Here are preliminary and unofficial notes taken by Deloitte observers at the Roundtable:

The general consensus of the panel
The general consensus of the panel was that fair value accounting under Statement 1571 is not the root cause of the current market turmoil. Panelists indicated that regulators should look beyond Statement 157 to address some of the issues prevalent in practice today, such as changing the regulatory capital requirements. In addition, the panelists voiced strong support for independent standard setting, noting that the process needs to be free from any political or regulatory intervention.
Three main themes from the discussion
Impairment guidance The panelists agreed that standard setters should revisit other-than-temporary impairment guidance. Several suggestions were made, including (1) to align the guidance for impairment of investments in debt securities (Statement 1152) with the guidance for loan impairments (Statement 1143) and (2) to segregate impairment loss between credit and other changes in fair value. Panelists from the investor and auditor community suggested a model in which credit loss on debt securities would be recognised currently in income, and other changes in the fair value of the instrument (the plug) would be recognized in other comprehensive income. The credit loss would be calculated on the basis of changes in expected cash flows in a manner similar to the Statement 114 model. Several panelists from the preparer community suggested that the investments should be carried at amortised cost so that only losses associated with credit are recognised and the fair value of the instrument is disclosed in the notes to the financial statements on a quarterly basis. They indicated that recognising liquidity losses in other comprehensive income distorts equity, which affects regulatory capital requirements. Additional disclosures Panelists agreed on the need for (1) more comprehensive disclosures that may include forward-looking information (such as sensitivity analysis) and (2) detailed discussion of techniques and inputs used by management to estimate fair value. Certain panelists suggested that additional disclosure requirements should be provided by regulators or standard setters before year-end financial reporting. Presentation Panelists agreed that improved income statement presentation of fair value measurements would enhance the transparency and usability of financial statements by the investor community and that the FASB should consider improving financial statement presentation as part of a long-term project. 1FASB Statement No. 157 Fair Value Measurements 2FASB Statement No. 115 Accounting for Certain Investments in Debt and Equity Securities 3FASB Statement No. 114 Accounting by Creditors for Impairment of a Loan

Click for SEC news release (PDF 36k).

By law, registered firms with more than 100 public company audit clients must be inspected annually; firms with fewer public company audit clients must be inspected at least once every three years. This information is included in the PCAOB's announcement (PDF 17k) of its approved budget for 2009 of $157.6 million.

The newsletter (PDF 147k) 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. Past GIOS Newsletters are here.

In this issue of the GIOS newsletter:

IFRS Matters

• SEC Issues Proposed Roadmap for Use of IFRS by US Issuers
• IASB Reveals Steps in Response to Credit Crisis
• FASB and IASB Issue Discussion Paper on Financial Statement Presentation
• IASB Permits Reclassification of Certain Financial Instruments
• IASB Proposes Amendments to Financial Instrument Disclosure Requirements
• IASB Issued Educational Guidance on Fair value Measurements

Regulatory Matters

• SEC Clarifies Guidance on Impairment of Perpetual Preferred Securities
• SEC Comments on Executive Compensation Disclosures
• SEC Holds Roundtable on Transparent Disclosures
• SEC Begins Study of Mark-to-Market Accounting

US GAAP Matters

• FASB's Valuation Resource Group Discusses Nine Fair Value Topics

PCAOB Matters

• PCAOB Proposes Seven Auditing Standards on Risk Assessment

Other Matters

• FASB and IASB Announce Joint Response on Credit Crisis

IFRS 1 was first issued in June 2003, and since then it has been amended frequently. As a result, the IFRS became more complex and less clear. In 2007, therefore, the Board proposed, as part of its annual improvements project, to change IFRS 1 to make it easier for the reader to understand and to design it to better accommodate future changes. 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. Subscribers can download it from the IASB's website.

 

• Clemens Boersig, Chairman of the Supervisory Board, Deutsche Bank AG, Germany
• Noriaki Shimazaki, Executive Vice President, Sumitomo Corporation, Japan

The appointments fill vacancies that will arise at the end of the year when Max Dietrich Kley and Junichi Ujiie retire as Trustees. The Trustees expect to announce a successor from the investment community for David Shedlarz, a retiring US-based Trustee, in due course. Six current Trustees have been reappointed for a second three-year term: Marvin Cheung, Sam DiPiazza, Robert Glauber, Liu Zhongli, Sir Bryan Nicholson, and Mohandas Pai. Click for IASCF press release (PDF 72k).

The report notes that, in some markets, IFRSs will likely contribute to substantial changes in:

• Insurance product design, price and offerings
• Investment strategy
• Risk management practices
• Securitisation
• Merger and acquisition (M&A) activity

Click to download:

• El tránsito hacia los IFRS en seguros (PDF 247k)
• The IFRS Journey in Insurance: A Look Beyond the Accounting Changes (PDF 428k)

This book has:

• Highlights of and discussions on Malaysia-specific requirements compared to IFRS
• Practical examples and illustrative applications of IFRS
• Guidance on the practical issues encountered by users and preparers of IFRS financial statements
• Suggestions and discussions on the areas in the standards where formal guidance is ambiguous
• Commentaries and updates on development up to August 2008 of IFRS and Interpretations as of December 31, 2007 as discussed in the book

iGAAP Financial reporting in Malaysia (ISBN-13 978-981-4228-56-5 and ISBN-10 981-4228-56-7) is published by CCH Asia Pte Limited and may be ordered from the CCH Malaysia Website.

 

The FSP will increase disclosure requirements for public companies for reporting periods that end after 15 December 2008 (that is, including calendar year 2008). Click for press release (PDF 17k).

• Conceptual Framework Phase C – Measurement
• Conceptual Framework Phase D – Reporting Entity
• Consolidation
• Derecognition of Financial Instruments
• Fair Value Measurements
• Financial Instruments – Comprehensive Project
• Financial Instruments with Characteristics of Equity (Liabilities and Equity)
• IFRIC D23 – Non-cash Distributions to Owners
• Leases
• Post-employment Benefits including Pensions
• IFRS for Private Entities (formerly IFRS for SMEs)
• Related Party Disclosures