December

iGAAP Financial Reporting Standards in India

09 Dec 2008

Deloitte Touche Tohmatsu India Private Limited has compiled 'iGAAP Financial Reporting Standards in India including a Comparison with IFRS' – a practical and comprehensive guide for companies based in India.

It includes a comparison of each Indian Standard with the relevant standard under IFRS. This book is the ideal one-stop reference guide financial reporting in India in view of the planned convergence of Indian GAAP with IFRSs by 2011. The book includes illustrative examples to demonstrate how the standards work in practice and provides commentary for further support in areas where Indian GAAP is ambiguous, unclear, or does not provide any guidance. iGAAP Financial Reporting Standards in India (ISBN: 9788184731347) has been published by Wolters Kluwer (India) Private Ltd, New Delhi and may be ordered from the CCH India website.

 

US Financial Reporting Alert in Spanish

08 Dec 2008

Deloitte (Colombia) has published the Spanish version of the Deloitte USA Financial Reporting Alert 08-17 (October 2008) – 'Accounting Considerations Related to Redemption Restrictions on Money Market Funds'.

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UK Parliament Q&A with IASB chairman

08 Dec 2008

IASB Chairman Sir David Tweedie and others gave evidence at a hearing on the banking crisis conducted by the Treasury Committee of the United Kingdom Parliament on Tuesday 11 November 2008.

The Committee has released the Uncorrected Testimony (PDF 229k) of that portion of the hearing. Evidence presented by Sir David begins at Question 185. Presented below is Sir David's response to a question about whether the IASB inappropriately caved in to political pressure to amend IAS 39 for Reclassifications of Financial Assets to allow companies to stop measuring some financial assets at fair value.

Q186 Chairman: Sir David, 'spineless' and 'caved in'. Answer?

Sir David Tweedie: I think we experienced something that, I hope, firstly, we never see again in standards setting, but I think there was just a blunt threat to blow the organisation away. That came very, very rapidly. We heard a speech by the Commissioner saying that he had legislation prepared to have a 'carve out' from part of our standards. They cannot put words in at the moment (though I suspect that might be thought about); they can only remove words, and what that would mean was they would be able to transfer out of things like the trading account into some other account – held for maturity, or whatever else – without any controls whatsoever. So companies could have taken items out of that, not at fair value, as we require, but they could have taken them out at original transaction price, for example. There were no disclosures; you would never know what had happened, and suddenly we would see all these losses flowing back in, if they did not think they had been impaired on a permanent basis. I think accounting in Europe would have been totally out of control if they had used the option to take the 'carve out'. Our problem was we originally intended to have at least a week to find out whether, in fact, we had managed to get our standards equivalent, as far as reclassification is concerned, with the United States. We did not have a week; we had only a matter of days. What we did is we contacted the American standards sector, the Securities and Exchange Commission in America, and the major accounting firms, and say: 'We think we have done it here. Is that right?' However, when we put it through – we put it through on the Monday and, if I remember rightly, the European Commission voted on the Tuesday or Wednesday – we had no time whatsoever for consultation. We explained at that meeting: 'If we find we have made a mistake, we are going to come back again'. In a way, we have got a mistake on the transition. That is what happens when you do not consult.

PCAOB report on audit firm inspections 2004-07

08 Dec 2008

The Public Company Accounting Oversight Board today released a report summarising the inspection findings of the eight domestic accounting firms that were subject to annual inspections over the past four years.

The PCAOB focuses its inspections on those areas of an audit likely to pose the most significant challenges for an auditor or to pose the most significant risk to investors of misstated financial statements. These include areas that are fundamental to any audit, such as testing of revenue, as well as areas that pose increasingly challenging issues in current market conditions, such as testing of fair value measurements. Click to download Report on the PCAOB's 2004, 2005, 2006, and 2007 Inspections of Domestic Annually Inspected Firms (PDF 107k). Here is an overview of the findings:

  • Inspectors continue to find deficiencies in important audit areas, both established and emerging. These areas include critical and high-risk parts of audits, such as revenue, fair value, management's estimates, and the determination of materiality and audit scope. These deficiencies occurred in audits of issuers of all sizes, including in some of the larger audits they reviewed. In some cases, the deficiencies appeared to have been caused, at least in part, by the failure to apply an appropriate level of professional skepticism when conducting audit procedures and evaluating audit results. In addition, even in areas where inspectors have observed general improvement, deficiencies continue to arise. The inspectors will continue to focus on the significant areas where they have encountered deficiencies.
  • In certain well-established audit areas, such as the confirmation of accounts receivable and the auditing of income tax accounts, the incidence of deficiencies encountered has declined. In certain other areas, such as the performance of analytical procedures, the nature of the deficiencies identified by inspectors has generally narrowed during the four-year period, with fewer of them relating to the overall failure to apply the governing standard and more relating to only one or a few aspects of the standard. In addition, inspectors have, in recent years, reviewed some audits of issuers whose audits had been reviewed in prior years in order to evaluate whether performance in the areas commented upon in prior years had improved. In the majority of these specific audits, inspectors observed improvement in the auditing of those areas.
  • In response to the identification, during the inspection process, of quality control deficiencies, firms have changed their audit methodologies, processes, or related quality control systems.

