Challenge to legitimacy of the PCAOB continues

04 Dec 2009

On 7 December 2009, oral argument begins in a US Supreme Court case in which the constitutionality of the Public Company Accounting Oversight Board (PCAOB) is being challenged. If the plaintiffs' arguments are successful, it could mean an end to the existence of the PCAOB as currently structured under law.

The case has been through several levels of court proceedings, the most recent being a decision by the D.C. Circuit Court of Appeals against the challenge to the PCAOB. The plaintiffs have appealed to the US Supreme Court:


IAASB staff alert on audit confirmations

04 Dec 2009

To help auditors use external confirmation procedures more effectively, the staff of the International Auditing and Assurance Standards Board (IAASB) has released Emerging Practice Issues Regarding the Use of External Confirmations in an Audit of Financial Statements.

This staff practice alert highlights areas within the International Standards on Auditing (ISAs) that are particularly relevant when deciding to request external confirmations, designing and carrying out confirmation procedures, and evaluating responses received. The alert highlights the need for auditors to pay particular attention to circumstances that may affect the planned use of confirmations, including the risk of fraud and the adequacy of evidence. Click to Download the Alert from the IAASB Website (PDF 136k).


Accounting Roundup – November 2009

03 Dec 2009

We have posted the November 2009 Edition of Accounting Roundup published by Deloitte & Touche LLP (United States).

The newsletter is now organised by topic rather than by standard-setter. Topics covered in this issue include:


  • FASB Votes to Defer Statement 167 for Interests in Certain Entities
Income Taxes
  • Accounting Implications of Tax Law Change for Businesses and Home Buyers
Pensions and Other Postretirement Benefits
  • Financial Reporting Considerations Related to Pensions and Other Postretirement Benefits
  • Guidance on Material Modifications to Revenue Arrangements With Multiple Deliverables
Financial Instruments
  • IASB Issues IFRS on Classification and Measurement of Financial Assets
  • IASB Proposes New Approach to Accounting for Credit Losses
Earnings per Share
  • EITF Reaches Consensus on Accounting for Stock Dividends, Including Distributions to Shareholders With Components of Stock and Cash
  • EITF Reaches Consensus-for-Exposure Regarding Effect of a Loan Modification When the Loan Is Part of a Pool That Is Accounted for as a Single Asset
Stock Compensation
  • EITF Reaches Consensus-for-Exposure Regarding Impact of Denominating the Exercise Price of a Share-Based Payment Award in the Currency of the Market in Which the Underlying Equity Security Primarily Trades
Related Parties
  • IASB Revises IAS 24 on Related-Party Disclosures
SEC Matters
  • SEC Observations and Expectations About Executive Compensation Disclosures
  • SEC Releases PCAOB Proposal on Auditing Standard 7
Other Accounting
  • EITF Reaches Consensus-for-Exposure on Casino Base Jackpot Liabilities
  • EITF Reaches Consensus-for-Exposure on the Definition of Deferred Acquisition Costs of Insurance Entities
Other Auditing
  • Reports Released by the Institute of Internal Auditors Audit Executive Center
  • Sample Forms Published by the PCAOB
You will find past issues of Accounting Roundup Here.


SEC Comment Letters on Domestic Registrants (Third Edition)

03 Dec 2009

In January 2008, Deloitte (United States) published two Special Reports analysing the comments by the staff of the US Securities and Exchange Commission on the financial statements of registrants.

One of the 2008 reports reviewed comments on domestic registrants using US GAAP. The other reviewed comments on foreign private issuers using IFRSs. And in February 2009, Deloitte published a revised edition of the first report:   SEC Comment Letters on Domestic Registrants: A Closer Look (PDF 810k). We have now published a third edition that reflects new topics and updates existing topics to reflect new areas that the SEC staff has commented on since the February 2009 edition. The SEC staff has continued to issue comments on all topics included in that edition, such as revenue recognition, business combinations, segment reporting, financial instruments, and impairments. In addition, in light of the troubled credit markets, the staff has continued to closely scrutinize goodwill and intangible asset impairments, other-than-temporary impairments, deferred tax valuation allowances, pension liabilities, executive compensation disclosures, MD&A disclosures, debt covenant compliance, fair value disclosures, and the allowances for loan losses, just to name a few. New to this third edition are sections on the following industries:
  • Financial services, including the banking, securities, and real estate industries
  • Energy and resources, including the power and utilities and oil and gas industries
  • Health sciences, including the health care and life sciences industries
  • Consumer and industrial products, particularly the retail industry
Click to download SEC Comment Letters on Domestic Registrants: A Closer Look (Third Edition) (PDF 2,589k).


Japan will allow some companies to use IFRSs

02 Dec 2009

As we Reported in June 2009, on 30 June 2009, the Business Accounting Council (advisory body to the Financial Services Authority of Japan (FSA)) approved its Opinion on the Application of International Financial Reporting Standards (IFRS) in Japan (Interim Report).

The FSA published an English translation of the 'Interim Report' on the FSA's Website. At the same time, the FSA published on their website for comment, only in Japanese, 13 Related Documents including Proposed Ordinances that would have to be adopted to implement the 'Interim Report'. Yesterday, the FSA announced that they will release the final IFRS Ordinances on 11 December 2009. Those Ordinances will be effective immediately on release. Click here for yesterday's Announcement and Near-final Draft Ordinances on the FSA's website in Japanese only. Among other things, the Ordinances would allow certain Japanese public companies voluntarily to start using IFRS in their consolidated financial statements starting from the fiscal year ending 31 March 2010. As a result of comments received on the proposed Ordinances, the FSA has significantly reduced the parallel reporting requirements for those companies voluntarily electing early use of IFRSs. Japan intends to consider, around 2012, whether to make IFRSs mandatory for all public companies starting around 2015 or 2016.

