30 September 2011: European Outreach Meetings on the IASB Agenda Consultation

The European Financial Reporting Advisory Group (EFRAG), in partnership with European National Standard Setters, will organise outreach events on the IASB consultation on its future work programme published in July 2011. The events will be held throughout Europe in October and November. A Brussels event will be organised by EFRAG and the European Commission. The purpose of the events is stimulating debate in Europe and collecting European views. Please click for more information in the EFRAG press release (link to EFRAG website).

30 September 2011: Speech of ESMA Chair on transparency touches on the valuation of sovereign debt

In a speech entitled Market Transparency – Does it prevent crisis? given at the Austrian Financial Market Authority Supervision Conference in Vienna, Steven Maijoor, Chairman of the European Securities and Markets Authority (ESMA), spoke about similarities between the credit crunch and the current European sovereign debt crisis and how transparency can be an answer to the lack of trust in banks and markets. "At the beginning of the crisis, in 2007 and 2008, a lack of transparency regarding exposures to subprime mortgages created a situation of uncertainty about the financial positions of banks," Maijoor says in his speech and continues "in the more recent months of the financial crisis a lack of transparency from banks on their exposures to sovereign debt and related instruments are generating new suspicions about the conditions of individual banks." Transparency on financial performance and positions will restore trust into markets and banks, Maijoor claims, and IFRSs have contributed to both the quality and quantity of the information provided as part of the financial statements presented by listed companies. However, IFRSs need to be applied correctly to serve the end of transparency, and national supervisory authorities and ESMA have to and will ensure consistent enforcement across the EU. As you will understand, we are currently looking at how banks are applying IFRS for the valuation of sovereign debt. It is very important for ESMA that financial institutions apply IFRS correctly, and are consistent in their valuations of sovereign debt exposures. This especially holds for the upcoming annual financial statements. In July 2011, ESMA published a public statement on disclosures related to sovereign debt to be included in IFRS financial statements. Click for: full text of Steven Maijoor's speech (link to ESMA website) IAS Plus overview of accounting developments in Europe

30 September 2011: IASB provides update on expected release of documents in the coming months

The IASB has announced more definitive timing of the expected release of documents from a number of its current projects. In a work plan update provided in the most recent IASB Update, the IASB notes the expected timing as follows: Expected timing Pronouncements to be issued Mid-October 2011 Release of IFRIC 20 Stripping Costs in the Production Phase of a Surface Mine (summary of draft Interpretation) Narrow-scope exposure draft amending IFRS 1 First-time Adoption of International Financial Reporting Standards to allow for the prospective application of paragraph 10A of IAS 20 Accounting for Government Grants and Disclosure of Government Assistance for first-time adopters (project summary) November 2011 Review draft of the hedge accounting chapter of IFRS 9 Financial Instruments (90 day comment period) Revised exposure draft in the revenue recognition project (expected) December 2011 Exposure draft of the 2011-2012 cycle of annual improvements Amendments to IAS 32 Financial Instruments: Presentation and IFRS 7 Financial Instruments: Disclosures arising from the offsetting project First quarter 2012 Revised exposure draft in the leases project The update does not extend to other projects for which pronouncements may be issued before the end of 2011 under the previously announced work plan, e.g. financial instruments impairment and insurance contracts. Click for: IASB Update (link to IASB website) Our summary of the IASB's agenda, which has been updated for these and other developments.

29 September 2011: EFRAG draft comment letter on the IASB's ED Investment Entities

The European Financial Reporting Advisory Group (EFRAG) has issued its draft comment letter on IASB's ED Investment Entities. In August 2011 the IASB issued the Exposure Draft Investment Entities. The ED provided criteria and guidance to determine whether an entity is an investment entity. The draft proposed that an investment entity measure its investments in controlled entities at fair value through profit or loss in accordance with IFRS 9 Financial Instruments. EFRAG believes that the parent of an investment entity should be permitted to retain the fair value accounting that is applied by its investment entity subsidiary to controlled entities. EFRAG also encourages IASB to carry out an impact assessment to better understand better the practical implications of any amendments to IAS 28 Investments in Associates and Joint Ventures. Please click for EFRAG's press release containing a link to the draft comment letter (link to EFRAG website).

29 September 2011: Agenda for IFRS Advisory Council Meeting

The IFRS Advisory Council is meeting in London on 10-11 October 2011. The agenda for the meeting is set out below. IFRS Advisory Council Meeting Agenda 10-11 October 2011, London Monday, 10 October 2011 Welcome and Chairman’s preview Overview of last four months IASB activities (financial instruments, insurance contracts, leases and revenue recognition) Trustees review of the IFRS Interpretation Committee Trustees due process oversight committee Trustee strategy review and Monitoring Board review Raising the profile of the Council / working with the Trustees The IASB’s agenda consultation How to deal with the conceptual issues at stake at the present juncture Tuesday, 11 October 2011 Insurance contracts Revenue recognition XBRL update World Bank review of standards IFRS 'branding' IFRS Foundation education activities Click for access to the full agenda and agenda papers (link to IASB website).

29 September 2011: Upcoming Dbriefs webcast: Important IFRS Developments

A Global Financial Reporting Dbriefs Webcast is scheduled to be held on Tuesday, 18 October 2011, discussing the unprecedented pace of standard-setting developments at the International Accounting Standards Board (IASB). The topics to be covered include: The IASB's timeline for the issuance of exposure drafts and new accounting standards An update on the revenue recognition project Recent developments including the issuance of the IASB's agenda consultation and the exposure draft on investment entities. Full details of the webcast are provided below: Topic: IFRS: Important Developments Date and time: Tuesday, 18 October 2011 9:00-10:00am London time (GMT +1), which is 4:00-5:00pm Hong Kong Time (GMT +8) Host: Randall Sogoloff, Leader – Global IFRS Communications Presenters: Philip Barden, Partner – UK IFRS Centre of Excellence More information: Click Here Registration: Click Here Access to recordings and other materials from past webcasts is available on our IFRS Webcasts page.

28 September 2011: SME Implementation Group publishes five draft guidance Q&As for public comment

The SME Implementation Group has published for public comment five questions and answer documents (Q&A) on draft guidance related to the implementation of the International Financial Reporting Standard for Small and Medium-sized Entities (IFRS for SMEs). Comments are due 30 November 2011. Click for: IASB press release (link to IASB website) Draft Q&A Application of the IFRS for SMEs for financial periods ending before the IFRS for SMEs was issued (link to IASB website) Draft Q&A Interpretation of 'undue cost or effort' and 'impracticable' (link to IASB website) Draft Q&A Jurisdiction requires fallback to full IFRSs (link to IASB website) Draft Q&A Departure from a principle in the IFRS for SMEs Draft Q&A Prescription of the format of financial statements by local regulation

28 September 2011: Guide through IFRSs 2011

The IFRS Foundation has published A Guide through International Financial Reporting Standards IFRSs July 2011. This guide is a two-volume set of all IFRSs and IASs issued by the IASB at 1 July 2011, with cross-references and other annotations added for references to other IFRSs, including IASs and IFRIC and SIC interpretations. The guide also includes illustrative examples, implementation guidance, bases for conclusions and dissenting opinions published in appendices to the IFRSs. This two-volume guide may be purchased for £90 plus shipping on the IASB's Website. Discounts are available for bookshops/agents, multiple copies, students/academics and residents of middle and low income countries. You will find more information and ordering details here.

