non-profit entities, SMEs, and state-owned entities to publish financial statements that are prepared in accordance with IFRSs.
- Auditing. The Audit Law requires the financial statements of the following types of entities to be independently audited: entities that are listed or planning a listing; unlisted with capital exceeding appoximately US$40,000; foreign-invested; wholly or partly state owned; and financial institutions including banks, insurers, broker/dealers, and investemnt funds. Auditing standards are established by the Audit Committee of Mongolian Institute of Certified Public Accountants.
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16 February 2009: IFRS considerations for audit committees
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Deloitte LLP (United States) has published IFRS Considerations for Audit Committees (PDF 238k). The strong global movement toward IFRSs and recent US SEC activity have created a need for audit committees and company management to discuss the potential costs, benefits, and other effects of a transition to IFRSs. Because audit committees have a fiduciary responsibility to protect the interest of shareholders and oversee the integrity of the company's financial reporting process, their involvement in the transition to IFRS is essential. This 21-page publication is designed to assist audit committee members in preparing for meaningful and effective conversations about IFRSs, and includes:
- A high-level overview of IFRS accounting requirements and potential IFRS-U.S. Generally Accepted Accounting Principles differences.
- Implementation considerations.
- Key questions audit committees should ask.
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15 February 2009: Second meeting of Financial Crisis Advisory Group
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The Financial Crisis Advisory Group (FCAG) was established by the IASB and US FASB in response to the recent global financial crisis. Its purpose is to advise both boards about the role of accounting during the crisis and potential changes. The FCAG held its second meeting in New York on 13 February 2009. Presented below are the preliminary and unofficial notes taken by a Deloitte observer at the meeting. For related information please see our Credit Crunch Page.
IASB-FASB Financial Crisis Advisory Group Meeting
13 February 2009 |
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The members of the FCAG discussed various issues ranging from the focus and purpose of the financial statements to fair value measurements. Noted below are highlights of the issues discussed:
Aim of financial statements
The FCAG members generally agreed that the financial statements are primarily directed toward investors, which includes a broad range of stakeholders, including lenders, investors, and creditors. The members also agreed that the joint project on financial statement presentation and XBRL will significantly improve and enhance how the users view the financial statements.
Financial statements vs. financial stability
The members generally agreed that financial statements must serve the purpose of helping users in making informed decisions by providing transparent information. Further, most agreed that accounting should not be used to counteract pro-cyclicality and should be neutral. In addition, the members generally agreed that it is the job of the prudential regulators to ensure financial stability and incorporating financial stability in the financial statements would jeopardize its transparency.
Dynamic provisioning for regulatory capital allocation
Various views were raised and discussed regarding the application of 'dynamic provisioning'. Some members voiced concerns that allowing entities to create reserves (without having appropriate guidelines or regulation) may lead to earnings management, while others suggested that prudential regulators should establish a minimum requirement for capital adequacy that should drive the reserve requirement.
The Chairman of the IASB voiced concern that dynamic provisioning will distort the income statement and suggested that regulators and standard setters work together to figure out how best to display the impact of dynamic provisioning on the balance sheet, that is, through equity with no impact on the income statement. Certain members also supported this view recommending that accounting should not be changed to meet regulatory capital requirements. Certain members also recommended that regulators prohibit entities from distributing such capital reserves (recorded in equity) through dividends or stock buyback to maintain the adequacy of such reserves.
Although there was much discussion on this topic, the chairman of the FCAG recommended that this issue be discussed in greater detail during the March 5 meeting, prior to which a concept paper on dynamic provisioning will be distributed to the members. The concept papers will discuss the two models (that is, change in provision through income or equity) and may broaden the concept of dynamic provisioning to not just loans, but to other financial instruments.
Fair Value Measurements
The chairman of the FCAG highlighted that the SEC's study on mark-to-market accounting highlighted that fair value was used to measure a minority of assets and liabilities at the financial institutions studied and was not to be blamed for the failure of the financial institutions. In fact members pointed out that credit losses (as highlighted in the study) were the primary driver of bank failures.
Certain FCAG members highlighted that the real issue is how to apply fair value in distressed markets. These members also identified that recording gains on liabilities (due to credit downgrade) does not provide useful representation of bank's performance and results in misrepresentation of true losses, which are suppressed by such gains. Members also noted that Statement 157 provides flexibility in measuring fair value, which requires the use significant judgment, but due to litigation risk and risk of being second guessed, results in incorrect application of fair value.
