Our comments on IFRIC agenda decision on derecognition

10 Dec 2006

We have submitted a letter to the IFRIC in response to their November 2006 tentative rejection wording on derecognition of financial assets.

Click to Download Our Letter (PDF 120k). An excerpt:

Overall, we disagree with IFRIC's view that these issues do not require a full interpretation.... Even with the rejection wording we believe there is ambiguity as to how the derecognition guidance works; inconsistency in wording between the IASB Update in September and the IFRIC Update in November; and therefore we would expect further questions to be asked of IFRIC in the future in this area.

New IASB-FASB joint working group on leases

09 Dec 2006

The International Accounting Standards Board and the United States Financial Accounting Standards Board have announced the membership of a new international working group that will help the boards in their Joint Project on Lease Accounting.

The joint project involves comprehensive reconsideration of all aspects of lease accounting and is expected to lead to fundamental changes in how lessees and lessors account for leases. The boards expect to publish a joint discussion paper in 2008 expressing their preliminary views. Click for Press Release (PDF 51k).

Members of the International Working Group on Leases





Ann Bordelon

Vice-President of Real Estate Finance

Wal-mart Stores, Inc.

United States

John Bober

Managing Director

GE Energy Financial Services

United States

Bill Bosco


Leasing 101

United States

Neri Bukspan

Managing Director

Standard & Poor's Credit Market Services

United States

Jan Buisman

Senior IFRS Technical Partner



Kevin Davies

Manager, Technical Accounting Department

Anglogold Ashanti Limited

South Africa

Thomas Gruber

Director Accounting and Financial Reporting

Daimler Chrysler Financial Services AG


Ho Soh Khim

Chief Accounting Officer

Singapore Aircraft Leasing Enterprise


Peter Kilgour

Finance Director

Swire Properties Limited

Hong Kong SAR

David Maxwell


Classic Technology Limited

United Kingdom

Rich Jones

Partner, National Office

Ernst & Young

United States

Richard Richards

Group General Manager Reporting and Tax

Qantas Airways


Iain Robertson

Manager, Accounting Policy and Special Projects

Canadian Pacific Railway


Thomas Schroer

Chairman, Accounting and Taxation Committee



David Trainer


New Constructs, LLC

United States

Mark Venus

Finance Director

BNP Paribas Lease Group


Jed Wrigley

Director of International Accounting and Valuation


United Kingdom

George Yungmann

Senior Vice President

Financial Standards National Association of Real Estate Investment Trusts

United States

Thomas Schroer

Chairman, Accounting and Taxation Committee



Accounting Roundup – November 2006

08 Dec 2006

We have posted the November 2006 Edition of Accounting Roundup published by Deloitte & Touche LLP (USA).

Topics covered in this issue include:

FASB Developments

  • FASB Issues Proposed FSP FIN 46(R)-d
  • Tentative Guidance on Statement 133 Implementation Issue

EITF Developments

  • EITF Meeting 16 November 2006

GASB Developments

  • GASB Publishes Comprehensive Implementation Guide

AICPA Developments

  • Audit Risk Alert: Understanding SAS 112
  • ASB Issues SAS 113, Omnibus - 2006
  • ASB Issues SSAE 14, SSAE Hierarchy
  • Audit Guide: Assessing and Responding to Audit Risk
  • Practice Guide: Interpretation 48

PCAOB Developments

  • PCAOB Extends Implementation Date of Rule 3523

International Developments

  • IASB Issues Operating Segments Standard
  • IFRIC Interpretation on Group and Treasury Share Transactions
  • IFRIC Interpretation on Service Concession Arrangements
  • Fair Value Measurements Discussion Paper
Click for November 2006 Edition (PDF 249k). You will find past issues of Accounting Roundup Here.

Regulation of financial reporting in the EU

08 Dec 2006

Charlie McCreevy, the European Commissioner for Internal Market and Services, spoke on Financial Reporting in the EU: Striking the Right Regulatory Balance at a conference organised by the European Accounting Federation (FEE) in Brussels.

Here are excerpts on several matters:

Fair value reporting. "Today's Conference will explore, in particular, whether principles-based fair value reporting poses a conflict between transparency and stability. It will also consider whether greater access to information over the internet is an opportunity or a risk. The accounting firms are right to provoke a debate on this. Personally, I am sceptical about the benefits, but I will be interested to hear the outcome of your discussions."

Implementation of IFRSs. "I think there is a feeling out there that the investment was worth it and that the benefits outweigh the initial costs. However, we still need to maintain our focus so that further improvements can be made. In particular, more consistency and more coherence still need to be developed. We can debate the theoretical value or not of fair value reporting until the cows come home but if there are big differences of approach across the EU, then this will certainly not contribute to financial stability and transparency."

Statutory audit. "The Commission has wide powers to deliver implementing measures under the new statutory audit directive, but I will follow my motto of 'less is more'. Implementing measures will be adopted only after their usefulness is fully demonstrated. Two issues need to be addressed as a matter of urgency. Firstly, how to deal with third country auditors. The Commission will launch a consultation early next year on this. We want, above all, to avoid duplication. The starting point for cooperation between oversight bodies should be the home country principle. This is why I have suggested to the US PCAOB that we should develop a roadmap towards future cooperation between US and EU oversight bodies. This has been done in the accounting field and it should be done for auditing, too. Secondly, we need to consider what should be done about the adoption of the IAASB's International Standards on Auditing, the so-called 'ISAs'. I envisage that we might also launch a consultation on this in the course of next year."

