From Financial Director – 'Seeing stars, changing stripes'

31 Mar 2008

"Once anathema to American authorities, US companies are now sure to adopt IFRS, making them a truly global set of accounting standards." This is the lead in to a story in the 26 March 2008 issue of Financial Director.

The article discusses a range of issues surrounding the use of IFRSs by United States companies. Here is the Link to the Article on Financial Director's website. Isobel Sharp, audit partner in Deloitte (United Kingdom) and president of the Institute of Chartered Accountants of Scotland, is quoted:

One of the trickiest aspects of UK IFRS conversion was that many international standards were being improved from 2001 to 2005. We didn't have, until fairly late in the process, a settled set of standards, a situation which was compounded by the time it took for Europe to adopt the improved IFRS. Converting was thus trying to hit a moving target. The effort of the IASB is no longer a 'scatter gun' over many standards, but more of a 'rifle' approach in certain key areas like leasing and debt/equity. Hopefully, it will be easier for future IFRS converters to get a fix on the target....

We have to get away from thinking that using IFRS means there must be only one way of doing everything and that any sign of difference means the system is a failure. US preparers and auditors are accustomed to having thousands of pages of accounting guidance, much of which is produced on an industry-by-industry basis. It will be for the UK and others to stop any excessive rule creep. But reasonable variations should simply be accepted.

Stay Tuned Online – IFRS and UK GAAP updates

31 Mar 2008

The Deloitte London IFRS Centre of Excellence is running a series of hour-long Internet-based financial reporting updates, aimed at helping finance teams keep up to speed with IFRS and other financial reporting issues.

Each update lasts no more than an hour, and sessions are held three times a year, at the end of March, July and November. We intend to make a recording of each session available on IAS Plus for a period of at least four months from the date of the presentation. The second in the series was held on Thursday 27 March 2008.

The topics covered in the 27 March 2008 Stay Tuned Online IFRS and UK GAAP Update were:

  • the new version of IFRS 3 Business Combinations and changes to IAS 27 Consolidated and Separate Financial Statements
  • amendments to IFRS 2 Share-based Payment
  • amendments to IAS 32 in respect of puttable financial instruments and obligations arising on liquidation
  • Deloitte's Half A Story survey of interim financial reporting under the Disclosure and Transparency Rules and IAS 34.
The recording is no longer available online.


New Global Offerings Services newsletter

28 Mar 2008

We have posted the March 2008 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 March 2008 Edition of the Deloitte Global Offerings Services Newsletter (PDF 208k).
Past GOs Newsletters are Here.


Agenda for SME Working Group meeting

27 Mar 2008

The IASB's Small and Medium-sized Entities Working Group will meet on Thursday and Friday, 10-11 April 2008 at the The Grange Holborn Hotel (Orion Suite), 50-60 Southampton Row, London WC1B 4AR.

The agenda for the meeting is shown below. Click for Project Information.

Agenda – IASB SME Working Group Meeting

Thursday 10 April 9:00-17:30

  • Introductory Remarks
    • Introduction of new Working Group members
    • Brief review of events since last Working Group meeting
    • Objectives of this Working Group meeting
  • Discussion of Issues Raised in Comment Letters and Issues Raised in the Field Tests (excluding need for additional guidance and disclosures)
Friday 11 April 9:00-16:00
  • Continuation of discussion from the previous day (as needed)
  • Adequacy of guidance
  • Disclosures
  • IASCF Training Materials for the IFRS for SMEs


Discussion Paper on employee benefits

27 Mar 2008

The IASB has published for comment a Discussion Paper (DP) 'Preliminary Views on Amendments to IAS 19 Employee Benefits'.

The DP represents the first step in a comprehensive Projecton accounting for post-employment benefit promises. This step is limited in scope to the following issues:
  • The deferred recognition of some gains and losses arising from defined benefit plans (currently IAS 19 allows multiple options for deferring recognition)
  • Presentation of defined benefit liabilities
  • Accounting for benefits that are based on contributions and a promised return
  • Accounting for benefit promises with a 'higher of' option
Therefore, the DP focuses on improvements to IAS 19. In the longer term, the IASB intends to work with the US FASB towards a common standard on post-employment benefit promises. Because that project will take many years to complete, the Board concluded that short-term improvements are needed to provide users with better information about post-employment obligations. The Board intends to review the responses to this paper, modify or confirm its preliminary views, and then develop an exposure draft of amendments to IAS 19 for public comment.

Among the Board's preliminary views are the following:

  • Recognise all changes in the value of plan assets and in the post-employment benefit obligation in the financial statements in the period in which they occur. This means, among other things, removing the options for deferred recognition of gains and losses in defined benefit plans.
  • Classify benefit promises into defined benefit promises and contribution-based promises.
  • Measure contribution-based promises (which include cash-balance plans), as follows:

    The measurement of the entity's liability for a contribution-based promise should be based on current best estimates, unbiased, probability-weighted amounts, and observable market values where they exist. Also, the entity should assume that the benefit promise does not change. The IASB believes that the measurement attribute fair value assuming that the benefit promise does not change best expresses this approach.

