30 June 2010: Australia clarifies compliance with IFRS

The Australian Parliament has passed financial reporting reform legislation which require an explicit statement of compliance with IFRS in the directors declaration accompanying the financial statements. The change is designed to counter a lack of awareness that the financial statements of Australian companies and other reporting entities are compliant with IFRS (Australia has a series of Accounting Standards that are equivalent to IFRS for for-profit entities). The change will apply to financial statements from 30 June 2010. The reforms also remove the previous requirement to include both parent and consolidated financial statements in annual reports and make various other amendments. Deloitte (Australia) has produced an Accounting Alert explaining the changes. Click for: Deloitte (Australia) Accounting Alert Australian government press release Our Australian country page.

30 June 2010: Newsletter on IASB-FASB convergence

Deloitte's IFRS Global Office has published an IFRS in Focus Newsletter – IASB and FASB modify convergence strategy (PDF 78kb). This newsletter describes the modified convergence strategy and updated work plan of the IASB and FASB. The IASB and FASB have modified their convergence strategy in response to concerns about constituents’ ability to provide comments on the large number of proposals that were expected to be published during the second quarter 2010. All of our past IFRS in Focus newsletters are Here. Our IASB agenda page is Here.

30 June 2010: CEBS publishes two follow-up reports on its assessment of banks' disclosures

The Committee of European Banking Supervisors (CEBS) has published Assessment of banks' transparency in their 2009 audited annual reports and Follow-up review of banks' transparency in their 2009 Pillar 3 reports. In its press release, CEBS states that "This work reflects CEBS’s ongoing interest in the banks’ disclosure of the impact of the crisis on their activities and financial situation." Assessment of banks' transparency in their 2009 audited annual reports (PDF 281k) considers, among other things, financial instrument disclosures effected by the mandatory application of amendments to IFRS 7 from 1 January 2009 onward. Follow-up review of banks' transparency in their 2009 Pillar 3 reports (PDF 654k) discusses "Synergies with IFRS" as part of its overall assessment of Pillar 3 disclosures.

30 June 2010: Heads Up on FASB's proposed guidance on fair value measurement and disclosure

On 29 June 2010, the FASB issued a proposed Accounting Standards Update (ASU), Fair Value Measurements and Disclosures (Topic 820): Amendments for Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs. The proposed ASU is the result of a joint project between the FASB and IASB (the “boards”) to develop a single, converged fair value framework. Deloitte (United States) has issued a Heads Up Newsletter (PDF 122k) that provides an analysis of the key provisions of FASB's proposals on fair value and measurement that includes: Summary of notable provisions. Highest-and-Best-Use and Valuation-Premise concepts. Measuring the fair value of financial instruments that are managed within a portfolio. Other key proposals. Disclosures. Convergence with IFRSs.

30 June 2010: Agenda for 8-9 July 2010 Interpretations Committee meeting

The IFRS Interpretations Committee will meet at the IASB's offices in London on Thursday and Friday 8 and 9 July 2010 (morning only on 9 July). The meeting is open to the public and will be webcast. The tentative agenda is shown below. Agenda for the Interpretations Committee Meeting Thursday and Friday, 8 and 9 July 2010 Thursday 8 July 2010 (10:15-18:00h) Introduction IAS 16 Property, Plant and Equipment - Accounting for production phase stripping costs in the mining industry IFRS 2 Share-based Payment – Vesting and non-vesting conditions IAS 27 Consolidated and Separate Financial Statements – Put options written over non-controlling interests Review of Tentative Agenda Decisions published in May IFRIC Update IAS 1 Presentation of Financial Statements – Going concern disclosures: specifying consequence of concern IAS 12 Income Taxes – Recognising deferred tax assets for unrealised losses on AFS debt securities IAS 39 Financial Instruments: Recognition and Measurement – Impairment of financial assets reclassified from AFS to loans and receivables Items for Continuing Consideration IFRS 1 First-time Adoption of International Financial Reporting Standards – Fixed date in derecognition exception IFRS 1 First-time Adoption of International Financial Reporting Standards – Day 1 gains IFRS 1 First-time Adoption of International Financial Reporting Standards – Repeat application IAS 21 The Effects of Changes in Foreign Exchange Rates – Repayment of investment/CTA IAS 29 Financial Reporting in Hyperinflationary Economies – Reporting in accordance with IFRS after a period of chronic hyperinflation IAS 40 Investment Property – Change from fair value model to cost model Friday 9 July (09:00-12:30h) IAS 27 Consolidated and Separate Financial Statements – Put options written over non-controlling interests (continued from previous day) IAS 16 Property, Plant and Equipment - Accounting for production phase stripping costs in the mining industry (continued from previous day if needed) IFRS 2 Share-based Payment – Vesting and non-vesting conditions (continued from previous day if needed) Items for Continuing Consideration (continued from previous day if needed) New Items for Initial Consideration (time permitting) IFRS 3 Business Combinations – Regrouping and consistency of contingent consideration guidance IAS 19 Employee Benefits – Accounting for statutory employee profit sharing arrangements IAS 28 Investments in Associates – Step-acquisition: fair value as deemed cost IAS 36 Impairment of Assets – Accounting for goodwill impairment testing when non-controlling interests are recognised All IFRSs – Encouraged versus required disclosures Administrative Session – Interpretations Committee work in progress

30 June 2010: EFRAG consultation on its proactive work in Europe

Following the publication of its new Strategy for European Proactive Financial Reporting Activities earlier this month, the European Financial Reporting Advisory Group (EFRAG) has now launched a public Consultation on Proactive Work (PDF 568k). EFRAG’s proactive work is intended to influence future standard-setting developments by engaging with European constituents and providing timely and effective input to the early phases of the IASB's work. Currently, EFRAG is working among others on projects concerning corporate income tax, business combinations under common control and a disclosure framework. Possible future projects include: European perspective on development of post implementation reviews (Post-implementation review policy) European input to the IASB’s post- implementation review of IFRS 3 Business Combinations European Input to the IASB’s post-implementation review of IFRS 8 Operating Segments Post-implementation review of IFRIC 12 Service Concession Arrangements Government grants Understanding the decision environments of users of the financial report Application of IFRS to individual financial statements Performance reporting – Phase 3 Share-based payments The public consultation closes on 30 September 2010.

30 June 2010: Study of China's adoption of IFRS-based standards

The Institute of Chartered Accountants of Scotland has published Chinese Accounting Reform: Towards a Principles-based Global Regime. This is the report of a study of China's adoption of IFRS-based accounting standards. The study: Describes China's new accounting regime Offers perspectives on a principles-based approach in China Describes the accounting profession in China Explains how standards are enforced in China Examines the future of Chinese accounting standards and IFRSs Our most striking finding is the strength of official support and commitment to principles-based accounting, led by the Ministry of Finance. It is unlikely that China will give up all accounting sovereignty in the near future. But China's efforts in implementing an IFRS-based regime give cause to hope that the goal of a single accounting language is truly within reach. The study is copyright Institute of Chartered Accountants of Scotland, and we are grateful to the ICAS for giving us permission to post it on IAS Plus. Click here to download Chinese Accounting Reform: Towards a Principles-based Global Regime (PDF 649k).

30 June 2010: Limited-scope ED on fair value measurement

The IASB has issued an exposure draft (ED) Measurement Uncertainty Analysis Disclosure for Fair Value Measurements proposing relatively minor amendments to the proposals in its May 2009 ED on fair value measurement. The May 2009 ED proposed a three-level fair value hierarchy that categorises observable and non-observable market data used as inputs for fair value measurements. Under that hierarchy, Level 3 inputs are 'unobservable inputs' used for the fair value measurement of assets or liabilities for which market data are not available. Required disclosures would include a 'measurement uncertainty analysis' (sometimes called a 'sensitivity analysis'). The newly proposed amendments would enhance the original proposal by requiring the measurement uncertainty analysis disclosure to reflect the interdependencies between unobservable inputs used to measure fair value in Level 3. Comment Deadline is 7 September 2010. Click for IASB Press Release (PDF 101k). The US FASB has also issued a similar exposure draft, Fair Value Measurements and Disclosures (Topic 820): Amendments for Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs, relating to the measurement uncertainty analysis disclosure. Presented below are the IASB's key conclusions to date on fair value measurement, based on the May 2009 ED and subsequent redeliberations and decisions. Goal of the IASB's fair value measurement project: The goal of the project is to define fair value, establish a framework for measuring fair value, and require disclosures about fair value measurements. However, it would not change the circumstances in which assets, liabilities, equity, and disclosure items must be measured at fair value under IFRSs. IASB conclusions to date on fair value measurement: Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). In the absence of an actual transaction at the measurement date, a fair value measurement assumes that a transaction takes place at that date in the principal (or most advantageous) market for the asset or liability. Fair value is a market-based measurement, not an entity-specific measurement. Therefore, a fair value measurement should be determined using the assumptions that market participants would use when pricing the asset or liability, including assumptions about risk. As a result, a fair value measurement does not consider an entity's intention to hold an asset or to settle or otherwise fulfil a liability. For a non-financial asset, fair valuation presumes the asset is used at its highest and best use. To increase consistency and comparability in fair value measurements and related disclosures, the IASB would establish a fair value hierarchy that prioritises into three levels the inputs to valuation techniques used to measure fair value, giving the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1 inputs) and the lowest priority to unobservable inputs (Level 3 inputs): Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date. Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. If the asset or liability has a specified (contractual) term, a Level 2 input must be observable for substantially the full term of the asset or liability. Level 3 inputs are unobservable inputs for the asset or liability. Unobservable inputs would be used to measure fair value to the extent that relevant observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date. However, the fair value measurement objective remains the same – an exit price from the perspective of a market participant who holds the asset or owes the liability at the measurement date. Therefore, unobservable inputs should reflect the assumptions that market participants would use when pricing the asset or liability, including assumptions about risk.

