Deloitte 2011 Corporate Responsibility Report

30 Dec, 2011

Deloitte has published its 2011 Corporate Responsibility Report, reflecting Deloitte's wider outlook on corporate responsibility, and acknowledging that Deloitte's most significant impacts on society result from the work that member firms do for their clients.

The Deloitte 2011 Corporate Responsibility Report has been checked by the Global Reporting Initiative (GRI) as Application Level B, and also serves as Deloitte's Communication on Progress to the United Nations Global Compact for 2010-2011.

Click for access to the report.

More information about the report is available on our website.

The Bruce Column — Looking ahead to the defining decision of 2012

29 Dec, 2011

As 2011 draws to an end two significant speeches were made in Washington - both looking toward 2012. Robert Bruce, our resident, regular columnist assesses their importance.

In the early days of December two significant speeches were delivered in Washington. The first came from the Chief Accountant of the SEC, Jim Kroeker, the second from the Chairman of the IASB, Hans Hoogervorst. They come from different standpoints. But you could detect common ground and also, and perhaps more important, a serious desire to increase the landmass of that common ground.

Hoogervorst talked of his experience on the Financial Crisis Advisory Group. 'Through the traumatic experience of this crisis', he said, 'I became convinced more than ever that the best protection available to investors is transparency. Indeed, without transparency there cannot be enduring stability'. Then he went on to talk of his passion for the goals of the IASB. These he defined as: 'To develop and sustain, first and foremost for investors, a single set of globally accepted and high quality accounting standards. These standards must be set independently and then consistently applied and enforced'.

Then he pointed out to his American audience that: 'These goals may sound familiar'. Why? 'They are almost identical to those of the FASB'. He drew parallels. FASB's principles were deeply embedded in the IASB. The SEC had helped establish the framework which set up the IASB. Paul Volcker, a giant in US financial history, had become the first Chairman of the IASB's trustees. When it was agreed in 2002 that the work of IASB and FASB should move towards convergence a US Board member at the IASB became Chair of the FASB.

Then he looked back. When the FASB was set up in 1973 the world was a different place. As he said: 'Market participants on either side of a transaction were mainly located in the same jurisdiction. Investors and preparers could speak the same financial reporting language'.

But all that had changed: 'Since then', he said, 'and especially in the last 20 years, the world's capital markets have integrated and become more interdependent. US investors seek investment returns and diversify risk on an international basis. US companies seek to raise capital on markets around the world, while US capital markets seek to attract international listings'.

The result was inevitable. 'The emergence of interconnected financial markets explains the momentum gathering behind the move to global accounting standards. Investors need comparable, reliable financial reporting around the world. For global investor protection, we need a global accounting language'.

Jim Kroeker was optimistic but cautious with his words. He said that 'there is reason to be quite encouraged'. But the process of assessing the whole issue was taking longer. But that didn't mean that they were discouraged. 'I believe that the passage of a grain of sand in the hour glass of time is not nearly as critical as ensuring that we take this opportunity to establish a strong and lasting framework'.

And that framework had five points to it. It should 'demonstrate a high level of support for US commitment to continued development and use of global consistent high quality accounting standards'. It should 'provide both in fact and in substantive operation clear US authority over standards applicable in the US capital markets'. It should 'provide for and facilitate a strong US voice in the process of establishing global accounting standards'. It should 'be responsive to the economic and other impacts of change'. And finally it should 'consider whether to retain "US GAAP" as the basis for US financial reporting, thereby mitigating the costs and complexity of introducing a new set of standards under regulatory regimes, contractual documents, and US laws under which compliance with US GAAP is often specifically contemplated'.

All that sounds fine and feasible.

And Hoogervorst agreed. 'I recognise the challenges and significant pressures facing the SEC in making its decision', he said. 'The US is the largest and most liquid national capital market in the world. So, transitional concerns have to be carefully considered. The SEC must believe that this is the right decision for the US. From an investor protection and capital formation standpoint, I believe it is'.

And he gave an example of why this is so. 'US investors now seek and should seek investment returns on a global basis', he said. 'For example, in its submission to the SEC, CalPERS made the point that they currently invest in 47 markets around world. If the SEC is to protect CalPERS in this international environment it must be an active participant in the development and global enforcement of IFRS'. And how would that come about? 'For that to happen', said Hoogervorst, 'the SEC needs skin in the game'.