IASCF seeks comments on Constitution review

08 Dec 2008

The Trustees of the International Accounting Standards Committee Foundation (IASCF) have issued for comment a discussion document on the second part of the five-yearly review of the IASCF Constitution.

The document addresses constitutional issues that were not covered in the first part of the review. Some of the issues on which the IASCF seeks comment are:

  • whether the section of the constitution dealing with governance of the Foundation, which now mentions only the IASCF, should also refer to the new monitoring group proposed under part 1 of the Constitution Review
  • geographical mix of Trustees
  • effectiveness of Trustee oversight activities
  • funding arrangements
  • the IASB's agenda-setting procedures
  • the IASB's existing due process procedures
  • the possible need for 'fast track' due process procedures
  • principles-based approach to standards
  • whether the IASB should set standards for not-for-profit entities and the public sector
  • procedures and composition of the Standards Advisory Council

Comments are due by 31 March 2009. The Trustees expect then to continue their consultations in a series of round-table meetings to encourage further debate and comment from stakeholders around the world. The Trustees plan to conclude the second part of the review at their meeting in October 2009. The amendments to the Constitution would take effect on or after 1 January 2010. Click for:

IFRS presentation and disclosure checklist for 2008

08 Dec 2008

We have posted Deloitte's IFRS Presentation and Disclosure Checklist for 2008 (Word version). The checklist is formatted to allow the recording of a review of financial statements, with a place to indicate yes/no/not-applicable for each presentation and disclosure item.

The checklist is a Microsoft Word File Zipped (502k).

Note that none of the new and revised Standards and Interpretations included in this checklist for the first time is effective for annual periods beginning 1 January 2008 (although early adoption is permitted for most). Therefore, for entities with year-ends of 31 December 2008 that have not elected to adopt any of these Standards or Interpretations in advance of their effective dates, and that would prefer to defer the move to the new terminology introduced by IAS 1(2007), it may be preferable to complete the 2007 release of the Presentation and Disclosure Checklist, which includes all of the Standards and Interpretations effective for accounting periods beginning 1 January 2008. The only change will be that IFRICs 11, 12 and 14, which were not effective for accounting periods beginning 1 January 2007 and, therefore, were shown in shaded text in the 2007 checklist, are effective for periods beginning 1 January 2008 and, therefore, where applicable, they should be completed.

Our various IFRS model financial statements and related checklists, including translations, are always available here.

Newsletter on recent revisions to IFRS 1

08 Dec 2008

Deloitte's IFRS Global Office has published a special edition of our IAS Plus Update Newsletter 'Revisions to IFRS 1 on First-time Adoption of IFRSs'.

Frequent amendments to IFRS 1 since its original release in 2003 had made the standard more complex and less clear. The new version of IFRS 1 just issued retains the substance of the previous version, but within a changed structure. It replaces the previous version and is effective for entities applying IFRSs for the first time for annual periods beginning on or after 1 January 2009. Earlier application is permitted.

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IFRIC meeting for January 2009 is cancelled

07 Dec 2008

The IASB has announced that the meeting of the International Financial Reporting Interpretations Committee (IFRIC) scheduled for 8 and 9 January 2009 has been cancelled. Because of IFRIC's recent progress, there were not sufficient agenda items for the IFRIC to consider to warrant a meeting.

Regarding items discussed at IFRIC's November 2008 meeting, the announcement said:

A near-final draft based on Interpretation D24 Transfers of Assets from Customers (formerly 'Customer Contributions') will be posted for comment on the IASB's website by the end of the week commencing 8 December.

Regarding IFRIC's project on the treatment of voluntary prepaid contributions under a minimum finding requirement in accordance with IFRIC 14, the staff will present the proposed amendment to the Board at its January meeting. The proposed amendment approved by the Board will also be discussed with the Pensions Working Group at its meeting in January.

IFRSs gaining acceptance among US CPAs

06 Dec 2008

The US accounting profession increasingly believes that international accounting standards will be implemented in the United States and is beginning to prepare for the change, according to a survey conducted by the American Institute of Certified Public Accountants.

The survey shows a significant and positive shift in the number of firms and companies that are starting to prepare for eventual adoption of IFRSs.

  • 55% of CPAs at firms and companies nationwide now say they are preparing in a variety of ways for adoption of IFRS, an increase of 14 percentage points from 41 percent who were preparing for change according to an AICPA survey in April 2008.
  • 65% of CPAs say they have some knowledge of IFRS but need to learn more.

The survey results are based on 1,495 AICPA-member respondents, who took an online survey between 22 September and 2 October 2008. The margin of error was less than plus-or-minus 3 percentage points. Click for:

AICPA IFRS webcast offered free 12 December 2008

05 Dec 2008

The American Institute of CPAs has launched a new IFRS Quarterly Webcast series called Migrating to IFRS: A Conversion Review. The first program in the series is designed to be step one in a multi-step educational process to help practitioners and financial managers get up to speed in all aspects of IFRS implementation. This webcast will be provided free to participants who do not seek CPE credit.

Details:

  • When: Friday, 12 December 2008, 2 pm to 4:30 pm EST
  • Registration: Click here to register
  • Webcast title: IFRS 101: The Essentials
  • Webcast content: Background and history on the IFRS convergence efforts, the recent SEC Roadmap, summary of critical differences between IFRS and US GAAP, and how all of these changes will affect audit firms and companies
  • Price: Free, but free registration of a CPA2Biz account is required

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