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IFRS Model Financial Statements 2012

Oct 16, 2012

Deloitte's Global IFRS Office has released "International GAAP Holdings Limited — Model financial statements for the year ended 31 December 31 2012."

These financial statements illustrate the presentation and disclosure requirements of IFRSs for the year ended December 31, 2012, by an entity that is not a first-time adopter of IFRSs. They illustrate the impact of the application of IFRSs that are mandatorily effective for the annual period beginning on January 1, 2012.

The publication includes:

  • Section 1 — Overview of new and revised International Financial Reporting Standards (IFRSs)
    • An overview of new and revised IFRSs that are mandatorily effective for the year ended December 31, 2012.
    • An overview of new and revised IFRSs that are not yet mandatorily effective but allow early application for the year ended December 31, 2012.
  • Section 2 — Model financial statements of International GAAP Holdings Limited for the year ended 31 December 2012.

Click to view IFRS Model Financial Statements 2012.

Notes from the October IFRS Foundation Trustees meeting

Oct 15, 2012

Deloitte observer notes are available from the IFRS Foundation Trustees meeting held in Brussels on October 12, 2012. The meeting consisted of reports from IASB Chair Hans Hoogervorst, the Due Process Oversight Committee, the Education and Content Services Committee, and the IFRS Advisory Council chair. Trustees Chairman Michel Prada provided a summary of the important issues discussed by the Trustees in nonpublic sessions of the meeting.

The topics discussed at the meeting include (click for Deloitte observer notes for each topic):


Friday, October 12, 2012 (13:25-14:30)

Three new IFRS Foundation Trustees appointed

Oct 12, 2012

The IFRS Foundation has announced the appointment of Sheila Fraser, Wiseman Nkuhlu, and Heidi Miller as Trustees.

Sheila Fraser is a chartered accountant and has served as the Auditor General of Canada from 2001 to 2011. She was also the former chair of the Canadian Public Sector Accounting Board and is currently a member of the International Public Sector Accounting Standards Board (IPSASB).

Professor Wiseman Nkulu is a chartered accountant currently serving as a chancellor of the University of Pretoria. He was a former economic adviser in South Africa, the first chairman of the Steering Committee, chief executive of the Secretartiat of the New Partnership for Africa's Development (NEPAD), a former president of the South African Institute of Chartered Accountants, a former chairman of the South African Council of Higher Education, and a former president of the International Organization of Employers.

Dr. Heidi Miller has over 30 years of experience in the financial services industry where she held senior executive positions at firms such as JPMorgan Chase & Company, Bank One, Citigroup, and Travellers Group.

The appointments, approved by the IFRS Foundation Monitoring Board, begin January 1, 2013, and will expire on December 31, 2015. The terms are renewable once.

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SEC commissioner thinks the U.S. "will get there eventually" on IFRSs

Oct 12, 2012

In a recent speech to the American Bar Association International Section, SEC Commissioner Elisse B. Walter noted that she believed the United States "will get there eventually" with IFRS adoption but that the time frame was uncertain.

In a wide-ranging speech covering numerous topics, Commissioner Walter, speaking in her own capacity, discussed the SEC's role in conforming regulations globally within the context of the SEC's mission, for which she noted "coordination efforts in some areas take longer than perhaps our foreign counterparts would hope."

In relation to IFRSs specifically, Commissioner Walter stated:

SEC staff from the Office of the Chief Accountant has published its final report on the IFRS Work Plan.  This report has given the Commission much to consider.  While I continue to believe that converged standards are important to serving the interests of investors in the increasingly global capital markets, we cannot incorporate IFRS unless and until we are confident that it will serve U.S. investors well.

Speaking more broadly, Commissioner Walter noted the "Commission cannot take actions in areas merely for the sake of international consistency if it is not the right thing to do for U.S. investors and U.S. markets" but added her belief that "more often than not, what is in the best interest of the U.S. markets and what is in the best interest of the global market will not be mutually exclusive."

Ms. Walter also discussed other global regulatory issues such as over-the-counter derivatives, swaps regulation, the proposed unified legal entity identifier system, and monitoring the financial system in the context of automated trading and interconnected markets.

Click for the full text of the speech (link to the SEC's Web site).

FASB issues proposals on consolidations and foreign currency matters

Oct 11, 2012

The FASB has issued two proposed Accounting Standards Updates (ASUs): "Consolidation (Topic 810): Accounting for the Difference between the Fair Value of the Assets and the Fair Value of the Liabilities of a Consolidated Collateralized Financing Entity (a consensus of the FASB Emerging Issues Task Force)" and "Foreign Currency Matters (Topic 830): Parent’s Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity (a consensus of the FASB Emerging Issues Task Force)."

