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IASB publishes exposure draft for new IFRS – Insurance Contracts

29 Jul 2010

The IASB has published for public comment an exposure draft of a proposed IFRS for insurance contracts. Exposure Draft ED/2010/8 'Insurance Contracts' proposes a single IFRS that all insurers, in all jurisdictions, could apply to all contract types on a consistent basis. The proposed IFRS would apply to writers of both insurance and reinsurance contracts.

A summary of the key proposals follows:

Scope and recognition

The proposed IFRS would apply to all insurance contracts as defined. An insurance contract would be recognised at the earlier of:

  • the insurer being on risk to provide coverage to the policyholder for insured events; and
  • the signing of the insurance contract.

An insurer would derecognise an insurance liability when it is extinguished.


Measurement of the insurance contract is based on a 'building block approach' that portrays a current assessment of the contract, using the following:

  • an unbiased, probability-weighted average (expected value) of future cash flows expected to arise as the insurer fulfils the contract;
  • the effect of time value of money; and
  • a margin.

The building blocks would be used to measure the combination of rights and obligations arising from an insurance contract rather than to measure the rights separately from the obligations. The combination of rights and obligations would be presented on a net basis.


With respect to disclosure, the ED proposes that entities should disclose qualitative and quantitative information about:

  • the amounts, recognised in its financial statements, arising from insurance contracts; and
  • the nature and extent of risks arising from insurance contracts.

ED/2010/8 is open for comment until 30 November 2010. Click for:

IFRS Insights – Update on convergence and conversion

29 Jul 2010

We have posted the IFRS Insights Newsletter for July 2010 from Deloitte & Touche LLP (United States).

IFRS Insights (PDF 397k) is a newsletter on IFRSs aimed at US companies. This issue includes:
  • The latest FASB and IASB convergence activities; a detailed table with the target date for each convergence project is included
  • Technology considerations related to the SEC's "dual-reporting" requirements
  • An overview of the financial statement presentation project
  • An industry update for power and utilities companies
We have Permanent Links to all IFRS Insights on our USA country page.


FASB goes it alone on accounting for repurchase agreements (repos)

29 Jul 2010

At its meeting held on 28 July 2010, the FASB chairman announced that he added a limited scope project to the FASB's agenda to improve accounting for repurchase agreements (repos) or other agreements that both entitle and obligate the transferor to repurchase or redeem financial assets before their maturity.

Although this is not a joint project with the IASB, the FASB intends to consider how the proposed improvements are similar to or different from IFRS.

When the IASB and FASB decided in June 2010 to amend their convergence workplan, the IASB's derecognition project was removed from the current priority list to be reconsidered again sometime after June 2011. Prior to this workplan change, the IASB had issued ED/2009/3 Derecognition, which would have changed the way in which repos where accounted for, proposing to treat these transactions as sale transactions.

Constituents overwhelmingly disagreed with the proposed approach as described in the ED, noting these transactions were almost universally perceived as financing and that their treatment as sale transactions would increase volatility in profit or loss that had no economic substance. The IASB and FASB had also debated alternative accounting treatments for repos in light of this constituent feedback before deferring the project.

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Canada proposes a two-year delay in IFRS implementation for rate-regulated activities

29 Jul 2010

During the Board meeting in July 2010 the IASB noted that it seemed unlikely for the Board to reach a decision concerning the accounting for rate-regulated activities that would allow a solution to be found in time for the adoption of IFRSs by Canada.

The IASB considered four alternatives of how to move forward with the project:
  • a "fast-tracked" standard,
  • an interim solution for pending initial adopters of IFRS while later considering a longer term solution,
  • an amendment to IFRS 1 to permit the continued use of previous national GAAP for rate regulated activities for first time adopters, or
  • continue with the existing project under its current timeframe.
The IASB finally agreed to continue its current project under the existing timeframe without amending IFRS 1.

The Canadian Accounting Standards Board (AcSB) has now reacted by proposing a two-year delay in IFRS implementation for qualifying entities with rate-regulated activities since "Financial statement preparers in Canada currently recognizing regulatory assets and regulatory liabilities require certainty about how they should account for the effects of the actions of their rate regulator when adopting IFRSs for the first time." The new implementation date would be 1 January 2013, with earlier application permitted.