29 June 2010: Newsletter on revenue recognition ED

Deloitte's IFRS Global Office has published an IFRS in Focus Newsletter – IASB Issues Revenue Recognition Exposure Draft (PDF 97k). [Prior to June 2010, these newsletters were titled IAS Plus Update.] The newsletter explains the IASB's 24 June 2010 proposed new standard (jointly with FASB) that would supersede IAS 11 Construction Contracts and IAS 18 Revenue and related interpretations. The core principle proposed in the ED would require an entity to recognise revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration that it expects to receive in exchange for those goods or services. All of our past IFRS in Focus and IAS Plus Update newsletters are Here.

29 June 2010: US Supreme Court ruling on PCAOB

The United States Supreme Court has issued its Decision (PDF 714k) in the Constitutional challenge to legitimacy of the US Public Company Accounting Oversight Board (PCAOB). For background on the challenge, see the IAS Plus News Story of 4 Dec 2009. The PCAOB was created by the Sarbanes-Oxley Act of 2002. The Supreme Court held that an aspect of the PCAOB structure under the Act – the 'dual for-cause limitations on the removal of Board members' – 'contravene the Constitution's separation of powers'. The Court also held that 'the unconstitutional tenure provisions are severable from the remainder of the statute'.

28 June 2010: G20 reiterates support for global accounting standards

Following their summit meeting in Toronto on 26-27 June 2010, the leaders of the G20 group of nations have issued a Declaration (PDF 509k) reaffirming their support for a single set of global accounting standards as a means for strengthening the global financial market infrastructure. Unlike the G20 leaders' Declaration in September 2009 following their Pittsburgh summit, this new Declaration does not make reference to a June 2011 deadline. The G20 was first organised in the wake of the Asian financial crisis of the late 1990s. With the onset of the global financial crisis in 2008, the G-20 has become the principal forum to lead global efforts to stem the crisis and mitigate its effects. Below is an excerpt from the Declaration following the Toronto summit. Click here to go to our Credit Crunch Page. Financial Sector Reform We agreed to strengthen financial market infrastructure by accelerating the implementation of strong measures to improve transparency and regulatory oversight of hedge funds, credit rating agencies and over-the-counter derivatives in an internationally consistent and nondiscriminatory way. We re-emphasized the importance of achieving a single set of high quality improved global accounting standards and the implementation of the FSB's standards for sound compensation. Accounting Standards We re-emphasized the importance we place on achieving a single set of high quality improved global accounting standards. We urged the International Accounting Standards Board and the Financial Accounting Standards Board to increase their efforts to complete their convergence project by the end of 2011. We encouraged the International Accounting Standards Board to further improve the involvement of stakeholders, including outreach to emerging market economies, within the framework of the independent accounting standard setting process

28 June 2010: Suriname plans to adopt IFRS for SMEs

The government of Suriname is deliberating a new accountancy law that would require the IFRS for SMEs (with full IFRSs as an option) for large and medium-sized unlisted companies and any other unlisted company whose financial statements are audited. Full IFRSs would be required for listed companies. The proposed law is supported by the Association of Accountants of Suriname. Currently, Suriname does not have any legislation on accounting principles or financial statements. The local securities exchange also does not prescribe a specific set of accounting principles to be used by its listed companies. However, while IFRSs are not mandatory, a company is free to use IFRSs if it wishes.

27 June 2010: Updated EFRAG 'endorsement status report'

The European Commission has endorsed the IASB's 23 July 2009 Amendments to IFRS 1: Additional Exemptions for First-time Adopters. Consequently, 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 25 June 2010 (PDF 118k). Currently, the following six IASB pronouncements await endorsement action: IFRS 9 Financial Instruments Amendment to IFRIC 14 Prepayments of a Minimum Funding Requirement IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments Revised IAS 24 Related Party Disclosures Amendment to IFRS 1 Limited Exemption from Comparative IFRS 7 Disclosures for First-time Adopters Improvements to IFRSs You can always find the endorsement status report Here.

26 June 2010: IFAC urges G-20 to adopt global standards

The International Federation of Accountants (IFAC) has submitted a Series of Recommendations (PDF 201k) for consideration by the G-20 at its meeting on 26-27 June 2010 in Toronto, Canada. The recommendations emphasise the need for greater transparency and accountability in public sector finances and urge the G-20 to support adoption of International Financial Reporting Standards globally. IFAC's recommendations: The G-20 should strongly encourage all governments to provide greater transparency and accountability in public sector finances. The G-20 should encourage all governments to provide transparency and greater accountability in respect to stimulus programs and bailout plans designed to alleviate the global financial crisis. The G-20 should encourage all nations to monitor government debt and liabilities for their true economic implications. In order to better assess systemic risks in government debt and liabilities on a global level, the G-20 should urge the adoption and implementation of International Public Sector Accounting Standards (IPSASs) in countries throughout the world. The G-20 should encourage all governments to adopt and implement common global standards not only for public sector accounting, but also for accounting, auditing, and auditor independence. Regarding recommendation 5 above, IFAC's letter states: In order to improve the ability of capital markets to work globally, to allow investments to move more efficiently across borders, and to reduce risks and uncertainties in the capital markets, the G-20 should encourage the early adoption and implementation of International Financial Reporting Standards (IFRS), International Standards on Auditing (ISAs), and the auditor independence requirements set out in the Code of Ethics for Professional Accountants. This will assist the G-20's goal of strengthening transparency and accountability in the context of financial and capital markets and creating a level playing field in the interpretation and exchange of financial information. Consistent financial information around the world can do much to facilitate cross-border activity and economic and financial stability.

26 June 2010: IASB has posted its amended work plan

The IASB has posted on its website its Amended Work Plan and Project Timetable as of 25 June 2010 reflecting the Changes announced on 24 June 2010 and sent to the G20, as well as other changes to IASB-only projects. We have updated the IAS Plus Agenda Projects Page accordingly.

25 June 2010: New IFAC SMP practice management guide

The Small and Medium Practices (SMP) Committee of the International Federation of Accountants (IFAC) has issued the Guide to Practice Management for Small- and Medium-sized Practices, to provide guidance on how this sector can better manage their practices and ultimately operate in a safe, profitable, and professional manner. Click here to Download the 455-page Guide without charge from IFAC's website.

25 June 2010: Accounting Roundup – special edition

Deloitte (United States) has published a special edition of Accounting Roundup titled The Tidal (Coming In) Waves of Accounting and Financial Reporting Changes. This edition updates a special edition issued in May 2010 titled The Tidal Wave of Financial Accounting and Reporting Changes. On June 24, 2010, in response to concerns from constituents, the Financial Accounting Standards Board (FASB) revised its agenda and timeline for completing its (1) joint projects with the International Accounting Standards Board (IASB) and (2) FASB-only projects. [See IAS Plus story directly below.] Many of those concerns focused on the FASB's due process procedures and whether exposing so many proposed standards at one time would cause the Board to 'shortcut' those procedures or would allow constituents enough time to provide public comments to the FASB. Taking those concerns into consideration, the FASB and IASB have spread out their standard-setting agendas, limiting the number of joint projects that can be exposed in any one calendar quarter to four. This update to Accounting Roundup – Special Edition reflects (1) the FASB's revisions to its agenda and timeline (discussed in the Next Steps sections of the articles in this publication) and (2) developments that have occurred in the joint and FASB-only projects since the original issuance of this publication, in particular the offsetting, financial instruments with characteristics of equity, and leases projects. Click to download: Accounting Roundup Special Edition June 2010 (PDF 163k). You will find past issues Here.

