October

US bankers ask SEC to override FASB fair value guidance

14 Oct 2008

The American Bankers Association (ABA) yesterday sent a Letter to US SEC Chairman Cox requesting that the SEC immediately take the following steps:

  • Override FSP FAS 157-3 and replace it with guidance that clarifies that fair value in illiquid markets does not include forced or distressed sales. [Click here for Information about FSP 157 -3]
  • Provide guidance on 'other than temporary impairment' as requested in ABA's letters to the SEC and the FASB
  • Suspend the proposal on accounting for securitizations
  • Suspend work by accounting standard setters on any projects that would require fair value in any future accounting standards pending Congressional review of the study mandated by the Emergency Economic Stabilization Act
The ABA's letter also notes that "yesterday 15 European countries moved to make the types of accounting changes ABA has been advocating, but that FASB on Friday, as a practical matter, failed to implement".
Click to view the Letter to US SEC Chairman Cox (PDF 263k).

 

EBF and Business Europe urge fair value changes

14 Oct 2008

The European Banking Federation and Business Europe have issued a Joint Statement on Financial Market Turmoil.

One of the recommendations in the statement relates to fair value measurements:

The pro-cyclical nature of fair value measurement of financial assets appears to have worsened the impact of the crisis on financial and non-financial corporations. It is vital that accounting standard-setters take up the issue and seriously consider amending fair value accounting rules for assets in markets where liquidity suddenly disappears.

Click to view Joint Statement on Financial Market Turmoil (PDF 193k).

IASB update on applying fair value in inactive markets

14 Oct 2008

The International Accounting Standards Board has published a Press Release updating its work to consider the application of fair value when markets become inactive.

In the update, IASB Chairman Sir David Tweedie states:

"This press release says two things. First, that guidance within IFRSs is already clear that distress sales should not be included in fair value measurement. Secondly, that recent guidance from the FASB is consistent with the findings of our own expert panel on illiquid markets.

Click to view the IASB press release (PDF 161k).

IASB amends IAS 39 to permit some reclassifications

14 Oct 2008

The IASB has issued amendments to IAS 39 'Financial Instruments: Recognition and Measurement' and IFRS 7 'Financial Instruments: Disclosures' that would permit 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 in rare circumstances. The amendments are effective 1 July 2008.

Click for IASB Press Release (PDF 168k).

 

IAS Plus newsletter on proposed amendments to IFRS 5

13 Oct 2008

Deloitte's IFRS Global Office has published a Special Edition IAS Plus Newsletter – Proposed Amendments regarding Discontinued Operations (IFRS 5).

The ED was issued 25 September 2008. It proposes to revise the definition of discontinued operations and require additional disclosure about components of an entity that have been disposed of or are classified as held for sale.
Click to view Special Edition IAS Plus Newsletter – Proposed Amendments regarding Discontinued Operations (IFRS 5) (PDF 95k). You will find all Past IAS Plus Newsletters Here.

 

Deloitte will sponsor IFRS 2008/09 conference

13 Oct 2008

Deloitte will be the main sponsor of IFRS 2008/9 Strategic Direction and Practical Interpretation, a conference that will be held in London on Wednesday 12 November 2008. Speakers at this annual conference include IASB Chairman Sir David Tweedie (opening keynote address and open dialogue) and Deloitte partners Ken Wild and Veronica Poole.

Topics that will be covered include an analyst's view of financial reporting priorities; FSF recommendations on risk disclosures, valuations, and off balance sheet vehicles; the professional practice view of IFRSs; valuations in light of the credit crunch; the year ahead for IFRSs; implications of IFRSs for directors and auditors; complexity of standards; and IFRSs and regulation.

 

IAS Plus newsletter on proposed amendments to IFRS 1

13 Oct 2008

Deloitte's IFRS Global Office has published a Special Edition IAS Plus Newsletter – Additional Exemptions Proposed for First-time Adopters (IFRS 1).

The ED was issued 25 September 2008. It proposes:
  • to exempt companies from retrospective application of IFRSs for oil and gas assets using the full cost method and for operations subject to rate regulation.
  • to exempt companies with existing leasing contracts accounted for in accordance with IFRIC 4 from reassessing the classification of those contracts according to IFRSs when the same classification has previously been made in accordance with national GAAP.
Click to view Special Edition IAS Plus Newsletter – Additional Exemptions Proposed for First-time Adopters (IFRS 1) (PDF 93k). You will find all Past IAS Plus Newsletters Here

 

ICAS study on implementation of IFRSs in UK, Italy, Ireland

13 Oct 2008

The Institute of Chartered Accountants of Scotland has published a comparative study of The Implementation of IFRS in the UK, Italy and Ireland.

The study examines:
  • the resultant changes in financial reporting, in terms of the additional disclosures and the impact of IFRSs on profit and equity;
  • the costs involved in implementation of IFRSs;
  • the most problematic international accounting standards for adopters; and
  • the usefulness of the resulting IFRS information from the perspective of preparers and users.
ICAS hopes that the study will aid companies implementing international standards in the future. Both the full report and an executive summary may be downloaded from the ICAS website:

 

SIX Swiss Exchange areas of focus and updated IFRS circular

13 Oct 2008

The SIX Swiss Exchange (formerly known as SWX) has released its Annual Communiqué identifying the areas on which they intend to focus in their regulatory reviews of annual financial reports for 2008 of SIX Swiss Exchange listed companies.

The areas of focus will be:
  • Measurement and disclosure of financial instruments (IAS 39/IFRS 7)
  • Impairment of assets (IAS 36)
  • Assets and obligations relating to employee benefit plans (IAS 19/IFRIC 14)
  • Non-current assets held for sale and discontinued operations (IFRS 5)
Further, the SIX Swiss Exchange has updated its Admission Board Circular Nr. 6 (PDF 167k), which identifies IFRS issues that have led to discussions with or actions against issuers in the past.

Click for the Communiqué (PDF 59k).

AICPA staff release technical Q&A on liquidity restrictions

12 Oct 2008

The staff of the American Institute of CPAs has issued a new nonauthoritative Technical Practice Aid (TPA) addressing the potential accounting and auditing implications when a fund or its trustee imposes restrictions on a nongovernmental entity's ability to withdraw its balance in a money market fund or other short term investment vehicle.

The TPA covers balance sheet classification, disclosures, debt covenants, subsequent events and going-concern considerations, among other things. Click for all of our Credit Crunch Information.

 

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