News

IASB (International Accounting Standards Board) (blue) Image

IASB concludes the 2009-2011 Annual Improvements cycle

17 May, 2012

The IASB issued 'Annual Improvements 2009-2011 cycle', a collection of amendments to IFRSs, in response to issues addressed during the 2009–2011 cycle. Five standards are primarily affected by the amendments, with consequential amendments to numerous others.

Annual Improvements 2009–2011 Cycle makes amendments to the following standards:

Standard Amendments
IFRS 1 First-time Adoption of International Financial Reporting Standards Permit the repeated application of IFRS 1
Borrowing costs relating to qualifying assets for which the commencement date for capitalisation is before the date of transition to IFRSs
IAS 1 Presentation of Financial Statements Clarification of the requirements for comparative information
IAS 16 Property, Plant and Equipment Classification of servicing equipment
IAS 32 Financial Instruments: Presentation Clarify that tax effect of a distribution to holders of equity instruments should be accounted for in accordance with IAS 12 Income Taxes
IAS 34 Interim Financial Reporting Clarify interim reporting of segment information for total assets in order to enhance consistency with the requirements in IFRS 8 Operating Segments

The amendments are effective for annual periods beginning on or after 1 January 2013, but can be applied earlier. For more information, please see the press release on the IASB's website or our Annual improvements page.

IOSCO (International Organization of Securities Commissions) (dark gray) Image

IOSCO restructures

17 May, 2012

The International Organization of Securities Commissions (IOSCO), the worldwide association of national securities regulatory commissions, is currently holding its annual conference in Beijing, and has announced a restructure of its governance structure, operations and funding.

A brief summary of the changes:

  • Governance. In an effort to streamline the governance structure and decision-making process, a new transitional IOSCO Board has been constituted.  The new Board will subsume the functions of IOSCO's Technical Committee (TC), the Executive Committee (EC) and the Emerging Markets Committee Advisory Board.  Mr. Masamichi Kono, Vice Commissioner for International Affairs at the Financial Services Agency of Japan (JFSA) and Chairman of the subsumed IOSCO Technical Committee, has been appointed as Chairman of the new Board.  Mr Kone will step down from the position in March 2013 and will be replaced by Greg Medcraft, Chairman of the Australian Securities & Investment Commission (ASIC)
  • Cooperation. IOSCO approved a resolution that allows it to take tougher measures to encourage compliance by IOSCO members who have not yet signed the Multilateral Memorandum of Understanding Concerning Consultation and Cooperation and the Exchange of Information (MMoU). The MMoU allows member organisations to cooperate with each other in matters of enforcement.  The new resolution is designed to assist these non-signatories in overcoming obstacles in securing support from their governments or legislatures for implementing the legal and regulatory changes required for compliance with the MMoU
  • Funding.  The members discussed the need for alternative sources of funding to expand services to members (especially in emerging markets), including technical assistance, education and training, and research on global global securities market issues.  The discussion included the possible creation of an IOSCO Foundation.

Click for:

  • Press release "IOSCO prepares for the regulatory and financial challenges ahead" (link to IOSCO website)
  • Press release "The MMoU: Ten years of enhancing cross-border enforcement cooperation" (link to IOSCO website)
  • Press release "Masamichi Kono of Japan FSA to lead IOSCO’s new board" (link to IOSCO website).
IFRS Foundation (blue) Image
IFRS for SMEs (mid blue) Image

IFRS Foundation translation update

15 May, 2012

The IFRS Foundation has announced the publication of the Arabic translation of IFRS for SMEs training Module 22 'Liabilities and Equities'.

The Arabic translation is available on the IASB's Arabic-language training modules webpage. In total, 28 Arabic-language modules are now available for download.

Deloitte Comment Letter Image

Deloitte comment letters on two IFRS Interpretations Committee tentative agenda decisions

15 May, 2012

Deloitte's IFRS Global Office has submitted two letter of comment to the IFRS Interpretations Committee on (1) Tentative agenda decision: IAS 1 Presentation of Financial Statements and IAS 12 Income Taxes – Presentation of payments of non-income taxes and (2) Tentative agenda decision: IAS 12 Income Taxes – Accounting for market value uplifts introduced by a new tax regime.