24 June 2010: IASB and FASB update G20 on project timetables

The IASB and FASB have submitted to the G20 leaders a Progress Report on Commitment to Convergence of Accounting Standards and a Single Set of High Quality Global Accounting Standards (PDF 64k). Here is the IASB-FASB Transmittal Letter to the G20 (PDF 53k). The progress report identifies and explains changes to the approach and timetables of a number of the boards' joint projects. The boards had previously Announced their Plan to Make these Changes on 3 June 2010, with three objectives: prioritise the major projects to permit a sharper focus on issues and projects that they believe will bring about significant improvement and convergence of IFRS and US GAAP. phase the publication of exposure drafts (EDs) and related consultations to enable the broad-based and effective stakeholder participation in due process that is critically important to the quality of our standards. This includes limiting to four the number of significant or complex EDs issued in any one quarter. issue a separate consultation document seeking stakeholder input about effective dates and transition methods. Some of the key changes, from an IASB perspective, are noted below. Progress Report and Latest IASB Project Timetable Consolidation. Completion of a standard that would replace IAS 27 is planned for 4Q 2010, including improved disclosures about structured entities. Additionally, in 3Q 2010, IASB will issue an ED of proposed changes to its consolidation requirements relating to investment companies to align with existing US GAAP. IASB would finalise this in 1Q 2011. Derecognition of financial instruments. In March 2009, the IASB had issued an ED setting out a proposed derecognition model and an alternative model proposed by some Board members. Respondents favoured the alternative model. The IASB had anticipated issuing a revised ED in 3Q 2010 and a final standard by 1Q 2011. The new timetable would split the project into three components: Disclosure. The IASB will finalise new disclosure requirements for derecognitions by 3Q 2010. Balance sheet offsetting (netting) of derivatives. This is, in a sense, a presentation alternative to complete derecognition. IASB and FASB will jointly issue a separate ED in 4Q 2010 proposing changes to address differences in their standards on balance sheet netting of derivative contracts and other financial instruments and related disclosures. Those differences can materially affect financial reporting by financial institutions. Final converged netting standards are planned for 2Q 2011. Comprehensive standard on derecognition. At a future date, following additional staff research, the IASB and FASB will make a decision about the nature and scope of any further improvement and convergence efforts. Financial Instruments Hedge accounting. In 3Q 2010 the IASB will publish an ED on hedge accounting (previously scheduled for Q2 2010), with a final standard planned for 2Q 2011. Meanwhile, the FASB will hold public roundtable meetings with stakeholders on its 27 May 2010 Comprehensive Financial Instruments Proposals, which include hedge accounting. IASB will participate in those roundtables. Classification and measurement of Financial Liabilities. IASB issued an ED in May 2010. Final standard planned for 2Q 2011. Impairment of Financial Assets Measured at Amortised Cost. IASB issued an ED in November 2009. Final standard planned for 2Q 2011. Financial statement presentation. This project has essentially been split into three parts: Presentation of comprehensive income. The IASB issued a Proposal on 27 May 2010 that would require all entities to present results of operations in a single, continuous statement of comprehensive income (a two-statement presentation would be prohibited). FASB published a Similar Proposal. They expect to issue converged final standards in 4Q 2010. A comprehensive standard on financial statement presentation. In 2008, the boards published a Discussion Paper proposing comprehensive principles for presenting financial statements. Among those principles were (a) a cohesive structure for the balance sheet, statement of comprehensive income, and cash flow statement, (b) a subtotal of profit or loss in the comprehensive income statement, and (c) presentation of operating cash flows by the direct method. The boards have now decided to engage in additional outreach activities in 4Q 2010 before finalising and publishing an ED. Meanwhile, in 3Q 2010 they will post to their websites a staff draft of proposed standards that reflect tentative decisions made to date. An ED is now planned for 1Q 2011, with a final standard in 4Q 2011. Discontinued operations. This is a limited scope project to eliminate differences between the IFRS and US GAAP definitions of discontinued operations and related disclosures. The two boards plan an ED in 1Q 2011 and converged final standards in 4Q 2011. Financial instruments with characteristics of equity. In February 2008, IASB published a Discussion Paper that invited comment on a similar November 2007 FASB discussion document. Subsequently both boards decided to pursue an approach that differs from the proposals in the FASB discussion document. The plan had been for an ED in June 2010 and final IFRS by 2Q 2011. The new plan is for an ED in 1Q 2011 and a final standard in 4Q 2011. Leases. Because discussions between IASB and FASB on lessor accounting are taking longer than previously anticipated, publication of an ED has moved to 3Q 2010. However, a final converged standard is still expected in 2Q 2011. Fair value measurement. The IASB has decided to issue (in late June 2010) a limited exposure draft proposing relatively minor amendments to the proposals in its May 2009 ED on fair value measurement. The amendments relate to the proposed disclosure of a 'sensitivity analysis' for Level 3 fair value measurements for all assets and liabilities measured at fair value. As a consequence, IASB's final fair value measurement standard is now planned for 1Q 2011. Revenue recognition. An Exposure Draft was issued on 24 June 2010, and a final IFRS is planned for issue by 2Q 2011. Post-employment benefits. An Exposure Draft was issued in April 2010. A final IFRS is planned for 1Q 2011. Insurance contracts. The joint progress report acknowledges that IASB and FASB have reached different conclusions on several important technical issues in this project. The IASB plans to publish an ED in July 2010. In light of their differing views, the FASB plans to decide in July the best means for obtaining stakeholder input on the IASB proposal (for example, by publishing it as an exposure draft or in some other way). The progress report does not indicate a timetable for a final IFRS. However, the IASB's work plan on its website indicates final IFRS in 2Q 2011. Emissions trading schemes. In May 2010, the boards agreed that other MoU projects had a higher priority. The boards now plan a joint ED in 2H 2011, with a final converged standard sometime in 2012.

24 June 2010: Notes from special 23 June 2010 IASB-FASB meeting

The IASB and FASB held a special joint meeting on 23 June 2010 at the IASB's office in London. Click to go to the preliminary and unofficial Notes Taken by Deloitte Observers at the meeting.

24 June 2010: Exposure Draft on revenue

The IASB and FASB have jointly published for public comment an exposure draft (ED) on Revenue from Contracts with Customers. If adopted, the proposals would supersede IAS 11 Construction Contracts and IAS 18 Revenue and related interpretations. The core principle proposed in the ED would require an entity to recognise revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration that it expects to receive in exchange for those goods or services. To apply that principle, an entity would: Identify the contract(s) with a customer. Normally each revenue transaction is a single contract, but sometimes the elements of a multiple-element contract must be accounted for separately or, less commonly, two contracts are combined. Identify the separate performance obligations in the contract. If an entity promises to provide more than one good or service, it would account for each promised good or service as a separate performance obligation only if the good or service is distinct – that is, it is or could be sold separately. Determine the transaction price. Transaction price is the probability-weighted amount of consideration that an entity expects to receive. This would take into account collectibility, the time value of money, the fair value of noncash consideration, and consideration payable to a customer. Allocate the transaction price to the separate performance obligations in proportion to the standalone selling prices of the goods or services underlying each performance obligation. Recognise revenue when the entity satisfies each performance obligation by transferring the promised good or service to the customer. A contract for the development of an asset (for example, construction, manufacturing, and customized software) would result in continuous revenue recognition only if the customer controls the asset as it is developed. The ED also specifies the accounting for contract costs. Costs of obtaining a contract are charged to expense when incurred. If the costs incurred in fulfilling a contract are not eligible for capitalisation in accordance with other standards (for example, IAS 2 Inventories), an entity would recognise an asset only if those costs: relate directly to a contract (or a specific contract under negotiation); generate or enhance resources of the entity that will be used in satisfying performance obligations in the future; and are expected to be recovered. For many companies the new approach will not change the amount or timing of revenue recognition. However, in some cases there could be a significant impact. For example, the standard would require separate up-front recognition of revenue from providing a mobile phone that is bundled, without a separate charge, as part of a contract for mobile phone services. Comment deadline on the ED Revenue from Contracts with Customers is 22 October 2010. Click for IASB Press Release (PDF 116k). Link to IAS Plus Project Page.