  • Recognise unvested past service cost in the period of a plan amendment.
  • Recognise both vested and unvested contribution-based promises as a liability.
  • Allocate the benefits earned under a contribution-based promise to periods of service in accordance with the benefit formula.

The Board does not express a preliminary view on the presentation of the components of post-employment benefit cost in comprehensive income (within or outside of profit and loss). Instead, several alternatives are discussed and comments invited.

The DP is organised as follows:

  • Summary of Preliminary Views
  • Invitation to Comment
  • Chapter 1: Introduction
  • Chapter 2: Deferred recognition of changes in the liability for defined benefit promises
  • Chapter 3: Presentation approaches for defined benefit promises
  • Chapter 4: Introduction to contribution-based promises
  • Chapter 5: Definitions
  • Chapter 6: Recognition issues relating to contribution-based promises
  • Chapter 7: Measurement of contribution-based promises – core issues
  • Chapter 8: Measurement of benefits after the accumulation phase
  • Chapter 9: Disaggregation, presentation and disclosure of contribution-based promises
  • Chapter 10: Benefit promises with a 'higher of' option
  • Appendix A Classification of benefit promises
  • Appendix B Comparison of a promise with a fixed return of 0 per cent and a career average salary promise
  • Appendix C Comparison of Board's preliminary views for contribution-based promises with the existing IAS 19 requirements

The DP is being published by the IASB. However, it will also be considered for publication by the US Financial Accounting Standards Board for comment by its constituents. The Comment Deadline is 26 September 2008. Click for Press Release (PDF 55k). The IASB's goal is to issue a revised IAS 19 by 2011.

New Deloitte Guide to IFRS 5

26 Mar 2008

The Deloitte IFRS Global Office has published an IAS Plus Guide to IFRS 5 Assets Held for Sale and Discontinued Operations.

Since issuance of IFRS 5 in 2004, various practical application issues have arisen – principally because the guidance in the Standard is not always clear as to how certain transactions should be accounted for and how the requirements of IFRS 5 interact with those of other Standards. This guide, in addition to providing detailed summaries and explanations of the requirements of IFRS 5, includes supplementary guidance and examples based on Deloitte's experience with the Standard. It summarises the latest IFRS thinking and the evolving literature – including on issues such as partial disposals of subsidiaries, and the impact of the disclosure requirements of other Standards. Appendices provide a comparison with US GAAP and a checklist of IFRS 5's presentation and disclosure requirements.
Click to view IAS Plus Guide to IFRS 5 Assets Held for Sale and Discontinued Operations (PDF 813k). Our IFRS Publications Page has permanent links to this and many other Deloitte IFRS publications.


IFAC's 2008 auditing, assurance, and ethics handbook

25 Mar 2008

The International Federation of Accountants (IFAC) has released its 2008 Handbook of International Auditing, Assurance, and Ethics Pronouncements.

The handbook can be downloaded free of charge in PDF format from the IFAC Website. Print copies can be purchased for US$150 plus shipping. The handbook includes all pronouncements on auditing, review, other assurance, and related services issued by the IAASB as of 1 January 2008. It also includes the IFAC Code of Ethics for Professional Accountants, issued by the International Ethics Standards Board for Accountants, along with new definitions for 'firm', 'network', and 'network firm'. Click for Press Release (PDF 35k).


US SEC – next steps toward mutual recognition

25 Mar 2008

The US Securities and Exchange Commission has announced a series of actions it intends to take to further the implementation of the concept of mutual recognition for high-quality regulatory regimes in other countries.

Click for SEC Announcement (PDF 38k). Here is an overview:

The Commission contemplates taking the following actions:

  • Exploring initial agreements with one or more foreign regulatory counterparts, which would be based upon a comparability assessment by the SEC and by the foreign authority of one another's regulatory regimes.
  • Considering adoption of a formal process for engaging other national regulators on the subject of mutual recognition. This process could be accomplished through rulemaking or other appropriate mechanisms, possibly informed by one or more initial agreements with other regulators.
  • Developing a framework for mutual recognition discussions with jurisdictions comprising multiple securities regulators tied together by a common legal framework, including Canada (which has no national securities regulator, but rather provincial regulators) and the European Union (whose national securities regulators are subject to supranational legislation and directives).
  • Proposing reforms to Rule 15a-6 in order to improve the process by which US investors have access to foreign broker-dealers.


IASB Webcast on employee benefits Discussion Paper

23 Mar 2008

On 27 March 2008 the IASB will release its Discussion Paper (DP) on post employment benefits titled Preliminary Views on Amendments to IAS 19 Employee Benefits.

On that day, Stephen Cooper, Member of the IASB, will introduce the DP in a live Web presentation from 12:00pm to approximately 12:30pm GMT. Click here for More Information and Registration Details on the IASB website.


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