Further, members agreed that fair value provides transparency; however, the Boards (the IASB and FASB) should continue to explore methods to improve fair value before broadening its application to other financial assets and liabilities.
In addition, the members agreed that the mixed attribute model should be reviewed and the Boards should consider simplifying the impairment guidance.
This summary is based on notes taken by observers at the FCAG meeting and should not be regarded as an official or final summary.
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15 February 2009: Pakistan grants 'relaxation' of IAS 39
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The Securities and Exchange Commission of Pakistan (SECP) has granted a 'relaxation' of the requirements of IAS 39 by allowing impairment losses on available-for-sale (AFS) equity securities to be charged against equity, rather than against profit or loss as IAS 39 requires. Click for SECP Announcement (PDF 79k). The 'relaxation' is valid till 31 December 2009. The 'relaxation' was granted in response to requests from various financial institutions in Pakistan, including mutual funds, insurance companies, leasing companies, banks, and the corporate sector in general. The SECP said it granted the relaxation because recognising impairment losses on AFS equity securities through profit or loss 'will not reflect the correct financial performance of the corporate entities'. Nonetheless, the SECP's announcement said that 'those companies who are willing to follow the full requirements of IAS 39 are encouraged to do so'.
The current and former presidents of the Institute of Chartered Accountants of Pakistan (ICAP) expressed support for the 'relaxation'. Asad Ali Shah, current ICAP President, said that 'such deviations from IFRSs have been witnessed in extraordinary situations in the world'. The Competition Commission of Pakistan, however, expressed concern that failure to recognise losses could be viewed as deceptive marketing of securities.
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15 February 2009: Can financial reporting be made simpler?
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The Global Accounting Alliance (GAA) has published a report Getting to the Heart of the Issue – Can Financial Reporting Be Made Simpler and More Useful? (PDF 880k). The GAA is an alliance of professional accountancy bodies in nine significant capital markets, with total membership of 750,000 professional accountants in over 140 countries. The report is based on interviews conducted in 2008 with financial regulators from Australia, Canada, China, France, the European Commission, South Africa, the United Kingdom, and the United States of America, international regulators, and major accounting firms. Interviewees included IASB Chairman Sir David Tweedie and Jeff Willemain, Global Managing Partner–Regulatory and Risk, Deloitte Touche Tohmatsu. The research was undertaken to consider the barriers to a more principles based accounting regime, and the increasing complexity and detail in company financial statements. The GAA is arranging a number of roundtable events where regulators and other stakeholders in financial reporting around the world can begin discussing ideas emerging from the research.
The GAA proposes that a number of questions be considered by the key stakeholders in financial reporting, such that some agreed recommendations might emerge. The GAA is intending to facilitate a series of events internationally where these debates can take place. These questions are as follows:
- Should an agreed international framework for accounting standards be adopted with a clear hierarchy comprising (i) a conceptual framework; (ii) principles based standards; and (iii) limited authoritative guidance?
- Should guidance be provided for preparers and auditors on the exercise of judgement in the application of principles based standards and on the documentation of reasons for the judgements made?
- Should regulators be encouraged to accept a reasonable degree of variation in accounting treatments and to take a more effective, outcome oriented approach to regulation?
- Should a single definitive set of general purpose financial statements be retained?
- Should standard setters be encouraged to drop requirements considered redundant?
- How can company boards be encouraged to provide better quality communication?
- Should an international framework for high level summary financial statements be developed in order to provide information suitable for retail and less sophisticated investors?
- Should general purpose financial statements be developed and published in XBRL format to allow users to drill down to whatever level of detail is required?
- Should company communication be improved through the use of clearer language, less jargon and coded language, and a focus on clarity and transparency?
- How has the recent financial crisis affected the debate on these issues?
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14 February 2009: New designs, numbering for IASB pronouncements
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The IASB has changed the layout of the cover of its due process documents and has introduced reference numbers to help constituents keep track of consultative documents.
- Reference numbers. These numbers will indicate the type of document, the year of publication, and a serial number. For example, ED/2009/02 indicates that the document is the second exposure draft to be published by the IASB in 2009.
- Covers. The covers of documents are colour coded as follows: blue for discussion papers, beige for exposure drafts (illustrated to the left), and red for standards. All accompanying booklets such as the basis for conclusions and implementation guidance will be grey. Education publications will have either a green cover or a green bar at the top right corner of the front cover.
