May

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Deloitte (United States) 2008 IFRS Survey: Where Are We Today?

23 May 2008

Deloitte & Touche LLP (United States) has published 2008 IFRS Survey – Where Are We Today?.

This brief but informative report discusses the results of approximately 200 responses by US-company senior finance professionals to Deloitte's 2008 survey on IFRSs. The primary goal of the survey was to ascertain US companies' level of awareness about and interest in IFRSs. Some findings:
  • 30% of the respondents said that, if given the choice now, they would consider adopting IFRSs. Another 10% percent felt they needed more information. 18% were undecided.
  • Even among those companies that indicated they would not adopt IFRSs, if given the choice now, 45% would still consider adopting IFRSs within the next seven years.
  • The industries with the most interest in adopting IFRSs were financial services, health services, and consumer and industrial products.
  • Overall, more than 50% of respondents believe that at least a quarter of all US issuers will be using IFRSs within the next seven years, with approximately 85% of respondents indicating that at least 10% of US issuers will be using IFRSs.
  • Of those US companies that would consider adopting IFRSs, 53% said they would adopt within three years.
  • Of those companies considering IFRSs, 64% say they lack skilled resources in their US operations while 34% believe they lack skilled resources in their non-US operations. These results indicate that more training in IFRSs is required.

Click to view 2008 IFRS Survey – Where Are We Today? (PDF 850k).

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Notes from day 3 of the IASB's May 2008 meeting

22 May 2008

The International Accounting Standards Board held its monthly meeting on Tuesday to Friday 20-23 May 2008 at the Board's offices in London.

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

 

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Determining cost of an investment in separate financial statements

22 May 2008

The IASB has amended two standards to change the way the cost of an investment in the separate financial statements is measured on first-time adoption of IFRSs.

The amended standards are IFRS 1 First-time Adoption of IFRSs and IAS 27 Consolidated and Separate Financial Statements. The Board made the amendments because retrospectively determining cost and applying the cost method in accordance with IAS 27 on first-time adoption of IFRSs cannot, in some circumstances, be achieved without undue cost or effort.

The amendments to IFRS 1 and IAS 27:

  • Allow first-time adopters to use a 'deemed cost' of either fair value or the carrying amount under previous accounting practice to measure the initial cost of investments in subsidiaries, jointly controlled entities, and associates in the separate financial statements
  • Remove the definition of the cost method from IAS 27 and replace it with a requirement to present dividends as income in the separate financial statements of the investor
  • Require that, when a new parent is formed in a reorganisation, the new parent must measure the cost of its investment in the previous parent at the carrying amount of its share of the equity items of the previous parent at the date of the reorganisation.

The amendments to IFRS 1 and IAS 27 are effective for annual periods beginning on or after 1 January 2009, with earlier application permitted.

Click for Press Release (PDF 47k).

 

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IASB issues improvements to 20 IFRSs

22 May 2008

The IASB has published final amendments to 20 IFRSs, and the related Bases for Conclusions and guidance, resulting from the Board's Annual Improvements Project for 2007.

Some amendments, in turn, cause consequential amendments to other IFRSs. The amendments are based on proposals in an Exposure Draft published in October 2007.

The IASB's annual improvements project provides a vehicle for making non-urgent but necessary minor amendments to IFRSs.

The effective date for most amendments is annual periods beginning on or after 1 January 2009.  Click for IASB Press Release (PDF 57k).

The improvements are of two broad types:

  1. Amendments that result in accounting changes in presentation, recognition, or measurement. The topics for these are listed in the table below.
  2. Terminology or editorial changes that have no or minimal effect on accounting. These affected IFRS 7, IAS 8, IAS 10, IAS 18, IAS 20, IAS 29, IAS 34, IAS 40, and IAS 41.

 

Improvements of IFRSs for presentation, recognition, or measurement

IFRSTopic of amendment
IFRS 5 Non-current Assets Held for Sale and Discontinued Operations
  • Plan to sell the controlling interest in a subsidiary
IAS 1 Presentation of Financial Statements
  • Current/non-current classification of derivatives
IAS 16 Property, Plant and Equipment
  • Recoverable amount
  • Sale of assets held for rental
IAS 19 Employee Benefits
  • Curtailments and negative past service cost
  • Plan administration costs
  • Replacement of term 'fall due'
  • Guidance on contingent liabilities
IAS 20 Accounting for Government Grants and Disclosure of Government Assistance
  • Government loans with a below-market rate of interest
IAS 23 Borrowing Costs
  • Components of borrowing costs
IAS 27 Consolidated and Separate Financial Statements
  • Measurement of subsidiary held for sale in separate financial statements
IAS 28 Investments in Associates
  • Required disclosures when investments in associates are accounted for at fair value through profit or loss
  • Impairment of investment in associate
IAS 29 Financial Reporting in Hyperinflationary Economies
  • Description of measurement basis in financial statements
IAS 31 Interests in Joint Ventures
  • Required disclosures when interests in jointly controlled entities are accounted for at fair value through profit or loss
IAS 36 Impairment of Assets
  • Disclosure of estimates used to determine recoverable amount
IAS 38 Intangible Assets
  • Advertising and promotional activities
  • Units of production method of amortisation
IAS 39 Financial Instruments: Recognition and Measurement
  • Reclassification of derivatives into or out of the classification of at fair value through profit or loss
  • Designating and documenting hedges at the segment level
  • Applicable effective interest rate on cessation of fair value hedge accounting
IAS 40 Investment Property
  • Property under construction or development for future use as investment property
IAS 41 Agriculture
  • Discount rate for fair value calculations
  • Additional biological transformation

