Corporate reporting - trends and tensions in convergence

31 Jul 2008

Jeff Willemain, Global Managing Partner, Regulatory & Risk, Deloitte Touche Tohmatsu, recently contributed to the International Corporate Governance Network (ICGN) 2008 Yearbook, which was distributed at the ICGN Conference in Seoul, June 2008.

The paper Corporate Reporting: Trends and Tensions in Convergence (PDF 39k) focuses on the evolution of accounting standards and the issues associated with convergence and adoption of International Financial Reporting Standards (IFRSs).

SEC roundtable on performance of IFRSs and US GAAP

31 Jul 2008

The US Securities and Exchange Commission will host a roundtable on 4 August 2008 to analyse the performance of IFRSs and US GAAP during the recent period of market turmoil.

The roundtable, which will be webcast, will consist of two panels that will include investors, issuers, auditors, and various other parties with experience in financial reporting. Representatives from the FASB and the IASB will be present as observers. US SEC Chairman Christopher Cox said:

This roundtable will provide the Commission with valuable insights from investors, issuers, auditors, and others about the way that both IFRS and US GAAP performed in the context of the current pressures on the marketplace. We are particularly interested in how the two sets of standards dealt with the key accounting issues in the subprime crisis, including off-balance sheet entities and fair value.

Written submissions are invited. Click for More Information on the SEC's website.


IAS Plus Newsletter on IAS 39 - eligible hedged items

31 Jul 2008

Deloitte's IFRS Global Office has published a Special Edition IAS Plus Newsletter — IAS 39: Eligible Hedged Items.

The amendments relate to:
  • Identifying inflation as a hedged risk or portion
  • Hedging with options
Click to view Special Edition IAS Plus Newsletter– IAS 39: Eligible Hedged Items (PDF 140k). You will find all Past IAS Plus Newsletters Here


PCAOB adopts rules for succeeding to registration of audit firm

30 Jul 2008

The US Public Company Accounting Oversight Board has adopted rules govern when an audit firm would be allowed to succeed to the registration status of a predecessor firm following a merger or other change in the registered firm's legal form, without the new legal entity needing to apply for registration.

The PCAOB will submit the rules to the Securities and Exchange Commission for approval. The rules will take effect 60 days after Commission approval. Click for More Information on the PCAOB's website.


Amendment to IAS 39 for eligible hedged items

30 Jul 2008

On 30 July 2008, the IASB published amendments to IAS 39 'Financial Instruments: Recognition and Measurement' to clarify two hedge accounting issues.

The two issues are:

  • Inflation in a financial hedged item
  • A one-sided risk in a hedged item

The amendments are based on the September 2007 exposure draft Exposures Qualifying for Hedge Accounting, but focus more narrowly only on the two foregoing areas.

The amendment does not address either (a) what can be designated as a hedged portion under IAS 39 or (b) the European carve-out option used by a few European companies. These issues will be addressed separately.

Inflation in a financial hedged item Inflation may only be hedged if changes in inflation are a contractually specified portion of cash flows of a recognised financial instrument. Therefore, where an entity acquires or issues inflation-linked debt, it has a cash flow exposure to changes in future inflation to which cash-flow hedge accounting may be applied. However, the amendment clarifies that an entity may not designate an inflation component of issued or acquired fixed-rate debt in a fair value hedge because such a component is not separately identifiable and reliably measurable. The amendments also clarify that a risk-free or benchmark interest rate portion of the fair value of a fixed-rate financial instrument will normally be separately identifiable and reliably measurable and, therefore, may be hedged.

A one-sided risk in a hedged item IAS 39 permits an entity to designate purchased options as a hedging instrument in a hedge of a financial or non-financial item. The entity may designate an option as a hedge of changes in the cash flows or fair value of a hedged item above or below a specified price or other variable (that is, a one-sided risk). The amendments make clear that the intrinsic value, not the time value, of an option reflects a one-sided risk and, therefore, an option designated in its entirety cannot be perfectly effective. The time value of a purchased option is not a component of the forecast transaction that impacts profit or loss. Therefore, if an entity designates an option in its entirety as a hedge of a one-sided risk arising from a forecast transaction, hedge ineffectiveness will arise. Alternatively, an entity may choose to exclude time value as permitted by IAS 39 to improve hedge effectiveness.

The amendments to IAS 39 are effective for annual periods beginning on or after 1 July 2009, with earlier application permitted, and must be applied retrospectively. Therefore, if an entity has a hedge accounting relationship that is no longer considered qualifying under the amended IAS 39, the entity must restate its comparative prior period(s).

Click for Press Release (PDF 52k).


IFRSs in your Pocket in Russian

29 Jul 2008

Deloitte & Touche CIS (Russia) has published МСФО в кармане. 2008 год – a Russian translation of IFRSs in your Pocket 2008.

Click here to view МСФО в кармане. 2008 год (PDF 697k, 186 pages).
This pocket guide includes summaries of all IFRSs issued through March 2008. Please click here for Information about Deloitte Russia.

Agenda project pages updated for July 2008 meeting

26 Jul 2008

We have updated the following agenda project pages to reflect the discussions and decisions at the July 2008 meeting of the International Accounting Standards Board:

Deloitte Canada Countdown IFRS transition newsletter

25 Jul 2008

Deloitte Canada has released the July 2008 issue of their Countdown IFRS transition newsletter, to provide a snapshot of where we are now as far as Canada's transition to IFRSs is concerned – both in Canada and in Deloitte.

Among the topics covered in this issue of Countdown are the Canadian Securities Administrators' release of additional guidance relating to early adoption of IFRSs; the release of the IASB revised work plan and implications for Canadian companies; and how to cope with the changes in changeover to IFRSs. As always, there is also an update on current IFRS events. Click below for:


Notes from day 3 of the July 2008 IASB meeting

25 Jul 2008

The International Accounting Standards Board held its July 2008 meeting at the IASB's offices, 30 Cannon Street, London on Tuesday to Friday 22-25 July 2008.

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

New Global IFRS and Offerings Services newsletter

25 Jul 2008

We have posted Deloitte's US Reporting Newsletter for Non-US Based Companies June-July 2008 Edition.

The newsletter is developed by Deloitte's Global IFRS and Offerings Services (GIOS) team – Deloitte practitioners assisting non-US companies and non-US practice office engagement teams in applying US GAAP and IFRSs and in complying with the SEC's financial reporting rules. The GIOS Newsletter is an update on relevant GAAP, regulatory, and other matters, webcasts, and publications, with hyperlinks to source material.
Click to view US Reporting Newsletter for Non-US Based Companies June-July 2008 Edition (PDF 372k).


Correction list for hyphenation

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