28 September 2011: 'Changing of the guard' continues with resignation of IFRS Foundation COO

The Trustees of the IFRS Foundation have announced that Tom Seidenstein, Chief Operating Officer of the IFRS Foundation, will step down from his role at the end of the year in order to return to the United States. Mr Seidenstein joined the (then) IASC Foundation in 2000 and has managed the operation of the Foundation, work related to strategy, governance and policy, and financing. The Trustees have begun a search process for his successor, who will have the title of Executive Director. Click for press announcement (link to IASB website).

28 September 2011: Upcoming United States Accounting Roundup webcast

Deloitte (United States) is hosting a IFRS quarterly accounting roundup webcast in late September. The webcast will discuss accounting, standard setting, and reporting developments for the quarter, recent positions on accounting and reporting of the FASB, IASB, SEC, and PCAOB, and other hot topics. Full details of the webcast are provided below: Topic: Quarterly Accounting Roundup: An Update of Important Developments Date and time: Thursday, 29 September 2011 at 2:00pm-3:30pm United States Eastern Daylight Time (GMT-04:00) Host: Bob Uhl, Partner – Deloitte & Touche LLP More information: Click Here Registration: Click Here

27 September 2011: EFRAG draft comment letter on the Interpretations Committee's tentative agenda decision on IAS 12

The European Financial Reporting Advisory Group (EFRAG) has issued its draft comment letter on the Interpretations Committee's tentative rejection decision on IAS 12 Income Taxes. In December 2010, the IASB issued amendments to IAS 12 introducing a rebuttable presumption that an asset is recovered entirely through sale unless the entity has clear evidence that recovery will occur in another manner. In September 2011, the Interpretations Committee received a request to clarify whether the list of cases in which that presumption can be rebutted is exhaustive. The Interpretations Committee decided not to add this item to its agenda arguing that IAS 12 is sufficiently clear and that diversity in practice on the rebuttal of the presumption should not emerge. However, the rejection notice also contains guidance on the subsequent accounting if the presumption is rebutted. EFRAG therefore believes that the rejection notice is in effect an interpretation. In EFRAG's view, rejection notices should not be written as though they were authoritative guidance and should not result in a change in accounting practice. Please click for EFRAG's press release containing a link to the draft comment letter (link to EFRAG website).

27 September 2011: Call for EFRAG TEG Applicants – deadline for submissions extended

The present mandate period for seven of the twelve members of EFRAG’s Technical Expert Group (EFRAG TEG) expires on 31 March 2012. In order to fill the vacancies, EFRAG is looking for candidates from a wide range of backgrounds and geographical origins and welcomes all applications. EFRAG is in particular looking for candidates from Central and Eastern Europe and for candidates with a user background. The deadline for candidates to submit their candidatures has now been extended until 10 October 2011. Please click for more information on the EFRAG website.

26 September 2011: IASB translation update

The IFRS Foundation has announced the publication of the following translations: Language Translated publication Availability* Russian Presentation of Items of Other Comprehensive Income (Amendments to IAS 1) eIFRS subscribers Spanish Presentation of Items of Other Comprehensive Income (Amendments to IAS 1) IAS 19 Employee Benefits Bases for Conclusions on IAS 27 (2011), IAS 28 (2011) and IFRS 10 eIFRS subscribers French Exposure draft ED/2011/3 Mandatory Effective Date of IFRS 9 Request for Views Agenda Consultation 2011 Unrestricted (via the IASB 'Comment on a proposal' webpage) Albanian Macedonian IFRS for SMEs Registered users (via the IASB 'Access the IFRS for SMEs' webpage) Georgian Romanian 'Red Book' of IFRSs Purchased via the IASB webshop * All of the publications can also be accessed by eIFRS subscribers. The Arab Society of Certified Accountants (ASCA/Jordan) has also issued an Arabic-language version of a book containing IFRSs and IFRSs for SMEs. Click for press release (link to ASCA/Jordan website).

23 September 2011: Final notes from the September IASB meeting

The IASB's regular monthly meeting was held on 19-22 September 2011 in London, some of which was a joint meeting with the FASB. We have posted Deloitte observer notes from the remaining sessions held on Thursday (click through for direct access to the notes): Thursday, 22 September 2011 (other sessions) Annual Improvements to IFRSs – 2010-2012 (IASB only) IAS 16 Property, Plant and Equipment – Revaluation model and proportionate restatement IAS 24 Related Party Disclosures – Key management personnel IFRS 2 Share-based payment – Vesting and non-vesting conditions IFRS 8 Operating Segments – Reconciliation of segment assets in IFRS 8 IAS 7 Statement of Cash Flows – Classification of interest paid that is capitalised IAS 36 Impairment of Assets – Disclosure of the recoverable amount IAS 1 Presentation of Financial Statements – Current/non-current classification of debt IAS 12 Income Taxes — Recognising deferred tax assets for unrealised losses on available-for-sale debt securities Other issues considered for amendments within the scope of the Annual Improvements process IFRS 2 Share-based payment – Review of the requests received by the IFRS Interpretations Committee in relation to IFRS 2 IFRS 1 First-time Adoption of IFRSs – Review of a request received by the IFRS Interpretations Committee IFRS 8 Operating Segments – Review of a request received by the IFRS Interpretations Committee Click here to go to the preliminary and unofficial Notes Taken by Deloitte Observers for the entire meeting.

23 September 2011: IAS 19 Employee Benefits – Mark-up version

The IASB has posted to its website a mark-up version of IAS 19 Employee Benefits highlighting the amendments made to the previous version of IAS 19 to match the requirements in IAS 19 as issued in June 2011. For an overview of all changes please go to our earlier story. Please click here for access to the mark-up version on the IASB's website.

23 September 2011: GRI issues construction and real estate guidance, supports call for integrated sustainability reporting

The Global Reporting Initiative (GRI) has issued a final Supplement, providing guidance on how to apply GRI's Reporting Framework and Guidelines in the construction and real estate sectors. The GRI's Framework and Guidelines set out the principles and indicators organisations can use to report their economic, environmental, and social performance. The Construction and Real Estate Sector Supplement provides guidance for those who invests in, develop, construct, or manage buildings on the principles and indicators to follow to report business strategy and performance. Specific issues covered in the new Supplement include building and materials certification, CO2 emissions, management and remediation of contaminated land and labour health and safety issues. The GRI has also lent its support to the 'Corporate Sustainability Reporting Coalition', an investor-led group which is calling on United Nations member states to commit to develop, a global policy framework that requires listed and large private companies to integrate sustainability information into annual reports and financial statements, or explain why if they do not do so. Click for: GRI press release on new Supplement (link to GRI website) GRI announcement on sustainability reporting coalition (link to GRI website) Our sustainability reporting page.

