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iGAAP newsletter June 2010

02 Jul 2010

Deloitte (United Kingdom) has published the June 2010 edition of their quarterly iGAAP Newsletter.

This newsletter covers the activities of the IASB and the UK Accounting Standards Board (ASB). Each issue includes updates on the activities of the IASB and the ASB, project timetables for both boards, links to new Deloitte publications, an interview of someone involved with IFRSs, and a table showing IFRSs issued but not yet effective or endorsed by the European Union. The interviewee for the June 2010 issue is Ken Wild, Deloitte's recently retired Global IFRS Leader. Click to download iGAAP Newsletter June 2010 (PDF 157k). Links to all past issues are on our United Kingdom Country Page.


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Comprehensive summary of the IASB's project on fair value measurement

02 Jul 2010

A comprehensive project summary, prepared by the IASB staff, has been posted to the fair value measurement project page of the IASB's site.

The project summary (PDF 951k) provides the background to the IASB's fair value measurement project and explains how the IASB plans to finalise an IFRS on fair value measurement. The summary also includes a comparison of the tentative decisions reached so far in the project with the proposals in the IASB's May 2009 exposure draft Fair Value Measurement and the proposals in the US Financial Accounting Standards Board's (FASB) exposure draft of a proposed Accounting Standards Update (ASU) Amendments for Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs (link to FASB website).


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New name and web address for the IASC Foundation

01 Jul 2010

The IASC Foundation has formally changed its name to the IFRS Foundation with effect from 1 July 2010. The change represents the next step in a process to simplify the names in use across the organisation announced following the conclusion of the Constitutional Review in 2010.

The International Financial Reporting Interpretations Committee (IFRIC) and the Standards Advisory Council (SAC) have already been renamed as the IFRS Interpretations Committee and the IFRS Advisory Council, respectively. The name of the International Accounting Standards Board (IASB) will remain unchanged. The IASB's website has been changed to coincide with the name change and is now In addition, IFRS Foundation and IASB email addresses will end in ''. We have updated the links on our pages to reflect the new addresses. (The old webpages and email addresses will be rerouted to from 1 July 2010 and so will continue to work.) Click for IASC announcement. See also our IFRS Foundation page.


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iGAAP 2010 Financial Instruments: IAS 32, IAS 39, IFRS 7 and IFRS 9 Explained

01 Jul 2010

Deloitte (United Kingdom) has developed iGAAP 2010 Financial Instruments: IAS 32, IAS 39, IFRS 7 and IFRS 9 Explained (Sixth Edition), which has been published by LexisNexis. This publication is the authoritative guide for financial instruments accounting under IFRSs.

The 2010 edition continues to include many practical examples, comparisons with US GAAP, an IFRS 7 disclosure checklist and model disclosures. The new edition also includes guidance on the IASB's new standard on financial assets, IFRS 9 Financial Instruments, as well as Interpretations and relevant IASB activities up to and including 31 March 2010. iGAAP 2010 Financial Instruments: IAS 32, IAS 39, IFRS 7 and IFRS 9 Explained (Sixth Edition) (1,139 pages, June 2010) can be purchased through You will find a permanent link to this and many other Deloitte IFRS publications on our IFRS Publications Page.


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IASB and FASB post staff draft of proposed financial statement presentation standard

01 Jul 2010

The IASB and the US FASB posted to their websites a staff draft of a proposed standard on their joint project to develop a standard on financial statement presentation. The draft reflects the cumulative, tentative decisions made by the boards concluding with their joint meeting in April 2010. However, work on the project is continuing, and the proposals are subject to change before the boards decide to publish an exposure draft for public comment.

Before finalising and publishing the exposure draft, the boards will engage in further outreach and analysis. These activities will focus primarily on two issues: (1) the perceived benefits and costs of the proposals, and (2) the implications of the proposals for financial reporting by financial institutions. The boards are not formally inviting comments on the this staff draft; however, they welcome input from interested parties. The boards expect to publish an exposure draft for public comment in early 2011. Link to IAS Plus Project Page.


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EU formally adopts amendments to IFRS 1 and IFRS 7

01 Jul 2010

The European Union has published the Commission Regulation (EC) No 574/2010 (Amendment to IFRS 1 Limited Exemption from Comparative IFRS 7 Disclosure for First-time Adopters and Amendment to IFRS 7 Financial Instruments: Disclosures) endorsing the amendments adopted by the IASB on 29 January 2010.

Last week the European Union published the Commission Regulation (EC) No 550/2010 (Amendments to IFRS 1 Additional Exemptions for First-time Adopters) endorsing the amendments adopted by the IASB on 23 July 2009. Thus currently only five IASB pronouncements await endorsement action.