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13 February 2009: UK publication on half-yearly reporting
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Deloitte (United Kingdom) has published Our Better Halves (PDF 1,246k) – a survey of the half-yearly financial reports of 130 UK listed companies. Because UK listed companies must follow IFRSs, these reports conform to IAS 34 as well as other UK requirements. Our Better Halves includes a review of:
- compliance with the Disclosure and Transparency Rules and IAS 34;
- the different presentations adopted in half-yearly financial statements; and
- how companies complied with the requirements for their Interim Management Report, that is, the narrative part of the half-yearly financial report.
The publication includes current reporting requirements and latest developments, as well as various 'good practice' examples. It is aimed primarily at financial directors and financial controllers of public companies, as well as non-executive directors, including audit committee members, of listed companies. It may also be of interest to non-listed companies that prepare their financial statements under IFRSs.
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13 February 2009: IFRS newsletters available in Chinese
13 February 2009: China's CPA exam is undergoing reforms
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The Chinese CPA Examination System is undergoing reform. The finalised examination reform scheme was issued in January 2009, and the new system will run in parallel with the current system for 2009 to ensure a smooth transition. Highlights of the reforms are as follows:
- Exam structure. The CPA examinations will be transformed into a dual-level structure, with certificates given to successful candidates after each level:
- Level 1: Professional Stage
- Level 2: Comprehensive Stage
- Hierarchy. An examinee can take the examinations of the comprehensive stage only after passing those of the professional stage
- Frequency. Examinations will be held once a year for both levels
- Exam subjects. The Professional Stage will cover six subjects: accounting, auditing, financial and cost management, economic law, taxation law, and corporate strategies and risk management (this latter topic is a newly added subject)
We have more information on our China Country Page.
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13 February 2009: Deloitte webcast – IFRS update
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On 17 February 2009, Deloitte (United States) will hold a live web presentation titled IFRS: New Year, New Updates. Details:
- Topic: The latest developments relating to IFRSs and the convergence efforts between the FASB and IASB, including:
- The latest regulatory developments relating to IFRSs
- An update on the IASB-FASB memorandum of understanding
- The current IFRS requirements for leasing, consolidations, and pension accounting and recent standard setting developments in these areas
- Date: Tuesday, 17 February 2009
- Time: 2:00pm - 3:30pm EST (19:00 GMT)
- Host: Robert Uhl, Partner, Deloitte & Touche LLP
- More Information and Registration
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13 February 2009: FASB's Valuation Resource Group meeting
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The US Financial Accounting Standards Board has established a Valuation Resource Group (VRG) to provide the FASB staff with information about implementation issues regarding fair value measurements used in financial reporting. The VRG met on 5 February 2009 and discussed the four issues listed below. Deloitte (United States) has published the 13 February 2009 edition of the Heads Up Newsletter (PDF 115k) explaining the four issues:
- VRG Issue No. 2009-1: SEC's Study on Mark-to-Market Accounting
- VRG Issue No. 2009-2: Proposed FSP FAS 157-c Measuring Liabilities Under FASB Statement No. 157
- VRG Issue No. 2009-3: AICPA Draft Issues Paper, FASB Statement No. 157 Valuation Considerations for Interests in Alternative Investments
- VRG Issue No. 2009-4: Goodwill Impairment Considerations
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13 February 2009: Heads Up – evaluating an entity's internal controls
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We have posted a new issue of the Heads Up Newsletter: COSO, PCAOB, and CAQ Address Internal Controls (PDF 87k) from Deloitte (United States). This Heads Up discusses three new publications released by COSO, the PCAOB, and the CAQ to assist management and auditors in evaluating an entity's internal controls. The three publications are:
- Guidance on Monitoring Internal Control Systems, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)
- Staff Views – An Audit of Internal Control Over Financial Reporting That Is Integrated With an Audit of Financial Statements: Guidance for Auditors of Smaller Public Companies, finalised by the Public Company Accounting Oversight Board
(PCAOB)
- CAQ Lessons Learned – Performing an Audit of Internal Control in an Integrated Audit, published by the Center for Audit Quality (CAQ)
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12 February 2009: IASB will release 2009 Bound Volume in March
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The IASB will publish International Financial Reporting Standards 2009 Bound Volume in March. BV2009 presents in a single volume the latest authoritative version of IFRSs, including Interpretations and supporting documents – illustrative examples, implementation guidance, bases for conclusions, and dissenting views, as issued by the IASB at 1 January 2009. It also includes the IASC Foundation Constitution, the IASB Framework for the Preparation and Presentation of Financial Statements, the Preface to IFRSs, the Due Process Handbooks for the IASB and IFRIC, an updated glossary of terms, and a comprehensive index. It's £60, and discounts are available for academics, students, residents of middle and low income countries, and for multiple copies. You can Register Your Interest on IASB's Website now to receive priority shipping when BV2009 is released. |
