June

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SEC proposes to drop reconciliation for IFRS registrants

21 Jun 2007

On 20 June 2007, the US Securities and Exchange Commission agreed to issue a 'proposing release' that would eliminate the requirement to reconcile financial statements to US GAAP if the financial statements are in full compliance with the English language version International Financial Reporting Standards (IFRSs) as published by the International Accounting Standards Board.

This proposed approach would give foreign private issuers a choice of using IFRSs without reconciliation, US GAAP, or their local GAAP reconciled to US GAAP in preparing financial statements that are filed with the SEC either in a registration statement or an annual report. The changes would apply starting with their 2008 annual reports, which would be filed in 2009. The release is expected to be posted within the next week or so and will have a 75-day comment period. Michael D Coco, Special Counsel in the SEC's Office of International Corporate Finance, outlined the proposal to the Commission. Click to Download Mr Coco's Remarks(PDF 37k). Also, the SEC is expected to issue during the next several months a 'concept release' targeted at US domestic issuers. That release will invite comments on whether US issuers should be permitted to use IFRSs in preparing their financial statements. On the basis of the feedback it receives, the Commission will consider whether to issue a proposing release changing the requirements for domestic companies. That release could come in 2008 or 2009.

In a Press Release (PDF 43k), Sir David Tweedie, IASB chairman, commented on the importance of the SEC decision:

The SEC's proposal shows its recognition of the tangible benefits of a single set of financial reporting standards used in the world's integrating capital markets and the relevance of the continuing IASB-FASB convergence process to the economies of the US and the rest of the world. If approved, the rule will eventually reduce significantly the barriers to capital flows between countries using full IFRSs and the United States. We appreciate the SEC's continued support of our work. Our ultimate aim at the IASB is to have a single set of accounting standards used worldwide. The SEC's proposal is an important step in achieving that goal, but much work remains to be done.
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SEC Chairman's remarks on globalisation and IFRSs

21 Jun 2007

US SEC Chairman Christopher Cox recently addressed a meeting of the New York Society of Security Analysts.

His remarks focused on globalisation of the world's securities markets, the need for IFRSs, and how XBRL can contribute to development of global accounting standards. Click to  Download Chairman Cox's Remarks  (PDF 22k). Here is an excerpt:

The need for fast, reliable, high quality, and affordable information to make the right investment choices has never been more urgent. Your vocation has given you the responsibility to help America's investors meet that need - and to help you in your work, interactive data is on the way. Of course, you're not the only beneficiaries. Investors - retail and professional alike - and financial journalists will benefit as well. Not only that, but through its ability to improve the quality and accuracy of information, interactive data will improve the accuracy of financial statements, improve audit quality, and drive down issuer costs. It also helps address concerns about accounting complexity, through its potential to accelerate the development of a set of truly global accounting standards.
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Notes from day 2 of the IASB June 2007 meeting

21 Jun 2007

The International Accounting Standards Board held its June 2007 meeting at its offices, 30 Cannon Street, London, on Tuesday through Friday 19-22 June 2007. Click here to go to the preliminary and unofficial Notes Taken by Deloitte Observers at the meeting.

Among other things, the Board approved Interpretations on:

Click here to go to the preliminary and unofficial Notes Taken by Deloitte Observers at the meeting.

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Notes from day 1 of the IASB June 2007 meeting

20 Jun 2007

The International Accounting Standards Board held its June 2007 meeting at its offices, 30 Cannon Street, London, on Tuesday through Friday 19-22 June 2007. Click here to go to the preliminary and unofficial Notes Taken by Deloitte Observers at the meeting.

Among other things, the Board approved Interpretations on Customer Loyalty Programmes and on the Limit on a Defined Benefit Asset.
Click here to go to the preliminary and unofficial Notes Taken by Deloitte Observers at the meeting.
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Global convergence with International Standards on Auditing

20 Jun 2007

At the recent Mexico City Conference on Accounting and Auditing in Latin America, John Kellas, Chairman of the International Auditing and Assurance Standards Board spoke about Convergence with International Standards on Auditing.

While his remarks focused on auditing standards, they have equal relevance in the context of global accounting standards. Regarding adoption versus convergence, Mr Kellas argued strongly for the direct adoption by a national standard setter of ISAs, or working towards adopting these standards. "For the vast majority of countries, adoption is the most sensible strategy: Adoption has all the advantages of convergence; all countries may contribute to the standard setting process and IAASB has no domination by any one jurisdiction; and it is the fastest way to eliminate or minimise differences." Mr Kellas presented a list of attributes of high quality auditing standards that apply equally to accounting standards:

High-quality standards are:

  • Clear
  • Not capable of different interpretations
  • Capable of translation
  • Enforceable
  • Designed to achieve a high-quality audit
  • 'Jurisdictionally neutral'
  • Strike a balance between principles and rules
  • Subject to due process
  • Subject to public oversight
Click to Download Mr Kellas's Presentation (ZIP 481k). The ZIP file contains both the text of his remarks (Word DOC) and his presentation slides (PowerPoint PPT).
Click for our 16 June 2007 conference News Story.
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Special newsletter on insurance Discussion Paper

20 Jun 2007

Deloitte's IFRS Global Office has published a special edition of our IAS Plus Newsletter titled Phase II of IFRS for Insurance Contracts – IASB Discussion Paper.

