IFRS Foundation publishes IFRS Taxonomy 'common-practice' enhancements

31 Aug 2011

The IFRS Foundation has published IFRS Taxonomy 2011 interim release: common-practice concepts.

This interim release enhances the IFRS Taxonomy by providing common-practice extensions for the face of financial statements, to reduce the work load of preparers filing electronically.

In June 2011, the IASB published for public comment an exposure draft of the IFRS Taxonomy 2011 interim release: common-practice concepts which contained supplementary tags that reflected disclosures which were commonly reported by entities in their IFRS financial statements.

Click for IFRS Foundation announcement (link to IASB website). More information about XBRL is available on our XBRL page.

Japan finalises regulation amendments to retain US GAAP option

31 Aug 2011

The Financial Services Authority of Japan (FSA) has announced the finalisation of the removal of time limit for the use of United States Generally Accepted Accounting Principles (US GAAP) by certain Japanese entities.

As proposed, the finalised revised regulations revert back to the situation before a revision made in December 2009, which introduced a prohibition on the use of US GAAP with effect from fiscal years ending after 31 March 2016. Accordingly, under the revised regulations, in principle:

  • United States Securities Exchange Commission (SEC) registrants are permitted to also use US GAAP for domestic Japanese filing purposes
  • Non-registrant current US GAAP users (typically companies which started using US GAAP for Japanese domestic purposes before 1977) are permitted to continue using US GAAP for domestic Japanese filing purposes. This option remains in place for an unspecified period, but may not be permanent.

Click for access to the announcement by FSA including the revised ordinances (link to FSA website, in Japanese).

Upcoming NSS, WSS and AOSSG meetings

31 Aug 2011

Several meetings of groups of standard setters in the field of accounting and financial reporting who support the IASB in the development of a single set of high quality international accounting standards are coming up in autumn.

The National Standard Setters (NSS) are meeting in Vienna on 12 and 13 September 2011. The NSS is a grouping of national accounting standard-setters from around the world, plus other organisations that have a close involvement in financial reporting issues. An agenda for this meeting is not publicly available. For topics discussed during the last meeting and likely to be continued at the upcoming meeting please see the report from the March 2011 NSS meeting.

The World Standard Setters (WSS) are meeting in London on 15 and 16 September 2011. The WSS meeting offers a forum for the NSS to exchange views with the IASB. On the agenda (PDF 192k, link to IASB website) are updates on new standards and staff drafts, the future agenda of the IASB and post-implementation reviews. The WSS meeting also offers an opportunity for regional groups of standard setters to draw the IASB's attention to developments in the Asia and Oceanian region, Africa and Latin America.

The AOSSG (Asian-Oceanian Standard-Setters Group) will hold its third annual meeting in Melbourne on 23 and 24 November 2011. The tentative agenda for the meeting indicates the meeting will consider a range of topics, including a 'vision paper', IASB projects such as financial instruments, revenue, leases and insurance contracts, and other topics such as Islamic finance and agriculture. Click for more information about the meeting (link to AOSSG website).

FASB and EFRAG co-operate on disclosure framework project

29 Aug 2011

The Financial Accounting Standards Board (FASB) and European Financial Reporting Advisory Group (EFRAG) have formally agreed to work together on their respective projects to develop a disclosure framework, with a view to creating a consistent framework for both United States and international GAAP.

FASB added a disclosure framework project to its agenda in 2009 with the goal of establishing an overarching framework intended to make financial statement disclosures more effective, coordinated, and less redundant. EFRAG is undertaking a 'pro-active' project on disclosures with the objective of making disclosures more relevant for users but at the same time ensure that only useful information is prepared and disclosed. In May 2010, EFRAG appointed an Advisory Panel chaired by former EFRAG chairman Stig Enevoldsen to provide advice and input to the project.

A possible co-operation between FASB and EFRAG was first indicated in the agenda papers for the June meeting of EFRAG's Technical Experts Group (TEG).

