IFAC proposes tweaks to its membership obligations in respect of international standards

08 Dec, 2011

The Board of the International Federation of Accountants (IFAC) has released for public comment proposed revisions to its Statements of Membership Obligations (SMOs).

IFAC member bodies are required to comply with the SMOs by the IFAC Constitution, and SMOs form the basis of the IFAC Member Body Compliance Program. They serve as a framework for professional accountancy organisations focused on serving the public interest by adopting, or otherwise incorporating, and supporting implementation of international standards and maintaining adequate enforcement mechanisms to ensure the professional behavior of their individual members.

The SMOs include obligations on IFAC member bodies to identify and undertake actions to have the following adopted and implemented in their jurisdictions:

  • International Financial Reporting Standards (IFRSs), in respect of at least public interest entities
  • International Public Sector Accounting Standards (IPSASs).

Responsible parties are also encouraged to consider the use of the IFRS for SMEs in relation to non-public interest entities. In jurisdictions where English is not an official or widely used language, member bodies are also required to use best endeavours to establish or support processes for translations of international standards, and exposure drafts to the extent practicable.

The amendments proposed clarify these (and other) obligations by providing guidance on how member firms are required to respond in light of the type of influence the member body has in the standard setting process. The proposals would revise the terminology used from "incorporation" of international standards to "adoption and implementation".

Comments on the proposals are due by 5 March 2011. Click for IFAC press release (link to IFAC website).

IASB releases agenda for its December meeting

07 Dec, 2011

The IASB will be holding its December 2011 meeting on 13-16 December 2011, much of it a joint meeting with the FASB.

You can access the agenda on our December 2011 IASB meeting page.  We will also post Deloitte observer notes on this page as they are available.

FASB and IASB chairs discuss global accounting standards

07 Dec, 2011

At the AICPA National Conference on Current SEC and PCAOB Developments, FASB Chairman Leslie Seidman and IASB Chairman Hans Hoogervorst discussed global accounting standards and the possible future endorsement of IFRSs by the US Securities and Exchange Commission (SEC).

Ms Seidman spoke first, summarising the points of the FAF comment letter to the SEC in which it expresses "strong support for IFRS becoming the foundation for future accounting standards, but also offers constructive suggestions to mitigate the transition risks that have been identified". On the topic of convergence, Ms Seidman echoed comments made by Mr Hoogervorst at a recent IFRS conference in Australia in saying "the side-by-side convergence model is not the optimal model in the long run".

In discussing the approach the United States may take to the adoption of IFRS in more detail, and the FASB's ongoing role, Ms Seidman made the following comments:

We always are going to need a nimble, responsive body to address important matters in the U.S. In cases where other countries share the issue, we would hope to convince the IASB or IFRIC to take up the issue and then participate in the process. But, if they don’t, we would address the issue for the U.S., and then the IASB could later consider the standard for broader use.

There are a couple of things to think about here. The IASB is in the process of a global agenda consultation, which has been long awaited by many parts of the world. We would expect the IASB to add projects to address those regional concerns. Second, many parties are calling for a period of calm to allow them to transition to the new standards, and for the IASB to focus on the Conceptual Framework for the next few years. But I have yet to experience a period of calm as an accountant in the U.S., and I expect pressing matters to continue to emerge that require our prompt attention. So you can think of this as a safety net if you like, but something that is very important in our culture.

In his speech, Mr Hoogervorst noted that the endorsement of IFRSs is used in most parts of the world, but he noted "there should be a clear timeline for the completion of the initial 'endorsement process'" in the US. He also raised the participation of national standards setters in the IASB's due process, noting "more institutional arrangement for engaging national standard-setters and regional bodies concerned with accounting standards is needed".

Mr Hoogervorst also discussed the possibility of allowing US companies the option of adopting IFRS, noting that certain US companies were already calling for "a single set of high quality standards and IFRSs being the most effective means to accomplish that objective". Mr Hoogervorst continued:

Companies like these have been leading the way in terms of consolidating and coordinating their international financial reporting. I think providing a limited number of such US companies with the option to use IFRSs for their US consolidated financial reporting would offer a good test of IFRSs.

I know that there are inevitable concerns about having two GAAPs in the US marketplace. However, if the major competitors of such companies are using IFRSs, comparability will actually increase. Comparability could be further assured if those competitors were foreign private issuers in the US, already subject to SEC review.

From a global perspective, such a limited and early option to use IFRSs would provide a clear signal of a US commitment to IFRSs.

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Deloitte IFRS podcast on integrated reporting

07 Dec, 2011

A new Deloitte podcast is available.

Nick Main, Deloitte Global Leader, Sustainability & Climate Change Services and Robert Bruce discuss the concept of 'integrated reporting' and the International Integrated Reporting Council's (IIRC) Discussion Paper Towards Integrated Reporting – Communicating Value in the 21st Century.

Nick discusses the key changes proposed and provide insights into what integrated reporting is all about. The podcast is available for download here (18:30 mins 8 mb) or via iTunes; it is one of a series that will be posted to IAS Plus.

Deloitte comment letter on the IFRS Interpretations Committee's tentative decision

05 Dec, 2011

Deloitte's IFRS Global Office has submitted a letter of comment to the IFRS Interpretations Committee on its tentative decision not to take onto the Committee's agenda requests for Interpretations of IAS 19, Employee Benefits, with respect to providing guidance on the classification of 'Altersteilzeit' (ATZ) plans under the revised version of IAS 19 issued in June 2011.