22 September 2011: Additional notes from the September IASB meeting

The IASB's regular monthly meeting is being held on 19-22 September 2011 in London, some of which is a joint meeting with the FASB. We have posted Deloitte observer notes from some of the sessions held on the Wednesday and Thursday (click through for direct access to the notes): Wednesday, 21 September 2011 (other sessions) Financial Instruments – Impairment (IASB-FASB) Feedback from Impairment Summit and Financial Instruments Working Group Originated/Purchased Assets of Lower Credit Quality Principle of Transfers Between Buckets Thursday, 22 September 2011 Financial instruments – Hedge accounting (IASB only) Macro Hedge Accounting Notes from the remaining sessions held on Thursday will be posted soon. Click here to go to the preliminary and unofficial Notes Taken by Deloitte Observers for the entire meeting.

22 September 2011: Minutes from the second meeting of the Experts Group on Non-Financial disclosure by Companies

The European Commission's Expert Group on disclosure of non-financial information by EU companies held its second meeting on 12 September 2011. Minutes from that meeting are now available on the EC's website (PDF 57k). The discussions of the expert group focused on whether a principles-based approach, rather than a detailed, rules-based one should be chosen; whether existing international frameworks are possible references for principles-based legislation, including the UN Global Compact, the OECD Guidelines for Multinational Companies, the UN "Protect, Respect and Remedy" Framework for Business and Human Rights, as well as the ISO 26000 and the IASB Management Commentary; whether legislation should mandate a set of specific topics to be covered by non-financial reports; whether a disclosure requirement should take the form of a general reporting obligation; and whether an obligation to disclose non-financial information will have positive effects on business accountability, company performance and capital markets in general. The discussions were based on two non-papers circulated to the members of the expert group ahead of the meeting and included as Annex 2 to the minutes. The experts are now invited to submit written comments on the issues discussed. The next meeting is expected to take place on 30 September 2011. A legislative proposal on the disclosure of non-financial information by companies is planned for the first half of 2012. More information on international developments in integrated reporting is available on our IAS Plus page on integrated and sustainability reporting.

21 September 2011: Further notes from the September IASB meeting

The IASB's regular monthly meeting is being held on 19-22 September 2011 in London, some of which is a joint meeting with the FASB. We have posted Deloitte observer notes from some of the sessions held on the first three days of the meeting (click through for direct access to the notes): Monday, 19 September 2011 (other sessions) Insurance Contracts (IASB-FASB) [updated 23 September 2011] Disclosure Risk adjustment: Objective and confidence level disclosure Risk adjustment: Techniques and inputs Tuesday, 20 September 2011 (other sessions) Asset and Liability Offsetting (IASB only) Clarifying amendments to IAS 32 Offsetting disclosures – Effective date and transition Location of offsetting guidance Financial instruments – Hedge accounting (IASB only) Disclosures: Dynamic hedging strategies Hedging using credit derivatives Effective date and transition Wednesday, 21 September 2011 Leases (IASB-FASB) Presentation: Lessor statement of financial position Classification: Lessor statement of cash flows Lessee transition issues Notes from the financial instruments impairment session held on Wednesday will be posted soon. Click here to go to the preliminary and unofficial Notes Taken by Deloitte Observers for the entire meeting.

21 September 2011: Monitoring Board summary of comments on IFRS Foundation governance review

The Monitoring Board has released a document summarising responses to its Consultative Report on the Review of the IFRS Foundation's Governance, published on 7 February 2011. The report provides a summary of responses from the 80 comment letters received, which expressed a wide variety of views. In high-level terms, respondents replied as follows (noting the contrary view was also often expressed by a significant proportion of respondents): Consultative Report on the Review of the IFRS Foundation's Governance Summary of respondent's views IASB Many respondents agree (or partially agree) with the proposal to urge concrete efforts to deepen the pool of candidates for IASB membership Many respondents agree that the roles of the IASB Chair and CEO of the IFRS Foundation should be separate Many respondents agree that a clearer division of responsibility between staff dedicated to the IASB operations and staff dedicated to the Foundation's administrative and oversight functions should be considered Trustees Some respondents believe the current constitutional requirements regarding Trustee composition are adequate, but others made many suggestions for improvement around geographical balance and professional backgrounds Many respondents agree with the proposal to provide increased transparency into the process for Trustee nominations, but many think the current arrangements for involvement of the Monitoring Board in the nomination process are appropriate A large majority of respondents agree that further clarification of the criteria for the Trustee's candidacy would help support confidence of stakeholders Monitoring Board A larger majority of respondents agree with limiting the Monitoring Board membership to capital markets authorities Most respondents agree with expanding the Monitoring Board membership by adding a mix of permanent members (representing major emerging markets) and rotating members (from other markets) A majority of commenting respondents supported the selection of rotating members through IOSCO Most respondents agree the Monitoring Board should continue to make decisions by consensus While most respondents broadly support increased interaction between the Monitoring Board and other parties with a stake in IFRSs, views varied broadly as to how to achieve this A large majority of respondents generally support increased transparency into the Monitoring Board's functions and support the measures provided in the report as a means to increase visibility A large majority of respondents oppose the Monitoring Board's direct involvement in IASB agenda-setting with compulsory power - in general, those respondents say the current arrangement is absolutely appropriate and further involvement should be avoided in order not to damage the standard-setter's independence in terms of both substance and appearance Most respondents did not support the expansion of the Monitoring Board involvement in the nomination of the IASB Chair A large majority of respondents agree that the Monitoring Board's responsibilities should explicitly include consultation with the Trustees as they further develop the framework There were many views against the establishment of a permanent secretariat for the Monitoring Board Other areas The majority of respondents believe the current arrangements for the standard-setting process adequately ensure the appropriate involvement of all relevant stakeholders and that all relevant public policy objectives are taken into account There is full agreement on establishing a more stable and independent funding model, and most respondents argue that improvement in the funding model is primarily a responsibility of the Trustees The majority of respondents agree with the need for regular reviews of the governance structure and in general, there should be alignment between future Monitoring Board governance reviews and the IFRS Foundation Constitution reviews The Monitoring Board intends to coordinate closely with the IFRS Foundation Trustees who are currently undertaking a separate strategy review in order to develop a joint package of improvements, with the objective of finalising the process during the fourth quarter of 2011. Click for: Monitoring Board press release (link to IOSCO website) Summary of Comments to the Consultative Report on the Review of the IFRS Foundation's Governance (link to IOSCO website)

20 September 2011: Notes from the September IASB meeting

The IASB's regular monthly meeting is being held on 19-22 September 2011 in London, some of which is a joint meeting with the FASB. We have posted Deloitte observer notes from some of the sessions held on the first two days of the meeting (click through for direct access to the notes): Monday, 19 September 2011 Leases (IASB-FASB) Scope - inventory Applicability of financial asset guidance to the right to receive lease payments Lessor subsequent measurement issues Lessor accounting: residual value guarantee Tuesday, 20 September 2011 Accounting for Stripping Costs in the Production Phase of a Mine (IASB only) Board approval of IFRIC 20 Accounting for Put Options Written over Non-controlling Interests (IASB only) IFRS Interpretations Committee – Update from last meeting (IASB only) Notes from the other sessions held on these two days (insurance, offsetting and hedge accounting) will be posted soon. Click here to go to the preliminary and unofficial Notes Taken by Deloitte Observers for the entire meeting.

