Topics covered in this issue include:

FASB Developments

• FASB Proposes FSP on Convertible Debt Instruments
• FASB Invites Comments for an Agenda Proposal on Accounting for Insurance Contracts
• FASB Removes FSP on Quantifying Misstatements From Agenda

AICPA Developments

• AICPA Issues SSARS
• AICPA Proposes SSARS-Defining Professional Requirements
• AICPA Professional Ethics Executive Committee Issues Proposed Guidance on Network Firms
• AICPA Professional Ethics Division Issues FAQ on the Independence Impact of Providing Interpretation 48 Services to an Attest Client

SEC Developments

• SEC Issues Concept Release on Giving US Issuers the Choice to Apply IFRSs
• SEC Updates Compliance and Disclosure Interpretations
• SEC Proposes to Revise Limited Offerings Exemptions in Regulation D
• SEC Issues Final Rule to Define 'Significant Deficiency'
• SEC's Office of the Chief Accountant Updates FAQs on Auditor Independence
• SEC Adopts Revisions to EDGAR Filer Manual
• First Meeting of the SEC Advisory Committee on Improvements to Financial Reporting
• SEC Issues Letter Clarifying Servicers' Ability to Make Loan Modifications

FASAB Developments

• Proposed Statement on Reporting Gains and Losses From Changes in Assumptions

International Developments

• IASB and ASBJ Agree on Achieving Convergence by 2011
• IFRIC Clarifies Effects of Interpretation 14

Click to view August 2007 Edition of Accounting Roundup (PDF 269k). You will find past issues of Accounting Roundup Here.

 

Prohibited Non-audit Services - Question 8 (issued August 06, 2007) Q: Regulation S-T Rule 306 and Exchange Act Rule 12b-12(d) require foreign private issuers to provide all filings, related exhibits and all documents under the cover of Form 6-K using the English language. In connection with filings with the Commission, is an accountant independent if at any point during the audit and professional engagement period the accountant provides translation services to SEC audit clients based in foreign jurisdictions or US clients with foreign operations? A: No. Translation services require the accountant to make decisions and judgments on behalf of the client's management on the selection and application of words, phrases, and specific accounting, business and industry terms, in order to appropriately convey the meanings as expressed by management in the original language. This might create a mutual or conflicting interest between the accountant and the audit client and might put the auditor in a position of auditing its own work.

Click to view the SEC's Frequently Asked Questions on Auditor Independence.

Topics to be discussed include:

• An overview of the preliminary model for financial statement presentation
• The statement of comprehensive income
• The statement of cash flows and related reconciliation of the statement of cash flows to the statement of comprehensive income
• Possible additional segment disclosures
• A brief report on the recent recasting exercise and input from participants in that exercise

 

Starting 1 January 2009, all business entities are required to prepare their financial statements in conformity with IFRSs. We have added a Chile Page to our pages of Information by Jurisdiction.

 

Guía Rápida IFRS (IFRSs in your Pocket in Spanish) (PDF 836k, 88 paginas, Marzo 2007). En Chile, el Colegio de Contadores a través de la comisión de Principios y Normas de contabilidad, junto con el Banco Interamericano de Desarrollo (BID), acordó iniciar un proceso de convergencia a las Normas Internacionales de Información Financiera, convergencia planificada a partir del 1 de enero de 2009, con lo cual todas las empresas deberán preparar estados financieros de acuerdo a esta normativa.

 

The agenda is available on our September 2007 IASB meeting page.

 

The proposal, titled IAS 39 – Exposures Qualifying for Hedge Accounting, addresses:

• What can be designated as a hedged item in a hedge accounting relationship – that is, which risks qualify for designation as hedged risks when an entity hedges its exposure to a financial instrument.
• Circumstances in which an entity may designate a portion of the cash flows of a financial instrument as a hedged item.

The ED is now available for eIFRS subscribers and will be freely available on the IASB's website from 17 September 2007. Comment deadline is 11 January 2008.

Click for Press Release (PDF 15k).

The main changes from the previous version are to require that an entity must:

• Present all non-owner changes in equity (that is, 'comprehensive income' – see box below) either in one statement of comprehensive income or in two statements (a separate income statement and a statement of comprehensive income). Components of comprehensive income may not be presented in the statement of changes in equity.
• Present a statement of financial position (balance sheet) as at the beginning of the earliest comparative period in a complete set of financial statements when the entity applies an accounting policy retrospectively or makes a retrospective restatement.
• Disclose income tax relating to each component of other comprehensive income.
• Disclose reclassification adjustments relating to components of other comprehensive income.

IAS 1 changes the titles of financial statements as they will be used in IFRSs:

• 'balance sheet' will become 'statement of financial position'
• 'income statement' will become 'statement of comprehensive income'
• 'cash flow statement' will become 'statement of cash flows').

The revised IAS 1 is effective for annual periods beginning on or after 1 January 2009. Early adoption is permitted. Click for Press Release (PDF 17k).

Comprehensive income for a period includes profit or loss for that period plus other comprehensive income recognised in that period. The components of other comprehensive income include: changes in revaluation surplus (IAS 16 and IAS 38). actuarial gains and losses on defined benefit plans recognised in accordance with paragraph 93A of IAS 19. gains and losses arising from translating the financial statements of a foreign operation (IAS 21). gains and losses on remeasuring available-for-sale financial assets (IAS 39). the effective portion of gains and losses on hedging instruments in a cash flow hedge (IAS 39).

 

Representatives from over 50 accounting standard setting bodies are expected to participate. Presented below is the agenda for the meeting.

Annual IASB Meeting with World Standard Setters 24-25 September 2007, London Monday 24 September 2007, 10:30h to 17:00h Adoption and Implementation of IFRSs – Shared experiences Implementation – our experiences: Adoption: Australia Convergence: PR China Adopting IFRSs – our experience: Canada Korea Contemplating adoption – our plans and issues: India Mexico US GAAP/IFRS Convergence Update Implementation and Enforcement of IFRSs Round-table questions and answers with all of the day's presenters Tuesday 25 September 2007, 09:00h to 16:45h IASB Planning and Priorities Business Combinations Round-table Discussions IFRSs for SMEs IFRSs Technical Update Element Definitions, Recognition and Measurement – Conceptual Framework phases B and C The Reporting Entity and Consolidations – Conceptual Framework phase D, Consolidations and Joint Ventures Presentation of Financial Statements – phase B Fair Value Measurements

 

We have begun posting these to our South Africa Page. Here is the link to download the September 2007 Issue (PDF 657k). Among the IFRS-related points covered in this issue are:

• IFRS Current Issues – Disclosure of an analysis of the age of financial assets that are past due but not impaired
• IFRS Advisory
• IFRS 7 – Credit Risk Disclosures
• Preliminary Views on Insurance Contracts
• Practical Application of Grant Date of Share-Based Payments