 

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Notes from day 1 of the IASB's May 2008 meeting

21 May 2008

The International Accounting Standards Board held its monthly meeting on Tuesday to Friday 20-23 May 2008 at the Board's offices in London.

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

 

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Notes from day 2 of the IASB's May 2008 meeting

21 May 2008

The International Accounting Standards Board held its monthly meeting on Tuesday to Friday 20-23 May 2008 at the Board's offices in London.

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

 

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FASB webcast on the crisis in the credit markets

21 May 2008

The US Financial Accounting Standards Board will present a live webcast on the current crisis in the credit markets.

The panelists will discuss factors impacting the credit markets, financial accounting and reporting issues facing participants in the credit markets, and actions taken to respond to those issues. Viewers will have the opportunity to email questions.

Details of FASB Webcast on Credit Crisis:

  • Title of Webcast: The Crisis in the Credit Markets: Causes, Reporting Issues, and Responses.
  • Date and Time: Monday, 2 June 2008, 2:00 PM to 3:00 PM (US EDT).
  • Cost: Free of charge.
  • Panelists: Robert Herz, Chairman of the FASB; Matt Schroeder, Managing Director and Global Head of Accounting Policy, Goldman Sachs; Raymond Beier, Partner at PricewaterhouseCoopers; and Jack Ciesielski, Publisher of The Analyst's Accounting Observer.
  • Moderator: Wall Street Journal reporter David Reilly.

 

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Several issues in CESR's updated prospectus FAQ relate to IFRSs

21 May 2008

The Committee of European Securities Regulators (CESR) has issued the fifth updated version of Frequently Asked Questions Regarding Prospectuses: Common Positions Agreed by CESR Members.

Several of the questions involve IFRS issues, including the following issues:
  • Issue 15. Interaction between the prospectus Regulation and IAS 8: When an issuer changes an accounting policy in its financial statements (for instance, on initial application of a new IFRS) and applies that policy retrospectively, does this mean that the issuer has to restate comparative figures in the prospectus that would be affected by the retrospective application of the new accounting policy?
  • Issue 48. Pro forma financial information: illustrative examples: Several of the issues relate to IFRS 3 and IFRS 5

Click to view Frequently Asked Questions Regarding Prospectuses: Common Positions Agreed by CESR Members (PDF 289k).

 

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AICPA Council designates IASB as a recognised standard setter

20 May 2008

The governing Council of the American Institute of CPAs (AICPA) has voted to designate the International Accounting Standards Board as the recognised accounting standard setter for purposes of establishing international financial accounting and reporting principles.

Technically, the Council's vote amends AICPA Ethics Rules 202 and 203, thereby providing AICPA members with the option to use International Financial Reporting Standards (IFRSs) without any need to reconcile to US GAAP figures:

Under Rule 202, a member who performs professional services shall comply with the standards promulgated by the designated bodies. Additionally, a member may not say that financial statements are in accordance with generally accepted accounting principles unless they follow the standards promulgated by a standard setter listed in Appendix A of Rule 203.
This designation applies to all IFRSs, including the planned IFRS for SMEs. With the Council's vote to designate the IASB, the AICPA's Auditing Standards Board and Accounting and Review Services Committee will now prepare clarifying language on how to modify audit, review, and compilation reports when reporting on financial statements prepared in accordance with IFRSs. Other bodies designated by Council to promulgate accounting standards under Rules 202 and 203 are:
  • The Financial Accounting Standards Board (FASB)
  • The Governmental Accounting Standards Board (GASB)
  • The Federal Accounting Standards Advisory Board (FASAB)
– all US-based.

Click to view the AICPA Press Release (PDF 44k).

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AICPA launches www.ifrs.com website

20 May 2008

The American Institute of Certified Public Accountants (AICPA) has launched a new website www.ifrs.com.

The website is intended to help AICPA members and financial professionals learn about and stay informed on International Financial Reporting Standards. Resources include a history of convergence, a high-level overview of the differences between IFRS and US GAAP, frequently asked questions, articles, textbooks and CPE courses, helpful links and assistance for audit committee members. Click for Press Release (PDF 46k).

 

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