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2010

Notes from December IASB meeting

15 Dec 2010

The IASB is meeting in London on 13-17 December 2010 for its regular December meeting, some of which is a joint meeting with the FASB.

We've posted Deloitte observer notes from the topics discussed on the first two days of the meeting, as follows (click through for direct access to the notes for that particular topic):

Monday, 13 December 2010 (IASB only)

  • IFRS 1 — Severe hyperinflation — comment letter analysis
    • Scope of the amendment
    • Comparative information
    • Other comments
  • Post-employment benefits
    • Past service costs, curtailments and settlements
    • Multi-employer plans
    • Tax and administration costs
    • Mortality assumptions
    • Incorporating IFRIC 14
    • Identification of back-end loaded plans
    • Interim reporting
    • State plan and group plan disclosures

Tuesday, 14 December 2010 (IASB-FASB joint meeting)

  • Fair value measurement
    • Disclosure requirements for modifications to fair value
    • Fair value measurement of a liability issued with an inseparable third-party guarantee
  • Asset and liability offsetting
    • Multilateral netting arrangements
    • Disclosure requirements
    • Transition requirements
    • Comment period

The IASB and FASB also discussed revenue recognition, the notes for this session will be posted soon.

Click here to go to the preliminary and unofficial Notes Taken by Deloitte Observers for the entire meeting.

Notes from Day 3 of December IASB meeting

15 Dec 2010

The IASB is meeting in London on 13-17 December 2010 for its regular December meeting, some of which is a joint meeting with the FASB.

We've posted Deloitte observer notes from the topics discussed on day three of the meeting. We have also posted the notes of the revenue recognition project discussion from Day 2 of the meeting. The topics discussed were as follows (click through for direct access to the notes for that particular topic):

Tuesday, 14 December 2010

Wednesday, 15 December 2010

Click here to go to the preliminary and unofficial Notes Taken by Deloitte Observers for the entire meeting.

We comment on ED/2010/9 'Leases'

15 Dec 2010

Deloitte has submitted a comment letter on Exposure Draft ED/2010/9 'Leases'.

The proposal would result in a consistent approach to lease accounting for both lessees and lessors using a 'right-of-use' approach.

We agree with the proposed right-of-use model when it is applied to very simple lease arrangements that include a fixed term with fixed payments as we believe this will increase transparency of the economic effects of leasing arrangements to users of the financial statements. However, we have significant concerns over the application of the right-of-use model when the arrangement includes other terms such as options and contingencies.

Click to Download our Comment Letter (PDF 146k).

OECD and GRI form partnership to promote sustainability reporting

14 Dec 2010

The Global Reporting Initiative (GRI) and the Organisation for Economic Co-operation and Development (OECD) have announced a Memorandum of Understanding forming a partnership which aims to give companies greater guidance and support on how to conduct their business responsibly and report on their sustainability performance.

The partnership is designed to help companies make greater use of the OECD Guidelines for Multinational Enterprises and the GRI Sustainability Reporting Framework, with the objective of bringing increased coherence and consistency to their efforts to act more responsibly and be more transparent about their sustainability.

The OECD Guidelines for Multinational Enterprises and the GRI Sustainability Reporting Framework are based on and promote the same internationally agreed standards and principles for responsible business conduct, including social and human rights and economic and environmental matters. The GRI Sustainability Reporting Framework provides guidance on how to measure sustainability performance and the OECD Guidelines for Multinational Enterprises provides a benchmark to assess such performance.

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ASB study on capital management disclosures

14 Dec 2010

The UK Accounting Standards Board (ASB) has conducted a study into financial capital management disclosures based largely on published annual reports and accounts of 65 companies across all market sectors.

25 companies appeared to have given no IAS 1 capital management disclosures at all. The annual reports and accounts of the residual 40 companies were then reviewed in more detail covering both the business review and the audited financial statements. Even though the study concludes that there is good practice in places the overall finding is:

"The majority of companies omitted or provided largely boilerplate information about financial capital in a manner that failed to convey meaningfully how they assess capital and how they manage it over the medium to long term. There are significant opportunities for improvement in reporting about capital."

Click for:

 

New exposure draft from IAESB

13 Dec 2010

The International Accounting Education Standards Board (IAESB) has released for public exposure a proposed revision of International Education Standard (IES) 7 'Continuing Professional Development: A Program of Lifelong Learning and Continuing Development of Professional Competence'.