The objective of proposed ASU Consolidation (Topic 810) is “to resolve the diversity in practice in the accounting by a reporting entity for the difference between the fair value of the financial assets and the fair value of the financial liabilities of a consolidated collateralized financing entity and to arrive at the amount a reporting entity would ultimately expect to realize.” Currently, IFRSs do not have any specific guidance on collateralized financing entities.

The objective of proposed ASU Foreign Currency Matters (Topic 830) is “to resolve the diversity in practice about whether Subtopic 810-10, Consolidation — Overall, or Subtopic 830-30, Foreign Currency Matters — Translation of Financial Statements, applies to the release of the cumulative translation adjustment into net income when a parent either sells a part or all of its investment in a foreign entity or no longer holds a controlling financial interest in a subsidiary or group of assets that is a nonprofit activity or a business (other than a sale of in substance real estate or conveyance of oil and gas mineral rights) within a consolidated foreign entity.” The amendments proposed in this exposure draft do not eliminate any of the existing differences between U.S. GAAP and IFRSs.

Comments were due by December 12, 2012.

Background information on the consensuses reached at FASB Emerging Issues Task Force meeting are available in Deloitte's EITF Snapshot newsletter.

Click for (links to the FASB's Web site):

IOSCO to consider "larger role" in IFRSs

Oct 08, 2012

The Board of the International Organization of Securities Commissions (IOSCO) has agreed to consider an IFRS Foundation request to play a larger role in global efforts to further the international adoption and implementation of IFRSs.

The IOSCO Board, which was formed as part of the restructure of IOSCO earlier this year, agreed to consider the move in response to a request in a meeting with Michel Prada, the chairman of the Trustees of the IFRS Foundation, "as a means to improve the comparability and integrity of financial statements across the globe."

IOSCO’s Committee on Multinational Disclosure and Accounting will take up the proposal. The Committee was previously a standing subcommittee of the IOSCO Technical Committee, which has now been subsumed within the IOSCO Board. The proposals would extend the previously stated responsibilities of the Committee, which include monitoring the development and interpretation of IFRS, providing comments on proposed standards and interpretations, and promoting consistent regulatory interpretation and enforcement of IFRSs.

The development was announced by IOSCO as part of outlining the outcomes of the IOSCO Board's inaugural meeting held on October 3 and 4, 2012. The meeting also saw discussion on work mandated by the G20 Leaders and the Financial Stability Board (FSB) on regulatory reform, together with other projects, including global legal entity identifiers, over-the-counter derivatives, regulation of money market funds, and oil price reporting. The meeting also considered emerging market perspectives and noted support for the possible creation of an IOSCO Foundation.

Click for IOSCO press release (link to the IOSCO's Web site).

Sustainability Accounting Standards Board officially launched

Oct 05, 2012

The Sustainability Accounting Standards Board (SASB) was formally announced on October 4, 2012. The organization was formed to establish an understanding of material sustainability issues facing industries and to create sustainability accounting standards suitable for disclosure in standard filings, such as the Form 10-K and 20-F.

The SASB plans to incorporate its standards into the SEC rules for all publicly held companies, governing the specific kinds of sustainability information companies must disclose and how to disclose it.

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IASB podcast on insurance contracts

Oct 03, 2012

The IASB has made available a podcast on the current state of debate on the IASB/FASB joint project on insurance contracts. The podcast, by Darrel Scott (IASB member) and Andrea Pryde (Technical Principal), reports on developments in the project following the September 2012 joint IASB/FASB meeting.

In particular, this podcast focuses on the boards' transition requirements for the forthcoming standard and the IASB decision on targeted reexposure of the insurance contracts proposal.

To listen to the podcast, click here (link to the IASB's Web site).

The Bruce Column — Interview with Paul Volcker

Oct 02, 2012

Robert Bruce interviews Paul Volcker, the most influential central banker of our era, about the state of global financial reporting.

Paul Volcker (118x110)Paul Volcker has been arguably the most influential central banker of our era. As Chairman of the US Federal Reserve from 1979 to 1987 he was the architect of the great economic buoyancy which led to the prolonged growth curve of financial services across the following twenty years. And now, with the ‘Volcker Rule’ plan to curb banks’ proprietary trading almost up and running, he is still at the heart of efforts to bring stability to the markets. Back in 2001 he also found time, and enthusiasm, to chair the trustees at the inception of the IASB and to strongly influence the development of IFRS across the following five years. In the words of the New York Times: ‘In what would have been retirement years for anyone else he became Chairman of the group overseeing the IASB and guided it to a level of independence that outraged French bankers.’ Having supported the endeavours of Sir David Tweedie, the IASB Chairman throughout those years, he returned this September to speak at the annual conference of the Institute of Chartered Accountants of Scotland, where Tweedie is currently President.