23 June 2010: IASB webcast on replacement of IAS 39

On 6 July 2010, the IASB will host a live webcast on the Board's project to replace IAS 39 Financial Instruments: Recognition and Measurement. Discussion topics will include: an update on the main outcomes of the Expert Advisory Panel on impairment of financial assets measured at amortised cost and next steps in the impairment phase, an update on the hedge accounting phase, and a general update on timing for the project. There is no charge to participate in the webcast, but registration is required. Participants will have an opportunity to submit written questions during the webcast. Webcast Topic: The IASB's project to replace IAS 39 Date and Time: Tuesday, 6 July 2010, 10:00-11:00am London time, and again at 15:00-16:00pm London time More Information and Registration on IASB Website: Click Here IAS Plus Project Page: Financial Instruments

23 June 2010: Singapore proposes to adopt IFRS for SMEs

The Singapore Accounting Standards Council (ASC) has published a Statement of Intent setting out the reasons why the ASC intends to introduce the IASB's final standard International Financial Reporting Standard for Small and Medium-sized Entities (IFRS for SMEs) as the Singapore Financial Reporting Standard for Small Entities (SFRS for Small Entities). The SFRS for Small Entities would be a reporting option for entities in Singapore that have no public accountability and satisfy certain criteria. "The ASC believes that the adoption of the IFRS for SMEs would benefit the smaller entities in Singapore by reducing undue financial reporting burden arising from the considerable number of recognition and measurement bases and detailed disclosures requirements." Click to download ASC's Statement of Intent (PDF 258k). The ASC requests comments by 18 August 2010. Eligibility to use the IFRS for SMEs in Singapore: An entity is eligible to use the SFRS for Small Entities if: (I) it is not publicly accountable; and (II) it qualifies as a small entity by virtue of it satisfying two out of the three threshold criteria as prescribed by the ASC. (I) An entity is deemed to be publicly accountable if: Its debt or equity instruments are traded in a public market or it is in the process of issuing such instruments for trading in a public market (such as a domestic or foreign stock exchange or an over-the-counter market, including local and regional markets), or It is a deposit-taking entity and/or holds assets in a fiduciary capacity for a broad group of outsiders as one of its primary businesses. This is typically the case for banks, insurance companies, securities brokers/dealers, mutual funds and investment banks, or It is a public company defined under the Singapore Companies Act, or It is a charity defined under the Charities Act, or It is a credit society defined under the Co-operative Societies Act or a society deemed to be a credit society under the Co-operative Societies (Amendment) Act 2008. (II) An entity qualifies as a small entity if it satisfies two of the following three criteria (determined on a consolidated basis): Total annual revenue of not more than S$10 mil; Total gross assets of not more than S$10 mil; and Number of employees not more than 50.

23 June 2010: IFRS insurance accounting newsletter

Deloitte (United Kingdom) has published the June 2010 issue of Insurance Accounting Newsletter. This issue is titled Almost There... and focuses on the discussions the joint IASB-FASB meetings in May and early June 2010. The expected publication date of the Exposure Draft is July 2010. Click to download Issue 15 of the Insurance Accounting Newsletter (PDF 113k). There are permanent links all issues of the newsletter on IAS Plus Insurance Project Page.

22 June 2010: Insurance accounting newsletter in German

Deloitte (United Kingdom) is publishing a series of Insurance Accounting Newsletters. We post these regularly on our IAS Plus Insurance Project Page. Deloitte (Germany) is translating some of these newsletters into German. The latest is: Versicherungsbilanzierung 9: Sicherer, aber langsamer Fortschritt (PDF 364k) Translation of UK Issue 14: Steady, If Slow Progress (PDF 112k) All of the earlier insurance newsletters available in German are on our Germany Country Page.

21 June 2010: IFRS Foundation Trustees will meet 6-7 July

The Trustees of the IFRS Foundation will meet at the Algonquin Room, Four Seasons Hotel, 2800 Pennsylvania Avenue NW, Washington, DC USA, on Tuesday and Wednesday 6-7 July 2010. The portion of the meeting on 6 July from 13:45-17:00pm is open to public observation. The agenda for that portion of the meeting is: Report of the IASB Chairman Report of the IFRS Advisory Council Chairman Report of the Due Process Oversight Committee Discussion of Strategy Review

21 June 2010: Webcasts on IFRS for SMEs available on-line

The World Bank has made available for viewing on their website a two-part webcast presentation by Paul Pacter An Overview of the IFRS for SMEs. Each part is approximately one hour long. The presentation reviews the requirements in each of the 35 sections of the IFRS for SMEs and highlights differences with full IFRSs. To view the webcast presentations: Part 1: Overview of IFRS for SMEs Part 2: Overview of IFRS for SMEs These presentations together are one of the 20 training modules used in the IASB's train-the-trainers workshops for the IFRS for SMEs. For more information about the workshops or to download all of the presentations Click Here.

20 June 2010: Agenda project pages updated

We have updated the following pages on IAS Plus to reflect the discussions and decisions at the joint IASB-FASB meeting held on 15-17 2020: Balance Sheet Offsetting (new project page created) Insurance Contracts Leases Liabilities - IAS 37

20 June 2010: Joint meeting of two IASB advisory groups

The IASB's Analyst Representative Group and Global Preparers Forum will meet jointly with representatives of the IASB at the IASB's offices in London on Friday, 25 June 2010, from 10:00am to 15:30pm London time. The meeting is open to public observation and will be webcast. The agenda for the meeting is presented below. Analyst Representative Group (ARG): The ARG is a group of approximately 15 professional financial analysts who meet three times a year with representatives of the IASB to provide the views of professional investors on financial reporting issues. The ARG was formed in 2003. Global Preparers Forum (GPF): The GPF is a group of representatives of companies that use IFRSs with whom the IASB meets several times a year. The purpose of the Global Preparers Forum is to provide input into concepts and proposals that the IASB is developing and offer advice to the IASB on the practical implications of its intended proposals for preparers of financial statements. The meetings are open to public observation. Agenda for the Joint Meeting Analyst Representative Group and Global Preparers Forum 25 June 2010, London Work plan update Financial Statement Presentation Leases Post-2011 IASB Agenda

20 June 2010: Special joint IASB-FASB meeting 23 June 2010

The IASB and FASB will hold a special joint Board meeting on Wednesday 23 June 2010 from 14:00 to 18:00pm London time at the IASB's offices in London. Presented below is the agenda for the meeting. Special IASB-FASB Joint Board Meeting Agenda 23 June 2010, London IASB-FASB Joint Meeting (14:00-18:00pm London Time) Insurance Contracts

20 June 2010: PCAOB Q&A on audit firm annual reports

The US Public Company Accounting Oversight Board has published staff guidance, in the form of questions and answers, about the requirement that registered public accounting firms file annual reports with the PCAOB on Form 2. Beginning in 2010, all firms that are registered with the PCAOB as of 31 March of a particular year must, by 30 June of that year, file an annual report on Form 2 covering the 12-month period ending March 31. Information to be reported annually includes, among other things, information about audit reports issued, disciplinary histories of new personnel, and certain information about fees billed to issuer audit clients for various categories of services. PCAOB rules on annual reporting became effective on 31 December 2009 and, therefore, all firms registered with the Board on 31 March 2010, must file an annual report on Form 2 by 30 June 2010. Click to download PCAOB Staff Q&A on Form 2 (PDF 191k).

19 June 2010: President Obama letter to G20

In a letter to the leaders of the other G20 countries in advance of their upcoming meeting in Toronto on 26-27 June 2010, US President Barack Obama urged continued efforts to facilitate recovery from the global financial crisis and repair global financial systems. In the area of financial reporting, President Obama urged renewed 'efforts to enhance transparency and increase disclosure by our large financial institutions'. He said that greater transparency and disclosure will 'promote market integrity and reduce market manipulation'. Click to download President Obama's Letter to the G20 (PDF 114k).

19 June 2010: Tommaso Padoa-Schioppa will be Trustees' Chairman

The IASC Foundation Monitoring Board has approved the appointment of Tommaso Padoa-Schioppa, former Italian Minister of Economy and Finance, as Chairman of the Trustees. He will take over from Gerrit Zalm, who currently serves as Chairman and whose term was expiring this year, after the Trustees' meeting on 7 and 8 July 2010. Mr Padoa-Schioppa briefly served as Chairman of the Trustees from January 2006 to May 2006, when he was asked to become Italy's Minister of Economy and Finance. From 1998 to 2005, he was a member of the first Executive Board of the European Central Bank. He is currently President of Notre Europe and Chairman of Promontory Europe. Click for Monitoring Board Announcement (PDF 298k).