The proposed redrafting aims to assist the ongoing worldwide development of continuing professional development systems and compliance mechanisms.

Comments on the exposure draft are requested by 8 March 2011. Click for IAESB press release (link to IFAC website).

United States 'Blue Ribbon Panel' develops plans for private company standard-setting board

13 Dec 2010

At a meeting held on 10 December 2010, the 'Blue Ribbon Panel' addressing how United States accounting standards can best meet the needs of users of private company financial statements has continued its discussion of a potential new standard-setting board for private companies, reaffirming a consensus view reached in October that a separate private company standards board under the oversight of the Financial Accounting Foundation (FAF) be created.

The panel also addressed related issues such as how the new board would work with the Financial Accounting Standards Board (FASB) throughout the standard-setting process, what would be the new board's mission and structure, and how it would be potentially funded. The panel also began preparation of a draft report containing its recommendations, and is expected to issue the report to the FAF Board of Trustees in early 2011 and then to the public.

Click for press release (link to FAF website).

Peru requires IFRS for public filers

13 Dec 2010

On October 14, 2010 the Peruvian regulator (CONASEV), issued resolution Nº 102-2010-EF/94.01.1 by which public filers in the local Stock Market must prepare financial statements under IFRS as issued by the International Accounting Standard Board (IASB).

Until now, Peruvian companies (public and non-public) issue financial statements under Peru Generally Accepted Accounting Principles (PEGAAP) which is IFRS based after endorsement by the Consejo Normativo de Contabilidad (CNC). The last endorsement of IFRS by CNC was on August 23, 2010 which is effective since January 1, 2011. Therefore non-public companies will continue to issue financial statements under PEGAAP, while public companies will apply IFRS 1 and issue financial statements under full IFRS as issued by IASB.

CONASEV has indicated that public companies should prepare the first financial statements under IFRS by December 31, 2011; investment funds, and others should prepare the first financial statements under IFRS by December 31, 2012. Early application of IFRS is optional and should be communicated to CONASEV. The adoption of IFRS should be definitive and unreserved. Interim financial statements will be presented under IFRS for the year 2012 (if early adoption was elected, 2011).

CONASEV's resolution is a significant step towards transparency and high quality financial information in the Peruvian stock market.

Click for resolution Nº 102-2010-EF/94.01.1 (PDF 195k, in Spanish)

'IFRS at a critical crossroad'

13 Dec 2010

The IASB has posted to its website a section of the keynote speech entitled 'Regulatory Reform and IFRS at a Critical Crossroad' at the FEI conference, given by IFRS Foundation Trustee Harvey Goldschmid.

In his speech Mr. Goldschmid describes two basic scenarios that are probable if the US Securities and Exchange Commission (SEC) comes to a negative decision on IFRS adoption:

"First, the coalition of nations supporting IFRS could break apart. Rather than two sets of accounting standards, IFRS and U.S. GAAP, we could go back to pre-2000 fragmentation. Many national accounting systems would exist. The cost, in terms of lack of transparency and comparability, higher accounting expenses, etc., would be extremely large.

The second basic scenario is even worse from a U.S. perspective. The coalition in support of IFRS could hold and the U.S. would become isolated. The U.S. would no longer play the large and constructive role it now plays in IFRS development and oversight. I believe that without active U.S. participation the overall quality of the international accounting standards would deteriorate. Remember, there is less concern about transparency and investor protection in some other parts of the world."

Click for keynote speech excerpt (link to IASB website).

 

Six Deloitte publications issued

13 Dec 2010

Deloitte's Asia-Pacific IFRS Centre of Excellence in Hong Kong has published Hong Kong Financial Reporting Standards – Illustrative Annual Financial Statements 2010, illustrating disclosures in force for December 2010 year ends and beyond. Deloitte (United States) has published a new Heads Up newsletter summarising some of the feedback received in the comment letters to the FASB's exposure draft on revenue recognition and feedback from the roundtable discussions on the exposure draft as well as a Heads Up newsletter on the deferral of the effective date of disclosures about troubled debt restructurings. We have also posted the December 2010 edition of EITF Snapshot, the November 2010 edition of Accounting Roundup and the December 2010 edition of Australia Accounting Alert.

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