11 February 2009: Heads Up – SEC's revised financial reporting manual
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In December 2008, the Division of Corporation Finance of the US Securities and Exchange Commission released a new version of its Financial Reporting Manual (see our News Story of 14 Dec 2008. This 267-page manual is specifically intended for the SEC staff, but because it contains useful information for registrants it has been posted to the SEC's website. The manual provides the SEC staff's interpretations of form requirements and portions of Regulations S-X and S-K, including guidance on topics such as the form and content of a registrant's financial statements, providing separate financial statements of businesses acquired or to be acquired and investments in entities accounted for by the equity method, pro forma financial information, Management's Discussion and Analysis, and non-GAAP financial measures. Deloitte (United States) has published a special issue of the Heads Up newsletter (PDF 102k) discussing the manual. An appendix to Heads Up is a table summarising the more important additions and changes since the previous edition of the manual.
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On 2 April 2009 the SEC updated the manual. The links below have been changed to the new versions of Heads Up and the Manual.
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Click for:
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10 February 2009: IFRS illustrative financial statements – insurance
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The Deloitte UK Insurance Centre of Excellence has published illustrative 2008 IFRS financial statements for an insurance group. The disclosures are based on IFRSs issued at 31 October 2008 and effective for years beginning on or after 1 January 2008. The statements are not intended to include 'model' disclosures covering all circumstances but, rather, to indicate the type of disclosure required. The nature and amount of disclosure will depend on the underlying business, the extent and complexity of financial instruments and insurance contracts, and how they are managed. Special references are made to disclosures that might be associated with the credit crunch and the recent IASB pronouncements on financial instruments, but further specific consideration by insurers will be needed. A copy of Deloitte's disclosure checklist for IFRS 4 and IFRS 7 is included at the end of the document. Click to download Delto Insurance Group plc – Illustrative Financial Statements and Selected Disclosures for the Year Ended 31 December 2008
(PDF 676k). There's a permanent link on our Model Financial Statements Page.
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10 February 2009: IASB updates its 'Who We Are' booklet
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The International Accounting Standards Board has published an updated version of IASB and the IASC Foundation – Who We Are and What We Do. This six-page booklet contains a great deal of information about the organisation and its work, including the mission; structure; due process; lists of Board members, IASCF Trustees, and senior staff; funding; use of IFRSs; and contact details. We are grateful to the IASC Foundation for giving us permission to post the booklet on IAS Plus. Click to download IASB and the IASC Foundation – Who We Are and What We Do (PDF 782k – link is to the latest version).
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10 February 2009: IFRS presentation and disclosure checklist in Spanish
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Deloitte (Colombia) has published a Spanish translation of our IFRS presentation and disclosure checklist for 2008:
IFRS Presentation and Disclosure Checklist for 2008 (Word version)
IFRS Presentation and Disclosure Checklist for 2008 (PDF version)
These and other Spanish resources are on our Pagina de Recursos en Español.
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10 February 2009: EC wants loss provisioning reforms
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In a speech titled 'The Credit Crisis – Looking Ahead', Charlie McCreevy, the European Commissioner for Internal Market and Services, offered views on the causes of the current problems in the global financial markets. He cited two accounting issues – mark-to-market measurements and prohibition of 'dynamic provisioning' (recognition of expected, rather than incurred, loan losses) – as factors that contributed to the problems of financial institutions in Europe. Click to Download Commissioner McCreevy's Speech (PDF 77k). Here is an excerpt on accounting:
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I turn now to accounting standards and capital requirements. These have also exacerbated the markets' recent problems because of rules that are 'pro-cyclical'. When market liquidity becomes tight as of now – sales decisions and valuations based on the so-called 'mark-to-market value' reinforce the downward spiral: They result in further forced sell-offs, which in turn reinforce and amplify the falls in mark-to-market prices. That is why I recently brought forward a measure to provide firms with more flexibility on the mark to market requirements and to facilitate asset transfer from the trading to the banking book.
