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April

Tricia O'Malley will chair AcSB

09 Apr 2009

Patricia (Tricia) O'Malley has been appointed Chair of the Accounting Standards Board of Canada (AcSB) effective in mid-June 2009.

Ms O'Malley had been the first full-time AcSB Chair starting in October 1999 prior to her appointment to the International Accounting Standards Board in January 2001. At the conclusion of her term on the IASB in June 2007, she became the IASB's Director of Implementation Activities, managing IFRIC Interpretations and improvements projects. Before becoming a full-time standard-setter, she was a partner in the National Assurance and Professional Practice Group of KPMG. Canada is adopting IFRSs as Canadian GAAP for publicly accountable enterprises for interim and annual financial statements relating to financial years beginning on or after 1 January 2011.

Financial Stability Forum recommendations

09 Apr 2009

The Declaration on Strengthening the Financial System (PDF 137k) issued by the leaders of the Group of 20 (G20) following their meeting in London on 2 April 2009 calls for the Financial Stability Forum (FSF) to be expanded, given a broadened mandate to promote financial stability, and re-established with a stronger institutional basis and enhanced capacity as the Financial Stability Board (FSB).

The FSF has now done that – click for Press Release (PDF 20k). The FSB membership will include all G20 countries as well as Spain and the European Commission. The FSB is chaired by Mario Draghi, Governor of the Bank of Italy. Its Secretariat is based at the Bank for International Settlements in Basel, Switzerland.

Obligations of Financial Stability Board members: As obligations of membership, member countries and territories commit to pursue the maintenance of financial stability, maintain the openness and transparency of the financial sector, implement international financial standards (including the 12 Key International Standards and Codes), and agree to undergo periodic peer reviews, using among other evidence IMF/World Bank public Financial Sector Assessment Program reports. The FSB will elaborate and report on these commitments and the evaluation process. The 12 key International Standards and Codes include International Financial Reporting Standards and International Standards on Auditing.

Concurrently, the FSF issued an updated set of recommendations and principles to strengthen financial systems. The Press Release (PDF 64k) includes an overview of the recommendations and principles plus links to download the four individual reports that comprise the recommendations and principles:

The recommendations note the following IASB actions to date:

  • Consistent guidance has been issued by the International Accounting Standards Board (IASB) and the US Financial Accounting Standards Board (FASB) for fair valuation when markets are illiquid, and for the transfer of assets between valuation categories in rare circumstances. The IASB has also proposed revised standards for the consolidation and disclosure of off-balance sheet entities and related exposures. The IASB finalised in March 2009 an amendment to IFRS 7 setting forth enhancements to required risk and valuation disclosures for financial activities, including for complex financial instruments.

Regarding financial reporting and pro-cyclicality, the recommendations state:

  • The Basel Committee on Banking Supervision should assess how to address the impact of differences between International Financial Reporting standards (IFRS) and US Generally Accepted Accounting Principles (GAAP), the appropriate treatment of off-balance sheet exposures and guarantees, and the treatment of highly liquid government securities.
  • The FASB and IASB should issue a statement that reiterates for relevant regulators, financial institutions and their auditors that existing standards require the use of judgement to determine an incurred loss for provisioning of loan losses.
  • The FASB and IASB should reconsider the incurred loss model by analysing alternative approaches for recognising and measuring loan losses that incorporate a broader range of available credit information. The FSF recommends that the FASB and IASB establish a resource group to provide input on technical issues and complete this project on an expedited basis.
  • Accounting standard setters and prudential supervisors should examine the use of valuation reserves or adjustments for fair valued financial instruments when data or modelling needed to support their valuation is weak.
  • Accounting standard setters and prudential supervisors should examine possible changes to relevant standards to dampen adverse dynamics potentially associated with fair value accounting. Possible ways to reduce this potential impact include the following:
    • Enhancing the accounting model so that the use of fair value accounting is carefully examined for financial instruments of credit intermediaries.
    • Transfers between financial asset categories.
    • Simplifying hedge accounting requirements.
A wide range of 'credit crunch' information is Here on IAS Plus.

New EFRAG planning and resource committee

09 Apr 2009

The European Financial Reporting Advisory Group (EFRAG) Supervisory Board has appointed an interim Planning and Resource Committee (PRC) as part of EFRAG's restructuring.

The role of the PRC will be to set the agenda for proactive work that results in the issuance of discussion papers, position papers, and other outputs. The PRC will provide guidance on the allocation of resources from EFRAG and National Standard Setters (NSS) to proactive projects and will monitor the progress of the work concerned. Members of the interim PRC are:
  • Peter Sampers - Member of the EFRAG Supervisory Board, Chair of the PRC ad interim
  • Angelo Caso - Chair of the OIC (Italian Standard Setter)
  • Ian Mackintosh - Chair of the UK ASB
  • Jean-Francois Lepetit - Chair of the ANC (French Standard Setter)
  • Hans Van Damme - Member of the EFRAG Supervisory Board
  • Stig Enevoldsen - Chairman of EFRAG TEG
Click for Press Release (PDF 60k).

