October

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Joint IASB-FASB advisory group on credit crisis

18 Oct 2008

The International Accounting Standards Board and the US Financial Accounting Standards Board (FASB) will create a global advisory group of regulators, preparers, auditors, investors, and other users of financial statements to help ensure that reporting issues arising from the global economic crisis are considered in an internationally co-ordinated manner.

The two Boards will be Meeting jointly on 20 and 21 October, at which time they will discuss the initial topics for the advisory group to consider. Click for Press Release (PDF 100k).

 

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Keidanren wants IFRSs in Japan

17 Oct 2008

Nippon Keidanren (the Japan Business Federation) has issued a Statement on the Future Directions of Accounting Standards in Japan in which they urge the adoption of IFRSs in Japan.

The Keidanren proposes that IFRSs be required in the consolidated financial statements of listed companies after a three-year phase-in period. Unlisted companies, and those listed companies that do not prepare consolidated financial statements, would be permitted to use IFRSs. The Keidanren statement points out that Japan is 'the only country among the major capital markets which has not officially announced the adoption of IFRS'.

Excerpt from Statement by the Keidanren – Proposal Towards Adopting IFRS:

A. Publish a Roadmap Including Adoption of IFRS Having had the U.S. announcement this year, Japan became the only country among the major capital markets, which has not officially announced the adoption of IFRS. Some of the Japanese companies have already begun the study of IFRS preparing for future adoption. Japan should accelerate the discussion of the future direction of accounting standards and set out a concrete Roadmap as soon as possible, indicating the adoption of IFRS. It is important to mention in the Roadmap the necessary conditions in adopting IFRS, such as, checking the direction of discussions of mid-long term projects at the IASB, adequate governance of the IASB, and progress in the ASBJ-IASB convergence project.

B. Scope of Application of IFRS For the near term, it is appropriate to permit the use of IFRS for listed companies as an option. In the future, because we think it is necessary to have a single set of accounting standards, for the purpose of securing reliability and convenience for the investors, Japan should require all listed companies to apply IFRS for preparing their financial statements. In that case, there should be, at least, three years of preparation period. It is also important make decisions taking into account to maintain and heighten Japan's international presence.

Click to view Statement on the Future Directions of Accounting Standards in Japan (PDF 23k)

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Notes from day 4 of the October 2008 IASB meeting

17 Oct 2008

The International Accounting Standards Board is holding its regular October 2008 meeting at the IASB's offices, 30 Cannon Street, London on Monday to Friday 13-17 October 2008. The meeting is open to public observation and is being webcast.

Click here to go to the preliminary and unofficial Notes Taken by Deloitte Observers at the meeting.

 

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Buckle Up (On the Road to IFRS in the US)

16 Oct 2008

Deloitte (United States) has published Buckle Up (On the Road to IFRS).

International Financial Reporting Standards have quickly become a priority for US companies now that the Securities and Exchange Commission (SEC) has proposed an IFRS road map and rules changes. This book, the eleventh in our 'Straight Talk' series, helps executives understand the implications of IFRS and their role in addressing the associated changes. The publication also offers practical suggestions to help companies navigate through these important issues. "Today's decisions will determine the direction and speed of your transition. It can be a smooth ride, but could also become a roller coaster or a train wreck." Click to download Buckle Up (On the Road to IFRS) (PDF 3,661k).

 

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Deloitte Alert on fair value of perpetual preferred

16 Oct 2008

Deloitte (United States) has published a Financial Reporting Alert on SEC Issues Letter Clarifying Other-Than-Temporary Impairment Guidance for Perpetual Preferred Securities.

The SEC letter is mentioned in our 15 October news story. Click to download Deloitte Financial Reporting Alert 08-16 (PDF 28k). Note: This Alert was revised 18 October 2008.

 

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Notes from day 3 of the October 2008 IASB meeting

16 Oct 2008

The International Accounting Standards Board is holding its regular October 2008 meeting at the IASB's offices, 30 Cannon Street, London on Monday to Friday 13-17 October 2008. The meeting is open to public observation and is being webcast.

Click here to go to the preliminary and unofficial Notes Taken by Deloitte Observers at the meeting.

 

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Discussion Paper on financial statement presentation

16 Oct 2008

The IASB and the US FASB have jointly published for comment a Discussion Paper (DP) 'Preliminary Views on Financial Statement Presentation'.

