Proposed international standard on compilation engagements

29 Oct, 2010

The International Auditing and Assurance Standards Board (IAASB) has proposed a new proposed pronouncement – International Standard on Related Services (ISRS) 4410 Compilation Engagements.

The proposed standard is the first step in the IAASB'S work to create robust standards for services that can be used by entities that are either not required or do not elect to be audited to meet their business reporting needs.

Click here for IAASB Press Release (IFAC website), which includes a link to download the proposal. Comments are due by 31 March 2011.

Proposals for a three-tier reporting framework in the UK

29 Oct, 2010

The UK Accounting Standards Board (ASB) has published its proposals for the future of financial reporting in the UK and Republic of Ireland.

The Exposure Drafts set out proposals for a three-tier reporting framework, which aims to balance the needs of preparers and users of accounts.

The proposed three-tier approach, which has been developed and consulted on over the past six years, builds on the existing system:

  • Tier 1 – Quoted groups will continue to report under international financial reporting standards (IFRS), as adopted by the EU. They would be joined in Tier 1 by other companies that are publicly accountable. This would apply if their debt is traded on public markets, or if they hold deposits or manage other people's money. (Some very small financial institutions would be exempt.)
  • Tier 2 – All other UK entities, except those that apply the Financial Reporting Standard for Smaller Entities (FRSSE), would report under a new standard based on the IFRS for SMEs, which is considerably shorter and less complicated than current UK standards. The FRSME, as it would be called, would be modified to comply with UK and EU law and to ease tax reporting.
  • Tier 3 – The smallest companies will continue to use the simplified version of UK standards, the FRSSE.

The consultation period will run until 30 April 2011. It is proposed that the new framework would be effective from 1 July 2013.

The document published today includes an explanation of the proposals, a draft Impact Assessment and the two new proposed standards. Click for:

New editorial corrections to IFRSs

29 Oct, 2010

The IASB has posted to its website a new batch of Editorial Corrections to IFRSs.

This batch includes editorial corrections and changes to IFRS for SMEs (issued July 2009), IFRS 9 Financial Instruments (issued November 2009), Bound Volume (Red Book) 2010, Bound Volume (Blue Book) 2010, Improvements to IFRSs (issued May 2010) and IFRS 7 Financial Instruments: Disclosures – Transfers of Financial Assets (issued October 2010).
Click for Editorial Corrections to IFRSs.


IASB issues additions to IFRS 9 for financial liability accounting

28 Oct, 2010

The International Accounting Standards Board (IASB) has today issued requirements on the accounting for financial liabilities.

These requirements will be added to IFRS 9 Financial Instruments and complete the classification and measurement phase of the IASB's project to replace IAS 39. They follow the IASB's November 2009 issue of IFRS 9, which prescribed the classification and measurement of financial assets.

The new requirements address the problem of volatility in profit or loss arising from an issuer choosing to measure its own debt at fair value. This is often referred to as the 'own credit' problem. The IASB decided to maintain the existing amortised cost measurement for most liabilities, limiting change to that required to address the own credit problem. With the new requirements, an entity choosing to measure a liability at fair value will present the portion of the change in its fair value due to changes in the entity's own credit risk in the other comprehensive income (OCI) section of the income statement, rather than within profit or loss.

IFRS 9 applies to financial statements for annual periods beginning on or after 1 January 2013. Entities are permitted to apply the new requirements in earlier periods, however, if they do, they must also apply the requirements in IFRS 9 that relate to financial assets.

Click for:


Agenda for 4-5 November 2010 Interpretations Committee meeting

28 Oct, 2010

The IFRS Interpretations Committee meeting is scheduled for 4 and 5 November 2010 in London (morning only on 5 November and only if needed).

You can access the agenda on our November 2010 IFRIC meeting page. We will also post Deloitte observer notes on this page as they are available.