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IAASB Chairman reappointed

29 Jul 2010

The Board of the International Federation of Accountants (IFAC) has reappointed Prof. Arnold Schilder to lead the International Auditing and Assurance Standards Board (IAASB).

The IAASB is the independent standard-setting board supported by IFAC. Prof. Schilder's reappointment is for the period 2012–2014.


Click for IFAC press release (link to IFAC website). Background information about the IAASB is available on our IAASB page.

Stay Tuned Online – IFRS and UK GAAP update

29 Jul 2010

The Deloitte London IFRS Centre of Excellence is running a series of hour-long Internet-based financial reporting updates, aimed at helping finance teams keep up to speed with IFRSs and other financial reporting issues.

Each update lasts no more than an hour, and sessions are normally held three times a year, approximately at the end of March, July, and November. We intend to make a recording of each session available on IAS Plus for a period of at least four months from the date of the presentation. The topics covered in the July 2010 webcast:
  • Latest IFRS developments
  • IFRS 3(2008) – now in force
  • ED/2010/6 Revenue from Contracts with Customers
  • New UK Corporate Governance Code
  • Other UK GAAP developments
To access the recording Click Here. There is a permanent link on our UK Country Page.


IASB targets analyst views in fair value measurement questionnaire

28 Jul 2010

The IASB has published a questionnaire for financial statement users on its June 2010 exposure draft ED/2010/7 Measurement Uncertainty Analysis Disclosure for Fair Value Measurements - Limited re-exposure of proposed disclosure.

The ED proposes that companies disclose sensitivity information ('measurement uncertainty analysis') about all 'Level 3' fair value measurements included in financial statements - not just for financial instruments, but also other items such as investment properties, biological assets and property, plant and equipment measured on the revaluation basis.

The questionnaire is targeted at users of financial statements, particularly analysts, and requests feedback in areas such as:

  • The usefulness of 'measurement uncertainty analysis' to different categories of assets and liabilities
  • How measurement uncertainty analysis information is used - 'worst case' or 'best case' scenarios, or for other uses
  • Whether information presented by class of asset and liability is sufficient
  • Additional disclosures that would be useful.

The deadline to complete the questionnaire is 7 September 2010. The questionnaire can be accessed on the IASB website. More information on the proposals is available in our IFRS in Focus newsletter (PDF 60k) and our Fair value measurement project page.

Canadian guide on IFRS transition

28 Jul 2010

The Canadian Institute of Chartered Accountants (CICA) has published The IFRS Changeover: A Guide for Users of Financial Reports. The guide is designed to help users of external financial reports better understand the potential impacts of Canada's transition to International Financial Reporting Standards (IFRS). Deloitte (Canada) Partner, Peter Chant, participated in the preparation of the publication.

The guide has been published by the CICA's Canadian Performance Reporting Board and is available online at More information on IFRS in Canada can be found on our Canada country page.

Accounting & Auditing Standards Board in Bhutan

28 Jul 2010

The lhengye zhungtshog (cabinet) of Bhutan has approved the formation of an accounting and auditing standards board of Bhutan (AASBB) on 26 July.

The board will set Bhutanese accounting and auditing standards in line with international standards. So far there is no defined Bhutanese GAAP. The provision of the Companies Act of Bhutan (2000) that listed companies must present their financial statements in compliance with GAAP is usually construed to mean India GAAP. The AASBB will also develop plans for the formation of chartered institutes and chartered accountants qualification in the country and harmonise financial reporting formats.

Illustrative Examples in XBRL for the IFRS Taxonomy 2010

27 Jul 2010

The IFRS Foundation has published illustrative examples in eXtensible Business Reporting Language (XBRL) for the IFRS Taxonomy 2010.

The purpose of these examples is to illustrate the use of the IFRS Taxonomy in financial statements, in accordance with the XBRL architecture outlined in The IFRS Taxonomy Guide. Click Here to access the illustrative examples in XBRL on the Foundation's website.


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