June

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Updated EFRAG endorsement status report

20 Jun 2008

The European Financial Reporting Advisory Group (EFRAG) has updated its report showing the status of endorsement, under the EU Accounting Regulation, of each IFRS, including standards, interpretations, and amendments.

Click to download the Endorsement Status Report as of 19 June 2008 (PDF 34k). Currently, the following IASB pronouncements have not yet been endorsed for use in Europe:
  • IFRS 1 and IAS 27 Cost of an Investment in a Subsidiary, Jointly-Controlled Entity, or Associate
  • IFRS 2 Share-based Payment: Vesting Conditions and Cancellations
  • IFRS 3 Business Combinations (2008)
  • IAS 1 Presentation of Financial Statements (revised September 2007)
  • IAS 23 Borrowing Costs (revised March 2007)
  • IAS 27 Consolidated and Separate Financial Statements (2008)
  • IAS 32 and IAS 1 Amendments for Puttable Instruments and Obligations Arising on Liquidation
  • IFRIC 12 Service Concession Arrangements
  • IFRIC 13 Customer Loyalty Programmes
  • IFRIC 14 IAS 19 – The Limit on a Defined Benefit Asset, Minimum Funding Requirements, and their Interaction
  • Improvements to IFRSs – 2007 (affects various standards)

 

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Securities regulators support creation of an IASCF monitoring group

19 Jun 2008

The world's securities authorities – represented by IOSCO, as well as the European Commission, the Japan Financial Services Agency and the US Securities and Exchange Commission, the securities authorities in the world's three largest capital markets – welcome the proposal to create an IASC Foundation Monitoring Group.

That proposal is part of the 2008 Constitution Review currently being conducted by the IASCF. A Joint Announcement (PDF 34k) by the securities regulators said:

We are pleased at the progress being made in advancing interaction between securities authorities and the IASCF. The increased adoption and use of IFRS in capital markets around the world necessitates strengthening the accountability of the Foundation to the authorities responsible for setting financial disclosure requirements by public companies. In organizing the upcoming roundtable, the Foundation acknowledges the need to create a mechanism for interaction between securities authorities and the IASCF that approximates the historical relationship between securities authorities and national standard setters. This, in turn, will enable securities authorities that allow or mandate the use of IFRS to discharge their mandates relating to investor protection, market integrity and capital formation effectively.

 

European Union (old) Image

EU bank regulators report on valuing instruments in illiquid markets

19 Jun 2008

The Committee of European Banking Supervisors (CEBS) has published a report on issues relating to the valuation of complex and illiquid financial instruments.

The report puts forward a set of issues that should be addressed by institutions and accounting and auditing standard setters in order to improve the reliability of the values ascribed to these instruments.

The analysis focuses on the following valuation related aspects:

  • challenges for the valuation of complex financial instruments or instruments for which no active markets exist;
  • transparency on valuation practices and methodologies as well as related uncertainty; and
  • auditing of fair value estimates.
Click for:
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iGAAP 2008 Financial Instruments: IAS 32, IAS 39 and IFRS 7

19 Jun 2008

Deloitte & Touche LLP (United Kingdom) has developed iGAAP 2008 Financial Instruments: IAS 32, IAS 39 and IFRS 7 Explained (Fourth Edition), which has been published by LexisNexis.

This publication is the authoritative guide for financial instruments accounting under IFRSs. The 2008 edition expands last year's edition with further interpretations, examples, discussions from the IASB and the IFRIC, and updates on comparisons of IFRSs with US GAAP for financial instruments. It also includes extracts from 2007 annual reports illustrating IFRS 7 Financial Instruments Disclosures. iGAAP 2008 Financial Instruments: IAS 32, IAS 39 and IFRS 7 Explained (Fourth Edition) (851 pages, June 2008) can be purchased through www.lexisnexis.co.uk/deloitte.
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Notes from the second day of the June 2008 IASB meeting

18 Jun 2008

The IASB held its June 2008 meeting at its offices, 30 Cannon Street, London, on 17-20 June 2008.

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

AICPA (American Institute of CPAs) (lt green) Image

AICPA calls for 3 to 5 year timeline for IFRSs in US

18 Jun 2008

Barry C Melancon, president and CEO of the American Institute of Certified Public Accountants, speaking at a forum of accounting and finance authorities on international accounting, called for a reasonable and clear-cut time frame of three to five years for the US accounting profession to adopt International Financial Reporting Standards.

Click for AICPA News Release (PDF 48k).

 

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Notes from the first day of the June 2008 IASB meeting

18 Jun 2008

The IASB held its June 2008 meeting at its offices, 30 Cannon Street, London, on 17-20 June 2008.

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

European Union (old) Image

EC 'effect studies' on IFRIC 14 and IAS 1

18 Jun 2008

The European Commission has published 'effect studies' of the impact of two IASB pronouncements awaiting endorsement for use in Europe:

The Commission's effect studies relied, in turn, on effect studies undertaken by EFRAG. The Commission Services (EC staff) concluded that both pronouncements will have positive cost-benefits effects and that they should, therefore, be endorsed in the EU without delay.

 

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Heads Up on IASB-FASB conceptual framework proposals

18 Jun 2008

On 29 May 2008, the IASB and the FASB jointly published similar consultative documents on two of the eight phases of their joint project to develop an improved conceptual framework.

The framework will provide a foundation for developing future accounting standards. The two consultative documents are:
  • Exposure Draft: Chapters 1 and 2 of the Conceptual Framework (Objective and Qualitative Characteristics). Exposure Draft (ED). Chapters 1 and 2 of the framework (Objective and Qualitative Characteristics). This ED addresses the objective of financial reporting, the qualitative characteristics of information provided by financial reporting, and constraints on the provision of that information. The draft reflects the boards' updated proposals in the light of comments received on an initial consultation document published in July 2006.
  • Discussion Paper: Preliminary Views - The Reporting Entity. This publication sets out the boards' preliminary views on the reporting entity concept and related issues. Although the reporting entity concept determines some important aspects of financial reporting, the boards' existing frameworks do not address it specifically.
Deloitte & Touche LLP (USA) has published a Heads Up Newsletter (PDF 112k) describing the proposals.

 

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We disagree with IFRIC's draft decision on effective interest rate

17 Jun 2008

In a letter to IFRIC, Deloitte Touche Tohmatsu disagree with the IFRIC's tentative decision not to take onto the IFRIC's agenda a request for an interpretation on the application of the effective interest rate (EIR) method.

Click for our Letter to IFRIC (PDF 136k). Here is an excerpt:

In summary, we believe the tentative agenda decision wording does not provide sufficient clarity and that additional interpretive guidance is needed. We believe there are three important interpretative issues that need to be addressed:

  • (i) how to apply the effective interest rate to debt instruments with a market-based reset;
  • (ii) when should an entity apply AG7 compared to AG8; and
  • (iii) for inflation linked debt, is it possible to analogise with IAS 29 in the case when an entity is not applying that standard.
The application of the EIR is critical in determining the balance sheet carrying amount and the impact on profit or loss for debt instruments held at amortised cost, as well as the income recognition for those debt instruments classified as available-for-sale. The EIR has widespread application for both vanilla and complex debt instruments, yet the standard is not clear as to how the EIR method applies for instruments with variable cash flows.
Our past comment letters to IASB, IFRIC, IASC, and SIC are Here.

 

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