Dynamic provisioning served many banks well in the past. In this turmoil it has served the Spanish banks well and I would like to see a return to it more broadly. A system that introduces significant counter-cyclicality, requiring banks to build up more substantial buffers in good times so that they can let them run down in bad times, makes sense not only from a micro viewpoint – reducing the risk of bank failure – but from a macro viewpoint too: It serves to restrain excessive expansion during booms. And it reduces the likelihood of a much diminished capital base in recessionary times which makes it more difficult for banks to lend, thereby preventing the kick-starting of sustainable recovery.
Ideally, we should get international agreement on such a revised regime and I will be pushing for it.
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9 February 2009: Study on related party transactions
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The CFA Institute Centre for Financial Market Integrity has released a study titled Related-Party Transactions: Cautionary Tales for Investors in Asia. Focusing on Hong Kong, mainland China, and South Korea and taking the perspective of the investor, the study discusses the nature and motivation of these transactions and identifies circumstances where related party transactions have compromised minority shareholders. The study explores the effectiveness of current regulations aimed at protecting shareholders' interests and offers the following recommendations to protect investors:
- Investor vigilance: Investors should try to engage controlling shareholders when transactions are disclosed and they should be more vigilant in examining them when they are put up for a vote.
- Effective approval and disclosure: Upon determination of fairness by an independent advisor, transactions should be approved by 'disinterested' directors and disclosed to investors in a timely manner. If a transaction is material, it should also be approved by shareholders.
- Corporate board independence: In situations where managers are also majority shareholders, independent directors have a greater onus in exercising their duties to protect the interests of independent shareholders.
- Greater transparency: Companies should voluntarily disclose the identities and the level of ownership of related parties, and also the policies in place to monitor and report such related party transactions.
- Statutory backing of regulations: Given the extent of losses minority shareholders could suffer from abusive transactions, one assurance that their interests are protected is to make companies legally liable when they violate regulations.
The IASB is currently working on a Project to enhance the relevance of related party disclosures under IAS 24 Related Party Disclosures.
The study was co-authored by Lee Kha Loon, CFA, and Abe De Ramos, both of the CFA Institute Centre for Financial Market Integrity. We have posted it here with the kind permission of the authors. Click for:
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8 February 2009: Heads Up – SEC's final rule on XBRL disclosures
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A new issue of the Heads Up Newsletter (PDF 92k) from Deloitte (United States) discusses the SEC's recently published final rule that requires most registrants to provide XBRL-tagged financial reports and schedules (an 'interactive data file') as an exhibit to certain periodic filings, registration statements, and transition reports that contain financial statements. There is related information on our XBRL Page.
The table below summarises the phase-in of requirements for XBRL data.
| Phase-In Group | Periods* Ending on or After |
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| Domestic and foreign registrants using U.S. GAAP that have a worldwide public float of more than $5 billion | 15 June 2009 |
| All other domestic and foreign large accelerated filers using U.S. GAAP | 15 June 2010 |
| All remaining registrants using U.S. GAAP and foreign private issuers using IFRSs as issued by the IASB | 15 June 2011 |
*Generally, an entity's first interactive data submission will be included as an exhibit to a quarterly report on Form 10-Q, or an annual report on Form 20-F or Form 40-F, as applicable.
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8 February 2009: Agenda for 17-20 February 2009 IASB meeting
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The International Accounting Standards Board will hold its regular February 2009 meeting at the IASB's offices, 30 Cannon Street, London on Tuesday to Friday 17-20 February 2009. The meeting is open to public observation and is being webcast. Presented below is the agenda for the meeting. The Board will also meet with the Standards Advisory Council on 23-24 February 2009 (agenda not yet released).
IASB Board Meeting Agenda
17-20 February 2009, London |
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Tuesday 17 February 2009 (afternoon only)
Wednesday 18 February 2009
Thursday 19 February 2009 (afternoon only)
Friday 20 February 2009 (morning only)
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6 February 2009: Newsletter on proposed amendments to IFRICs 9 and 16
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Deloitte's IFRS Global Office has published an IAS Plus Update Newsletter Amendments proposed for IFRICs 9 and 16 (PDF 131k). The newsletter discusses a proposal, published by the IASB on 30 January 2009, to amend IFRIC 9 Reassessment of Embedded Derivatives and IFRIC 16 Hedges of a Net Investment in a Foreign Operation as follows:
- IFRIC 9: To exclude from its scope embedded derivatives in contracts acquired in common control transactions or in the formation of a joint venture
- IFRIC 16: To allow entities to designate as a hedging instrument in a hedge of a net investment in a foreign operation an instrument that is held by the foreign operation that is being hedged
Comment deadline is 2 March 2009. Here are Links to All Past IAS Plus Newsletters.