At an education session held on the FASB project on 3 August 2011, the FASB agreed to allowing the FASB staff to co-operate with EFRAG staff by leveraging resources and sharing information towards the development of a Discussion Paper on the topic. Discussion in the education session considered the level of involvement of FASB itself (i.e. should it be more than just staff interaction) and what the possible outputs might be (e.g. a joint document, a converged 'core', or some other approach). The education session also covered issues such as the boundaries of financial reporting, the usefulness of disclosures to users and the concept of 'materiality' in the context of disclosures.

At its meeting held on 24 August 2011, the FASB approved a proposed decision process as a starting point for developing its overall disclosure framework. The process consists of a list of questions designed to formalise the FASB's method for identifying (1) needed disclosures and (2) useful disclosure information for consideration in future standard setting. The FASB also indicated that the framework, once finalised, may be used to evaluate (and potentially change) existing disclosure requirements. The FASB expects to issue a discussion paper on the project early next year.

In addition to working with EFRAG, FASB staff also plan to work with the U.S. Securities Exchange Commission (SEC) and the Public Company Accounting Oversight Board (PCAOB) to explore whether the application of materiality to disclosures of financial information can be clarified.

Improving the framework for disclosures has been a consistent theme in recent times. The IASB is also considering a project on disclosures, and in July received a report from the New Zealand and Scottish standard setters on possible disclosure improvements to IFRSs. In April 2011, the Accounting Standards Board (ASB) of the United Kingdom Financial Reporting Council (FRC) published a report Cutting Clutter: Combating clutter in annual reports. The International Integrated Reporting Committee (IIRC) is also seeking to simplify and streamline various aspects of reporting through its integrated reporting initiative, for which a Discussion Paper is expected in the coming months.

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Business Accounting Council of Japan meets a second time to discuss IFRS

29 Aug 2011

Following on from an earlier meeting on 30 June 2011, the Business Accounting Council of Japan (BAC) met on 25 August for the second time to continue discussions on IFRS in the presence of the Japanese Minister for Financial Services.

The meeting did not result in any clear consensus or decisions.

During the meeting, a two-page discussion paper proposing an approach for future consideration at the BAC was presented. The paper included general aspects of the approach as well as 11 specific items as primary items that warrant consideration:

  • General aspects: 1) wider implications of accounting are to be considered, 2) consideration should be careful and sufficient time be spent, incorporating hearing from the wider constituency and an analysis of the foreign situation, and 3) development of strategic thinking and overall design from the perspective of the Japanese national interest
  • Specific aspects: 11 primary items for future consideration, which may change during the course of consideration, are 1) overall design of accounting standards/disclosure system in Japan, 2) analysis of foreign situations/diplomatic policy and international demand, 3) accounting that contributes to economic activities, 4) impact of principle-based accounting standards, 5) impact on regulatory environment (industry regulation, public procurement), legal/contract environment, etc., 6) nonpublic and medium to small companies, 7) investor-issuer communication, 8) impact on auditors, 9) voluntary early adoption, 10) national accounting standards setter (ASBJ), and 11) governance over the IASB.

Members of the Council responded to the proposal with divergent comments.

The next session of the BAC is yet to be scheduled. Click for:


ASBJ and FASB meet to discuss convergence

29 Aug 2011

Representatives of the Accounting Standards Board of Japan (ASBJ) and the Financial Accounting Standards Board (FASB) met on 18-19 August 2011, in Tokyo, Japan.

This meeting was the eleventh in a series of discussions between the ASBJ and the FASB.

At this meeting, the ASBJ and the FASB updated each other with the recent developments in their respective convergence projects with the IASB. Furthermore, the ASBJ and the FASB exchanged views on the financial instruments, revenue recognition, leases and insurance contracts projects being undertaken by the FASB and the IASB.