19 June 2010: Deadline reminder – ED on impairment

We remind you that comments are due on 30 June 2010 on Exposure Draft: Financial Instruments: Amortised Cost and Impairment. The ED was issued on 5 November 2009. The ED proposes to modify the way impairment losses are recognised on financial assets measured at amortised cost. Current standard: IAS 39 recognises impairment of financial assets using an 'incurred loss model'. An incurred loss model assumes that all loans will be repaid until evidence to the contrary (known as a loss or trigger event) is identified. Only at that point is the impaired loan (or portfolio of loans) written down to a lower value. Proposed standard: The model proposed in the ED is an 'expected loss model'. Under that model, expected losses are recognised throughout the life of a loan or other financial asset measured at amortised cost, not just after a loss event has been identified. The expected loss model avoids what many see as a mismatch under the incurred loss model – front-loading of interest revenue (which includes an amount to cover the lender's expected loan loss) while the impairment loss is recognised only after a loss event occurs.

19 June 2010: Spanish newsletter on IASB's pension proposals

We have posted the following Spanish language newsletter from Deloitte (Colombia). You will find all of our resources in Spanish Here. Boletín de Actualización IAS Plus, Mayo 2010 – Eliminación del intermedio – IASB propone cambios importantes a la contabilidad de pensiones (PDF 31k) Spanish version of: IAS Plus Newsletter, May 2010 – Closing the Corridor – IASB proposes significant changes to pension accounting (PDF 86k)

18 June 2010: Notes from day 3 of June 2010 IASB-FASB meeting

The IASB and FASB are holding a joint meeting on 15-17 June 2010 at the IASB's office in London. Click here to go to the preliminary and unofficial Notes Taken by Deloitte Observers at the meeting.

17 June 2010: Notes from day 2 of June 2010 IASB-FASB meeting

The IASB and FASB are holding a joint meeting on 15-17 June 2010 at the IASB's office in London. Click here to go to the preliminary and unofficial Notes Taken by Deloitte Observers at the meeting.

16 June 2010: Notes from day 1 of June 2010 IASB-FASB meeting

The IASB and FASB are holding a joint meeting on 15-17 June 2010 at the IASB's office in London. Click here to go to the preliminary and unofficial Notes Taken by Deloitte Observers at the meeting.

15 June 2010: Deloitte IFRS newsletter in Japanese

Deloitte's IFRS Centre of Excellence in Japan has published a Japanese translation of the following IFRS in Focus newsletter: IASB proposes changes to the presentation of profit or loss and other comprehensive income in IAS 1 (PDF 290k) Here is the English Version (PDF 68k) We have also put a permanent link on our Japan Page. The Japan Center of Excellence IFRS web pages are Here.

14 June 2010: New leadership for Deloitte's IFRS Global Office

Ken Wild Joel Osnoss Veronica Poole Randall Sogoloff

After 10 years leading the DTT IFRS Global Office in London, Ken Wild retired on 31 May 2010, and a new leadership team under the direction of Joel Osnoss and Veronica Poole took the helm on 1 June 2010. Additionally, Randall Sogoloff, has been appointed as DTT Global IFRS Communications Leader. Given the increased adoption of IFRS as the de facto accounting language worldwide, the importance of having a high-quality, consistent approach to IFRS has never been more evident. The leaders of the Group of 20, who represent 19 of the world's largest national economies plus the European Union, have called for the world to coalesce around a single set of financial reporting standards by June 2011, and IFRS is undergoing a series of changes to become that single set of standards. While the acceptance of IFRS is widespread, it is not yet universal. However, the trend is continuing, with more countries, such as Brazil, Canada, and Korea, adopting IFRS in the next few years. The two most recent and notable actions in line with this trend came from the United States and Japan, which are home to 40 percent of the Global Fortune 500 companies. Japan's Financial Services Authority decided in December 2009 to permit voluntary use of IFRS, while the Securities and Exchange Commission in the United States in February published a plan for making a decision on the adoption of IFRS in 2011. In light of the changing IFRS landscape, clients globally, as well as Deloitte member firm professionals in all functions and virtually all geographies, are likely to be affected by IFRS over the next few years. The new Deloitte team has taken a fresh look at Deloitte-branded IFRS publications, and has enhanced format and content to make them even more informative as well as more multifaceted. Among the new suite of publications being launched are: IFRS in Focus: This newsletter will cover important accounting developments and provide commentary to help member firm practitioners understand how they will be affected. IFRIC Review: This new communication tool will examine matters discussed at the IASB's IFRS Interpretations Committee. The publication will offer insights on issues discussed during these meetings. Industry-Focused Publications: As developments unfold in connection with IFRS, the insights of industry leaders will be leveraged through these publications, highlighting issues and opportunities pertaining to specific industries.

13 June 2010: IFRS Foundation seeks nominees for four Trustees

The IFRS Foundation (new name as of 1 July 2010 for the IASC Foundation, the IASB's parent body) is seeking candidates to fill vacancies for four Trustees to serve for three-year terms from 1 January 2011 until 31 December 2013. All terms may be renewed once. Click for: Announcement on IFRS Foundation Website Information about the IFRS Foundation on IAS Plus

13 June 2010: FASB Chairman discusses convergence

Mr Herz

US Financial Accounting Standards Board Chairman Robert H Herz spoke On Convergence and Change at a conference in California on 3 June 2010. Two excerpts are below. Click to Download Chairman Herz's Remarks (PDF 122k). Excerpt on convergence: The intensified efforts by FASB and by the IASB represent our attempt to respond to the G20 leaders, who, following their meeting last fall in Pittsburgh, called on us to 'redouble' our efforts to complete convergence by our 2011 targets. By 'completing convergence' we mean completing major projects in the Memorandum of Understanding (MOU) that we first published in 2006 and that we have updated periodically. While this would bring US Generally Accepted Accounting Principles, or GAAP, and the International Financial Reporting Standards, or IFRS, closer and – just as important – would improve the standards in a number of key areas, it would not, as some have suggested, mean that US GAAP and IFRS would be fully converged. Many differences would remain. The SEC staff, as part of its recently announced work plan, will inventory and evaluate the significance of those continuing differences. Its evaluation of these remaining differences, along with many other considerations, will feed into the Commission's decision on whether, how, and when to incorporate IFRS into the US reporting system for public companies. Excerpt on revisions to project plans and timetables We and the IASB are in the process of developing a number of revisions to our MOU work plan that involve changes in the timing and scope of and approach on certain joint projects. The goals in making these changes to the work plan are to prioritize our efforts in order to better enable us to complete key projects as expeditiously as possible while also maintaining proper due process including enabling constituents to properly review, evaluate, and provide input. Accordingly, we will stagger the release of and the comment periods and roundtables on major EDs over the next year and will limit to four the number of significant or complex EDs we issue in any quarter. The inevitable and necessary result is that although we are still targeting completion of many of the projects by June 30, 2011, we will not complete all of them by that date and a few of the projects will now be targeted for completion in late 2011. We expect to issue a joint communiqué with the IASB detailing the updated work plan soon.

12 June 2010: Deloitte IFRS newsletters in Chinese

Deloitte China has published the Chinese translations of the following IAS Plus Update newsletters: IASB issues proposals on the fair value option for financial liabilities (PDF 156k) Here is the English Version (PDF 63k) Closing the Corridor – IASB proposes significant changes to pension accounting (PDF 144k) Here is the English Version (PDF 183k) Improvements to IFRSs 2010 (PDF 163k) Here is the English Version (PDF 77k) Click here to go to the IAS Plus China Page.

12 June 2010: Agenda project pages updated

We have updated the following pages on IAS Plus to reflect the discussions and decisions at the special joint IASB-FASB meetings held on 1 June 2010 and 10 June 2020: Consolidation Insurance Contracts Joint Ventures Leases

11 June 2010: Notes from special 10 June 2010 IASB-FASB meeting

The IASB and FASB held a special joint meeting to discuss Insurance Contracts on Thursday 10 June 2010 at the IASB's offices in London. Following the joint meeting, the IASB held a Board meeting on its own to discuss Joint Ventures. Click to go to the preliminary and unofficial Notes Taken by Deloitte Observers at the meeting.

11 June 2010: EFRAG strategy for 'proactivity'

The European Financial Reporting Advisory Group (EFRAG) has published its Strategy for European Proactive Financial Reporting Activities (PDF 1,970k). The strategy is intended to enhance EFRAG's role in influencing future standard-setting developments by engaging with European constituents and providing timely and effective input to the early phases of the IASB's work. EFRAG's strategy is 'underpinned by a set of aims that contribute to achieving EFRAG's overall objectives'. EFRAG identifies its four strategic aims as follows: Aim 1: Engage with European constituents to ensure we under stand their issues and how financial reporting affects them; Aim 2: Influence the development of global financial reporting standards; Aim 3: Provide thought leadership in developing the principles and practices that underpin financial reporting; and Aim 4: Promote solutions that improve the quality of information, are practical, and enhance transparency and accountability.

