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Heads Up on FASB's new business combinations standard

13 Dec 2007

We have posted the 12 December 2007 edition of the Heads Up Newsletter from Deloitte & Touche LLP (United States).

It summarises the FASB's recent issuance of Statements No. 141(R) Business Combinations and No. 160 Noncontrolling Interests in Consolidated Financial Statements. Those statements substantially elevate the role played by fair value and dramatically change the accounting for business combinations and noncontrolling interests. Their issuance represents the completion of the second phase of a multiphase project to reconsider the accounting for business combinations and to converge with the upcoming IASB standards. The IASB plans to release its equivalent of FAS 141(R) on 10 January 2008, with an effective date of 1 July 2009. The IASB's revised IFRS 3 will permit, but not require, recognition of the full goodwill of the acquired entity. SFAS 141(R) requires the full goodwill method. SFAS 141(R) and SFAS 160 may be downloaded without charge from the FASB Website.
Click to view Heads Up Newsletter (PDF 412k).


SEC will propose further delay of SOX 404 for small companies

13 Dec 2007

In testimony yesterday before the US House of Representatives Committee on Small Business, US SEC Chairman Christopher Cox announced that the SEC will consider delaying, for one more year, the requirement that small public companies report on their internal financial controls and have them audited.

The requirement is otherwise scheduled to go into effect for calendar year 2008. The Commission plans to study the costs and benefits of the requirement. Click for Chairman Cox's Testimony (PDF 35k). Here is an excerpt:

We anticipate that the study and analysis of the results will be completed no earlier than June 2008. Under the current schedule, smaller public companies would be expected to begin complying with Sarbanes-Oxley section 404(b) for fiscal years ending after December 15, 2008, with the result that unless there is an additional deferral, companies will incur compliance costs before the SEC has the benefit of the study and analysis. As a result, I intend to propose to the Commission that we authorize a further one-year delay in implementation for small businesses in order to base our decision on final implementation of section 404(b) on the best available cost data.


Three projects added to IASB's technical agenda

13 Dec 2007

At its meeting yesterday, the IASB agreed to add three projects to its active technical agenda.

We have created project pages for each (links below) and have updated our Project Agenda and Timetable Page. The Board decided not to take on a fourth project, on intangibles. Also, it decided not to undertake, at this time, a comprehensive reconsideration of IAS 20 Accounting for Government Grants and Disclosure of Government Assistance.

Three projects added to the IASB's technical agenda:

  • Emission Trading Schemes. The project will address emission trading rights, including any government grants associated with such emission trading rights, but will not address government grants more generally (that is, comprehensive reconsideration of IAS 20 is not included).
  • Common Control Transactions. The project will address accounting for combinations between entities or businesses under common control in the acquirer's consolidated and separate financial statements. Specifically, the scope of the project would be:
    • Define what a common control transaction is.
    • Include demergers and spin offs.
    • Consider accounting in both the separate and consolidated financial statements.
  • Management Commentary. The objective would be to develop a model for a narrative report, that would accompany but be presented outside of the financial statements, setting out management's explanation of the enterprise's financial condition, changes in financial condition, results of operations, and causes of changes in material line items. The project would build on the Discussion Paper that the Board published for comment in October 2005. The output of the project would be a 'best practice' guidance document rather than an IFRS.


Determining fair values of financial instruments under IFRSs

13 Dec 2007

The six largest accounting networks under the auspices of the Global Public Policy Committee (GPPC) have jointly issued a paper entitled Determining Fair Value of Financial Instruments under IFRSs in Current Market Conditions.

The objective of the paper is to enhance awareness of the requirements of IFRSs in relation to the determination of fair value of financial instruments and related disclosures. It is similar to the paper issued by the Center for Audit Quality on Measurement of Fair Value in Illiquid (or Less Liquid) Markets under US GAAP (see our news story of 4 October 2007). A draft of this paper was shared with the Financial Stability Forum, some board members and staff of the IASB, Standing Committee No. 1 of IOSCO, and the Accounting Task Force of the Basel Committee on Banking Supervision. The GPPC group believes that drawing attention to the issues is helpful in advance of the 2007 year-end reporting season, particularly because this is the first time that IFRSs – and especially the literature relating to valuation of financial assets and liabilities – has been applied extensively in difficult market conditions.
Click to view Determining Fair Value of Financial Instruments under IFRSs in Current Market Conditions (PDF 54k).


