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Agenda for 2-3 September 2010 Interpretations Committee meeting

22 Aug 2010

The IFRS Interpretations Committee will meet at the IASB's offices in London on Thursday and Friday 2 and 3 September 2010 (morning only on 3 September). The meeting is open to the public and will be webcast.

The tentative agenda is available on our meeting page for the meeting.

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IASB staff draft of IFRS on Fair Value Measurement

20 Aug 2010

The IASB has posted to its website a staff draft of a forthcoming IFRS on fair value measurement, reflecting the tentative decisions made to date by the IASB and the FASB.

The IASB's initial exposure draft on fair value measurement was issued in May 2009 and has been followed up a number of requests for information and feedback, including an additional limited scope exposure draft issued in June 2010.

The IASB is not requesting comments on the staff draft, but notes the FASB issued a nearly identical proposed Accounting Standards Update (ASU) Amendments for Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs. Accordingly, constituents may wish to comment on the proposals by submitting a comment letter to the FASB prior to the end of the comment period for the proposed ASU (7 September 2010).

The IASB and FASB expect to jointly consider comments received in developing a joint standard, which is expected to be issued early in 2011. Click for:

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Annual report of the UK FRRP

19 Aug 2010

The Financial Reporting Review Panel (FRRP) of the UK Financial Reporting Council (FRC) has published its annual report 2010. The FRRP is responsible for ensuring that the annual accounts of public companies and large private companies comply with the requirements of the Companies Act and applicable accounting standards.

An excerpt from the FRRP findings:


The Panel found continuing improvement in the general quality of IFRS financial reporting. It was particularly pleased to note improvements in the description of significant accounting policies and the disclosure of judgements made by Boards in applying those policies. However, in two areas, capital management and sharebased payment disclosures, reporting was sometimes poor in terms of content, extent and usefulness. The Panel believes that, as the economy stabilises, these areas will assume greater significance in corporate reports. The FRC will, therefore, conduct a targeted review of these matters. The results of the reviews are to be published in the autumn.

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IASB issues editorial corrections to leases ED

18 Aug 2010

The International Accounting Standards Board (IASB) has released a number of editorial corrections to ED/2010/9 Leases, published yesterday. ED/2010/9 is open for comment until 15 December 2010.

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Deloitte global press release on IASB and FASB proposals to overhaul lease accounting

18 Aug 2010

Deloitte has published a global press release on the IASB and FASB proposals to overhaul lease accounting. The IASB and FASB proposals would creates a new accounting model for both lessees and lessors and eliminates the concept of operating leases.

Excerpts from the press release:

"As leasing is such a common transaction, this proposal would, no doubt, affect companies around the globe and across all industries," said Joel Osnoss, Global IFRS Leader, Clients & Markets, Deloitte Touche Tohmatsu Limited.

"Many of the proposed requirements could prove time-consuming to adopt, which makes a well-thought-out work plan critical to a smooth transition to the new accounting rules. Companies that use leasing should start thinking today about how this proposal could affect their financial statements, and should consider the need to make changes to lease structuring, performance metrics, debt covenants, and systems. Education of key stakeholders will also be necessary."

The IASB has stated that the comment period will end on 15 December 2010, with the final standard due for publication in June 2011. The effective date of the new leasing standard is still uncertain. The proposed transition requirements would not grandfather any existing leases. Therefore, lessors and lessees that enter into longer-term leases will need to consider the potential affect of the proposed rules on existing leases.

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Deloitte (UK) press release on IASB leases proposals

18 Aug 2010

Further to our earlier story, Deloitte (United Kingdom) has published a press release on the IASB's proposals in ED/2010/9 Leases.

Excerpts from the press release:

Veronica Poole, head of the Deloitte Global IFRS Leadership Team, said:

"The proposals mean that all leases would be brought onto the balance sheet as liabilities, along with their matching assets. It means that IASB Chairman, Sir David Tweedie, may yet achieve his oft-repeated ambition of flying on an aircraft which actually appears on that airline's balance sheet"

Mark Beddy, UK audit partner in the Deloitte real estate practice, commented:

"In the long-term, we believe that the accounting changes in the treatment of property leases will transform the way many companies approach property strategies. Property in general will need to become a much more strategic business issue. Forced to view property as having a balance sheet liability, companies will have to give much more consideration to how to manage and reduce it."