20 September 2011: Perspectives and practical recommendations on integrated reporting

Deloitte's Global Sustainability and Climate Change Services Group has issued Integrated Reporting — A better view? (PDF 1,213k). The publication provides a brief history of reporting trends, a discussion of common challenges, and some practical recommendations for the adoption of integrated reporting. The publication makes the following observations: Just as the world has inexorably moved toward the adoption of International Financial Reporting Standards (IFRS), the progression toward a single, global, common framework for integrated reporting seems inevitable. Less clear, however, is the timing of adoption, which may be affected by a variety of economic, political, social, and other factors. Regardless of how the timing plays out, forward-thinking companies are putting integrated reporting on their agendas now, as the benefits of being ahead of the curve may be significant. Click for: Integrated Reporting — A better view? (PDF 1,213k) IFRS in Focus — International Integrated Reporting Committee issues Discussion Paper on Integrated Reporting (PDF 74k) Our earlier story on the International Integrated Reporting Committee (IIRC) discussion paper on integrated reporting The Bruce Column — Going for Long-Term Value

20 September 2011: Use of Options within the Accounting Directives

The European Commission services have published a report on the responses received to the consultation of accounting regulatory committee members on the use of options within the European Accounting Directives. This report provides an update on the extent to which certain options included within the Accounting Directives have been incorporated into the law of the Member States and EEA countries. The report summarises the responses to a questionnaire distributed to the representatives in the Accounting Regulatory Committee (ARC) in 2010. It includes responses from all 27 Member States, as well as Norway, and the responses are accurate as at 1 July 2010. Where Member States gave explanations on how options have been incorporated into national law, they are also provided. Please click for access to the report (PDF 816k, link to EC website).

19 September 2011: IFRS in Focus newsletter describes the recent IIRC discussion paper on integrated reporting

Deloitte's Global Office has issued IFRS in Focus — International Integrated Reporting Committee issues Discussion Paper on Integrated Reporting (PDF 74k). The IFRS in Focus newsletter provides an overview of the IIRC's Discussion Paper Towards Integrated Reporting — Communicating Value in the 21st Century, which introduces proposals for the future development of corporate reporting and argues that a change is necessary, as there have been major changes in the way business is conducted and how businesses create value. See also our earlier story on the discussion paper.

19 September 2011: Russian translations of new and revised standards

The IFRS Foundation has announced the publication of translations of six new and revised standards into Russian. The translated standards are the "package of five" new and revised standards addressing the accounting for consolidation, involvements in joint arrangements and disclosure of involvements with other entities published by the IASB in May 2011, IFRS 13 Fair Value Measurement published in May 2011 and the amended IAS 19 Employee Benefits published in June 2011. All translations are available on the IASB's New and revised standards webpage (eIFRS subscribers only).

19 September 2011: India exposes consolidation, joint arrangement and disclosure standards for comment

The Institute of Chartered Accountants in India (ICAI) has published a number of exposure drafts which propose to adopt Indian Accounting Standard (Ind-AS) equivalents to the package of five standards on consolidation, joint arrangements and disclosures issued by the IASB in May 2011. The start date for Ind-AS have not yet been proclaimed by the Indian Government, and there are a number of differences between existing Ind-AS and IFRSs (see our earlier story). The exposure drafts propose certain amendments to the requirements of IFRS 10, IFRS 11, IFRS 12, IAS 27 (2011) and IAS 28 (2011). Many of these amendments relate to application dates, differences in terminology, amendments or references to other standards not yet adopted as Ind-AS (such as IFRS 9), Indian legal requirements for implementation, or to delete requirements which are not considered relevant in the Indian context. However, a number of the amendments alter the requirements of the equivalent IFRSs, e.g. the deletion of the exemption from consolidation for wholly-owned and partially owned subsidiaries in certain circumstances. Comments on the exposure drafts close on 15 October 2011. Click for: Access to the exposure drafts (link to ICAI website) Our India country page.

16 September 2011: EFRAG Update with meeting summary for the September EFRAG TEG meeting

The European Financial Reporting Advisory Group (EFRAG) has released the September 2011 issue of its EFRAG Update newsletter. The EFRAG TEG meeting was held on 7 to 9 September 2011. A highlight of the meeting was the issuance of a draft comment letter in response to the IASB Exposure Draft Mandatory Effective Date of IFRS 9. Click for the EFRAG Update (PDF 287k, link to EFRAG website). Links to earlier issues are available here.

15 September 2011: IASB work plan update

The latest IASB work plan timetable, as of 14 September, has been released and shows revised 'current best estimates' for its progress. The IASB has updated the expected timetable for Financial Instruments: Impairments to be for the fourth quarter of 2011 or 2012 (previously targeted in the fourth quarter of 2011). Click for: IASB work plan as of 14 September (link to IASB website) Our summary of the IASB's agenda and timetable

15 September 2011: EFRAG invites companies to participate in the field-testing of new standards

The European Financial Reporting Advisory Group (EFRAG) will conduct field-testing of the new requirements on joint arrangements (IFRS 11 Joint Arrangements and IFRS 12 Disclosure of Interests in Other Entities) and the new requirements on consolidation (IFRS 10 Consolidated Financial Statements and IFRS 12 Disclosure of Interests in Other Entities), all published by the IASB in May 2011. The purpose of the field-testing is to identify potential implementation and application difficulty, and to estimate the effort required to implement and apply the new requirements. The findings of the field-testing will be used by EFRAG in developing its technical and its cost and benefit assessment of the new standards against the EU endorsement criteria. Click for: more information on the field testing of IFRS 11 and IFRS 12 (link to EFRAG website) more information on the field testing of IFRS 10 and IFRS 12 (link to EFRAG website)

14 September 2011: Norway and US regulators enter into a cooperative agreement

The Financial Supervisory Authority of Norway (Finanstilsynet) and the Public Company Accounting Oversight Board of the United States (PCAOB) have entered into a cooperative agreement, which "provides a basis for the resumption of joint inspections of PCAOB-registered accounting firms that are located in Norway and that audit, or participate in audits, of companies whose securities trade in U.S. markets". Also, the agreement includes provisions governing the sharing of confidential information between both regulators. Click for: PCAOB press release (link to PCAOB website) full text of the cooperative agreement (PDF 364k, link to Finanstilsynet website) Finanstilsynet press release (link to Finanstilsynet website, in Norwegian)