On 3 May 2007, the IASB released for comment a Discussion Paper on accounting for insurance and reinsurance contracts (the DP). This is the second phase of the insurance contracts project which in 2005 introduced IFRS 4 Insurance Contracts. The proposals set out in the DP would introduce fundamental changes to insurance accounting and focus on market-consistent measurement of insurance liabilities. This will affect the way investors, regulators, and other stakeholders assess the insurance industry. This special edition of our IAS Plus newsletter, prepared by insurance specialists, summarises and comments on the measurement issues raised in the DP. 
Click for Newsletter.
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IASB begins field testing of SME Exposure Draft

20 Jun 2007

The IASB has launched a comprehensive programme for field testing the proposals in the Exposure Draft of an IFRS for Small and Medium-sized Entities (IFRS for SMEs) during the comment period.

The testing will help to identify aspects of the exposure draft that may need reconsideration. Companies taking part in the field test are asked to provide background information about the company, submit their most recent annual financial statements under their existing accounting framework, prepare financial statements in accordance with the proposed IFRS for SMEs for the same financial year, and respond to a series of questions designed to identify any specific problems the company encountered in applying the exposure draft.

The IASB has published a Field Test Questionnaire and related Compliance Checklist for the proposed IFRS for SMEs. This checklist identifies all of the accounting recognition and measurement requirements in the Exposure Draft. It is intended to allow users of the draft IFRS for SMEs to pinpoint quickly those sections and paragraphs that are directly relevant to them. The Questionnaire is currently available in English and will also be available in Spanish and French in a few days. The IASB has established a separate email address for the SME field test correspondence: smefieldtests@iasb.org.
The IASB, in co-operation with national and international organisations around the globe, is identifying field test companies and will assist them in applying the requirements proposed in the exposure draft and in responding to the field test questionnaire. Field testers are asked to provide their information by 31 October 2007. Click for:
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CEBS plans for maintaining guidelines based on IFRSs

20 Jun 2007

In our News Story of 22 April 2007, we reported that the Committee of European Banking Supervisors (CEBS) invited comments on proposed amendments to its Financial Reporting Guidelines (FINREP).

Those Guidelines are used by European banks in preparing their supervisory reports based on IFRSs. The CEBS has recently published an Updated Report to the EU Financial Services Committee (FSC)  (PDF 1,107k) indicating that CEBS does not plan to add any major new reporting guides "in the next several years". However CEBS plans to update the guidelines annually, as necessary, to reflect changes to IFRSs.

In response to the industry's request, no major new requirements are planned in the next few years, in order to avoid undue repetitive implementation costs (although CEBS will keep the FINREP framework up to date with changes on IFRS/IAS, so that institutions do not have to use two frameworks: one that is IFRS compliant, and the other that is not. As a rule of thumb, these types of changes will be made on an annual basis).
Click for:
22 April 2007 news story.
Financial Reporting Guidelines (FINREP)
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IASC Foundation conference 29-30 August in Singapore

19 Jun 2007

The IASC Foundation, under which the IASB operates, has organised its annual IFRS Conference on Wednesday 29 August 2007 and Thursday 30 August 2007 at the Grand Hyatt Hotel in Singapore.

IASB Chairman Sir David Tweedie will chair the conference. On Wednesday afternoon, speakers will discuss IFRS financial statements from the perspectives of financial analysts, preparers, and regulators. Thursday's session will include a comprehensive technical update on IASB and IFRIC activities from three members of the IASB, plus technical breakout sessions. Considerable time is allowed on both days for audience comments and questions. Also,on Wednesday morning 29 August there will be five intensive half-day special-interest workshops for which conference participants can sign up. These will cover:
  1. IFRIC Update
  2. Insurance Contracts
  3. IFRS for SMEs
  4. IFRSs Teaching and Research
  5. US Market Update
Click to download Conference Brochure (PDF 1,136k). We have put a link to the conference website at the top of the right side column of this home page.
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Interim reporting compliance checklist for 2007

18 Jun 2007

Our Model IFRS Financial Statements and Compliance Checklists Page has links to a wide range of Deloitte illustrative financial statements and related presentation, disclosure, and compliance checklists for IFRSs.

We have added to that page an IAS 34  compliance checklist as of 31 May 2007. The checklist is formatted to allow the recording of a review of interim financial statements, with a place to indicate yes/no/not-applicable for each item.
We have begun working on our model IFRS annual financial statements for 2007. Our plan is to release them publicly in October 2007.
Click for our Model Financial Statements/Presentation and Disclosure Checklists page.

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