To be eligible to voluntarily start using IFRSs in 2010, domestic Japanese companies should meet both of (1) and (2) below:

  1. Basic Requirement – All of the following are satisfied:
    • Public company requirement (the entity's shares must be traded on the stock exchange)
    • Disclosure requirement (the entity's annual report includes a disclosure about the entity's policies to ensure proper presentation of the consolidated financial statements in conformity with IFRSs)
    • Human resource/control requirement (the entity has either a member of the board or an employee who is sufficiently knowledgeable about IFRS and has adopted an appropriate internal control framework over the preparation of consolidated financial statements in accordance with IFRSs)
  2. International Financial or Business Criteria – Either of the reporting entity, its parent, or certain other affiliated entities meet one of the following:
    • IFRSs are required by foreign laws or regulations
    • IFRSs are required by foreign stock exchange regulations or rules
    • The entity has a listed subsidiary whose capital under the Company Law is over 2 billion yen

Click for Opinion on the Application of International Financial Reporting Standards (IFRS) in Japan (Interim Report).

IPSASB consults on sustainability reporting

02 Dec 2009

The International Public Sector Accounting Standards Board (IPSASB) of the International Federation of Accountants (IFAC) has published a Consultation Paper Reporting on the Long-Term Fiscal Sustainability of Public Finances.

It seeks views on how information on the long-term sustainability of government programs may complement information available in traditional financial statements, thereby increasing transparency and enhancing accountability and decision making. In issuing the Consultation Paper, the IPSASB notes:

"There is a growing understanding that future generations of taxpayers will have to deal with the fiscal consequences of current government policies. Concerns about the ability of governments to meet future service delivery and financial commitments for health, pensions, debt-servicing, and other obligations have long existed, but have increased in the current economic environment. Uncertainty over the long-term financial consequences of government interventions, including the bailouts and stimulus packages that have characterized the global financial crisis, has added another dimension to concerns over the long-term sustainability of public finances in many countries."

Click here to Download the Consultation Paper (PDF 637k), which is copyright by IFAC and posted on IAS Plus with permission. Comments are requested by 30 April 2010.


Deloitte IFRS for SMEs newsletter in Spanish

02 Dec 2009

Deloitte (Colombia) is publishing a series of Spanish language bulletins about the new IFRS for SMEs.

We have previously posted Bulletins No 1 through 20 – links can be found Here. We have now posted Bulletin No 21 (1 December 2009), which discusses the following sections of the IFRS for SMEs:
  • Section 28 – Beneficios para empleados (Employee Benefits)
  • Section 29 – Impuestos a los ingresos (Income Taxes)
  • Section 30 – Cambio de moneda extranjera (Foreign Currency Translation)
  • Section 31 – Hiperinflación (Hyperinflation)
  • Section 32 – Eventos posteriores (Events after the End of the Reporting Period)
  • Section 33 – Revelaciones sobre partes relacionadas (Related Party Disclosures)
  • Section 34 – Actividades especializadas (Specialised Activities)
  • Section 35 – Transición hacia el IFRS para PYMES (Transition to the IFRS for SMEs)
Click to Download Bulletin 21 (PDF 336k). Nuestros Recursos en Español.


Mozambique extends use of IFRSs

01 Dec 2009

On 3 November 2009, the government of Mozambique approved a Decree establishing a new private sector accounting system that requires the use of IFRSs starting 1 January 2010 by all listed companies, public companies, companies with a majority state shareholding, and other large companies.

Starting 1 January 2011, IFRSs will be required for all medium-sized companies. The government said that introducing IFRSs would provide greater transparency and comparability and make auditing and regulation easier. Under a previous Decree, banks in Mozambique were required to use IFRSs starting in July 2008. Here is our Mozambique Page.


Financial Instruments Working Group to meet 9 December

01 Dec 2009

The IASB Financial Instruments Working Group (FIWG) will meet at the IASB's offices in London on 9 December 2009 from 10:00am to 1:00pm London time.

The meeting will be open to public observation. The IASB formed the FIWG in September 2004 to examine and question the fundamentals of IAS 39 within the context of the IASB's Framework, with the goal of "improving, simplifying, and ultimately replacing IAS 39".


IFRS conversion in the real estate industry

01 Dec 2009

Deloitte (United States) has published Ten Lessons from European IFRS Conversion in the Real Estate Industry as a guide to help US real estate companies think about potential conversion to IFRSs.

The report notes that the reception of IFRS in Europe (implemented in 2005) has been positive, with many stakeholders believing that IFRSs have led to improved quality in financial reporting when compared to other accounting frameworks. "The experience in Europe has provided practitioners with a mature perspective on taking a smart route through the transition period and the pitfalls on the way, conducting an efficient and effective transition, and securing long term financial reporting process efficiency." Click to Download the Full Report (PDF 1,406k).

Ten Lessons from European IFRS Conversion in the Real Estate Industry

  1. Conversion can be conquered
  2. the European real estate experience versus other industry sectors
  3. Getting the strategic plan right is fundamental
  4. Define the big issues early
  5. An opportunity for consistency across the industry – and to deal with the valuation issue once and for all
  6. Engage the right people
  7. The importance of communication
  8. Keep up-to-date with open matters and developments
  9. Look out for common pitfalls
  10. Make use of resources
This page on IAS Plus has links to Many Other Publications about First-time Adoption of IFRSs.


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