14 September 2011: New Zealand considers a new accounting standard framework

The New Zealand External Reporting Board (XRB) has released three documents outlining proposals for a new Accounting Standards Framework for New Zealand. The proposals include a multi-standard framework, where the standards to be applied would depend on the nature and classification of the entity. In summary terms, the new structure would operate as follows: For-profit entities. 'NZ IFRS', converged with International Financial Reporting Standards (IFRSs), supplemented by additional New Zealand specific standards, and harmonised as appropriate with Australia, applied as follows: 'Full NZ IFRS' for 'Tier 1' entities, with some entities, which will continue to be required to make an explicit and unreserved statement of compliance with IFRSs. This would apply to entities with public accountability, with some entities being 'deemed' to be publicly accountable 'Reduced Disclosure Requirements' (RDR) for 'Tier 2' entities, consistent with the approach adopted in Australia and replacing the existing New Zealand differential reporting framework. This would require the same recognition and measurement requirements as full NZ IFRS (Tier 1) but would allow reduced disclosures (and so would not result in New Zealand adopting the IFRS for SMEs) Public benefit entities (PBE). The establishment of a set of NZ PBE standards based on International Public Sector Accounting Standards (IPSAS) modified as appropriate for New Zealand circumstances and not-for-profit entities. The application of the standards would be based on a three tier structure, with the third tier (the smallest entities) using a simple reporting approach. The XRB proposes that the new for-profit framework be in place in time for it to be early adopted from 1 July 2012, the PBE framework so far as it applies to public sector entities be effective for financial years beginning on or after 1 July 2013, and the PBE framework for not-for-profit entities be effective for financial years beginning on or after 1 July 2014 (with early adoption allowed). The proposals for public benefit entities differ from that proposed by the antecedent Accounting Standards Review Board (ASRB) which suggested the adoption of IPSAS without modification. The consultation papers explain the change in approach as follows: The Discussion Document proposed that "pure" IPSAS be adopted as part of the PBE Accounting Standards. A key reason for this was to reduce standard setting costs. A number of respondents raised concerns about some technical aspects of IPSAS as well as the lack of standards on certain topics. The IPSAS Working Group also identified a small number of key technical areas that would need to be considered including the potential unsuitability of the IPSAS government business enterprise definition; the IPSAS definition of control; and the optional requirement to report heritage assets. Some respondents also expressed concerns about the IPSASB governance and funding arrangements... Given these factors, the XRB Board considers that it is premature to be confident that the risks surrounding the adoption of "pure" IPSAS have been adequately mitigated... The XRB Board will continue to monitor the development of IPSAS. A move to "pure" IPSAS is an aspiration over the longer term. The New Zealand Commerce Minister Simon Power has also announced complimentary proposals to simplify the financial reporting framework for small and medium-sized businesses and registered charities. Closing date for submissions on the XRB proposals is 16 December 2011. Click for: Access to the NZ XRB consultation documents (link to XRB website) New Zealand Commerce Minister Simon Power press release (link to NZ government website) Our New Zealand country page, with a history of developments in New Zealand financial reporting.

14 September 2011: Japanese standard setters reflect on 10 years of achievement, and the future

July 2011 marked the tenth anniversary of the establishment of the Japanese Financial Accounting Standards Foundation (FASF) and the Accounting Standards Board of Japan (ASBJ). The President of the FASF (Toshitaka Hagiwara) and Chairman of the ASBJ (Ikuo Nishikawa) have both written articles to commemorate the anniversary, in which they provide an assessment of the past achievements of the organisations, and commentary on the challenges going forward, including Japan's possible adoption of IFRSs. The retrospectives discuss Japan's convergence projects, the 'Tokyo Agreement' with the AASB, liaison with the IASB and FASB, role in establishing the Asian-Oceanian Standard-Setters Group (AOSSG), and other topics. Toshitaka Hagiwara (FASF President) made the following remarks (ASBJ translation): Although the current Japanese economic situation is severe, the accounting system as an infrastructure of the capital market is about to face a major turning point. The [Financial Services Agency] is deliberating the use of IFRSs in Japan and its outcome will have potentially significant effects both domestically and globally. This is an issue that our constituents need to collectively deal with in order to enhance global competitiveness of Japan. Ikuo Nishikawa (ASBJ Chairman) commented as follows (ASBJ translation): Given the current situation of the ongoing discussions on the use of IFRSs, the primary issue would be how to proceed with convergence of Japanese GAAP with IFRSs... If Japan wants to have the Japanese views incorporated into the IFRSs based on the consideration of what are the issues in implementing IFRSs, an approach that starts with converging Japanese GAAP with the IFRS would not suit such a purpose. To this end, we need to fully understand global trends, properly analyze the information, specify the issues to be delivered from Japan and then raise those issues to the IASB at an appropriate time. Success at the international negotiation table depends on strong support by domestic constituents. Click for: Full text of comments by the FASF President (link to ASBJ website) Full text of comments by the ASBJ Chairman (link to ASBJ website) Our Japan country page.

13 September 2011: Updated IAS 34 compliance checklist

Deloitte's IFRS Global Office has published an updated checklist of the requirements of IAS 34 Interim Financial Reporting, formatted to allow the recording of a review of interim financial statements, with a place to indicate yes/no/not-applicable for each item. The checklist addresses the requirements of IAS 34 at 30 June 2011. Click for: IAS 34 Compliance Checklist 2011 (PDF 88k) IAS 34 Compliance Checklist 2011 (MS Word Version, Zipped 78k) IAS 34 Compliance Checklist 2011 (Excel Version, 80k)

13 September 2011: GRI and ISO co-operate on sustainability

The Global Reporting Initiative (GRI) and the International Organization for Standardization (ISO) have signed a Memorandum of Understanding (MoU) to increase their co-operation on sustainability matters. GRI has developed a widely used sustainability reporting framework ("G3.1", with work commenced on the fourth generation guidelines, "G4"). GRI also participated in the development of ISO 26000 Social Responsibility, published by the ISO in November 2010. The MoU is intended to leverage the activities of the two organisations related to reporting and benchmarking by business and on sustainable development by sharing information on ISO standards and GRI programs, teaming up with other partners, participating in the development of new or revised documents, joint promotion and communication. Click for GRI press release (link to GRI website).

12 September 2011: Notes from the second day of the September IFRS Interpretations Committee meeting

The IFRS Interpretations Committee met in London on 9 September 2011 for the second day of its scheduled meeting. The topics discussed were as follows (click through to detailed Deloitte observer notes for that topic): Friday 9 September 2011 New items for initial consideration (continued from 8 September meeting) IAS 7 Statement of Cash Flows — Classification of cash payments for deferred and contingent consideration IAS 12 Income Taxes — Clarification of circumstances in which presumption of manner of recovery of investment property can be rebutted IAS 12 Income Taxes — Recognition of deferred tax for single assets in a corporate entity IAS 16 Property, Plant and Equipment — Recognition of insurance recoveries IFRS 10 Consolidated Financial Statements — Transitional requirements Administrative Session Click here to go to the preliminary and unofficial Notes Taken by Deloitte Observers for the entire meeting.

