The accounting under existing requirements depends on the classification of a lease. Classification as an operating lease results in the lessee not recording any assets or liabilities in the statement of financial position (balance sheet) under either International Financial Reporting Standards or US standards (generally accepted accounting principles). This results in many investors having to adjust the financial statements (using disclosures and other available information) to estimate the effects of lessees' operating leases for the purpose of investment analysis.

The proposals would result in a consistent approach to lease accounting for both lessees and lessors–a right-of-use' approach. Among other changes, this approach would result in the liability for payments arising under the lease contract and the right to use the underlying asset being included in the lessee's statement of financial position, thus providing more complete and useful information to investors and other users of financial statements.

ED/2010/9 is open for comment until 15 December 2010. Click for:

• IASB press release (PDF 21k)
• Access to the exposure draft (link to IASB website)
• Our Leases project summary

As part of their additional outreach, the boards are seeking entities that would be willing to take part, on a confidential basis, in field work to discuss and test the provisions of their proposals for lease accounting. The purpose of the field work is to assess the operationality and the costs and benefits of the proposed new standard. More Information is available in the IASB press release.

On 24 February 2010, the SEC issued a Statement in Support of Convergence and Global Accounting Standards, reiterating its belief "that a single set of high-quality globally accepted accounting standards will benefit U.S. investors and that this goal is consistent with our mission of protecting investors, maintaining fair, orderly, and efficient markets, and facilitating capital formation". In that Statement, the SEC directed its staff to develop and execute a work plan considering specific areas and factors about the potential transition to a system incorporating IFRS.

Consistent with this directive, the two Requests for Comment issued seek views on the following topics:

Comments close 60 days after publication of the Requests for Comment in the United States Federal Register. Click for:

• SEC release 33-9133 (link to SEC website)
• SEC release 33-9134 (link to SEC website)
• Our SEC page.

The current approach to developing financial standards for Islamic transactions is to benchmark against international standards such as IFRSs to ensure consistency with globally accepted standards and modifying them, where necessary, in order to ensure financial statements present fairly the financial position, financial performance and cash flows of the Islamic financial institution.

Click for:

• AAOIFI website
• Draft of the conceptual framework for financial reporting by Islamic financial institutions (PDF 263k) (translation of the final standard not yet available)
• IOSCO Islamic Capital Market Fact Finding Report (PDF 611k)
• Website of the yearly World Islamic Banking Conference
• Islamic Finance at Deloitte: "No interest...but plenty of attention"

• IFRS in Focus Newsletter – Insurance Contracts (PDF 105k)
• Past editions of IFRS in Focus
• Our Insurance Contracts project page
• Deloitte (United States) Heads Up Newsletter – IASB Issues Exposure Draft on Insurance Contracts (PDF 159k)

• Comment letter on tentative agenda decision: IFRS 1 First-time Adoption of International Financial Reporting Standards – Repeat application of IFRS 1 (24k)
• Comment letter on tentative agenda decision: IAS 21 The Effects of Changes in Foreign Exchange Rates – Repayments of investments (24k)

We agree with the decision not to add the IFRS 1 project to the IFRS Interpretation Committee's agenda, and we agree that the IASB should clarify the guidance relating to the repeat application of IFRS 1 as part of its annual improvements project. We understand the reasons for the decision not to include the IAS 21 on the agenda, but we encourage the IASB to include this issue in a future review of IAS 21.

All of our past letters of comment to the IASB are Here.

Click for:

• Heads Up Newsletter The Final Act Financial Reporting Implications of the Dodd-Frank Wall Street Reform and Consumer Protection Act (PDF 173k)
• Heads Up archive
• News, July 16, 2010.

The proposals in the ED would amend the accounting for defined benefit plans through which some employers provide long-term employee benefits, such as pensions and post-employment medical care. In defined benefit plans, employers bear the risk of increases in costs and of possible poor investment performance. The ED proposes improvements to the recognition, presentation, and disclosure of defined benefit plans.

The working group meeting will be open to observers. For more details about the meeting and how to register as an observer see the IASB's website.

A staff draft of an exposure draft arising from the project was published on 1 July 2010 (see our earlier story) and, in response to constituent concerns, the IASB is currently undertaking 'outreach' activities and field testing of the proposals. The formal release of the ED is expected early in 2011, with a final IFRS expected later in 2011. Other aspects of the project are also considering discontinued operations and the presentation of comprehensive income.

Click for:

• Access to IASB podcast (link to IASB website, the podcast is available in the 'Project podcasts' section)
• Access to IASB web presentation (external link)
• Our Financial Statement Presentation project page

• a top-down approach based on public enterprise GAAP (i.e., IFRSs) but providing for differences on a number of topics;
• adoption of the IFRS for Small and Medium-sized Entities (IFRS for SMEs);
• an independently developed set of standards.