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New board-level guide to sustainability

Jan 23, 2012

Deloitte's Global Center for Corporate Governance has released "The Sustainable Board," a white paper that provides a board-level overview of sustainability and its impact on organizations.

According to the paper, sustainability is increasingly becoming a top-of-mind issue for boards that are seeking to enhance performance and reputation, mitigate risks, and foster innovation and growth. The paper is presented as a series of topics, with examples of questions that boards may wish to ask themselves and management to further their understanding. There are specific sections on the measurement of sustainability information and sustainability transparency and disclosure.

The questions in the paper in relation to disclosure are reproduced below:


Questions for directors to ask
  • What are the organization's policies regarding setting goals and measuring performance in economic, environmental and social areas (i.e. internal reporting) and disclosing those activities to investors and other stakeholders (i.e. external reporting)?
  • Does management voluntarily disclosure sustainability and social responsibility related strategies, performance and risks beyond the general requirements set forth by regulators (e.g. Management's Discussion & Analysis guidance)? Is the board required to review and approve all sustainability disclosures before they are released?
  • What information, if any, does management provide on sustainability issues to regulators, customers, suppliers, non-governmental organizations or other stakeholders?
  • Does the organization disclose the metrics used to measure performance towards achieving its sustainability objectives? Is there a third party verification process for sustainability reports?
  • How does the board satisfy itself regarding the accuracy of the sustainability information that is publicly disclosed?

The paper notes the following in its conclusion:

Demand for reporting and disclosure of sustainability performance continues to increase – both as a response to regulation, and stakeholder and investor pressure, but also from internal management looking for better ways to manage risk and measure and improve performance.

Click for The Sustainable Board.

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IFRS Foundation issues exposure draft of updated XBRL taxonomy

Jan 20, 2012

The IFRS Foundation has published an exposure draft of the IFRS Taxonomy 2012. The proposed taxonomy is consistent with IFRSs, including IASs, and the IFRS for SMEs.

The IFRS Taxonomy 2012 is a translation of IFRSs as issued as of January 1, 2012, into eXtensible Business Reporting Language (XBRL).

The proposed taxonomy includes "common practice" extensions, which were derived from an analysis of IFRS financial statements and are designed to diminish the need for preparers to customize the taxonomy to fit their individual businesses. The need for these extensions originally arose from SEC concerns about the suitability of the existing IFRS taxonomy for U.S. filing purposes and the outcomes of a pilot XBRL study conducted in 2011.

The proposed taxonomy is open for comment until March 17, 2012. Click for more information (link to the IASB's Web site). The FASB has also recently announced the 2012 U.S. GAAP taxonomy.

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Notes available from the January IFRS Interpretations Committee meeting

Jan 18, 2012

Deloitte observer notes are now available from the IFRS Interpretations Committee meeting held in London on January 17–18, 2012.

The topics discussed include (click for detailed Deloitte observer notes for that topic):

Tuesday, January 17, 2012

Wednesday, January 18, 2012

Click for the preliminary and unofficial Notes Taken by Deloitte Observers for the entire meeting.

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Deloitte publication update

Jan 16, 2012

A reminder that you can access all the latest IFRS-related Deloitte newsletters through the "Publications" tab on the home page, including the latest edition of our "Model Financial Statements."

The most recent publications include:

The page also highlights that Deloitte's 2011 Model Financial Statements that reflect the early application of new and revised standards are now available. The model financial statements illustrate the impact of a number of new and revised standards and interpretations that are mandatorily effective on January 1, 2011, and the impact of the early application of new and revised Standards that are not yet mandatorily effective on January 1, 2011 (e.g., IFRS 9, Financial Instruments; IFRS 10, Consolidated Financial Statements; IFRS 11, Joint Arrangements; and IFRS 12, Disclosure of Interests in Other Entities, and amendments to IAS 1, IAS 12, and IAS 19). They also contain additional disclosures that are considered to be best practice, particularly when such disclosures are included in illustrative examples provided with a specific standard.

Click for IFRS Model Financial Statements for 2011 including early adoption.