12 September 2011: Agenda for the regular September IASB meeting

The IASB's regular monthly meeting is scheduled for 19-22 September 2011 in London, part of it a joint meeting with the FASB. Set out below is the agenda for the meeting (links are our project summary for each topic). Times are shown in London time (GMT+1). IASB Board Meeting Agenda 19-22 September 2011, London Monday, 19 September 2011 IASB-FASB Joint Meeting (13:15-19:00) Leases Insurance Contracts Tuesday, 20 September 2011 IASB Meeting (09:45-17:45) Accounting for Stripping Costs in the Production Phase of a Mine Board approval of IFRIC 20 Accounting for Put Options Written over Non-controlling Interests IFRS Interpretations Committee – Update from last meeting Asset and Liability Offsetting Financial instruments – Hedge accounting Wednesday, 21 September 2011 IASB-FASB Joint Meeting (12:30-17:45) Leases Financial Instruments – Impairment Thursday, 22 September 2011 IASB Meeting (08:30-15:30) Annual Improvements to IFRSs – 2010-2012 IFRS 2 Share-based payment – Review of the requests received by the IFRS Interpretations Committee in relation to IFRS 2 IFRS 1 First-time Adoption of IFRSs – Review of a request received by the IFRS Interpretations Committee IFRS 8 Operating Segments – Review of a request received by the IFRS Interpretations Committee Financial instruments – Hedge accounting Macro Hedge Accounting

12 September 2011: IIRC issues Discussion Paper on Integrated Reporting, proposes a new approach to corporate reporting

The International Integrated Reporting Committee (IIRC) today released a Discussion Paper Towards Integrated Reporting – Communicating Value in the 21st Century. The IIRC seeks to bring together world leaders from the corporate, investment, accounting, securities, regulatory, academic, civil society and standard-setting sectors to develop a new approach to reporting. The Discussion Paper is the first step in the development of an 'International Integrated Reporting Framework', with an exposure draft expected to be published in 2012. It seeks to build on existing developments in reporting such as the international convergence of accounting standards, sustainability guidance published by organisations such as the Global Reporting Initiative (GRI), and the IASB's IFRS Practice Statement Management Commentary. Integrated reporting aims to combine the different strands of reporting (financial, management commentary, governance and remuneration, and sustainability reporting) into a coherent whole that explains an organisation's ability to create and sustain value. The focus of an Integrated Report would be a broader explanation of performance than traditional reporting, by describing and measuring where practicable, the material components of value creation and, more importantly, demonstrating the links between an organisation's financial performance and the social, environmental and economic context in which it operates. The IIRC believes an Integrated Report should be an organisation's primary reporting vehicle, replacing rather than adding to existing requirements. Under the IIRC's vision, much information currently produced (including detailed financial reporting information, operational data and sustainability information) would move to an online environment enabled by technology, reducing clutter in the primary report so that report can focus only on the matters the organisation considers most material to long-term success. The table below provides an overview of the proposed Framework: The IIRC's Proposed International Integrated Reporting Framework GUIDING PRINCIPLES The following guiding principles would underpin the preparation of an Integrated Report: Strategic focus – providing insight into the organisations' strategic objectives, and how those objectives relate to its ability to create and sustain value over time and the resources and relationships on which the organisation depends Connectivity of information – shows the connections between the different components of the organisation's business model, external factors that affect the organisation and its performance depend Future orientation – management's expectations about the future, as well as other information to help report users understand and assess the organisation prospects and the uncertainties it faces Responsiveness and stakeholder inclusiveness – insight into the organisation's relationships with its key stakeholders and how and to what extent the organisation understands, takes into account and responds to their needs Conciseness, reliability and materiality – providing concise, reliable information that is material to assessing the organisation's ability to create and sustain value in the short, medium and long term. CONTENT ELEMENTS The guiding principles should be applied in determining the content of an Integrated Report, based on the following key elements: Organisational overview and business model – the organisation's mission, principal activities, markets, products and services, it's business model, value drivers and critical stakeholder dependencies, and its attitude to risk Operating context, including risks and opportunities – a more in-depth description of material issues, the process for determining which issues it considers material, and how the material issues affect the organisation's ability to create and sustain value over time Strategic objectives and strategies to achieve those objectives – risk management arrangements related to key resources and relationships, linkages and what makes the organisation unique and able to realise value in the future, such as the extent to which sustainability considerations have been embedded into its strategy and give it a competitive advantage Governance and remuneration – the organisation's governance structure, how it supports the strategic objectives of the organisation and relates to the organisation's approach to remuneration Performance – a concise and connected assessment of how the organisation has performed against its strategic objectives and related strategies, including KPIs, organisational impacts (both positive and negative) on resources and relationships, and significant external factors impacting performance Future outlook – opportunities, challenges and uncertainties the organisation is likely to encounter in achieving its strategic objectives and the resultant implications for its strategies and future performance. RESOURCES AND RELATIONSHIPS – THE "CAPITALS" In order to assist in understanding the concepts underlying the Discussion Paper, it contains the following example resources and relationships that can be conceived as different forms of "capital": Financial capital – pool of funds available to produce goods and provide services, obtained through financing or generated through operations or investments Manufactured capital – manufactured physical objects, e.g. buildings, equipment and infrastructure Human capital – people's skills and experience and their motivations to innovate Intellectual capital - intangibles that provide competitive advantage including intellectual property, brand and reputation Natural capital – an organisation's activities may impact positively or negatively on natural capital such as water, land, minerals and forests, and biodiversity and eco-system health Social capital - institutions and relationships established within and between each community, group of stakeholders and other networks to enhance individual and collective well-being. The Discussion Paper notes the development of Integrated Reporting will require a change in established thinking about decision making and reporting, and identifies regulatory change as one of many challenges. The IIRC is conducting a two-year pilot programme, commencing in October 2011, to test and further develop the International Integrated Reporting Framework (see our earlier story). If, and until, Integrated Reporting is the primary report for all organisations, the report outlines a number of possible alternate pathways to integrated reporting, including combining the sustainability report with the management commentary or the full annual report, publishing a separate integrated report, modifying sustainability reports or adopting integrated reporting internally to underpin management information. The IIRC is calling for comments on the Discussion Paper to be submitted by 14 December 2011. Click for: Access to the Discussion Paper (link to IIRC website) IIRC press release (link to IIRC website) Our sustainability reporting page, which includes a history of the IIRC and integrated reporting.

