Update on the IASB's SME project

06 Dec 2006

The Association of Chartered Certified Accountants (ACCA) published a special edition of its magazine Accounting & Business for the World Congress of Accountants, November 2006.

That issue included an article titled Standards and SMEs: Who, What, When and Why? (PDF 70k) written by Paul Pacter, the IASB's director of standards for SMEs, who is also webmaster of www.iasplus.com. We have posted the article, which is copyright ACCA 2006, with their kind permission.

Heads Up on SEC staff views updated

06 Dec 2006

On 26 September 2006, the SEC Regulations Committee of the American Institute of CPAs held its third meeting of the year with the SEC staff.

The Committee meets periodically with the SEC staff to discuss emerging technical accounting and reporting issues relating to SEC rules and regulations, as well as ongoing SEC staff projects and final rule releases. In October 2006, we posted on IAS Plus an edition of the Heads Up newsletter published by Deloitte & Touche LLP (United States) containing a preliminary summary the meeting. Since the original issuance of that Heads Up, some of the final discussion documents related to the 26 September 2006 meeting were posted to the AICPA's website. Those documents contain the final views of the SEC staff on some issues discussed at the meeting. In a few cases, the final discussion documents differ substantively from the original issuance of the Heads Up. Accordingly, Heads Up has been updated. The revised issues are denoted (revised), and there is a brief summary of the reason for the revision after the SEC view. Click to Download the Updated Heads Up Newsletter (PDF 111k).

Deloitte comment letters to the IAASB

06 Dec 2006

The Deloitte Touche Tohmatsu global network has, for years, submitted comment letters on all IASB, IFRIC, IASCF, IASC, and SIC comment documents including Discussion Papers, Exposure Drafts, and Draft Interpretations, We have a page on IAS Plus that has Links to All Letters to IASB, IFRIC, IASCF, IASC, and SIC since 1995, Also, we announce each new letter in a brief news story on this Home Page.

The Deloitte Touche Tohmatsu global network also submits global comment letters to the International Auditing and Assurance Standards Board (IAASB). We have created a new Page with Links to Our Letters to the IAASB, and we plan to announce each new letter on our Home Page. The permanent link to 'Deloitte Comment Letters' on the left side of this Home Page (under 'Deloitte Publications') will take you to our letters to IASB/IFRIC and also our letters to the IAASB. There's also a link on our IAASB Page.

RFP on approaches to measuring CPD for accountants

05 Dec 2006

The International Accounting Education Standards Board (IAESB) is seeking proposals for research into approaches adopted by a range of professions for measuring continuing professional development (CPD).

The research is expected to lead to an International Education Paper (IEP) in 2008 that will make recommendations as to 'good practice' for possible adoption by IFAC member bodies. The deadline for submission of proposals is 12 January 2007. Click for:

CESR report on auditor oversight in the EU

04 Dec 2006

The Committee of European Securities Regulators (CESR) has published a The Committee of European Securities Regulators (CESR) has published a Report on the Role of Securities Regulators in Auditor Oversight in the European Union.

The report examines the relationship between the securities regulators, the auditors, and their oversight system. The report generally reflects the auditor oversight structure in the EU/EEA member states as of 1 October 2005, with two exceptions. In the Netherlands, on 1 October 2006, the Dutch securities regulator took over the oversight of auditors and increased its powers in this area. Also, in Italy, in December 2005, a new law was passed that strengthened the powers of CONSOB (Italian securities regulator) in respect of auditor oversight. The report notes that "with the enactment of the 8th Directive on Statutory Audit which will be implemented in member states by mid-2008, each member state has to establish an auditor oversight body. Some member states are still in the process of establishing these auditor oversight bodies, so the situation as set out in this report is likely to change over the next two years."
Click for Full Report (PDF 117k).

Report on implementation of IFRSs in the United Kingdom

04 Dec 2006

The United Kingdom Financial Reporting Review Panel has published a report on its preliminary findings in respect of IFRS implementation by UK listed companies in their annual accounts.

The Panel found 'a good level of compliance with IFRSs' but also identified a number of recurring issues that are highlighted in the report, including the following:
  • There is "a tendency to use 'boiler-plate' descriptions for disclosure of accounting policies, irrespective of whether those policies had been applied in the accounts. IFRS accounts have been said to be too long and too complicated. More focused and thoughtful approaches to these areas might reduce their length and increase understanding of the complexities which are inevitable in sophisticated commercial operations."
  • IAS 1 disclosures relating to subjective or complex judgements made by management were sometimes bland and uninformative.
  • Not all companies complied with the requirement to disclose the possible impact on their financial statements of published Standards and Interpretations not yet effective at their reporting date.
  • Disclosures relating to intangible assets and goodwill acquired in business combinations needed improvement in some cases.
  • Similarly, disclosures relating to impairment testing of goodwill and indefinite-life intangible assets were inadequate in some cases.
  • The report reminds companies that all key management personnel are related parties under IAS 24 (even if they are not directors) and IAS 24 requires disclosure of remuneration.
Click to download:

Updated EFRAG endorsement status report

04 Dec 2006

The European Financial Reporting Advisory Group has updated its report showing the status of endorsement, under the EU Accounting Regulation, of each IFRS, including standards, interpretations, and amendments.