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Newsletter on IASB-FASB convergence

30 Jun 2010

Deloitte's IFRS Global Office has published an IFRS in Focus Newsletter – IASB and FASB modify convergence strategy.

This newsletter describes the modified convergence strategy and updated work plan of the IASB and FASB. The IASB and FASB have modified their convergence strategy in response to concerns about constituents' ability to provide comments on the large number of proposals that were expected to be published during the second quarter 2010. All of our past IFRS in Focus newsletters are Here.


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Limited-scope ED on fair value measurement

30 Jun 2010

The IASB has issued an exposure draft (ED) 'Measurement Uncertainty Analysis Disclosure for Fair Value Measurements' proposing relatively minor amendments to the proposals in its May 2009 ED on fair value measurement.

The May 2009 ED proposed a three-level fair value hierarchy that categorises observable and non-observable market data used as inputs for fair value measurements. Under that hierarchy, Level 3 inputs are 'unobservable inputs' used for the fair value measurement of assets or liabilities for which market data are not available. Required disclosures would include a 'measurement uncertainty analysis' (sometimes called a 'sensitivity analysis'). The newly proposed amendments would enhance the original proposal by requiring the measurement uncertainty analysis disclosure to reflect the interdependencies between unobservable inputs used to measure fair value in Level 3. Comment Deadline is 7 September 2010. Click for IASB Press Release (PDF 101k). The US FASB has also issued a similar exposure draft, Fair Value Measurements and Disclosures (Topic 820): Amendments for Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs, relating to the measurement uncertainty analysis disclosure. Presented below are the IASB's key conclusions to date on fair value measurement, based on the May 2009 ED and subsequent redeliberations and decisions.

Goal of the IASB's fair value measurement project:

The goal of the project is to define fair value, establish a framework for measuring fair value, and require disclosures about fair value measurements. However, it would not change the circumstances in which assets, liabilities, equity, and disclosure items must be measured at fair value under IFRSs.

IASB conclusions to date on fair value measurement:

  • Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price).
  • In the absence of an actual transaction at the measurement date, a fair value measurement assumes that a transaction takes place at that date in the principal (or most advantageous) market for the asset or liability.
  • Fair value is a market-based measurement, not an entity-specific measurement. Therefore, a fair value measurement should be determined using the assumptions that market participants would use when pricing the asset or liability, including assumptions about risk. As a result, a fair value measurement does not consider an entity's intention to hold an asset or to settle or otherwise fulfil a liability.
  • For a non-financial asset, fair valuation presumes the asset is used at its highest and best use.
  • To increase consistency and comparability in fair value measurements and related disclosures, the IASB would establish a fair value hierarchy that prioritises into three levels the inputs to valuation techniques used to measure fair value, giving the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1 inputs) and the lowest priority to unobservable inputs (Level 3 inputs):
    • Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date.
    • Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. If the asset or liability has a specified (contractual) term, a Level 2 input must be observable for substantially the full term of the asset or liability.
    • Level 3 inputs are unobservable inputs for the asset or liability. Unobservable inputs would be used to measure fair value to the extent that relevant observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date. However, the fair value measurement objective remains the same – an exit price from the perspective of a market participant who holds the asset or owes the liability at the measurement date. Therefore, unobservable inputs should reflect the assumptions that market participants would use when pricing the asset or liability, including assumptions about risk.


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EFRAG consultation on its proactive work in Europe

30 Jun 2010

Following the publication of its new Strategy for European Proactive Financial Reporting Activities earlier this month, the European Financial Reporting Advisory Group (EFRAG) has now launched a public Consultation on Proactive Work.

EFRAG's proactive work is intended to influence future standard-setting developments by engaging with European constituents and providing timely and effective input to the early phases of the IASB's work. Currently, EFRAG is working among others on projects concerning corporate income tax, business combinations under common control and a disclosure framework. Possible future projects include:
  • European perspective on development of post implementation reviews (Post-implementation review policy)
  • European input to the IASB's post- implementation review of IFRS 3 Business Combinations
  • European Input to the IASB's post-implementation review of IFRS 8 Operating Segments
  • Post-implementation review of IFRIC 12 Service Concession Arrangements
  • Government grants
  • Understanding the decision environments of users of the financial report
  • Application of IFRS to individual financial statements
  • Performance reporting — Phase 3
  • Share-based payments
The public consultation closes on 30 September 2010.
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CEBS publishes two follow-up reports on its assessment of banks' disclosures

30 Jun 2010

The Committee of European Banking Supervisors (CEBS) has published Assessment of banks' transparencyin their 2009 audited annual reports and Follow-up review of banks' transparency in their 2009 Pillar 3 reports. In its press release, CEBS states that "This work reflects CEBS's ongoing interest in the banks' disclosure of the impact of the crisis on their activities and financial situation."

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