9 September 2011: Notes from the first day of the September IFRS Interpretations Committee meeting

The IFRS Interpretations Committee met in London on 8-9 September 2011. We have posted Deloitte observer notes from the topics discussed on the first day of the meeting, as follows (click through for direct access to the notes for that particular topic): Thursday 8 September 2011 IAS 37 Provisions, Contingent Liabilities and Contingent Assets and IFRIC 6 Liabilities arising from Participating in a Specific Market – Waste Electrical and Electronic Equipment – Use of IFRIC 6 by analogy Review of Tentative Agenda Decisions published in July IFRIC Update IFRS 3 Business Combinations — Business combinations involving newly formed entities: factors affecting identification of the acquirer IFRS 3 Business Combinations — Business combinations under common control IFRS 3 Business Combinations — Acquirer in a reverse acquisition Agenda decision framework / content — Whether a framework should be developed for drafting agenda decisions given wording concerns raised IAS 27 Consolidated and Separate Financial Statements — Group reorganisations in separate financial statements Items for continuing consideration IFRS 8 Operating Segments — Aggregation of operating segments and identification of the chief operating decision maker IFRS 3 Business Combinations — Definition of a business IFRS 11 Joint Arrangements — Acquisition of an interest in a joint operation New items for initial consideration IFRS 1 First-time Adoption of IFRSs — Transition requirements relating to government loans Note that a late change was made to the agenda to include the discussion on IFRS 8. Deloitte observer notes from Friday (continuing the discussion of new items for initial consideration) will be posted soon. Click here to go to the preliminary and unofficial Notes Taken by Deloitte Observers for the meeting.

9 September 2011: EFRAG draft comment letter on IASB's exposure draft on the mandatory effective date of IFRS 9

The European Financial Reporting Advisory Group (EFRAG) has issued its draft comment letter on the IASB Exposure Draft Mandatory Effective Date of IFRS 9. In this draft letter, EFRAG agrees that there should be a delay in the effective date of IFRS 9 Financial Instruments, but expresses concern about the revised effective date of 1 January 2015. Below is an excerpt from the draft letter: EFRAG believes that, rather than setting a fixed effective date, it would be more appropriate to allow entities at least three years to implement IFRS 9 after the completion of all phases of IFRS 9 and the standard on insurance contracts. We believe that not requiring restatement of comparative information in the first year of application of IFRS 9 would be an inappropriate alternative to setting a proper effective date in the first place. EFRAG is seeking comments on its draft letter by 17 October 2011. Click for: EFRAG draft comment letter (link to EFRAG website) EFRAG press release (link to EFRAG website) Our Financial Instruments – Effective Date of IFRS 9 project page

9 September 2011: Upcoming Canadian IFRS webcast

Deloitte (Canada) is hosting a IFRS quarterly technical update webcast in late September. One of a series of quarterly updates with a focus on combining technical knowledge with practical experience, the webcast will discuss some of those IFRS requirements that are effective for 2011 as well as a review of recently and soon to be issued IFRSs, changes to the IASB project plan, and an update on regulatory matters. Full details of the webcast are provided below: Topic: Moving ahead in an IFRS world — 2011 IFRS third-quarter technical update Date and time: Tuesday, 27 September 2011 at 2:00pm-3:30pm Eastern Time (GMT-05:00) More information: Click Here Registration: Click Here

9 September 2011: 2011 IFRS 'Green Book' – Coming Soon

The IFRS Foundation has announced that A Guide through IFRS July 2011 will be available in October 2011. This volume (nicknamed the "Green Book") will include the full text of the Standards and Interpretations and accompanying documents (such as the Basis for Conclusions) issued by the IASB as at 1 July 2011 with extensive cross-references and other annotations. This edition does not contain documents that are being replaced or superseded but remain applicable if a reporting entity chooses not to adopt the newer versions early. Accordingly, this edition will include new standards such as IFRS 10 Consolidated Financial Statements and IFRS 11 Joint Arrangements, but will not contain IAS 31 Interests in Joint Ventures. The Green Book will sell for £90 plus shipping for the two book set (academic, developing country, and volume discounts apply). You will find more information and ordering details here.

8 September 2011: IASB effect analyses for IFRS 10 and IFRS 11

The IASB has posted to its website effect analyses for IFRS 10 Consolidated Financial Statements (including IFRS 12 Disclosure of Interests in Other Entities) and IFRS 11 Joint Arrangements (see our earlier story for more information about the effects analysis for IFRS 11). The effect analyses provide detailed insights into the potential impacts of the new requirements using case studies and other quantitative and qualitative material. They include an assessment of both the costs incurred by preparers of financial statements and the costs incurred by users of financial statements when information is not available. The analyses also consider the comparative advantage that preparers have in developing information that users would otherwise have to develop themselves. The effects analysis for IFRS 10 includes the following observations: IFRS 10 does not introduce new concepts, but instead builds on the control guidance that existed in IAS 27 and SIC-12 by adding additional context, explanation and application guidance that is consistent with the definition of control. Accordingly, at a very basic level, most consolidation decisions should be unaffected by the new consolidation model in IFRS 10 IFRS 10 will change the way in which control of structured entities is assessed, by focusing on all three elements of control (power, exposure or rights to variable returns and ability to use power to affect returns), rather than on risks and rewards which sometimes was the case when applying SIC-12. This may result in the consolidation of some entities previously 'off balance sheet' due to the brighter lines in IAS 27 and SIC-12 The IASB believes that although IFRS 10 contains an explicit requirement to continually assess control, it will not be necessary to constantly monitor and track changes in each factor that might affect control, as the circumstances that will trigger a reassessment should be obvious to the entity. The IFRS 10 analysis also provides a number of examples illustrating where the Standard may have an effect, grouped into examples where diversity in practice exists under IAS 27 and SIC-12 or where the control assessment relied on 'bright lines'. The examples include control without a majority of voting rights, investees previously within the scope of SIC-12, agency relationships and potential voting rights. Please click for: IASB announcement (link to IASB website) Effect analysis for IFRS 10 and IFRS 12 (link to IASB website) Effect analysis for IFRS 11 (link to IASB website) IAS Plus summary of IFRS 10 IAS Plus summary of IFRS 11 IAS Plus summary of IFRS 12

8 September 2011: GRI calls for input into sustainability reporting guidelines and first country annex

The Global Reporting Initiative (GRI) has called for comments on the proposed 'fourth generation' of its Sustainability Reporting Guidelines ("G4") and the first version of GRI's Guidelines tailored specifically for a country. The GRI's 'Sustainability Reporting Framework' includes Sustainability Reporting Guidelines, which are currently in their third version ("G3" and an updated "G3.1") and can be followed by entities in preparing sustainability reports. Annexes and supplements provide guidance in particular areas. The G4 guidelines are expected to address new requirements for sustainability data, and improve on the content in the current G3 and G3.1 guidelines with strengthened technical definitions and improved clarity (see our earlier story). The initial 'public comment period' on the G4 guidelines invites feedback, through an online survey, on the inclusion of proposed sustainability topics, and the potential shape of G4. The survey runs for 90 days and closes on 24 November 2011. GRI has also published a 'Brazilian National Annex' for public comment, the first version of GRI's Guidelines that is tailored specifically for a country. The deadline for submission of feedback on the National Annex is 25 October 2011. The GRI also supports the International Integrated Reporting Committee (IIRC) which is developing proposals for an integrated reporting framework. The IIRC is expected to publish a Discussion Paper in the near future. Click for: More information about the G4 survey (link to GRI website) More information about the Brazilian National Annex (link to GRI website) Our sustainability reporting page.