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Deloitte issues U.S. alert on accounting for eurozone sovereign debt holdings

Jan 12, 2012

Deloitte has issued a "Financial Reporting Alert" on the impairment of Greek government bonds (GGBs) and debt issued by other eurozone states. The alert notes that under U.S. GAAP and IFRSs, GGBs and other loans that are issued by the Greek state are impaired (other-than-temporarily impaired in the case of GGBs) as of December 31, 2011. The alert provides guidance on the measurement of the impairment loss for the different types of investments.

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Notes from the IFRS Foundation Trustees meeting

Jan 12, 2012

The IFRS Foundation Trustees held a meeting in Singapore on January 12, 2012.

Deloitte observer notes are posted from the meeting (click for direct access to the notes):

Thursday, January 12, 2012

Click for the preliminary and unofficial notes taken by Deloitte observers for the entire meeting.

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IAASB feedback statement on disclosure consultation

Jan 11, 2012

The IAASB has released a "Feedback Statement" on the responses to its January 2011 discussion paper "The Evolving Nature of Financial Reporting: Disclosure and Its Audit Implications." The discussion paper solicited views and perspectives of different stakeholder groups on the challenges arising as financial reporting continues to evolve to meet the changing needs of users.

The Feedback Statement presents a summary of the range of views on some of the more significant challenges faced by participants across the entire financial reporting supply chain, including the impact of trends in financial reporting, applying materiality to disclosures, evaluating misstatements generated by disclosures, the availability of audit evidence to support disclosures, and work effort.

To address some of the issues identified respondents have called for more auditing guidance in certain identified areas. However, the majority of the respondents were of the view that some of the more important issues could not be addressed by the IAASB on its own, but would require international collaboration and cooperation, particularly with both the accounting standard setters — including the IASB, the FASB, and regulators.

The need for a "Disclosure Framework" is a recurring theme in recent times. For example, our comment letter (PDF 126k) on the IASB's Agenda Consultation noted the "development of a clear framework for disclosures in financial statements is critical and urgent."

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

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IFRS Advisory Council membership update

Jan 10, 2012

The Trustees of the IFRS Foundation have announced the appointments and reappointments to the IFRS Advisory Council for memberships that ended December 31, 2011.

The new terms began on January 1, 2012, and are between one and three years to enchance continuity.

In addition, Paul Cherry has been reappointed for another two years as chairman of the Advisory Council. Patrice Marteau has been reappointed for one year, and Charles Macek has been reappointed for three years, both as vice-chairmen of the Advisory Council.

Click for:

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Outcomes from recent Capital Markets Advisory Committee meeting

Jan 09, 2012

The IASB has released a summary of the Capital Markets Advisory Committee (CMAC) meeting, which was held in London on October 12, 2011. The CMAC was previously known as the Analyst Representative Group (ARG) and is a group of professional financial analysts who regularly meet with members of the IASB to provide the views of professional investors on financial reporting issues.

The topics discussed at the meeting included:

  • XBRL. The CMAC considered the IFRS taxonomy, custom tags, and the Thomson Reuters taxonomy model
  • Risk-free rate of return. There was a general view among the participants that the determination of the risk-free rate was not the responsibility of the IASB; discussion also included when "synthesized" risk-free rates may be appropriate (e.g., entities operating in the Eurozone or multi-nationals).
  • Impairment of financial instruments. The CMAC considered the IASB's current impairment model (the "three bucket approach") and considered matters such as "day one losses," information needs, and the use of expected values.
  • Transition disclosures. The CMAC discussed disclosures made when an IFRS is issued but is not yet mandatory, a preference for IFRS 1 type disclosures when a new standard is applied for the first time, and related matters.
  • Other. The CMAC discussed the usefulness of project-specific case studies for accounting proposals and the IASB's agenda consultation.

Click for more information (link to the IASB's Web site).

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Introductory message from the new chairman of the IFRS Foundation Trustees

Jan 04, 2012

The IASB has posted an introductory message from the new chairman of the IFRS Foundation Trustees, Michel Prada.

In his introductory message, Michel Prada speaks about his previous work and his dedication to the development of global financial reporting standards. He warns about "uncertainty and ambiguity" in markets and says that the financial crisis should not impede efforts toward global accounting standards. He is committed to "managing the delicate balance between independence, legitimacy and public accountability" in his role as chairman. Click Mr. Prada's introductory message on the IASB's Web site.

Michel Prada became the new chairman of the IFRS Foundation Trustees effective January 1, 2012. See our earlier story for more information about his appointment.

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