IFRS for SMEs. "Work is also going on within the IASB on SME accounting. Again, I would repeat that what are needed are simple, easy to apply standards that help business. From what I have seen up to now, I have doubts whether the IASB standards will be able to achieve that. And I am very well aware that many in business share this concern."

Click for Full Text (PDF 81k).

Changes to the Financial Reporting Framework in Singapore

07 Dec 2006

Deloitte & Touche (Singapore) has published the 2006 Edition of Changes to the Financial Reporting Framework in Singapore.

This booklet summarises the status of adoption by the Council on Corporate Disclosure and Governance (CCDG) – Singapore's accounting standard setter – of International Financial Reporting Standards (including Interpretations) up to November 2006. It also includes a detailed comparison of Singapore GAAP and IFRSs. Click to Download the Booklet (PDF 205k). You will find more information about accounting standards in Singapore on our Singapore Page, including links to download prior-year editions of the Changes Booklet.

Non-EU issuers may use national GAAP two more years

07 Dec 2006

After receiving positive votes of agreement from the European Securities Committee and the European Parliament, the European Commission has adopted measures extending by two years the transitional exemption granted to foreign companies presenting financial statements prepared in accordance with national accounting standards for the issuing of securities on EU stock markets.

Under these measures, 'third-country' (non-EU) issuers are not subject to restatement obligations until 31 December 2008 if:
  • the financial information contains an explicit and unreserved statement that it complies with IFRSs; or
  • the financial information is prepared in accordance with Canadian GAAP, Japanese GAAP, or US GAAP; or
  • the financial information is prepared using a third-country GAAP in relation to which the following conditions are met:
    • the third-country authority responsible for that GAAP has made a public commitment to converge it with IFRS; and
    • that authority has established a work programme that demonstrates progress towards convergence before 31 December 2008; and
    • the issuer provides satisfactory evidence to the relevant competent authority demonstrating that the conditions in the above two points have been met.
A decision on the equivalence of third-country GAAPs with IFRS is expected to take place before the end of 2009. The measures also require the Commission Services to adopt a definition of equivalence and an equivalence mechanism before 1 January 2008. Click for:

Special edition IAS Plus Newsletter on IFRIC 11

07 Dec 2006

Deloitte's IFRS Global Office has published a special edition of our IAS Plus Newsletter titled IFRIC 11 Clarifies Accounting under IFRS 2.

IFRIC 11 IFRS 2: Group and Treasury Share Transactions addresses the application of IFRS 2 Share-based Payment to certain share-based payment arrangements involving an entity's own equity instruments and to arrangements involving equity instruments of the entity's parent. It is effective for annual periods beginning on or after 1 March 2007. Click for Newsletter (PDF 85k).

New IFRIC project pages created

07 Dec 2006

We have created pages on IAS Plus for the following projects recently begun or activated by the International Financial Reporting Interpretations Committee: .

We have created pages on IAS Plus for the following projects recently begun or activated by the International Financial Reporting Interpretations Committee:

You will find Links to All IFRIC Project Pages here. We also modified several pages on IAS Plus as a result of IFRIC's decision not to finalise Draft Interpretation 9 Employee Benefit Plans with a Promised Return on Contributions or Notional Contributions.

Significant audit issues in recent IASB proposals

07 Dec 2006

Deloitte Touche Tohmatsu has submitted a response to a request from the International Auditing and Assurance Standards Board (IAASB) for identification of significant audit issues in recent proposals by the International Accounting Standards Board (IASB).

Here is an excerpt:

We have concerns about measuring some items in the financial statements at fair value, including whether it is possible to develop sufficient accounting and auditing guidance on measuring fair value reliably. In the appendix to this letter, we have referred to significant audit issues that we have included in our recent comment letters to the IASB as well as an issue arising out of practice. In previous years, we have also highlighted audit issues and concerns around fair value measurement more generally, and specifically on financial instruments and share-based payments.

Click to:

PCAOB to consider revised internal control audit standard

06 Dec 2006

The US Public Company Accounting Oversight Board will meet on 19 December 2006 to consider proposing for public comment a new auditing standard to supersede the Board's Existing Auditing Standard No. 2 internal control over financial reporting, and other related proposals.

The revisions would "provide for a much more efficient, risk-based, scalable implementation" of the internal control audit requirements. The PCAOB's Announcement (PDF 73k) states:

The Board intends to propose a revised auditing standard that is shorter, easier to understand, and more clearly scalable to audits of companies of all sizes and complexity. Among the changes the Board plans to consider are:

  • Reducing granularity.
  • Redefining key terms.
  • Clarifying that the auditor's evaluation of materiality for purposes of an internal control audit is based on the same long-standing principles applicable to financial statement audits.
  • Consolidating the Board's standards on using the work of others in internal control audits and in financial statement audits into one new standard, so as to better facilitate integration of the two audits.

Correction list for hyphenation

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