7 September 2011: Our summary of new and revised accounting pronouncements

We've updated our summary of new and amended pronouncements document to provide a high level overview of new and revised accounting pronouncements that should be considered for financial reporting periods ending on or after 30 September 2011. The resource provides a brief summary of each pronouncement, and indicates whether it must be mandatorily applied for the first time at 30 September 2011, or whether it may be optionally applied, for various quarter ends. This information can be used to ensure that all new financial reporting requirements have been fully considered in the reporting close process. The information reflects developments to 31 August 2011 and will be updated through to December 2011, after which we'll produce an edition for December 2011 reporting. We'll include a permanent link to the most recent edition of the resource in the left-hand panel of our home page. This summary is also available for financial reporting periods ending on 30 June 2011.

6 September 2011: IFRS in Focus newsletter describes the recent IASB exposure draft on investment entities

Deloitte's Global Office has issued IFRS in Focus — IASB issues exposure draft on investment entities (PDF 88k). The IFRS in Focus newsletter provides an overview of the IASB's Exposure Draft ED/2011/4 Investment Entities, which proposes to define 'investment entities' as a separate type of entity that would be exempt from the consolidation accounting requirements in IFRS 10 Consolidated Financial Statements. See also our earlier story on the exposure draft.

6 September 2011: Hong Kong and mainland China update declaration on converged auditing standards

The Chinese Institute of CPAs and the Hong Kong Institute of CPAs (HKICPA) have signed a joint declaration which promises the ongoing convergence of auditing standards between the Chinese mainland and Hong Kong. The (then) China Auditing Standards Board and the Hong Kong Institute of CPAs had previously signed a joint declaration on the convergence of auditing standards on 6 December 2007 (see our earlier story). Since the time of signing the original declaration, the International Auditing and Assurance Standards Board (IAASB) has issued new standards arising from its clarification project. The Hong Kong Institute of CPAs issued equivalent standards in June 2010 and the Chinese Institute of CPAs completed a revision of China Auditing Standards in November 2010. The Institutes believe the only difference between the Hong Kong and mainland standards is an additional standard included in the revised China Auditing Standards about communication between predecessor and successor auditors. This reflects specific requirements and circumstances in mainland and does not conflict with the clarified Hong Kong Auditing Standards. Click for press release (link to HKICPA website).

5 September 2011: Deloitte comment letter on IASB's annual improvements proposals

Deloitte's IFRS Global Office has submitted a letter of comment on IASB Exposure Draft ED/2011/2 Improvements to IFRSs. We welcome the IASB's continuing efforts to deal with certain amendments to IFRSs in an efficient and effective manner and are pleased to note that the proposed amendments address discrete areas where differences in interpretation or possible conflicts between IFRSs have been identified. The following is an excerpt from the letter: We are generally in agreement with the intentions of the proposed amendments, but are concerned that some amendments (in particular, those to IFRS 1 First-time Adoption of International Financial Reporting Standards) may have unintended consequences. These unintended consequences arise principally from ambiguous drafting which... include inconsistencies between the Basis of Conclusions and the actual wording of the amendment. In addition, we note that the amendments introduce a number of terms (for example, 'required comparative period' and 'additional comparative information') for which a formal definition is not provided. This could also contribute to a lack of clarity over the scope and effect of the proposed amendments. The use of clearly defined terms will become more important as IFRSs are applied in new jurisdictions as terms in common use in one jurisdiction may be unfamiliar in another and also because any lack of clarity is likely to be exacerbated upon translation of IFRSs into another language. Comments on ED/2011/2 close on 21 October 2011. Click for our Comment Letter on ED/2011/2 (PDF 42k). All of our past comment letters are here.

2 September 2011: Australian court case sheds light on directors' responsibilities for compliance with Accounting Standards

The Federal Court of Australia has handed down penalty orders in a case involving financial reporting issues (the 'Centro case'). The penalty orders follow on from an earlier decision on 27 June 2011 where the Court found directors had breached their duties when they signed off on financial reports that failed to disclose significant matters. The Centro case includes allegations brought by the Australian Investments and Securities Commission (ASIC) over two financial reporting matters: the classification of liabilities (between current and non-current) and the disclosure of guarantees given. Under the Australian Corporations Act 2001, financial statements are required to comply with Australian Accounting Standards (equivalent to IFRSs) and directors are required to approve the financial statements. Accordingly, non-compliance with Accounting Standards or the approval processes is a contravention of the law. In the most recent judgement, the Court refused the directors' applications to be exonerated from their contraventions and made declarations that all directors and the Chief Financial Officer contravened the law. The Centro case considered the obligations of directors in relation to Australian financial reporting, including the extent to which directors can rely on management and external advisers, the degree of financial literacy required of directors, and the approval process for financial statements. It has been the matter of considerable debate in Australia. Click for ASIC announcement (link to ASIC website).

1 September 2011: FRC acts to increase transparency in corporate reporting

Further to our earlier story, the UK's Financial Reporting Council (FRC) has held discussions over the last six months with companies, investors, auditors and other interested parties following the release of its discussion paper, Effective Company Stewardship: Enhancing Corporate Reporting and Audit, in January 2011. The FRC has recently issued two additional reports following these discussions. The first, Boards and Risk: A Summary of Discussions with Companies, Investors and Advisers, summarises these discussions held over the last six months. The second, Effective Company Stewardship: Next Steps, outlines the responses received by the FRC to its original discussion paper and summarises the future actions that the FRC intends to take. In these reports, the FRC notes that there is one common issue to be addressed: "audit is not meeting user and/or public expectations and . . . there is a need for greater transparency about the judgements made by management and auditors in the course of preparing and auditing financial statements". Click for (all links to FRC website): FRC press release Boards and Risk: A Summary of Discussions with Companies, Investors and Advisers Effective Company Stewardship: Next Steps

1 September 2011: IFRS for SMEs news

Recent developments concerning the IFRS for SMEs include the following: The IFRS for SMEs has been adopted in Mauritius and a new training module and new translations are available. IFRS for SMEs adopted: In July 2011, the Parliament of Mauritius adopted amendments to the Companies Act 2001 to permit the following classes of companies to use the IFRS for SMEs as issued by the International Accounting Standards Board (IASB): a private company, other than a small private company, or public company, which does not qualify as a public interest entity as defined in the Financial Reporting Act; and any group of companies which does not qualify as a public interest entity under the Financial Reporting Act. According to Finance Bill 2009 enacted in February 2010 small state owned companies were already allowed to use the IFRS for SMEs. Please click for Act No. 20 of 2011 containing the July 2011 amendments (link to Mauritius Parliament website). IFRS for SMEs training modules: The IFRS Foundation Education Initiative has developed a training module for Section 2 of the IFRS for SMEs Concepts and Pervasive Principles. Ultimately, the IFRS for SMEs training material will include 35 stand-alone modules – one for each section of the IFRS for SMEs. Currently, 24 modules are available. Please click for access to all training modules on the IASB's website. IFRS for SMEs translated: Macedonian and Polish translations of the IFRS for SMEs have been completed and available for free download on the IASB's website. Translation into the following languages are still in process: Albanian, Hebrew, Japanese, Kazakh, Khmer, Mongolian, Serbian, Ukrainian.