10 June 2010: Spanish newsletter on improvements to IFRSs

We have posted the following Spanish language newsletter from Deloitte (Colombia). You will find all of our resources in Spanish Here. Boletín de Actualización IAS Plus, Mayo 2010 – Mejoramientos a los IFRS 2010 (PDF 29k) Spanish version of: IAS Plus Newsletter, May 2010 – Improvements to IFRSs 2010 (PDF 77k)

9 June 2010: Four IFRS publications in Spanish

We have posted the following Spanish language IFRS publications from Deloitte (Colombia). You will find all of our resources in Spanish Here. IFRS: ¿Qué deben estar considerando en este momento las juntas y los comités de auditoría? (PDF 10.6mb) Spanish version of: IFRS: What should boards and audit committees be considering now? (PDF 623k) Los IFRS en su bolsillo 2010 (PDF 1,267k) Spanish version of: IFRSs in your pocket 2010 (PDF 571k) Resumen de los IPSAS – Edición 2010 (PDF 445k) Spanish version of: IPSAS Summary – 2010 Edition (PDF 414k) Boletín de Actualización IAS Plus, Mayo 2010 – IASB emite propuestas sobre la opción del valor razonable para los pasivos financieros (PDF 27k) Spanish version of: IAS Plus Newsletter, May 2010 – IASB issues proposals on the fair value option for financial liabilities (PDF 63k)

8 June 2010: Newsletter on reporting comprehensive income

Deloitte's IFRS Global Office has published an IFRS in Focus Newsletter – IASB Proposes Changes to the Presentation of Profit or Loss and Other Comprehensive Income (PDF 68k). [Prior to June 2010, these newsletters were titled IAS Plus Update.] The newsletter explains the IASB's 27 May 2010 proposal to amend IAS 1 Presentation of Financial Statements to require: Presentation of 'profit or loss' and 'other comprehensive income' (OCI) as separate components in a single, continuous financial statement; and Separate presentation in OCI of items that will be reclassified to profit or loss ('recycled') in a subsequent period. FASB has published a similar proposal. All of our past IFRS in Focus and IAS Plus Update newsletters are Here. Click for the Project Page on IAS Plus.

8 June 2010: Notes from IPTF meeting with SEC staff

The International Practices Task Force (IPTF) of the AICPA's Center for Audit Quality meets periodically with the staff of the SEC to discuss emerging financial reporting issues relating to SEC rules and regulations. The IPTF has posted the Final Highlights of the November 24, 2009 Joint Meeting of the IPTF and the SEC Staff (PDF 139k). A number of the topics discussed relate to IFRSs. Here is the complete list: Issues related to Venezuela Monitoring inflation in certain countries SEC reporting implications: A foreign private issuer that uses US GAAP and the reporting of accounting changes that require retrospective application SEC reporting implication: A foreign private issuer issues a complete set of interim financial statements prepared in accordance with IFRS-IASB SEC reporting implications: Restatement of previously issued IFRS-IASB financial statements for IFRS 3R purchase price adjustments Application of ASC 855, Subsequent Events to Financial statements of certain Foreign Private Issuers and certain financial statements filed pursuant to S-X Rule 3-05 and Rule 3-09 SMEs for financial statements of S-X Rule 3-05 and Rule 3-09 of foreign businesses Selected financial data for IFRS-IASB issuers Applying the Item 17 price level changes accommodation to highly inflationary economies as defined under MFRS Foreign private issuers that voluntarily file using domestic forms Canadian registrants and adoption of IFRS

7 June 2010: Study of 347 accounting frauds in the United States

COSO (the Committee of Sponsoring Organizations of the Treadway Commission) has published a study, Fraudulent Financial Reporting: 1998-2007, that examines 347 alleged accounting fraud cases investigated by the US Securities and Exchange Commission during that ten-year period. It provides an in-depth analysis of the nature, extent, and characteristics of those accounting frauds and offers insights regarding new and ongoing issues needing to be addressed. Most of the frauds examined occurred before the Sarbanes-Oxley Act went into effect. Some of the more critical findings of the study are: Financial fraud affects companies of all sizes, with the median company having assets and revenues just under $100 million. The median fraud was $12.1 million. More than 30 of the fraud cases each involved misstatements/misappropriations of $500 million or more. The SEC named the CEO and/or CFO for involvement in 89% of the fraud cases. Within two years of the completion of the SEC investigation, about 20% of CEOs/CFOs had been indicted. Over 60% of those indicted were convicted. Over 80% of the CEOs/CFOs left the company within two years. In 47% of the cases, the SEC barred one or more individuals from serving as an officer or director of a public company. Civil fines were imposed in 65% of the cases, and disgorgements were imposed in 43%. The average fraud period extended 31.4 months (median 24 months). The two most common techniques used to fraudulently misstate the financial statements involved improper revenue recognition (61% of the cases) and asset overstatements primarily by overvaluing existing assets or capitalising expenses (51%). Understating expenses and liabilities occurred in 31% of the cases. Many of the commonly observed board of director and audit committee characteristics such as size, meeting frequency, composition, and experience do not differ meaningfully between fraud and no-fraud companies. Recent corporate governance regulatory efforts appear to have reduced variation in observable board-related governance characteristics. Virtually all of the fraud firms received an unqualified audit opinion on the last set of fraudulently misstated financial statements. However, the unqualified audit report of fraud firms was more likely (56%) to contain additional explanatory language than for no-fraud firms (36%). Twenty-six percent of the firms engaged in fraud changed auditors during the period examined compared to a 12% rate for no-fraud firms. Initial news in the press of an alleged fraud resulted in an average 16.7% abnormal stock price decline for the fraud company in the two days surrounding the announcement. News of an SEC or Department of Justice investigation resulted in an average 7.3% abnormal stock price decline. Companies engaged in fraud often experienced bankruptcy, delisting from a stock exchange, or material asset sales at rates much higher than those experienced by no-fraud firms. The report of the study may be Downloaded from the COSO Website (PDF 6,199mb). Click here for COSO Press Release (PDF 139k). The COSO study was conducted by four accounting professors: Mark S Beasley of North Carolina State University, Joseph V Carcello of the University of Tennessee, Dana R Hermanson of Kennesaw State University, and Terry L Neal of the University of Tennessee.

7 June 2010: EFRAG conclusions on the IFRS for SMEs

The European Financial Reporting Advisory Group (EFRAG) has submitted to the European Commission its analysis of the IFRS for SMEs' compatibility with the EU Accounting Directives. EFRAG's advice consists of: A letter to the European Commission specifying the requirements of the IFRS for SMEs that were assessed to be incompatible with the EU Accounting Directives. This letter also includes a description of the scope and limitations of the assessment. A feedback statement explaining EFRAG's reasons for not considering requirements identified by EFRAG's constituents to be incompatible with the EU Accounting Directives. A working paper including EFRAG's assessment of all the requirements of the IFRS for SME (the Working Paper). This 256-page working paper reviews the 230-page IFRS for SMEs paragraph by paragraph and identifies six requirements of the IFRS for SMEs that EFRAG believes are not compatible with the Directives (see box below). EFRAG's conclusion is that the following requirements of the IFRS for SMEs are incompatible with the EU Accounting Directives: The prohibition to present or describe any items of income and expense as 'extraordinary items' in the statement of comprehensive income (or in the income statement, if presented) or in the notes (IFRS for SMEs par. 5.10) The requirement to measure financial instruments within the scope of section 12 of the IFRS for SMEs (non-basic financial instruments) at fair value (IFRS for SMEs par. 12.7 and 12.8) (see Appendix par. 8 - 18). (Par. 11.2 of the IFRS for SMEs includes an option for entities to choose to apply the recognition and measurement provisions of IAS 39 Financial Instruments: Recognition and Measurement. As the option does not refer to a specific version of IAS 39, EFRAG has not been able to assess whether this option would be compatible with the EU Accounting Directives or not. Accordingly, EFRAG has disregarded the option when assessing whether or not the requirements of the IFRS for SMEs regarding financial instruments are compatible with the EU Accounting Directives or not.) The requirement to presume the useful life of goodwill to be ten years if an entity is unable to make a reliable estimate of the useful life (IFRS for SMEs par. 19.23) The requirement to recognise immediately in profit or loss any negative goodwill (IFRS for SMEs par. 19.24) The requirement to present the amount receivable from equity instruments issued before the entity receives the cash or other resources, as an offset to equity and not as an asset (IFRS for SMEs par. 22.7(a)) The prohibition to reverse an impairment loss recognised for goodwill (IFRS for SMEs par. 27.28) Click to download: EFRAG Letter to the Commission (PDF 1090k) Feedback Statement on EFRAG's Consultation (PDF 173k) EFRAG Working Paper (PDF 1,733k)