 

G20 Declaration and IASB response

08 Apr 2009

The Declaration on Strengthening the Financial System issued by the leaders of the Group of 20 (G20) following their meeting in London on 2 April 2009 calls on the accounting standard setters to improve standards for determining the fair values of financial instruments in illiquid markets and to take other actions regarding complexity of financial reporting, provisioning, and off balance sheet financing, among other matters:

Accounting standards

We have agreed that accounting standard setters should take action by the end of 2009 to:

  • reduce the complexity of accounting standards for financial instruments;
  • strengthen accounting recognition of loan-loss provisions by incorporating a broader range of credit information;
  • improve accounting standards for provisioning, off-balance sheet exposures and valuation uncertainty;
  • achieve clarity and consistency in the application of valuation standards internationally, working with supervisors;
  • make significant progress towards a single set of high quality global accounting standards; and
  • within the framework of the independent accounting standard setting process, improve involvement of stakeholders, including prudential regulators and emerging markets, through the IASB's constitutional review.

The IASB has responded to the G20 leaders' recommendations and, at the same time, to Recent Decisions taken by the US Financial Accounting Standards Board (FASB). Here are excerpts:

  • The IASB's response to the G20: 'The IASB is committed to taking action on each of the items recommended by the G20 by the end of 2009, the target date suggested by the G20, in order to ensure globally consistent and appropriate responses to the crisis.'
  • The IASB's response to the FASB actions: 'Initial reports regarding new or additional divergences between IFRSs and US GAAP being created by these FSPs appear to be overstated. A preliminary review of the FASB's decisions by IASB staff indicates that FASB's objectives and approach on the application of fair value when a market is not active appear to be broadly similar to those in IFRSs.'

Click for:

IASB Press Release (PDF 106k).

Declaration on Strengthening the Financial System (PDF 137k)

Accounting Roundup – first quarter 2009 review

08 Apr 2009

We have posted Accounting Roundup: First Quarter in Review–2009, prepared by the Accounting Standards and Communications Group of Deloitte LLP (USA). This newsletter provides brief descriptions of pronouncements affecting accounting, financial reporting, and corporate governance issued during 1Q-2009 by standard setters and regulators including FASB, EITF, AICPA, SEC, FASAB, PCAOB, GASB, IASB, IFRIC, and IAASB.

This quarterly review consists of articles, adapted as necessary, from issues of Accounting Roundup published in January and February 2009, as well as new articles for the month of March. There's also information about upcoming Dbriefs Webcasts. You will find past issues Here. International and IFRS-related developments covered in this edition of Accounting Roundup are:
  • IASB Amends Financial Instrument Disclosures
  • IASB Proposes Amendments to IFRIC Interpretations 9 and 16
  • IASB Issues Amendments to Clarify Accounting for Embedded Derivatives
  • IASB Proposes Amendments to Derecognition Requirements for Financial Instruments
  • FASB and IASB Issue Discussion Paper on Lease Accounting
  • IASB Proposes New Consolidation Standard
  • IASB Proposes Changes to Income Tax Accounting
  • FASB and IASB Issue Discussion Paper on Revenue Recognition
  • IFRIC Issues Interpretation on Customer Contributions
  • IASC Foundation Publishes 2009 IFRS XBRL Taxonomy for Public Comment
  • IASB Reexposes Proposed Standard on Related Parties

 

IFRSs in your Pocket 2008 in Polish

08 Apr 2009

Deloitte Poland has published Sygnalizujemy właściwy kierunek: Praktyczny przewodnik po MSSF 2008 – IFRS in your Pocket 2008 in Polish.

This publication is a translation into Polish of the English language IFRSs in your Pocket 2008 guide updateed to October 2008, and additionally includes a comparison between IFRSs and the accounting requirements of the Polish Accounting Act. As a member of the European Union, Poland requires all listed companies preparing consolidated financial statements to use IFRSs. Poland also requires all banks preparing consolidated financial statements, whether or not listed, to use IFRSs. Some other companies are permitted to use IFRSs in their consolidated or separate financial statements – those that are listed or have filed for admission to public trading and a parent company that is, itself, a subsidiary of an entity that prepares its consolidated financial statements using IFRSs. Other companies follow Polish Accounting Standards.

 

Comment deadline – discussion paper on presentation

07 Apr 2009

We remind you that comments are due on 14 April 2009 on the Discussion Paper: Presentation of Financial Statements, which was published jointly by the IASB and the FASB on 16 October 2008. The project is about how best to portray assets, liabilities, income, expense, cash flows, and related information in financial statements.