But let us leave the final word with Paul Beswick, Jim Kroeker's deputy, from a post to the SEC's website in connection with the same conference. 'We are in the process of drafting a final report that summarizes all of our efforts to complete the 2010 Work Plan', he said. 'The staff is drafting the report to provide our insights on what we have learned during the last almost two years of work. I would hope that the staff could get the final report out as soon as practicable in 2012'.

Hope springs eternal as we come up to the new year.

Robert Bruce
December 2011

IESBA proposes changes to the Code of Ethics for Professional Accountants to address conflicts of interest

28 Dec, 2011

The International Ethics Standards Board for Accountants (IESBA) is proposing changes to its Code of Ethics for Professional Accountants to provide additional guidance to professional accountants in business and in public practice concerning conflicts of interest, and to make revisions to provide more comprehensive guidance in identifying, evaluating, and managing conflicts of interest.

Among other requirements, the proposals would:

  • include a description of circumstances that might create a conflict of interest for the professional accountant, together with examples of such circumstances
  • require the professional accountant to take into account whether a reasonable and informed third party, weighing all the specific facts and circumstances available to the professional accountant at that time, would be likely to conclude that compliance with the fundamental principles is compromised
  • requires the professional accountant to understand the nature of the relationships and services in identifying whether a conflict of interest exists or may be created
  • require conflicts of interest within a network of firms to be evaluated when the professional accountant has reason to believe that a conflict of interest exists because of interests or relationships that another firm in the network has with a client
  • expand on the guidance in the Code regarding the nature of safeguards that may be available to manage conflicts of interest within firms
  • replace existing guidance for professional accountants in business, addressing circumstances in which conflicts of interest might arise when performing professional activities that compromise compliance with the fundamental principles and requiring the professional accountant in business to take steps to identify, evaluate, and manage those situations.

Click for IESBA press release (link to IFAC website).

Our summary of new and revised accounting pronouncements

23 Dec, 2011

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 31 December 2011.

The resource provides a brief summary of each pronouncement, and indicates whether it must be mandatorily applied for the first time at 31 December 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 19 December 2011 and will be updated through to March 2012, after which we'll produce an edition for March 2012 reporting. We'll include a permanent link to the most recent edition of the resource in the right-hand panel of our standards page. The summary is also available for financial reporting periods ending on 30 September 2011.

Click for:

International Valuation Standards Council update

23 Dec, 2011

An update of recent developments in relation to the International Valuation Standards Council (IVSC), including access to IVSC standards, collaboration with the IASB, code of ethical principles and the IVSC work plan.


  • Access to IVSC standards. Electronic access is now available to the International Valuation Standards published in July 2011. The standards can be accessed here (registration required) ahead of a comprehensive online service to be introduced at a later time
  • Collaboration with the IASB. The IVSC will participate in the IASB expert advisory group to assist in the development of educational material to support the implementation of IFRS 13 Fair Value Measurement and acknowledges each entity's respective pronouncements must be consistent to avoid causing confusion
  • Code of Ethical Principles. The Professional Board has approved the Code of Ethical Principles for Professional Valuers which has been updated to reflect the comments received on the Second Exposure Draft
  • IVSC work plan. The IVSC has appointed working groups on six projects and has agreed to add a project on investment property. Three Technical Information Papers on discounted cash flow, the cost approach for tangible assets and intangible assets are near completion and should be published in early 2012. Publication of Exposure Drafts on guidelines for fairness opinions and a Technical Information Paper on contributory asset charges is also expected soon.

There have also been a number of new board appointments. Click for more information (link to IVSC website).

FEE issues policy statement on current economic difficulties

23 Dec, 2011

The Federation of European Accountants (Fédération des Experts comptables Européens, FEE), has released a policy statement entitled 'Professional Accountants' Contribution in the Current Economic Difficulties: Enhancing Transparency and Confidence'.

FEE, an international non-profit organisation based in Brussels that represents 45 institutes of professional accountants and auditors from 33 European countries, believes that the European accountancy profession needs to play a key role in the current European crisis by contributing to the transparency and reliability of financial and non-financial information, therefore enabling better decision-making and contributing to restoring public and financial market confidence.