The next joint meeting is planned in the first quarter of 2012 in Norwalk, Connecticut. Click for:


UK Government and FRC publish discussion paper on reducing the financial reporting burdens for micro-entities

28 Aug 2011

The UK Department for Business, Innovation and Skills (BIS) and the Financial Reporting Council (FRC) have published a discussion paper with proposals to simplify the financial and corporate reporting requirements for the smallest businesses.

Small and medium sized entities (SMEs) feel that laws and regulations, and accounting and auditing standards governing business have become very much more complex in an attempt to address a world where businesses at the top end of the corporate sector have become larger and more diverse, and their activities increasingly complex. Complying with all these requirements is burdensome, costly and of little added little value to SMEs, to their stakeholders, or to other users.

The BIS and FRC's discussion paper seeks views on the development of a new reporting regime that

  • fulfils certain minimum requirements,
  • aligns financial reporting requirements with tax requirements, and
  • reduces or removes inconsistencies in the current requirements.

The discussion paper is available here (link to BIS website); comments are requested by 30 October 2011. The FRC has published a press release on the discussion paper (link to FRC website).

In a similar vein, the European Commission had proposed in February 2009 to allow Member States to exempt very small entities from the requirements of the 4th Directive. After a long period of negotiations, the European Parliament is currently considering the agreement on proposals reached by the Council of Ministers on 30 May 2011.

Further French translations of new and revised standards

28 Aug 2011

The IFRS Foundation has announced the publication of translations of six new and revised standards into French.

The translated standards are the "package of five" new and revised standards addressing the accounting for consolidation, involvements in joint arrangements and disclosure of involvements with other entities published by the IASB in May 2011 and the amendments to IAS 1 concerning the presentation of items of other comprehensive income published by the IASB in June 2011.

All translations are available on the IASB's New and revised standards webpage (eIFRS subscribers only).

Deloitte comment letter on EFRAG discussion paper

26 Aug 2011

Deloitte's IFRS Global Office has submitted a letter of comment to the European Financial Reporting Advisory Group (EFRAG) on its Discussion Paper Considering the Effects of Accounting Standards.

The comment letter highlights Deloitte's views on the contribution the discussion paper has in the methodology for effects analyses development as it relates to the IFRS Foundations Trustees' Strategy Review. The following is an excerpt from the letter:

We agree with the principle that effects analysis should be an element of the standard-setting process throughout the life cycle of a standard-setting project, including post-implementation reviews. We do not think that the same level of detail is necessary at each stage of a project and think that different procedures might be employed at different stages. . . . The methodology employed must be scalable, and the extent of effects analysis must be appropriate to the project in question (i.e., effects analysis should be proportional). Furthermore, we think that the principle of subsidiarity should apply. Consequently, effects analyses should be conducted by the IASB in conjunction with national or regional agencies with an interest in financial reporting.

In addition, we think the EFRAG should 1) collect and assimilate the responses, 2) identify the key findings, and 3) make recommendations to the IFRS Foundation Trustees' Due Process Oversight Committee.

Click to Download our Comment Letter on EFRAG's Discussion Paper Considering the Effects of Accounting Standards (PDF 104k). All of our past comment letters are here.

Referral of corporations powers locked in for a further five years in Australia

25 Aug 2011

David Bradbury MP, Australian Parliamentary Secretary to the Treasurer and Chairman of the Ministerial Council for Corporations, has announced the further extension of the referral of corporations power from the Australian states to the Commonwealth.

The referral of corporations powers underwrites the Australian Federal Government's ability to enact national laws dealing with corporations, in particular the Corporations Act 2011, which contains financial reporting requirements for entities with which it deals. Australian Accounting Standards (which are equivalent to International Financial Reporting Standards) are given the force of law by s.296 of the Corporations Act.

The current arrangements commenced in 2006 and the new agreement extends them to 2016.

Click for Australian Government press release (link to Australian Treasury website).

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