The following is an excerpt from the letter:

Although we understand that ATZ plans are entered into by employers to facilitate an orderly transition from older to younger workers and as such are intended as a form of termination benefit, we agree with the Committee's conclusion that the bonus payments they offer do not meet the definition of termination benefits under the revised version of IAS 19 because they are conditional upon completion of a period of service.

Click for our Comment Letter on the IFRS Interpretations Committee's tentative decision.

ESMA hosts meeting of regulators to discuss IFRS

05 Dec, 2011

On 1-2 December 2011, the European Securities and Markets Authority (ESMA) hosted a meeting of accounting enforcers from around 30 countries to discuss International Financial Reporting Standards (IFRS), enforcement systems and enforcement decisions.

In addition to representatives from national enforcers, representatives of the International Accounting Standards Board (IASB), International Auditing and Assurance Standards Board (IAASB), the European Commission and the International Organization of Securities Commission Organizations (IOSCO) participated in the meeting.

In a press release discussing the outcomes of the meeting, Steven Maijoor, ESMA chair, noted:

"IFRSs are global standards of which the ultimate success depends on their worldwide consistent application. Our experience in Europe has shown that this can only be achieved by bringing national enforcers together. There is a clear need to extend that cooperation on a global level, and ESMA is actively contributing to this."

ESMA periodically publishes extracts from the enforcement database of European Enforcers Coordination Sessions (EECS), a forum in which all EU National Enforcers of financial information meet to exchange views and discuss experiences of enforcement of IFRS. IOSCO is also involved in efforts to promote comparability and consistency of application and enforcement of IFRSs.

Global consistency in the application of IFRSs is a key theme. For instance, the recent SEC Staff Papers on IFRS also discussed this aspect, noting "diversity in the application of IFRS presented challenges to the comparability of financial statements across countries and industries".

Click for ESMA press release (link to ESMA website).

IFRS Foundation translation update

03 Dec, 2011

The IFRS Foundation has announced the publication of additional translations of its pronouncements into Arabic, Spanish and Mongolian.

The new translations are:

  • Arabic translation of the 2011 Red Book International Financial Reporting Standards (IFRSs). The translation can be accessed via the eIFRS site (eIFRS subscribers only) or in printed format from the IASB bookshop
  • Spanish translation of unaccompanied International Financial Reporting Standards 2011. The Spanish translations are available on the IASB's Official IFRS translations page (free registration required, available here)
  • Spanish translation of the Basis for Conclusions and Implementation Guidance for Presentation of Items of Other Comprehensive Income (Amendments to IAS 1) as issued in English by the IASB in June 2011. The Spanish translations are available on the Spanish New and Revised Standards page (eIFRS subscribers only)
  • Mongolian translation of the International Financial Reporting Standard for Small and Medium-sized Entities (IFRS for SMEs) 2009. The Mongolian translation is available on the IASB's Access the IFRS for SMEs page (registration required).

IASB and FASB announce revenue recognition webcast

01 Dec, 2011

The International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB) will be hosting a webcast on Thursday, 8 December 2011 regarding the boards' recently published exposure draft Revenue from Contracts with Customers.

The webcast will review the main proposals of the exposure draft developed by the IASB and FASB, also, it will describe how stakeholders can comment on the proposals. In addition, there will be an IASB only webcast on the the exposure draft on Monday, 12 December 2011.

Click for the press release (link to IASB website).

IASB meets with CIS and Baltic States for IFRS update

30 Nov, 2011

On 28 and 29 November 2011, members of the IFRS Foundation and the IASB met with representatives of professional accounting and auditing bodies and ministries from the Commonwealth of Independent States (CIS) and the Baltic States.

The meetings updated these countries on current projects, and the direction and future agenda of the IASB. The meeting also provided a forum to discuss the use of IFRSs within these jurisdictions, including the adoption of IFRSs and the IFRS for SMEs, as well as the process for translating the standards.

The event was attended by representatives from the following countries: Azerbaijan, Belarus, Georgia, Kazakhstan, Kyrgyz Republic, Latvia, Moldova, Russia, Tajikistan, Turkmenistan, Ukraine and Uzbekistan. Many of these countries have already adopted or permit the use of IFRSs and/or IFRS for SMEs.

The representatives also met with the International Auditing and Assurance Standards Board (IAASB) and the International Federation of Accountants (IFAC) to discuss adoption and implementation of International Standards on Auditing (ISAs).

Click for the IASB press release (link to IASB website). An IAASB press release is also available (link to IFAC website).

Stay Tuned Online — IFRS and UK GAAP update

28 Nov, 2011

The Deloitte London IFRS Centre of Excellence is running a series of hour-long Internet-based financial reporting updates, aimed at helping finance teams keep up to speed with IFRSs and other financial reporting issues.

Each update lasts no more than an hour, and sessions are normally held three times a year, approximately at the end of March, July, and November. We intend to make a recording of each session available on IAS Plus for a period of at least four months from the date of the presentation. The topics covered in the November 2011 webcast:

  • A review of UK corporate reporting
  • Latest IFRS developments
  • IAS 19(2011) Employee Benefits — update
  • The future of UK reporting including UK GAAP
  • The IASB’s revised revenue proposals

To access the recording click here. There's a permanent link on our UK country page.

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