Talking with him after he had delivered his speech it was obvious that his efforts and hopes, even at the age of 85, are undimmed. His view of the achievement of the IASB and IFRS remains unchanged and resolutely determined. ‘The IASB has done a terrific job developing credible international standards’, he says. And he reiterated the fundamentals. ‘The enormous complexity and range of the economic and financial world in the twenty-first century only reinforces the need for common accounting standards around the globe, for strong professional discipline in applying those standards, and for a framework of professional independence amid conflicting financial and political pressures’.

The arguments are, he suggests, unarguable. ‘If we really believe in open international markets and the benefits of global finance, then it can’t make sense to have different accounting rules and practices for companies and investors operating across national borders’, he said.

The remaining sticking point is, of course, the attitude of Volcker’s own country, the United States. The momentum which was created in the early days of the IASB, post the Enron collapse and scandal, has become dissipated by politics, and the feeling that America in general is drawing in its horns. The political will, despite the exhortations of the G20, is seen to be lacking. Volcker shares this view. ‘It is a little bit disappointing that the US in contrast has adopted a standoffish approach’, he says. ‘I’m a little puzzled’.

He points to ‘the enthusiasm of American international companies’. For some there is no desire for the status quo. And he sees it as damaging to American businesses to be on the outside of a global system. ‘Why create another problem for ourselves?’ he asks. ‘In the long-term they would be better off’.

It is not just about the long-term prospects for American multi-nationals. It is about reform within the United States itself. He draws the lessons of the last decade and sets them in context. ‘Substantial progress has been made with most countries, beginning in Europe, pledging allegiance to IFRS. But as disappointing to me as to the standard-setters, it is now the United States that, contrary to earlier indications appears to be a reluctant dragon. That can’t make sense’, he says. ‘The United States outside a broader international consensus would be an anomaly, counter to the basic interest of businesses, of investors, or of disciplined enforcement of consistent standards’.

He thinks that sticking to the status quo will only damage American business. ‘The day has long since gone when the United States could claim, with some justice, that it alone, with its long established GAAP, had “best practices” characterised by strong, comprehensive, and well enforced standards’, he says. The balance has changed. Joining in would bring America advantages. Continuing to stay out would not. ‘By now a great deal of progress has been made to achieve agreement on consistent, high quality and enforceable standards’, he says. ‘That convergence will help both the US and other standard setters in withstanding the pressures that inevitably arise to meet particular national or financial interests’.

He has long memories of the amount of cash spent by companies lobbying to stop changes in accounting rules for stock options, for example. ‘People argue wrongly that standards are above politics’, he says. ‘There is plenty of evidence that politicians bring pressure to bear’.

And he also feels that being part of the wider world would shake up the standard-setting process in America for the better. He thinks it is time for change. ‘Within the United States itself there is also much restiveness about the inscrutable detail of GAAP’, he says. ‘There have been too many incidents of weak and negligent practices, of conflicts of interest and political pressure, to any longer justify claims that “made in America” has exclusive superiority’.

He suggested that central bankers tend to be pessimists by nature. But he did express a degree of guarded optimism about the outcome for truly global IFRS. ‘I can only hope that the clear interest repeatedly expressed by the G20 itself in common accounting standards can be made operational in practice’, he said, ‘resolving the few issues that remain open and overcoming the recent hesitation in the United States itself’.

He applies his long experience and accumulated wisdom to the issue. ‘The basic argument is strong enough that if the rest of the world stick to IFRS the US will look odd’, he said. ‘Ultimately it will get done’.

IASB updates work plan for recent decisions, new projects

Oct 02, 2012

The IASB has released a revised work plan that updates the expected timing of various due process steps of its projects. There are a large number of changes, with deliverables for some projects being deferred, and a number of new projects included for the first time, which reflects recent board decisions. A summary is provided of the changes together with a listing of the projects for which a due process document is expected in the near future.

Summary of changes

The following is a summary of the changes in the revised work plan dated October 1, 2012:

Due process documents expected before the end of 2012

The following due process documents are expected to be issued by the end of 2012 (this includes those items already noted above):

Click for the IASB work plan as of October 1, 2012 (link to the IASB's Web site). We have updated our project pages to reflect the updated work plan and other known developments.

Correction list for hyphenation

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