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6 February 2009: We have updated our IASB agenda project timetable
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We have updated our IASB Agenda Project Summary and Timetable to reflect the IASB's decisions on its work plan made at the Board's December 2008 meeting. The timetable calls for publication by the IASB of 19 consultation documents and 26 final pronouncements between 2009 and 2011, including:
- 4 discussion papers
- 15 exposure drafts
- 24 final IFRSs
- 1 final guidance document
- 1 final Conceptual Framework chapter
On 8 additional projects, the timing of publication of a final document has not been determined.
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6 February 2009: Deloitte's 6th Annual Global Security Survey
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Deloitte Touche Tohmatsu's Global Financial Service Industry (GFSI) group has published their 6th Annual Global Security Survey, which benchmarks IT security and privacy in the financial services industry. The survey is based on interviews with senior security officers from the world's top global financial institutions in 32 countries. Findings include:
- As in previous surveys, respondents recognise that people are both an organisations greatest asset as well as its weakest link. But security vigilance is even more important in hard economic times, when the increased stress levels can lead people to behave in atypical ways.
- Even though both internal and external security breaches at financial institutions worldwide have fallen over the past 12 months, employee misconduct is a growing concern.
- The growing popularity of social networks and the proliferation of mobile media such as USB keys, MP3 players and PDAs, all cause an extra load on internal and external security. These devices present opportunities for unauthorised download and storage of confidential information in an unprotected medium. This is one of the factors that has contributed to the sudden rise of data protection and information leakage as a top priority for financial institutions – tied at second place with access and identity management.
- The top three information security priorities of financial institutions are:
- security regulatory compliance
- data protection and information leakage
- access and identity management
- In 2008, financial institutions saw a decline in the number of both external (47% vs. 65% in 2007) and internal (27% vs. 30% in 2007) security breaches.
- The leading drivers for financial institutions to protect the privacy of their clients information are privacy regulatory requirements (79%) followed by reputation and brand concerns (70%).
Click to download Deloitte GFSI's 6th Annual Global Security Survey (PDF 2,032k).
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5 February 2009: IFRS Questions and Answers in Chinese
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Deloitte & Touche in Taiwan has published a 214-page book IFRS Questions and Answers, in Chinese. This book – the first of a three-volume series – covers IFRS 2, IFRS 3, IFRS 5, IAS 2, IAS 12, IAS 18, IAS 20, IAS 27, IAS 28, IAS 31, and IAS 38. In explaining each Standard, the booklet includes a few examples and condensed analysis of GAAP difference between IFRSs and Republic of China GAAP. Volumes two and three are expected to be published in May and July to cover substantially all of the remaining IFRSs. You can purchase the book by email to  or On Line (Chinese).
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5 February 2009: IFRS e-Learning web address is changing
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Deloitte's IFRS e-Learning has been very popular, with over 2,000,000 modules having already been downloaded from IAS Plus. While many IAS Plus visitors access the e-Learning by clicking on the light bulb icon on our home page, some visitors have put the URL (web address) in their web browser's 'bookmarks' or 'favorites'. Please note, from 15 February 2009, the web address for Deloitte's IFRS e-Learning will be changing to http://www.deloitteifrslearning.com. Please ensure that your bookmarks or favorites are updated with the new address, as the old address will stop working on 15 February. If you access our IFRS e-Learning simply by clicking on the light bulb, just continue to do so. |
5 February 2009: SEC extends comment period on IFRS roadmap
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The US Securities and Exchange Commission has added another 60 days to the comment period on the release proposing a roadmap for the potential use, by domestic US registrants, of International Financial Reporting Standards as issued by the International Accounting Standards Board. The original comment deadline of 19 February 2009 has now been changed to 20 April 2009. The extension of the comment period is a result of requests received by the SEC to help improve the potential response rate and quality of responses to the proposal. The proposed roadmap sets forth milestones that, if achieved, could lead to the required use of IFRS by US issuers by 2014 if the Commission believes it to be in the public interest and for the protection of investors, with some large issuers permitted to use IFRSs even earlier. Click for:
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5 February 2009: Another new Deloitte IFRS publication in Spanish
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Deloitte (Colombia) has published the following Spanish translation of an IFRS-related publication:
IAS Plus Update on Assessment of Embedded Derivatives ED:
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5 February 2009: Are global accounting standards achievable?