Public consultation on country-by-country reporting

27 Oct, 2010

The European Commission is conducting a public consultation in order to gather stakeholders' views on country-by-country reporting by multinational companies. Country-by-country reporting is a concept that would require multinational companies to disclose financial information on their operations in third countries in their annual financial statements.

At present, issuers of securities in regulated markets in the EU are required to make public an annual financial report comprising, inter alia, a management report and the audited financial statements. When the issuer is required to prepare consolidated accounts, the audited financial statements must comprise consolidated accounts drawn up accordance with international accounting standards (IFRS). Currently, the applicable accounting standards do not require issuers to disclose financial information on a country-by-country basis in their consolidated accounts, although the Accounting Directives do require issuers to identify subsidiaries, jointly controlled entities and associates.

The IASB is currently working on a possible country-by-country reporting requirement which could be incorporated within a replacement Standard for IFRS 6 Exploration for and Evaluation of Mineral Assets. Once finalized, this standard is likely to become mandatory in the EU through the usual endorsement process under the IFRS Regulation.

The questionnaire for the consultation includes the following questions:

  • Would it be useful to have common EU rules on the disclosure of financial information on a country-by-country basis?
  • Would the disclosure of financial information on a country-by-country basis by multinational companies be meaningful to investors of the company concerned?
  • [...]
  • Would the disclosure of financial information on a country-by-country basis by multinational companies active in the extractive sector (e.g. minerals, oil, natural gas, etc.) be useful in order to improve domestic accountability and governance in natural resource-rich third countries?
  • [...]
  • If country-by-country reporting were to be considered useful, what kind of multinational companies would usefully be targeted?
  • Please provide information on the cost that you estimate that the introduction of country-by-country disclosure requirements could entail.

The questionnaire of the European Commission can be accessed here (link to EC website). Responses must be received by 22 December 2010.

Notes from special October IASB meeting

27 Oct, 2010

The IASB met in London on 27 October 2010 for a special meeting.

The topics discussed were as follows:

Click here to go to the preliminary and unofficial Notes Taken by Deloitte Observers for the entire meeting. The next IASB meeting will be a three day special meeting on Financial Instruments: Impairment scheduled for 10-12 November 2010.

New issue of the IASB's Investor Perspectives

27 Oct, 2010

In April 2010, the Trustees of the IFRS Foundation and the IASB launched a programme to enhance investors' participation in the development of International Financial Reporting Standards (IFRSs).

One of the enhancements is a newsletter for investors. Board members Stephen Cooper, Patrick Finnegan and Patricia McConnell publish timely updates on financial reporting matters. A new issue of the Investor Perspectives is now available:

All Investor Perspectives are archived on the IASB's website.

IASB webcast on leases exposure draft

27 Oct, 2010

On Monday 1 November, the IASB staff will be hosting a live webcast on common questions the staff are asked about the lease accounting proposals.

There is no charge to attend the web presentation, but you need to register to participate. You can do this now or any time before the presentation. Details of the webcast are as follows:
Topic: Common questions about the lease accounting proposals
Date and time: Monday, 1 November 2010, 10:00am and repeated again 3:00pm (UK time)
More information on the webcast and registration: click here (link to IASB website)
More information on IAS Plus: For our agenda project page click here


Trustee review of the IFRS Interpretations Committee

26 Oct, 2010

The IFRS Foundation Trustees' Due Process Oversight Committee is carrying out a review of the Interpretations Committee (formerly known as IFRIC) in order to assess its effectiveness.

The Trustees are seeking input into their review by means of a questionnaire, which covers the following matters:

  • Objectives and scope of activities of the Interpretations Committee
  • Membership
  • Operating procedures
  • Agenda criteria
  • Outputs from the Committee
  • Communications
  • Leadership
  • Interaction with the IASB.

The closing date for completion of the questionnaire is 31 January 2010. The Trustees are expected to publish a report from their review of the Interpretations Committee in the first half of 2011.

Click for:


Correction list for hyphenation

These words serve as exceptions. Once entered, they are only hyphenated at the specified hyphenation points. Each word should be on a separate line.