The policy statement contains a high-level summary of issues that preparers, auditors and public sector entities may wish to consider in the current economic circumstances. These include such things as the measurement of assets, impairment of financial and non-financial assets, going concern considerations, disclosures, areas of particular audit attention, and public sector governance.

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

IAASB publishes guidance on providing assurance on pro forma information

22 Dec, 2011

The International Auditing and Assurance Standards Board (IAASB) has released a new International Standard on Assurance Engagements (ISAE) dealing with pro forma information included in prospectuses.

ISAE 3420 Assurance Engagements to Report on the Compilation of Pro Forma Financial Information Included in a Prospectus provides guidance on the nature and extent of a practitioner’s work when engaged to report on the compilation of pro forma financial information. Among other matters, it establishes minimum benchmarks for suitable criteria for the compilation of such information.

The new standard is effective for assurance reports dated on or after 31 March 2013. Click for IAASB press release (link to IFAC website).

EFRAG consolidated report of joint events on the IASB agenda consultation 2011

22 Dec, 2011

The European Financial Reporting Advisory Group (EFRAG), in cooperation with the National Standard Setters (NSS), consolidated feedback statement summarising the input received from the eight European events held from October to November.

The IASB published a consultation paper in late July 2011 to seek public input on the strategic direction of its future work program. EFRAG and the NSS organised meetings with the purpose to help EFRAG gather European constituents' views for EFRAG's response to the IASB's consultation paper. The outreach meetings were held in October and November in eight European cities. On 5 December 2011, EFRAG issued its final comment letter to the IASB regarding the IASB Agenda Consultation 2011 Request for view. Feedback and views from the constituents who attended the outreach meetings were integrated into EFRAG's final comment letter.

A consolidated report on all activities during this integration feedback received is now available (PDF 598 KB, link to EFRAG website).

EFRAG and UK ASB issue discussion paper on income tax

22 Dec, 2011

The European Financial Reporting Advisory Group (EFRAG) and the UK Accounting Standards Board (UK ASB) have issued discussion paper 'Improving the Financial Reporting of Income Tax'.

The discussion paper provides possible enchancements to the requirements for financial reporting of income tax currently in IAS 12. Specifically, it provides possible changes to the reconciliation of tax expense to a standard rate; revisions to the requirements in respect of uncertain tax positions; and whether deferred tax should be discounted. Further, the discussion paper provides alternative approaches that could result in a replacement standard of IAS 12. The alternative approaches are the flow-through approach, the partial allocation approach, the valuation approach, and the accruals approach.

Comments on the paper are invited by 29 June 2012. The discussion paper can be downloaded via the press release on EFRAG's website.

Updated IASB work plan released

21 Dec, 2011

The IASB has released an updated work plan, dated 20 December 2011, incorporating the impacts of recently issued pronouncements and outlining revised 'current best estimates' for its various projects. A number of projects has been deferred, the expected timing of other projects more precisely defined, and deadlines for finalisation of IFRSs on leases and revenue recognition projects now not explicitly stated within the timeframes outlined (so now not expected before the end of 2012).

The following is a summary of the revised work plan:

  • Financial instruments:
    • Impairment - re-exposure clarified as being expected in the second quarter of 2012 (previously first half 2012)
    • Macro hedge accounting - an exposure draft on macro hedge accounting now due in third quarter 2012 (deferred from possible issue in first half of 2012)
    • General hedge accounting - a review draft of general hedge accounting requirements now expected in the first quarter of 2012 (previously fourth quarter 2011), with the targeted completion clarified as the second quarter of 2012 (previously first half of 2012)
  • Other core projects:
    • Leases - re-exposure clarified as being expected in the second quarter of 2012 (previously first half 2012), no stated target date for a finalised IFRS (previously second half of 2012)
    • Revenue recognition - no stated target date for a finalised IFRS (previously second half of 2012)
    • Insurance contracts - review draft or re-exposure clarified as being expected in the second quarter of 2012 (previously first half of 2012), no target date set for a finalised IFRS
  • Post-implementation reviews– there have been no changes in the indicative timing for the following reviews:
  • Agenda Consultation - a 'Feedback Statement' and roundtables are expected in the first quarter of 2012, with agenda decisions made during the course of 2012
  • Other projects:

Click for IASB work plan as of 20 December 2011 (link to IASB website). We have updated our project pages to reflect the updated work plan and other known developments.

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