Although Deloitte agrees with the IFRS Interpretation Committee's decisions to not include either of these projects on its agenda, we have suggested amendments to the tentative agenda decisions.

Click for full summaries and our comment letters on:

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Agenda for May 2012 IASB meeting

15 May, 2012

The IASB will be holding its May 2012 meeting on 21-24 May 2012 in Norwalk, CT, USA, part of it a joint meeting with the FASB.

You can access the agenda on our May 2012 IASB meeting page. We will also post Deloitte observer notes on this page as they are available.

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Agenda for May 2012 IASB 'education session'

15 May, 2012

The IASB has released the agenda for its meeting to be held on Thursday 17 May 2012. Most of the meeting will be an education session, however the IASB will also consider the next process step in the macro hedge accounting project (i.e. whether to issue a Discussion Paper or Exposure Draft).

The meeting has been truncated from its originally scheduled two days (there is currently no scheduled discussion for Friday 18 May), and precedes the joint IASB-FASB meeting to be held in Norwalk on 21-25 May 2012.

Further details of the agenda can be found on our May 2012 IASB education session page.  Any Deloitte observer notes from the meeting will also be posted on this page.

IFRS IC (IFRS Interpretations Committee) (blue) Image

Two new members of the IFRS Interpretations Committee, two members reappointed

14 May, 2012

The Trustees of the IFRS Foundation have announced today the appointments of Sandra Peters and John O’Grady as new members of the IFRS Interpretations Committee and the reappointments of Laurence Rivat and Kazuo Yuasa.

The new appointments fill vacancies that will arise when two current members of the IFRS Interpretations Committee reach the end of their second terms in June 2012. Sandra Peters is Head of Financial Reporting Policy with the CFA Institute in the United States and John O'Grady is the Asia-Pacific IFRS Leader for Ernst & Young.

The two reappointed members will complete their first terms at the end of June 2012 and have been reappointed for a further three-year term. Laurence Rivat is a Partner and Leader of Deloitte's IFRS Centre of Excellence in Paris and member of the Deloitte IFRS Leadership Team. Kazuo Yuasa is General Manager with the IFRS Office, Corporate Finance Unit, Fujitsu Limited, Japan.

Please click for the IFRS Foundation press release on the appointments (link to IASB website) and our overview of all members of the IFRS Interpretations Committee.

EFRAG (European Financial Reporting Advisory Group) (dk green) Image

Report on the European outreach event on the discussion papers 'Business Combinations Under Common Control' and 'Improving Financial Reporting of Income Tax' in London

14 May, 2012

The European Financial Reporting Advisory Group (EFRAG) has posted to its website a feedback statement reflecting input received in the EFRAG - UK ASB - OIC event on the discussion papers 'Business Combinations Under Common Control' and 'Improving Financial Reporting of Income Tax' held on 16 April 2012 in London.

The outreach event was part of a series of events held in various European cities in order to hear what practitioners and others thought about the topics considered in the discussion papers on business combinations under common control (published in October 2011) and improving the financial reporting of income tax (published in December 2011).

Since EFRAG had deliberately not taken a position in either discussion paper but rather attempted to provide a comprehensive analysis of the issues in order to stimulate a debate in Europe, the discussion was very open and comprehensive and even covered issues originally not included in the discussion papers such as general transactions made between related parties and the definition of income tax.

Please click for access to the report on the EFRAG website. Reports from the other outreach events of the series have not been published yet.

The input received during the outreach events and the comment letters on the discussion papers will form the basis for EFRAG’s re-deliberation of the issues. EFRAG will then decide about what further steps need to be taken before putting forward views to the IASB.

FSB (Financial Stability Board) (lt green) Image

FSB creates 'Enhanced Disclosure Task Force'

14 May, 2012

The Financial Stability Board (FSB) has announced the formation of a private sector 'Enhanced Disclosure Task Force' (EDTF) to develop principles for enhanced disclosures by financial institutions, based on current market conditions and risks, including ways to enhance the comparability of disclosures.

The FSB was established through the G7 and G20 to coordinate at the international level the work of national financial authorities and international standard setting bodies (including the IASB) and to develop and promote the implementation of effective regulatory, supervisory and other financial sector policies.