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In an article published in the 3 February 2009 edition of La Tribune (the French business daily), Nicolas Veron questions whether there is an appetite around the world for global solutions to the current global economic crisis, or whether regional or national responses are more likely to work. Mr Veron, a research fellow at European 'think tank' Breugel, argues that global solidarity on economic issues is probably out of reach. Instead, the goal should be more modest – to maintain an open economy in which all players have a chance to succeed. Mr Veron suggests that 'fair global competition entails in the short term a curb on domestic preference policies.... It also rests on harmonised international rules in key areas of regulation.' Click to download the article, titled Global Crisis: Global Solutions? (PDF 45k), which we have posted with the kind permission of the author. An excerpt:
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The crisis has also put international accounting standards, known as IFRS, in the dock. The IASB, which sets them, was slow off the mark and then overly cowed by political pressure. The prospects for IFRS adoption in the US seem distant once again.
Besides, common standards only serve a purpose if their implementation on the ground is consistent, which is currently far from being the case.
Finally, trust crucially rests on credible supervision of the clutch of global private intermediaries whose role is paramount for the whole system. For these, self-regulation is no
longer enough to foster confidence.
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4 February 2009: Six new Deloitte IFRS publications in Spanish
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Deloitte (Colombia) has published Spanish translations of six IFRS-related publications, as follows:
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IAS Plus Update on Disclosures of Investments in Debt Instruments ED:
IAS Plus Update on Related-party Disclosures ED:
IAS Plus Update on First-time Adoption ED:
Credit Crisis Alert:
GIOS Newsletter November 2008:
GIOS Newsletter October 2008:
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These and other Spanish resources are on our Pagina de Recursos en Español.
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4 February 2009: Heads Up – interim period fair value disclosures
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The US Financial Accounting Standards Board has invited comment on a proposed FASB Staff Position (FSP) that would extend the fair value disclosures currently required in annual reports under FASB Statement 107 to interim reports (to the extent it is practicable to estimate fair value). The new disclosures would be effective prospectively for interim
periods ending after March 15, 2009. Therefore, calendar-year-end entities would provide comparative fair value disclosures for first quarter 2009 and year-end 2008. This issue of Heads Up (PDF 84k) explains the proposal.
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4 February 2009: Accounting Roundup – January 2009
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We have posted the January 2009 Edition of Accounting Roundup (PDF 293k, 31 pages) published by Deloitte & Touche LLP (United States). The newsletter is now organised by topic rather than by standard-setter. Topics covered in this issue include:
Investment in Debt and Equity Securities
- FASB Issues Amendments to OTTI Model for Certain Investments in Securitization
Derivative Instruments and Hedging Activities
- FASB Issues Proposed Derivatives Implementation Guidance
- SEC Provides Temporary Exemptions for Eligible Credit Default Swaps
- IASB Proposes Amendments to Clarify the Accounting for Embedded Derivatives
Debt (Issuer Accounting)
- CAQ Issues White Paper on Loan Modifications
Fair Value Measurements
- FASB Issues Proposed FSP on Interim Disclosures About Fair Value of Financial Instruments
- AICPA Issues Draft Issues Paper on Alternative Investments
- SEC Finalizes Study of Mark-to-Market Accounting
Consolidations
- IASB Proposes New Consolidation Standard
Income Taxes
- FASB Issues FSP on Deferral of Interpretation 48
Pensions and Other Postemployment Benefits
- FASB Expands Disclosures About Postretirement Plan Assets
Revenue Transactions - General
- FASB and IASB Issue Discussion Paper on Revenue Recognition
- IFRIC Issues Interpretation on Customer Contributions
Other Accounting
- AICPA Issues Technical Practice Aid on Prospective Unlocking
- AICPA Issues Technical Practice Aid on Nonregistered Investment Partnerships
- AICPA Issues Technical Practice Aid on Determining Financial Statement Preparer
- FASAB Releases Exposure Draft on GAAP Hierarchy for Federal Entities
- IASC Foundation Publishes 2009 IFRS XBRL Taxonomy for Public Comment
- IASB Reexposes Proposed Standard on Related Parties
Other SEC Matters
- SEC Approves Revisions to Modernize Oil and Gas Reporting Requirements
- SEC Approves Rules Requiring Registrants to Submit Interactive Data
- SEC Issues Rule to Define 'Annuity Contract' and 'Optional Annuity Contract'
- SEC Issues Final Rule on Disclosures and Prospectus Delivery for Certain Mutual Funds
- SEC Issues Report on 21st Century Disclosure Initiative
- SEC Issues New Compliance and Disclosure Interpretations
Other Auditing
- PCAOB Issues Statement on Registration for Auditors of Nonpublic Broker-Dealers
- PCAOB Issues Staff Guidance on Auditing ICFR for Smaller Public Companies
- AICPA Issues Proposed SASs on Required Supplementary and Other Information
- AICPA Issues Proposed SAS on Compliance Audits
- AICPA Issues SAS Clarifying Audit Documentation
- AICPA Issues Interpretation on Reporting on the Design of Internal Controls
Other Developments
- GAO Releases Study of the U.S. Financial Regulatory System
You will find past issues of Accounting Roundup Here.