6 June 2010: G20 reaffirms commitment to global accounting standards

In a communique released after their meeting in Busan, Korea on 4-5 June 2010, the Group of 20 finance ministers and central bank governors reaffirmed their support of a single set of global accounting standards. The communique said: [We express] the importance we place in achieving a single set of high quality, global accounting standards and urged the International Accounting Standards Board and the Financial Accounting Standards Board to redouble their efforts to that end. We encouraged the International Accounting Standards Board to further improve involvement of stakeholders. The G-20 was established in 1999, in the wake of the 1997 Asian financial crisis, to bring together major advanced and emerging economies to stabilise the global financial markets. Since its inception, the G-20 has held annual Finance Ministers and Central Bank Governors Meetings and discussed measures to promote the financial stability of the world and to achieve a sustainable economic growth and development. Click to download: Text of G20 Communique (PDF 53k) Letter from IASB and FASB to G20 Finance Ministers (PDF 51k) sent in advance of the meeting

5 June 2010: Agenda for June 2010 IASB meeting

The IASB will hold its monthly meeting for June 2010 at its offices in London on Tuesday to Thursday 15-17 June 2010 (no meeting on Monday 14 June or Friday 18 June). Portions of the meeting are joint meetings with FASB. The meeting will be open to public observation and will be webcast. Presented below is the agenda for the meeting. IASB Board Meeting Agenda 15-17 June 2010, London Tuesday 15 June 2010 IASB Meeting (11:35-13:10am London Time) Leases Liabilities - IAS 37 IASB-FASB Joint Meeting (14:45-18:30pm London Time) Insurance Contracts Wednesday 16 June 2010 IASB-FASB Joint Meeting (08:30am-17:45pm London Time) Leases Insurance Contracts Balance Sheet Offsetting Thursday 17 June 2010 IASB-FASB Joint Meeting (08:30am-15:15pm London Time) Insurance Contracts Leases Accounting for Financial Instruments: Education Session on FASB Exposure Draft

4 June 2010: Back on-balance sheet – consolidation of VIEs/SPEs

Deloitte (United States) has published a paper titled Back on-balance sheet: Observations from the adoption of FAS 167. The paper discusses the effects of a recent FASB standard that changed the rules for consolidating 'variable interest entities' (VIEs, similar to what SIC 12 calls a 'special purpose entity', or SPE). FAS 167 requires an investor to consolidate a VIE if it has both (a) the power to direct the activities that most significantly impact the VIE's economics, and (b) the right to receive benefits or the obligation to absorb losses. Many US public companies completed their implementation of the new consolidation standard during the first quarter of 2010. The paper examines some of the challenges and issues that those initial adopters faced, as well as provides an analysis of the impact consolidation may have had on their consolidated financial statements. The issue of consolidation of VIEs is in the scope of the current joint IASB-FASB project on Consolidation. A final standard to replace IAS 27 is planned for fourth quarter 2010. Click to download Back on-balance sheet: Observations from the adoption of FAS 167 (PDF 259k).

4 June 2010: Accounting Roundup – May 2010

We have posted the May 2010 Edition of Accounting Roundup (PDF 258k) published by Deloitte & Touche LLP (United States). The newsletter covers United States and international accounting and auditing matters, including IASB-FASB convergence. Topics covered in this issue include: Update – FASB/IASB Convergence FASB and IASB Issue Joint Statement on Convergence; SEC Chairman Comments Cash Flows Effect of ASUs 2009-16 and 2009-17 on Presentation of Trade Receivable Financing Arrangements in the Statement of Cash Flows (as Revised) Comprehensive Income FASB Issues Proposed Guidance on Presentation of Comprehensive Income Financial Instruments FASB Issues Proposed ASU on Accounting for Financial Instruments IASB Issues Exposure Draft on Fair Value Option for Financial Liabilities Foreign Currency Matters FASB Releases ASU on Foreign Currency Issues Other Accounting Representatives of the SEC, PCAOB, and FASB Testify Before Congress Regarding Accounting and Auditing Issues FASB Announces Members of Not-for-Profit Advisory Committee Other SEC Matters SEC Issues Final Rule on Amendment to Municipal Securities Disclosure SEC Proposes Consolidated Audit Trail System to Better Track Market Trades SEC Launches New Web Page on Work Plan for Global Accounting Standards Other Auditing ASB Finalizes Clarified Auditing Standard on Laws and Regulations AICPA Issues TPA on Compilation and Review Engagements PCAOB Solicits Nominations for Standing Advisory Group FASAB Matters FASAB Issues Exposure Draft on Deferred Maintenance and Repairs Other International IASB Issues Annual Improvements to IFRSs IASC Foundation Announces Appointments to IFRS Interpretations Committee You will find past issues of Accounting Roundup Here.

4 June 2010: FASB-IASB letter to G20 finance ministers

The chairmen of the IASB and FASB have written to the G20 finance ministers to explain the reasons that the boards are planning to revise the timing of a few of their convergence projects beyond June 2011 (see stories below). The G20 finance ministers are meeting in Busan, Korea on 4-5 June 2010. In September 2009, the G20 Urged the IASB and FASB 'to redouble their efforts to achieve a single set of high quality, global accounting standards within the context of their independent standard setting process, and complete their convergence project by June 2011.' Click for Letter to G20 Finance Ministers (PDF 51k).

3 June 2010: SEC statement on FASB-IASB timing changes

US SEC Chairman Mary L Schapiro has issued a statement expressing confidence that the project timing changes planned by the FASB and IASB (see story below) will not negatively affect the Commission's work plan, Announced in February, to consider in 2011 whether and how to incorporate IFRSs into the US financial system. Chairman Schapiro said: I am confident that we continue to be on schedule for a Commission determination in 2011 about whether to incorporate IFRS into the financial reporting system for U.S. issuers. Click to download Chairman Schapiro's Statement (PDF 28k).

3 June 2010: IASB will delay some projects to 2H 2011

The IASB and the FASB have announced their intention to prioritise the major convergence projects 'to permit a sharper focus on issues and projects that they believe will bring about significant improvement and convergence between IFRSs and US GAAP'. The Boards noted that their constituents had voiced concerns about their ability to provide high-quality input on the large number of major exposure drafts planned for publication in the second quarter of 2010. The target completion dates for a few projects have extended into the second half of 2011. The Two Boards expect to release a new work plan identifying those projects and their new target dates shortly. IASB and FASB Joint Statement on Their Convergence Work In our November 2009 Joint Statement, we, the International Accounting Standards Board (IASB) and the US Financial Accounting Standards Board (FASB) again reaffirmed our commitment to improving International Financial Reporting Standards (IFRSs) and US generally accepted accounting principles (GAAP) and achieving their convergence. That Statement affirmed June 2011 as the target date for completing the major projects in the 2006 Memorandum of Understanding (MoU), as Updated in 2008, described project-specific milestone targets, and acknowledged the need to intensify our standards-setting efforts to meet those targets. We committed to providing transparency and accountability regarding those plans by reporting periodically on our progress. Our first report, dated 31 March 2010, described the progress we had made to date, explained some of the challenges we face in improving and converging our standards in certain areas, and reported changes made to certain project-specific milestone targets. As noted in our March 2010 progress report, we recognise the challenges that arise from seeking effective global stakeholder engagement on a large number of projects. Since publishing the March progress report, stakeholders have voiced concerns about their ability to provide high-quality input on the large number of major Exposure Drafts planned for publication in the second quarter of this year. The IASB and the FASB are in the process of developing a modified strategy to take account of these concerns that would: prioritise the major projects in the MoU to permit a sharper focus on issues and projects that we believe will bring about significant improvement and convergence between IFRS and US GAAP. stagger the publication of Exposure Drafts and related consultations (such as public round table meetings) to enable the broad-based and effective stakeholder participation in due process that is critically important to the quality of their standards. We are limiting to four the number of significant or complex Exposure Drafts issued in any one quarter. issue a separate consultation document seeking stakeholder input about effective dates and transition methods. The modified strategy retains the target completion date of June 2011 for many of the projects identified by the original MoU, including those projects, as well as other issues not in the MoU, where a converged solution is urgently required. The target completion dates for a few projects have extended into the second half of 2011. The nature of the comments received on the Exposure Drafts will determine the extent of the redeliberations necessary and the timeline required to arrive at high quality, converged standards. The IASB and the FASB have begun discussions on this proposed strategy with their respective oversight bodies and regulators, including members of the IASC Foundation Monitoring Board. It is expected that this action by the FASB and IASB will not negatively impact the Securities and Exchange Commission's work plan, announced in February, to consider in 2011 whether and how to incorporate IFRS into the US financial system. The boards expect to publish shortly a progress report that includes a revised work plan. Click to download the Joint Statement in PDF Format (PDF 20k).