Click to download the Endorsement Status Report as of 30 November 2006 (PDF 28k). You can always find it on our EFRAG Page. Currently, the following IASB pronouncements have not yet been endorsed for use in Europe:
  • IFRS 8 Operating Segments
  • IFRIC 12 Service Concession Arrangements
  • IFRIC 11 Group and Treasury Share Transactions
  • IFRIC 10 Interim Financial Reporting and Impairment

Australia proposes to undo changes it made to IFRSs

02 Dec 2006

On 30 November 2006, the Australian Accounting Standards Board (AASB) issued Exposure Draft ED 151 Australian Additions to, and Deletions from, IFRSs for comment.

ED 151 can be downloaded from the AASB Website (PDF 100kb). ED 151 reflects the AASB's recent decision to make Australian accounting requirements the same as IFRSs in respect of for-profit entities. To this end, the exposure draft proposes reinstating various accounting policy options that were previously deleted in making the existing suite of A-IFRS, and removing certain Australian-specific disclosures.

Options in accounting and disclosure

ED 151 proposes to allow entities the option to:

  • prepare cash flow statements using the 'indirect' method. Whichever method adopted, the reconciliation between profit and operating cash flows will no longer be required
  • use proportionate consolidation to account for their jointly controlled entities
  • account for government grants as deferred income or as a deduction from the related asset. The choice affects the timing of recognition of the grant as income
  • account for government grants in the form of a transfer of a non-monetary asset for use by the recipient at fair value or nominal amount
  • disclose government grants related to income as a credit in profit and loss or as a deduction from the related expense
  • disclose a reconciliation between the average effective tax rate and the applicable tax rate instead of a reconciliation between tax expense and accounting profit multiplied by the tax rate. Also, the ED proposes eliminating the additional disclosures related to the treatment of exchange differences on deferred taxes

 Reducing the magnitude of additional disclosures

ED 151 also proposes that entities no longer be required to make Australian specific disclosures relating to:

  • defined benefit plans, including the surplus or deficit determined under AAS 25 Accounting for Superannuation Plans and details about funding
  • associates and joint ventures
  • earnings per share calculations, including disclosure of an additional EPS number where there has been a major capital restructuring.
  • the reason and justification for not using the Australian currency as the presentation currency
  • the financial effect of a change in accounting policy made in the second half of the financial year on the previously reported half-year results/position
  • interim financial reporting – including the financial effect of subsequent events, details about dividends proposed or declared, and labelling of the interim financial report
  • for biological assets, their nature, estimate of physical quantity and details of restrictions on their use or sale
  • disclosure of credit standby arrangements and a summary of used and unused loan facilities as required by AASB 132 Financial Instruments: Disclosure and Presentation
  • for financial institutions, disclosures including interest analysis, contractual maturities, impairment losses and fiduciary duties.
Click for Deloitte Accounting Alert (PDF 41k).


Agenda for December 2006 IASB meeting

02 Dec 2006

The International Accounting Standards Board will hold its December 2006 Board meeting at its offices, 30 Cannon Street, London, on Tuesday through Thursday 12-14 December 2006. Presented below is the preliminary agenda for the meeting.

The International Accounting Standards Board will hold its December 2006 Board meeting at its offices, 30 Cannon Street, London, on Tuesday through Thursday 12-14 December 2006. Presented below is the preliminary agenda for the meeting.

Board Meeting Agenda

12-14 December 2006, London

Tuesday 12 December 2006

Wednesday 13 December 2006

  • Financial Instruments – Interest margin hedging [Education Session]
    • Representatives from the European Banking Federation will hold an education session for the Board, at which they will present a proposed alternative hedge accounting model.
  • Annual Improvements - 2006 [Please note this session may be moved to Tuesday 12 December if other sessions on that day take less time than anticipated]
    • 1. Should IAS 1 Presentation of Financial Statements be amended to provide guidance on situations where the financial statements of an entity are based on, but not in full compliance with, IFRSs?
    • 2. Should the term 'point-of-sale costs' in IAS 41 Agriculture be replaced with 'costs to sell' to improve consistency with other IFRSs?
    • 3. Should IAS 38 Intangible Assets permit the use of the unit of production method of amortisation when it results in a lower amount of accumulated amortisation than the straight-line method?
  • Financial Instruments – Hedging of portions of cash flow or fair value exposure
  • Financial Instruments – Due Process Document: Recognition and Measurement

Thursday 14 December 2006

  • Technical plan
  • Financial Statement Presentation phase A – Exposure Draft of Proposed Amendments to IAS 1 Presentation of Financial Statements: Comment letter analysis.
  • Financial Statement Presentation phase B:
    • Other comprehensive income
    • The statement of cash flows
    • Application of the working format to financial institutions
    • Tentative decisions to date and comprehensive illustration
  • Business Combinations Phase II– Redeliberations of the proposed revised IFRS 3:
    • Non-controlling interests and goodwill: Questions and answers
    • Combinations between mutual entities
    • Accounting for business combinations achieved by contract alone or in the absence of a transaction involving the acquirer

US PCAOB proposes $136 million 2007 budget

01 Dec 2006

The US Public Company Accounting Oversight Board has approved a budget of US$136.4 million for calendar year 2007, compared to $130.9 for 2006. The majority of the Board's outlays will be for personnel and related expenses to conduct inspections of registered public accounting firms.

To date, more than 1,700 public accounting firms have been registered by the Board, including approximately 750 firms based outside the United States. Firms with more than 100 public company audit clients must be inspected annually; firms with one to 100 public company audit clients must be inspected at least once every three years. The PCAOB expects to grow to a total headcount of 519 employees by year-end 2007, including approximately 250 inspections staff. This compares to an estimated 480 total and 230 inspections staff by the end of 2006. The budget is subject to US SEC approval. Click for:

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