Amaro Gomes appointed to the IASB

30 Apr 2009

Amaro Luiz de Oliveira Gomes has been appointed to a five-year term as a full-time member of the International Accounting Standards Board (IASB) starting 1 July 2009. Mr Gomes is currently Head of Financial System Regulation Department of the Central Bank of Brazil.

In that capacity, Mr Gomes has played a leading role in the adoption of International Financial Reporting Standards in Brazil. All listed companies and all banks (including domestic owned and foreign owned, listed and unlisted banks) will have to prepare and publish consolidated financial statements in full compliance with IFRSs starting with years ending 31 December 2010. At the Central Bank of Brazil, Mr Gomes has been responsible for drafting regulatory proposals on such matters as Basel II implementation, money laundering, accounting and auditing, microfinance, and prudential requirements. Since 2004, he has served on the Accounting Task Force of the Basel Committee on Banking Supervision. Before joining the Central Bank, Mr Gomes was an auditor with one of the international audit firms. He is co-author of a book Accounting for Financial Institutions. Click for Press Release (PDF 99k). Click for a complete History of Members of the IASB.


Modernised accounting law adopted in Germany

30 Apr 2009

The German Parliament has passed the Act to Modernise Accounting Law (in German: Bilanzrechtsmodernisierungsgesetz). A goal of the legislation is to reduce the financial reporting burden on German companies.

The accounting requirements under the Act are described as an alternative to International Financial Reporting Standards for small and medium-sized companies that do not participate in capital markets. In announcing the new law, the German Federal Ministry of Justice (which administers the Commercial Code (ComC) in Germany) said:

The modernised ComC accounting law is also an answer to the International Financial Reporting Standards (IFRS), published by the International Accounting Standards Board (IASB). The IFRS are geared to suit capital market oriented enterprises; in other words, they also serve information needs of financial analysts, professional investors and other participants in the capital markets.

By far the majority of those German enterprises that are required by law to keep accounts and records do not take part in the capital market at all. For this reason, there is no justification for committing all the enterprises that are required to keep accounts and records to the cost-intensive and highly complex IFRS. Also the draft recently discussed by the IASB of a standard IFRS for Small and Medium-Sized Entities is not a good alternative for drawing up an informative annual financial statement. Practitioners in Germany have strongly criticised the IASB draft because its application – compared with ComC accounting law – would still be much too complicated and costly.

The law exempts 'sole merchants' (proprietorships) with less than €500,000 turnover and Euro 50,000 profit from any obligation to keep accounts and records. Small companies (less than 50 employees, assets of €4.8 million, and annual turnover of €4.8 million) need not have an audit and may publish only a balance sheet. Medium-sized companies (less than 250 employees, assets of €19.2 million, and annual turnover of €38.5 million) have reduced disclosure requirements and may combine balance sheet items. Among the new accounting provisions of the ComC:
  • Companies will be permitted to capitalise internally generated intangible assets, while getting an immediate tax deduction for the costs.
  • Financial institutions will measure financial instruments designated as 'held for trading' at fair value, with value changes recognised in a 'special reserve'. The Ministry of Justice press release states: 'This special reserve has to be built up from part of the enterprise's trading profits when times are good and can then be used to offset trading losses when times get worse. Hence this special provision has an anticyclical effect. Here the necessary steps have been taken in order to respond to the financial markets crisis.'
  • Special purpose entities that are controlled must be consolidated.
The new law takes effect 1 January 2010, with early application for 2009 permitted. Click for


UK FRC encourages SEC to allow IFRSs

30 Apr 2009

The United Kingdom Financial Reporting Council (FRC), the UK's independent financial reporting regulator, has responded to the US Securities and Exchange Commission (SEC) on its proposed Roadmap on the use of International Financial Reporting Standards (IFRS) by US companies.