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4 February 2009: Financial Crisis Advisory Group will meet 13 Feb
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The joint IASB-FASB Financial Crisis Advisory Group (FCAG) will meet in New York City on Friday 13 February 2009. The FCAG was established in response to the recent global financial crisis. Its purpose is to advise both boards about the role of accounting during the crisis and potential changes. The FCAG held its first meeting on 20 January 2009. Click here for the preliminary and unofficial Notes Taken by Deloitte Observers at that meeting. The upcoming meeting on 13 February will be held at Baruch College, Newman Conference Center, Room H750, 151 East 25th Street, 7th Floor, New York, NY 10010 USA. It will be open to public observation and will be webcast. Click for More Information on IASB's website.
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3 February 2009: Malta switches from full IFRS to EU IFRS
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A recent amendment of legislation in Malta (which is a member of the European Union) published on 16 January 2009 changed the applicable GAAP requirement for the statutory accounts (both individual and consolidated) for all Maltese companies (both listed and unlisted) to IFRSs as adopted by the EU, rather than full IFRSs as was previously the case. The amendment took effect for accounting periods commencing on or after 1 January 2008. Click to download Legislation as Published in the Maltese Government Gazette (PDF 139k).
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3 February 2009: SEC Comment Letters on Domestic Registrants (Second Edition)
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In January 2008, Deloitte (United States) published two Special Reports – Available Here on IAS Plus – analysing the comments by the staff of the US Securities and Exchange Commission on the financial statements of registrants. One of the 2008 reports reviewed comments on domestic registrants using US GAAP. The other reviewed comments on foreign private issuers using IFRSs. Deloitte (United States) has now published a revised edition of the first report: SEC Comment Letters on Domestic Registrants: A Closer Look. This second edition reflects both new topics and new areas within existing topics that the SEC staff has commented on since the earlier edition. The SEC staff has continued to issue comments on all topics included in the first edition, such as revenue recognition, business combinations, segment reporting, financial instruments, and impairments. However, in light of the troubled credit markets, the staff has been more closely scrutinising goodwill and intangible asset impairments, other-than-temporary impairments, deferred tax valuation allowances, compliance with debt covenants, fair value, and the allowance for loan losses, just to name a few. Click to download SEC Comment Letters on Domestic Registrants: A Closer Look (PDF 810k). |
3 February 2009: IFRSs in the technology industry
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Deloitte (United States) has published International Financial Reporting Standards: Considerations for the Technology Industry (PDF 261k, 10 pages). This publication provides practical industry insights for executives and addresses IFRS questions, such as:
- Why should technology companies care about IFRS?
- What are some of the significant differences between IFRS and US Generally Accepted Accounting Principles (GAAP) for technology companies?
- How might IFRS impact the technology companies? And what are the accounting, tax, systems, and organizational implications of IFRS?
- Where should technology companies start? Which approach would work when it comes to IFRS?
- What lessons have been learned from the European experience?
Español: Click here for Estándares internacionales de información financiera: Consideraciones para la industria de tecnología (PDF 2,428k), the Spanish translation of this publication from Deloitte (Colombia). Our other Spanish language resources are Here.
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