The creation of the EDTF follows on from an FSB hosted roundtable on risk disclosures by financial institutions held in December 2011.  The FSB issued a summary of the outcomes from the roundtable in a March 2012 press release (link to FSB website), which also noted the intention to form a task force.

In addition to developing principles for enhanced disclosure, the task force is also to identify leading practice risk disclosures presented in annual reports for end-year 2011 based on broad risk areas.

Click for FSB press release (link to FSB website).  A summary of the key messages from the December 2011 roundtable is presented below for the convenience of our readers.

 

Key messages from the December 2011 FSB rountable

Risk disclosure foundations. Participants generally preferred risk disclosure requirements in accounting standards and securities regulatory requirements that are principles-based rather than rules-based, but investors also called for measures to improve comparability, such as more consistent risk disclosure formats or templates.

Improvements needed in financial institution risk disclosures. Investors and analysts stressed that disclosure that enhances the transparency of risks and risk management practices helps to build confidence in the firm’s management, which can be particularly important to attract debt and equity investors. Given the current financial market environment, participants expressed the view that enhanced qualitative and quantitative disclosure is particularly important in the following areas:

  • Information on governance and risk management strategies - disclosure should be put in the context of the financial institution’s business model to facilitate market understanding of risk management practices.
  • Summary disclosure and benefits of achieving comparability
  • Credit risk - participants encouraged improved disclosure about exposures to sovereign debt and to other financial institutions
  • Liquidity risk - given the increasing role of collateral, participants shared the view that the degree of asset encumbrance should be disclosed at a reasonable interim frequency as well as annually
  • Capital adequacy and risk weighted assets (RWAs) - participants said that disclosures on capital planning were important, and further disclosure about RWAs and their calculation methods
    would be helpful
  • 'Pillar 3' disclosure - participants generally supported more integrated presentation which would, for example, better link and allow navigation between the Pillar 3 and financial report (e.g., IFRS 7) risk disclosures, align the timing of their publication, and achieve more comparability across jurisdictions and banks
  • Scenario and sensitivity analyses - including the possible disclosure of stress tests in financial reports.
European Union Image

ESMA Chairman Steven Maijoor urges US to decide on IFRS adoption soon

11 May, 2012

In a keynote speech delivered to the 35th Annual Congress of the European Accounting Association in Ljubljana on 9 May, Steven Maijoor, chairman of the European Securities and Markets Authority (ESMA) urged his counterparts at the US Securities and Exchange Commission (SEC) to send a clear message about the adoption of IFRS in the US soon.

Mr Maijoor began his speech describing his understanding of ESMA's role and the key objectives he sees for ESMA in the context of the broader regulatory reform of financial markets across the main regions of the world. He touched upon the proposals for reforming audit in the EU, the combination of audit and consulting, and the strengthening supervision. He also pointed out ESMA's own standard setting activities and its interaction with the IASB.

Moving then on to the topic of financial reporting, Mr Maijoor spoke about two issues in-depth: International Public Accounting Standards (IPSAS) and IFRS as global accounting standards.

He countered the possible surprise at a financial market regulator addressing the issue of public sector accounting by pointing out the fact that due to the current crisis governments have become important and active capital markets participants and the difference between corporate debt and sovereign debt has become more and more obsolete. Mr Maijoor strongly supported a current consultation of stakeholders on the suitability of introducing IPSAS for EU Member States: "There is currently a wide gap in the transparency obligations for sovereign debt issuers compared with corporate debt issuers. [...] We all know that a high level of transparency is needed for effective market discipline and good governance, and good governance is now especially needed in the Euro-zone."

On the topic of global accounting standards, he expressed respect regarding the on-going debates in the US on the implications of IFRS adoption and listed the goals that have already been achieved. However, he also pointed out that the G20 are getting impatient and are increasing the pressure on the IASB and FASB to achieve a single set of high quality, global accounting standards while the US still seemed to hesitate to come to a conclusion. "However, the absence of a clear US SEC position, and even more regrettably, the lack of clarity on the timetable for their decision have not been to the advantage of the IASB." Mr Maijoor concluded his speech on a hopeful note: "I know that my American counterparts at the SEC believe in international co-operation, and I hope they will send a positive message to the market soon by having the courage to adopt IFRS."

Please click for the full text of Mr Maijoor's speech on the ESMA website.

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