The FRC encourages the SEC to permit US issuers who can demonstrate their competence in IFRS to be able to adopt IFRS in place of US Generally Accepted Accounting Principles (GAAP). The FRC also encourages the SEC to clarify that US companies that do adopt IFRS will not be at risk of being required to return to US GAAP at a later date if the SEC decides not to mandate IFRS for all US companies. The FRC's response also encourages the IASB and the US FASB to continue to work together but notes that the focus should be on achieving improvements in financial reporting, whether under US GAAP or IFRS, rather than convergence of IFRS and US GAAP as a goal in itself. Click for:


IAS Plus Newsletter – Improvements 2009

29 Apr 2009

Deloitte's IFRS Global Office has published an IAS Plus Update Newsletter – Improvements to IFRSs 2009 discussing the final Improvements to 12 IFRSs that the IASB issued on 16 April 2009. The IASB uses the annual improvements project to make necessary, but non-urgent, amendments to IFRSs that will not be included as part of another major project.

The latest amendments were included in exposure drafts of proposed amendments to IFRSs published in October 2007, August 2008, and January 2009. Most of the amendments are effective for annual periods beginning on or after 1 January 2010, although entities are permitted to adopt them earlier.
Click for Newsletter.
Past issues of all IAS Plus newsletters are Here.


Agenda for 7 May 2009 IFRIC meeting

28 Apr 2009

The International Financial Reporting Interpretations Committee (IFRIC) will meet at the IASB's offices in London on Thursday 7 May 2009 (one day only) 10:00am to 17:30pm.

The meeting is open to the public and will be webcast. The tentative agenda is shown below.

Agenda for the IFRIC Meeting - Thursday, 7 May 2009

  • Introduction
  • Compliance Costs for REACH (European Commission Regulation Concerning the Registration, Evaluation, Authorisation and Restriction of Chemicals)
  • Venture capital consolidations and partial use of fair value through profit or loss
  • Determination of cash equivalents
  • Review of Tentative Agenda Decisions published in March IFRIC Update
    • Classification of tonnage taxes
    • Disclosure of idle assets and construction in progress
    • Accounting for sales costs
    • Participation rights and calculation of the effective interest rate
    • Classification of failed loan syndications
    • Discount rate assumptions used in fair value calculations
    • Voluntary prepaid contributions under a minimum funding requirement
  • Staff Recommendations for Tentative Agenda Decisions
    • IFRS 3 Business Combinations
    • Acquisition related costs in a business combination
    • Earlier application of revised IFRS 3
    • Treatment of transaction costs on acquisition or disposal of non-controlling interests
    • Potential effect of IFRS 3 (as revised in 2008) and IAS 27 (as amended in 2008) on equity method accounting
    • Impairment of investments in associates
    • Hedging using more than one derivative as the hedging instrument (IG.F.2.1)
    • Meaning of significant or prolonged
    • Scope of IFRIC 12
    • Applicability to the customer
  • Administrative Session – IFRIC work in progress


iGAAP 2009 – Chinese language version

26 Apr 2009

Deloitte Taiwan has published iGAAP 2009 Chinese Version. This three-volume set, in traditional Chinese, includes all the content of iGAAP 2009 English Version.

The Chinese version is organised as follows:
  • Volume 1: Preface, Framework, IAS 1, IAS 8, IAS 16, IAS 40, IAS 38, IAS 36, IAS 2, IAS 12, IAS 18, IAS 19, IFRS 2, IFRS 8, IAS 26
  • Volume 2: Includes all of the iGAAP chapters relating to financial instruments (IAS 32, IAS 39, IFRS 7) and insurance contracts (IFRS 4)
  • Volume 3: IAS 37, IAS 23, IAS 21, IFRS 5, IAS 7, IAS 10, IAS 24, IAS 27, IFRS 3, IAS 28, IAS 31, IAS 33, IAS 34, IAS 11, IAS 20, IAS 29, IAS 41, IFRS 1
For information about purchasing iGAAP 2009 Chinese Version, please send an email to fltsai @ deloitte.com.tw.


Deloitte webcast – IFRS in the real estate industry

26 Apr 2009

On 30 April 2009, Deloitte (United States) will hold a live web presentation titled Revisiting International Financial Reporting Standards: What Will the Impact Be In the Real Estate Arena? .