SEC announces roundtable discussions on IFRSs

13 Dec 2007

The US Securities and Exchange Commission will host two roundtable discussions in December on issues surrounding the growing prevalence of International Financial Reporting Standards (IFRSs):

SEC Roundtables on the Growing Prevalence of IFRSs
  • The first roundtable, on 13 December 2007, will address the issues arising from the current co-existence of two accounting standards in the US markets. Under current rules, non-US companies with US listings often use IFRSs. The roundtable will consist of two panels, which will look at the effect of allowing foreign companies the choice of whether to use IFRSa or US GAAP) and denying that same choice to US issuers. The first panel will explore these issues primarily from the perspective of US investors, issuers, and markets, and the second panel primarily from the perspective of the global markets.
  • The second roundtable, on 17 December 2007, will focus on the practical issues surrounding the possible future use of IFRSs by US companies. The first panel will explore these issues primarily from the perspective of US investors, issuers, and markets. The second panel will discuss the experience of those global markets and foreign companies that have already completed the transition to IFRSs.
Click for:


Notes from first day of December 2007 Board meeting

12 Dec 2007

The International Accounting Standards Board held its December 2007 meeting at the Board's offices, 30 Cannon Street, London, on Tuesday to Friday, 11-14 December 2007.

Click here to go to the Preliminary and Unofficial Notes Taken by Deloitte Observers at the meeting.

Updated summary of public sector standards

12 Dec 2007

We have posted an updated version of Deloitte's 2007 Summary of International Public Sector Accounting Standards.

Subsequently replaced by the February 2010 Edition (PDF 414k).

Speeches at AICPA's annual SEC and PCAOB conference

11 Dec 2007

The American Institute of CPAs is holding its 35th Annual National Conference on Current SEC and PCAOB Developments in Washington on 10-12 December 2007, simulcast in five other cities, including London.

Various representatives from the SEC, PCAOB, AICPA, FASB and other groups are speaking at the conference. The conference is quite popular among SEC registrants and their auditors because the SEC and PCAOB representatives provide insights on important issues for calendar year-end reporting. Here are links to some of the presentations at the conference.

Speeches at AICPA's 35th Annual SEC and PCAOB Conference:

Posted 7 January 2008

Posted 31 December

Posted 27 December

Posted 21 December

  • Julie A. Erhardt, Deputy Chief Accountant, Office of the Chief Accountant (PDF 53k). Ms Erhardt presented her reactions to some of the points made in some of the approximately 80 comment letters the Commission has received on its Concept Release on the possible use of IFRSs by US issuers to prepare their financial statements for purposes of filings with the Commission.

Posted 16 December

Posted 15 December

Posted 14 December

  • Conrad W. Hewitt, Chief Accountant (PDF 46k). Mr Hewitt commented on: (1) adopting release concerning the elimination of the reconciliation to US GAAP for IFRS as issued by the IASB, and the concept release to allow US companies the option to switch from US GAAP to IFRS, (2) the Advisory Committee on Improvements to Financial Reporting (CIFiR), (3) Extensible Business Reporting Language (XBRL), and (4) a number of other projects of the Office of Chief Accountant.

Posted 12 December

Posted 11 December


New Global Offerings Services newsletter

11 Dec 2007

We have posted the September-October 2007 Edition of the Deloitte Global Offerings Services Newsletter.

Global Offerings Services is a global team of Deloitte practitioners assisting non-US companies and non-US practice office engagement teams in applying US and International accounting standards (that is, US GAAP and IFRSs) and in complying with the SEC's financial reporting rules. The GOs Newsletter is an update on relevant GAAP, regulatory, and other matters, webcasts, and publications, with hyperlinks to source material.
Click to view September-October 2007 Edition of the Deloitte Global Offerings Services Newsletter (PDF 140k). Past GOs Newsletters are Here.


Heads Up on US GAAP XBRL taxonomy

11 Dec 2007

On 5 December 2007, the US Securities and Exchange Commission released the XBRL US GAAP taxonomy for public comment.

The taxonomy is a collection of computer 'tags' that can be applied to financial data included in SEC filings to make the data interactive and more useful to investors. The public comment period concludes 4 April 2008. Some time in 2008, the SEC is likely to propose a rule that would require certain registrants to incorporate interactive data into future SEC filings. We have posted the 10 December 2007 edition of the Heads Up Newsletter (PDF 111k) from Deloitte & Touche LLP (United States), which describes the US GAAP XBRL taxonomy.


Correction list for hyphenation

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