This report analyses key issues arising from the differentiated nature of financial regulation in the international banking, insurance, and securities sectors. It also addresses gaps arising from the scope of financial regulation as it relates to different financial activities, with a particular focus on certain unregulated or lightly regulated entities or activities. The Joint Forum prepared this report at the request of the G-20 to help identify potential areas where systemic risks may not be fully captured in the current regulatory framework and to make recommendations on needed improvements to strengthen regulation of the financial system.

Annex 2 of the report (Fundamental Analysis of the Objectives of Financial Regulation) states: The objective of customer or stakeholder protection is not equivalent to the objective to reduce systemic risks. On the one hand, protecting customers may help to reduce systemic risk by for instance preserving market liquidity, while on the other this might increase systemic risks by undermining market discipline. To have financial supervisors put more emphasis on the objective of systemic risk reduction, the G-20 recommends in its 2009 report on Sound Regulation and Strengthening Transparency that 'as a supplement to their core mandate, the mandates of all national financial regulators, central banks, and oversight authorities, and of all international financial bodies and standard setters (IASB, BCBS, IAIS and IOSCO) should take account of financial system stability'.

Participants were auditors from smaller registered public accounting firms. At those Forums, the staff of the Division of Corporation Finance of the Securities and Exchange Commission reviewed common financial reporting issues facing smaller issuers that they have identified during their staff reviews of filings for smaller public companies. Click to download the SEC Staff Slide Presentation (PDF 267k) summarising some of the issues they have noted. Other SEC information for small businesses may be found here on the SEC's Website.

 

To give an example, in November 2009 the IASB issued IFRS 9 Financial Instruments with an effective date of 1 January 2013. This new IFRS, together with its copious amendments to other IFRSs, will be consolidated in the 2010 Bound Volume (the Red Book), as it was issued before 1 January 2010. It will not be included in the new Blue Book, as its effective date means that it is not required for annual reporting periods beginning on 1 January 2010.

The IASB expects to release the Blue Book – titled Consolidated Without Early Application – around 20 January 2010. They expect to have a facility for placing orders for this volume shortly on IASB's Website.

 

Mr Barnier has prepared written responses (PDF 156k) to questions posted in advance by the committees. His comments on accounting include:

In the area of financial information, one of my priorities will be the adoption by all of our partners, including the United States, of high-quality global accounting standards, in line with the recommendations of the G20. I would also like to improve the governance of the IASB significantly. As regards SMEs, I would like to put forward an ambitious proposal for the modernisation of accounting regulations. Lastly, with regard to the statutory audit of accounts, my priorities will be to enhance international cooperation in order to enable mutual recognition of supervisory systems in respect of [auditors], and potential adoption of the international [auditing] standards (ISA).

The paper is intended to help clarify the meaning of particular terms used by policy-makers, banks, regulators, accountants, and others in respect of bank provisioning and reserving, "since there is not yet a common understanding of what these terms are meant to cover". The paper is also intended to assist the readers of the recently issued joint EFRAG/FEE paper Impairment of Financial Assets: The Expected Loss Model (see IAS Plus News Story of 10 Dec 2009) by providing background information and an outline of the key terms of the various approaches and models that are currently being debated. FEE's announcement also notes that the paper "may also help to better understand the current discussions on impairment in relation to the proposals of the International Accounting Standards Board (IASB) for the impairment of financial assets". Click for:

• FEE Paper on Bank Provisioning and Reserving (PDF 1,245k)
• FEE Press Release (PDF 35k)

 

Here is a web page with links to the various publications.

Regarding IFRSs, the Report of the Meeting (PDF 42k) states:

Strengthening accounting standards. As requested by the G20 Leaders, the FSB continues to monitor progress in implementing G20 and FSB recommendations for improved, converged accounting standards. FSB members welcomed the IASB's plan to continue its enhanced technical dialogue with prudential authorities and market regulators on financial institution reporting issues, and to conclude its full review of the financial instruments standard by the end of this year.

Deloitte (Colombia) has published the Spanish translation of the following IFRS publications:

• Boletín de Actualización IAS Plus – IASB emite enmiendas al IAS 24 (PDF 32k)
• Spanish version of: IAS Plus Update November 2009 – IASB issues amendments to IAS 24 (PDF 68k)

• Boletín de Actualización IAS Plus – IFRIC aclara la contabilidad de la deuda por swaps de patrimonio (PDF 28k)
• Spanish version of: IAS Plus Update December 2009 – IFRIC clarifies accounting for debt for equity swaps (IFRIC 19) (PDF 79k)

• Boletín de Actualización IAS Plus – IASB enmienda la IFRIC 14 (PDF 31k)
• Spanish version of: IAS Plus Update December 2009 – IASB amends IFRIC 14 (PDF 60k)

Nuestra página de recursos en español: Clic.

 

The topics discussed were as follows (click through to access detailed Deloitte observer notes for each topic):

 

THURSDAY 7 JANUARY 2010 (10:00-18:15)

Introduction

Active Committee projects

• IAS 16 – Accounting for production phase stripping costs in the mining industry
• IFRS 2 – Vesting and non-vesting conditions

Review of tentative agenda decisions published in November 2009 IFRIC Update

• IAS 38 – Amortisation method
• IFRS 2 – Contingent manner of settlement
• IAS 27 – Presentation of comparatives when applying the 'pooling of interests' method
• IAS 27 – Combined financial statements and redefined reporting entities
• IAS 18 – Receipt of a dividend of treasury shares
• IFRS 4 and IAS 32 – Scope issue for investments in REITs
• IAS 32 – 'Fixed for fixed' condition

Annual improvements – Deliberation of comments received

• IFRS 1 – Revaluation basis as deemed cost
• IAS 27 – Impairment of investments in subsidiaries, jointly controlled entities and associates in the separate financial statements of the investor
• IFRS 3 – Measurement of non-controlling interests
• IFRS 3 – Transition requirements for contingent consideration from a business combination that occurred before the effective date of the revised IFRS
• IFRS 7 – Disclosures about the nature and extent of risks arising from financial instruments
• IAS 28 – Partial use of fair value for measurement of associates
• IAS 34 – Significant events and transactions
• Remaining issues from August 2008 Annual Improvements ED

 

FRIDAY 8 JANUARY 2010 (09:00-12:30)

Staff recommendations for tentative agenda decisions

• IFRS 8 and IAS 36 – Transition provisions for IFRS 8 amendment
• IAS 21 – Determination of functional currency of investment holding company
• IAS 32 – Debt/equity classification of instruments with obligation to deliver cash at the discretion of shareholders
• IFRS 1 – Accounting for costs included in self-constructed assets on transition
• IAS 39 – Unit of account for forward contracts with volumetric optionality

Administrative session

 

Click to go to the preliminary and unofficial notes taken by Deloitte observers for the entire meeting.

• Boletín de Actualización IAS Plus – IFRS 9 Instrumentos financieros (PDF 43k)
• Spanish version of: IAS Plus Update October 2009 – IFRS 9 Financial Instruments (PDF 226k)

You will find our resources in Spanish Here.