3 June 2010: IVSC proposes major revisions to valuation standards

The International Valuation Standards Council (IVSC) has published an exposure draft (ED) of proposed new International Valuation Standards (IVS). The ED would be the ninth edition of the comprehensive bound volume of IFRSs, with substantial changes from previous editions (see chart below). These standards cover valuations for most types of assets, including for the first time a proposed standard for financial instruments. The standards also reflect current developments in IFRSs. Here is an overview of some of the most significant changes to IVS proposed in the ED: Existing IVS Proposed new edition Concepts Fundamental to Generally Accepted Valuation Principles (GAVP) The generic valuation principles have been carried forward into the proposed IVS 101. Other material discussing market value and land and property has been merged into IVS 103 and IVS 303.01. Code of Conduct Removed. Property Types Not directly replicated. Some elements included in individual asset standards. Introduction to IVS 1,2,3 Not directly replicated. Elements included in IVS 101,103 and 105. IVS 1 Market Value and IVS 2 Other Bases of Value Merged into new IVS 103. IVS 3 Valuation Reporting Principles carried forward into IVS 105. IVA 1 Valuations for Financial Reporting Now included in IVS 201.01 to 201.04. Material updated and extended to reflect developments in IFRS. IVA 2 Valuations for Secured Lending Made specific to property and most material carried forward to IVS 202.01. IVA 3 Valuation of Public Sector Assets for Financial Reporting Title changed to reflect content and carried forward to IVS 201.05. GN1 Real Property Valuation and GN2 Lease Interests Elements carried forward and merged into IVS 303.01. GN3 Valuation of Plant and Equipment Updated and carried forward to IVS 302.01. GN4 Valuation of Intangible Assets This was replaced by a revised and extended GN4 published in February 2010. This contained comprehensive guidance on intangible assets. The proposed new standard IVS 301.02 is based on the revised GN4, but the more detailed guidance has been omitted. This will be incorporated into a future Technical Information Paper. GN5 Valuation of Personal Property It is not proposed to carry this forward into the new edition. The definition of personal property in the existing standards is very broad and covers many asset classes that are now the subject of more specific standards. GN6 Business Valuation Updated standards for business valuation are in IVS 301.01 GN7 Consideration of Hazardous and Toxic Materials This is not a valuation standard and the topic is one of many topics that influence value. No others are highlighted in the current IVS. Not carried forward GN8 Cost Approach and GN9 Discounted Cash Flow These are discussions on valuation methods and do not meet the criteria for inclusion in the standards. IVSC have working groups addressing these topics with a few to issuing updated Technical Information Papers GN10 Valuation of Agricultural Property Not being carried forward as it contains no valuation procedures that differ from other property types. A new project on biological assets is proposed which may result in a new standard. GN11 Reviewing Valuations The scope and limitations on any valuation assignment are now covered generically in IVS 104. Not carried forward GN12 Valuation of Trade Related Property Updated and carried forward as IVS 303.04 GN13 Mass Appraisal for Property Taxation Not being carried forward as it contains no valuation procedures that differ from the General Standards GN14 Valuations of Properties in Extractive Industries Not carried forward. A comprehensive project on valuations in the Extractive Industries is about to commence and will probably lead to a new standard. GN15 Valuation of Historic Property Carried forward as IVS 303.02 Click for: Press Release (PDF 80k) Overview and Questions for Respondents (PDF 282k) Download the ED (link to IVSC Website, PDF 850k) Comment deadline is 3 September 2010.

3 June 2010: Notes from special 1 June 2010 IASB-FASB meeting

The IASB and FASB held a special joint meeting on Tuesday 1 June 2010 at the IASB's offices in London. Following the joint meeting, the IASB held a Board meeting on its own. Click to go to the preliminary and unofficial Notes Taken by Deloitte Observers at the meeting.

3 June 2010: Impairment advisory group to meet 21-22 June 2010

The joint IASB-FASB Expert Advisory Panel (EAP) on the impairment of financial assets will meet on 21-22 June 2010, as follows: Location: Offices of the Industrial and Commercial Bank of China (ICBC), 55 Fuxingmennei Avenue, Xicheng District, Bejing, China Date and time: Monday 21 June: 14:00 - 18:00 (Beijing time) Tuesday 22 June: 08:00 - 14:45 (Beijing time) The Board established the EAP to advise them about the significant practical challenges in moving to an expected loss model as proposed in the IASB's November 2009 Exposure Draft. Under the proposals in the Exposure Draft, expected losses on loans (or other financial assets measured at amortised cost) are recognised throughout the life of the loan (or other asset), and not just after a loss event has been identified. On 26 May 2010, the IASB posted on its website a summary of the discussions to date by the EAP. Click: To access the Summary of Expert Advisory Panel Discussions on the IASB's website Information about the November 2009 Exposure Draft More Information about the EAP

2 June 2010: PCAOB guidance on registration of non-US audit firms

The US Public Company Accounting Oversight Board has published a staff guidance update related to the registration process for applicants from non-US jurisdictions where the PCAOB is prevented from inspecting PCAOB-registered firms. The affected jurisdictions currently are the 30 European countries, China, Hong Kong, and Switzerland. The guidance alerts applicants from the affected jurisdictions that the PCAOB staff intends to request certain additional information before acting on those applications, and it explains how an applicant can seek to avoid delay by including the information when it first submits the application. The guidance has been published in the form of an updated Frequently Asked Questions Regarding Issues Relating to Non-US Accounting Firms (PDF 42k).

2 June 2010: Report on EC consultation on IFRS for SMEs

In November 2009, the European Commission launched a Consultation to gain an understanding of EU stakeholders' view on the International Financial Reporting Standard for Small and Medium-sized Entities (IFRS for SMEs). The consultation period ended 12 March 2010. The Commission has now published a summary report of the 210 responses received. In addition, on 25 May 2010 the Commission held a stakeholders meeting on the review of the Accounting Directives and the IFRS for SMEs. The Commission has released the minutes of this meeting. A key question and responses: Question: Do you think adoption of the IFRS for SMEs should be provided for within the EU accounting legal framework? Response: Supported by majority of Respondents from 19 Member States: BG, CY, CZ, DK, EE, EL, ES, HU, IE, LT, LU, MT, NL, PL, PT, RO, SE, SL, UK, EU Org and Registered Lobbyists Opposed by majority of Respondents from 6 Member States: AT, BE, DE, FR, IT, SK Click to download: Summary Report of the Responses Received to the Commission's Consultation on the IFRS for SMEs (PDF 182k) Stakeholder Meeting Agenda and Presentations (PDF 182k) Minutes of 25 May 2010 Stakeholder Meeting (PDF 460k) Links to Individual Responses to Consultation (on European Commission website)

2 June 2010: Deloitte webcast on global financial reporting

The pace of standard-setting developments at the IASB is unprecedented and translates into challenging times for financial professionals. What important new developments should you watch closely? In this webcast from Deloitte's IFRS Global Office, we will discuss: The IASB's agenda and the state of convergence Recent developments with the IASB's projects on defined benefit plans, financial statement presentation, and financial liabilities Other recent IFRS news Stay informed about the latest developments from the IASB and learn how those developments may impact you and your company. Topic: IFRSs: How might developments at the IASB impact you? Date and time: 17 June 2010, 9:00-10:00am London time (GMT +1) which is 16:00-17:00pm HKT (GMT +8) Host: Joel Osnoss Presenters: Veronica Poole, Linda Riedel, and Randall Sogoloff More Info and Registration: Click Here

1 June 2010: Deloitte Canada IFRS transition newsletters

Deloitte Canada has published the May 2010 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: The Rules of the Game – Making your opinion count in the development of IFRSs The Real Deal – the focus this month is on Related Party Disclosures An update on International standard setting activities Click below for: May 2010 Edition Countdown Newsletter – English (PDF 1,615k) May 2010 Edition Countdown Newsletter – French (Compte à Rebours) (PDF 1,728k) Related items: You will find more information about financial reporting in Canada on our Canada Page. We have a special page on First-time Adoption of IFRSs