It does not address how those items are recognised or measured. The DP proposes fundamental changes in the appearance of financial statements, both in their structure and the level of detail presented. Some of the key changes include:
  • The line items presented, descriptions used and order of presentation would be aligned between the statements of financial position, comprehensive income, and cash flows.
  • The financial statements would be segregated into business activities (sub-categorised into operating and investing), financing activities, income taxes, and discontinued operations.
  • Items would be classified in the financial statements based on a 'management approach', with further sub-classifications then required.
  • A reconciliation would be required between the statement of cash flows and the statement of comprehensive income.

 

Deloitte comments on SEC IFRS 'Roadmap'

07 Apr 2009

Deloitte & Touche LLP (United States) has submitted to the US Securities and Exchange Commission its views on the SEC's proposed Roadmap for the Potential Use of Financial Statements Prepared in Accordance with International Financial Reporting Standards by U.S. Issuers.

The letter expresses support for allowing foreign registrants to use IFRSs and for the convergence efforts of the IASB and the FASB. But the letter suggests that there are some areas of the Roadmap that require further consideration by the SEC before it is adopted. Click for:

An excerpt from the Deloitte letter:

We support the steps that the SEC has already taken toward the acceptance of IFRSs in the U.S. capital markets, including allowing foreign private issuers to use IFRSs in their SEC filings without a reconciliation to U.S. GAAP. In our view, IFRSs are of high quality and are sufficiently comprehensive to provide transparent financial information. We also support a standard-setting process that addresses the ongoing needs of financial statement users and makes relevant improvements to standards. To that end, we are supportive of the convergence efforts of the IASB and FASB in developing the highest quality standards.

As with any important policy decision, the Commission will need to consider and weigh various factors in deciding whether to mandate IFRSs for all U.S. issuers. More specifically, the Commission will need to consider recent developments relating to the financial crisis, including the loss in confidence in the U.S. capital markets, the development of capital market alternatives outside the United States, and the impact on global competitiveness. Also, there have been ongoing questions about U.S. financial reporting, including the complexity of U.S. GAAP and the need to have standards that are less reliant on detailed rules and bright lines. While some may argue that, in light of recent events, this is not the time to make fundamental changes in financial reporting requirements, we believe that these very events reinforce the need to rethink the approach to financial reporting.

We support the objective in the proposed roadmap of transitioning all U.S. issuers to IFRSs but have a number of observations and recommendations regarding how the proposed roadmap can be improved. The most important of these recommendations are (1) the current need for the SEC to be more definitive about its plan to transition all U.S. issuers to IFRSs in the future and (2) the removal of the significant disincentives for early adopters of IFRSs.

Deloitte International Tax Source

07 Apr 2009

The Deloitte International Tax Source (DITS) is likely to be of interest to visitors to IAS Plus – who come from over 200 jurisdictions around the world.

DITS is a comprehensive one-stop web database for international tax rates, information, and analysis key to doing business in a cross-border environment. DITS provides access to:
  • Tax rates for more than 60 jurisdictions, including:
    • Corporate and historical income tax rates,
    • Domestic withholding rates,
    • Withholding tax rates for dividends, interest, and royalties for in-force and pending tax treaties, and
    • Indirect tax rates (VAT/GST/sales tax).
  • Comparative data on holding companies
  • Comparative data on transfer pricing policies
  • An executive library of:
    • International Tax and Business Guides and Highlights
    • A wide range of global tax publications
    • Tax tools
    • Live interactive webcasts led by Deloitte professionals
DITS is free, easy to use, and always available. Access the Deloitte International Tax Source at www.dits.deloitte.com/. There's a short video overview Here to introduce you to DITS.

 

G20 leaders support global accounting standards

07 Apr 2009

The Communiqué Issued by the Leaders of the Group of 20 (G20) following their meeting in London on 2 April 2009 calls on "the accounting standard setters to work urgently with supervisors and regulators to improve standards on valuation and provisioning and achieve a single set of high-quality global accounting standards".

This recommendation builds on the recommendation in the Final Report of G20 Working Group 1 Enhancing Sound Regulation and Strengthening Transparency (PDF 720k), issued 25 March 2009, which also recommends adoption of a single set of accounting standards globally. The report also recommends greater involvement of representatives of emerging market economies in the IASCF/IASB structure.

Recommendation 23: The IASB should enhance its efforts to facilitate the global convergence towards a single set of high-quality accounting standards by sharing the experience of countries that have completed this process and by providing technical assistance. — Responsibility: IASB — Timeline: Fall 2009 — Monitoring: Expanded FSF

The long-term benefits likely to result from the use of a harmonized set of international accounting standards are considerable, in particular from a market transparency and cost perspective. While adapting IFRS according to national circumstances rather than fully complying with them may be appropriate in some cases to take into account country-specific characteristics of markets, it also voids some of the benefits of a global set of accounting standards.

The Working Group recommends that the IASB facilitate the transition towards a single set of high-quality global standards globally by sharing the experience of countries that have completed this process and by providing global assistance.

Click for Communiqué Issued by the Leaders of the G20 (PDF 174k).

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