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IASB and FASB publish proposals to improve the financial reporting of leases

17 Aug 2010

The International Accounting Standards Board (IASB) and the US Financial Accounting Standards Board (FASB) today published for public comment joint proposals to improve the financial reporting of lease contracts. The proposals are one of the main projects included in the boards' Memorandum of Understanding. The proposals, if adopted, will greatly improve the financial reporting information available to investors about the financial effects of lease contracts.

The accounting under existing requirements depends on the classification of a lease. Classification as an operating lease results in the lessee not recording any assets or liabilities in the statement of financial position (balance sheet) under either International Financial Reporting Standards or US standards (generally accepted accounting principles). This results in many investors having to adjust the financial statements (using disclosures and other available information) to estimate the effects of lessees' operating leases for the purpose of investment analysis.

The proposals would result in a consistent approach to lease accounting for both lessees and lessors–a right-of-use' approach. Among other changes, this approach would result in the liability for payments arising under the lease contract and the right to use the underlying asset being included in the lessee's statement of financial position, thus providing more complete and useful information to investors and other users of financial statements.

ED/2010/9 is open for comment until 15 December 2010. Click for:

As part of their additional outreach, the boards are seeking entities that would be willing to take part, on a confidential basis, in field work to discuss and test the provisions of their proposals for lease accounting. The purpose of the field work is to assess the operationality and the costs and benefits of the proposed new standard. More Information is available in the IASB press release.

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Agenda for the special 24 August IASB meeting

17 Aug 2010

The IASB will hold an additional Board meeting on 24 August 2010 from 11:00 to 15:00 to discuss the Financial Instruments project and Income Taxes.

You can access the agenda on our 24 August 2010 meeting page.  We will also post Deloitte observer notes on this page as they are available.
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IASB webcast on lease accounting exposure draft

16 Aug 2010

On Wednesday 18 August 2010 IASB staff will present a live webcast to discuss the exposure draft Leases which is expected to be published tomorrow.

The webcast will summarise the proposals on lease accounting, and follows on from the lease webcasts that were presented on 10 June 2010 and 31 March 2010. This webcast will be followed by a question and answer session. There is no charge to attend the web presentation, but you need to register to participate.
  • Topic: Lease accounting exposure draft
  • Date and time: 18 August, 10:30am London time, repeated 3:30pm London time
  • More information about the leases project on IAS Plus: Click Here


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Conceptual Framework for Financial Reporting by Islamic Financial Institutions

13 Aug 2010

The Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) has issued two new accounting standards, one of which is a conceptual framework for financial reporting by Islamic financial institutions.

The AAOIFI is an Islamic international autonomous non-for-profit corporate body that prepares accounting, auditing, governance, ethics and Shari'a standards for Islamic financial institutions and the industry. It was founded in 1991 and has so far issued a total of 42 standards covering the areas of accounting, auditing, ethics, and governance for Islamic financial institutions (an English 2010 edition of the standards is available via the AAOIFI website).

Accounting Standards for financial reporting by Islamic financial institutions have to be developed because in some cases Islamic financial institutions encounter accounting problems because the existing accounting standards such as IFRSs or local GAAP were developed based on conventional institutions, conventional product structures or practices, and may be perceived to be insufficient to account for and report Islamic financial transactions. Shariah compliant transactions that observe the prohibition to charge interest may not have parallels in conventional financing and therefore, there may be significant accounting implications.

The current approach to developing financial standards for Islamic transactions is to benchmark against international standards such as IFRSs to ensure consistency with globally accepted standards and modifying them, where necessary, in order to ensure financial statements present fairly the financial position, financial performance and cash flows of the Islamic financial institution.

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Correction list for hyphenation

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