  • Topic: Increasingly, U.S. companies are factoring IFRS into their strategic planning – even as they focus on today's economic challenges. How might U.S. real estate companies reinforce their efforts around IFRS readiness today? The webcast will discuss:
    • The current economic crisis and its affect on IFRS in the U.S.
    • Lessons from the European IFRS experience.
    • The SEC's IFRS roadmap and timing for IFRS adoption.
    • Impact of IFRS on publicly owned and privately held real estate companies and funds.
  • Date: Thursday, 30 April 2009
  • Time: 11:00am US EDT (15:00 GMT)
  • Host: Dorothy Alpert, Principal – Deloitte LLP
  • More Information and Registration


Agenda project pages updated

25 Apr 2009

We have updated our IASB agenda project pages to reflect the discussions and decisions at the IASB's April 2009 meeting, as follows:

IASB conclusions on FASB FSPs

25 Apr 2009

The IASB has reviewed two recent FASB Staff Positions (FSPs) on fair value and impairment of financial assets and has reached the following conclusions:

  • FSP FAS 157-4, which provides guidance on determining fair value when market activity has decreased. The IASB has agreed that the guidance in FSP FAS 157-4 is broadly consistent with the principles of fair value in IFRSs and the recommendations of the IASB's Expert Advisory Panel. The IASB plans to include relevant guidance from the FSP in the IASB's exposure draft on Fair Value Measurement, which will be published in May.
  • FSP FAS 115-2 and FAS 124-2, which addresses other-than-temporary impairments for debt securities. The IASB has decided not to propose adopting the conclusions in this FSP. This FSP applies to debt securities and shifts the focus for assessing impairment from an entity's intent to hold until recovery to its intent to sell.

    FSP FAS 115-2 and FAS 124-2 requires:

    • An entity must assess whether (a) it intends to sell the debt security or (b) it is more likely than not that the entity will be required to sell the debt security before its anticipated recovery (for example, to meet working capital needs).
    • If it does intend to sell (or it cannot assert that it is more likely than not that it will not have to sell the securities before recovery), the entity will write the asset down to fair value through earnings.
    • If an entity does not intend to sell a debt security (available-for-sale or held-to-maturity), but it is probable that the entity will not collect all amounts due according to the debt's contractual terms, the entity will bifurcate the impairment amount:
      • The impairment due to credit, measured as the difference between amortized cost and the present value of expected cash flows discounted at the security's effective rate, would be recognised in earnings.
      • The remaining amount of the impairment (noncredit portion) would be recognised in other comprehensive income (separately from other unrealised gains and losses on available-for-sale securities). The noncredit portion for held-to-maturity securities recorded in other comprehensive income should be amortised prospectively (with the offsetting amount increasing the value of the asset) over the remaining life of the security.
    In deciding not to adopt FSP FAS 115-2 and FAS 124-2, the IASB said that, instead, it will take up the broad issue of impairment as part of its Comprehensive Review of IAS 39. The IASB believes that an immediate response to the recent FSP on impairment is unnecessary. The IASB also announced a timetable for the IAS 39 review, which calls for issuance of an exposure draft of a proposed replacement for IAS 39 by October 2009.
  • Click for:

    Proposed public sector convergence with IAS 39

    24 Apr 2009

    The International Public Sector Accounting Standards Board (IPSASB) has invited comment on three exposure drafts of proposed International Public Sector Accounting Standards (IPSASs):

    • ED 37 Financial Instruments: Presentation,
    • ED 38 Financial Instruments: Recognition and Measurement, and
    • ED 39 Financial Instruments: Disclosures.
    Additional application guidance has been included in each ED on two key public sector issues:
    • Provision by government of financial guarantees that are given at zero cost or below market price, and
    • Concessionary loans (loans at below market interest rates).
    Comments are requested by 31 July 2009. The EDs may be viewed by going to www.ifac.org/EDs. Click for Press Release (PDF 19k).

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