The goal of the project is to create a standard that requires entities to organise financial statements in a manner that clearly communicates an integrated financial picture of the entity. The project is about how best to portray assets, liabilities, income, expense, cash flows and related information in financial statements. It is not about how those items are recognised or measured. The boards propose the following two objectives for financial statement presentation:

  • Cohesiveness. Formatting the information in financial statements so that a reader can follow the flow of information through the various statements
  • Disaggregation. Separating information that responds differently to economic events

To achieve these main objectives the boards have developed a principle-based format that is presented in the discussion paper and is visualised below:

 

Statement of Financial PositionStatement of Comprehensive IncomeStatement of Cash Flows
Business
  • Operating assets and liabilities
  • Investing assets and liabilities
Business
  • Operating income and expenses
  • Investing income and expenses
Business
  • Operating cash flows
  • Investing cash flows
Financing
  • Financing assets
  • Financing liabilities
Financing
  • Financing asset income
  • Financing liability expenses
Financing
  • Financing asset cash flows
  • Financing liability cash flows
Income taxes Income taxes on continuing operations (business and financing) Income taxes
Discontinued operations Discontinued operations net of tax Discontinued operations
Other comprehensive income, net of tax
Equity Equity

The Comment Deadline is 14 April 2009. Click for Press Release (PDF 43k). The IASB's goal is to issue an exposure draft of proposed revisions to IAS 1 by 2010.

 

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EC endorses IAS 39 reclassification amendment

16 Oct 2008

The European Commission has approved, for use in Europe, the IASB's recent Amendment to IAS 39 and IFRS 7 permitting reclassification of some financial instruments out of the fair-value-through-profit-or-loss category and out of the available-for-sale category.

The amendments introduce into IFRSs the same possibility of reclassifications that is already permitted under US GAAP. The Commission's endorsement has been published in the Official Journal of the European Union as Regulation (EC) No 1004/2008 (PDF 47k).
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EC Declaration on IAS 39 and IFRS 7

16 Oct 2008

In our news story immediately below, we noted that the European Commission has approved, for use in Europe, the IASB's recent Reclassification Amendment to IAS 39 and IFRS 7.

That approval was preceded by an extended discussion of a number of financial instruments accounting matters by the EC's Accounting Regulatory Committee (ARC, which met on 15 October 2008), by EU G8 Heads of State (who met on 4 October 2008), and by the ECOFIN (the Eurogroup and EU Economic and Finance Ministers Council, who met on 6-7 October 2008). It was also preceded by an EFRAG Recommendation and several related speeches by EC President Jose Manual Barroso (Speech #1, Speech #2, and Speech #3). Here are links to the various ARC documents: Concurrent with the Commission's decision to approve the IAS 39 reclassification amendment, the Commission also made the following public declaration:

COMMISSION DECLARATION

Given the turbulence in financial markets, the Commission will continue to closely monitor all accounting issues that could impact on the stability of financial institutions and financial markets and will keep under constant review the implementation of IAS 39 and IFRS 7.

The Commission will continue to work intensively with all stakeholders and will organise a meeting within the next few days* to consider other possible issues under IAS 39 and IFRS 7. The Commission will, in particular, review the issue of the fair value option, embedded derivatives, insurance questions, and any other issues in IAS 39 and IFRS 7 of concern, and requests the IASB and CESR to begin work immediately in order to find appropriate solutions in the public interest taking into account an appropriate level of transparency. The Commission will propose further amendments to IAS 39 and IFRS 7, by all legal means if necessary, by the end of October.

The Commission also considers that an in depth reflection is needed on fair value accounting, including possible procyclicality effects. The newly formed EFC group on procyclicality could be one avenue for taking forward this question expeditiously.

The Commission takes note that Member States want to have an in depth reflection on the standard-setting process.

*IAS Plus comment: This meeting is set for Tuesday 21 October 2008.
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Notes from day 2 of the October 2008 IASB meeting

15 Oct 2008

The International Accounting Standards Board is holding its regular October 2008 meeting at the IASB's offices, 30 Cannon Street, London on Monday to Friday 13-17 October 2008. The meeting is open to public observation and is being webcast.

Click here to go to the preliminary and unofficial Notes Taken by Deloitte Observers at the meeting.

 

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