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April

Results from the meeting of the G20 Finance Ministers and Central Bank Governors

22 Apr 2012

On 19 and 20 April 2012, the G20 Finance Ministers and Central Bank Governors met in Washington D.C. to assess progress on the financial regulatory reforms.

In the run-up to the meeting organisations such as the IFAC and the Private Sector Taskforce (PSTF) urged the G20 to continue their push for financial regulatory reforms and to follow through on earlier recommendations.

The PSTF strongly encouraged the G20 to implement all of the 15 recommendations presented in its 2011 report with a strong emphasis on its first two recommendations, encouraging the G20 to:

  • Continue to focus on regulatory convergence in the financial sector, ensuring that G20 nations work together to identify and narrow gaps in regulatory practice; and
  • Discourage nations from implementing unilateral national regulatory reforms that are inconsistent with international standards and that widen—rather than narrow—the convergence gap.

The International Federation of Accountants (IFAC) urged the G20 to take action against inconsistent, unreliable public sector financial reporting: “For the last ten years IFAC has consistently promoted the need for better financial reporting and financial management in the public sector. The sovereign debt crisis has given rise to a very significant number of policy developments at an international level, but this issue has yet to be adequately addressed. The use of IPSASs by governments worldwide will improve the quality of financial information reported by public entities, which is critical for investors, taxpayers, and the general public.”

On 20 April, the chairman of the Financial Stability Board (FSB) reported to the G20 Finance Ministers and Central Bank Governors on progress in the financial regulatory reform programme. He reported "solid progress [...] in the priority areas identified by the G20 Leaders at Cannes and reiterated by Ministers and Governors in Mexico this past February." The FSB report was accompanied by  a joint report from the International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB) on their progress in converging their standards, together with a report on enhancements to the governance of the IASB. The Boards stated that they are "close to completing the MoU programme" and expect to issue final standards on the remaining projects by mid- 2013.

In the communiqué published after the meeting, the G20 Finance Ministers and Central Bank Governors reaffirmed their commitment to international convergence and regulatory reform: "We assessed progress on the implementation of our financial regulatory reform agenda as outlined in our February 2012 Communiqué in order to deliver on our commitments looking ahead to the Los Cabos Leaders’ Summit, and reaffirmed our commitment to common global standards by pursuing the financial regulatory reform agenda according to our agreed timetable in an internationally consistent and non-discriminatory manner." They also commented on the completion of the IASB/FASB MoU programme: “We support [...] the efforts of the IASB and FASB to achieve convergence to a globally accepted set of high quality accounting standards and urge them to meet their target of issuing standards on key convergence projects by mid-2013, at the latest, in order to achieve a single set of high quality international accounting standards” (emphasis added).

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Final notes from the April IASB meeting

20 Apr 2012

The IASB held its regular monthly meeting on 16 – 19 April 2012 in London, part of it a joint meeting with the FASB. We have posted the final Deloitte observer notes from the sessions held on Wednesday and Thursday.

Click through for direct access to the notes:

Wednesday, 18 April 2012

Thursday, 19 April 2012

You can also access the preliminary and unofficial notes taken by Deloitte observers for the entire meeting.

Outcomes from recent Capital Markets Advisory Committee meeting

20 Apr 2012

The IASB has released a summary of the Capital Markets Advisory Committee (CMAC) meeting which was held in London on 22 February 2012. The CMAC was previously known as the Analyst Representative Group (ARG) and is a group of professional financial analysts who regularly meet with members of the IASB to provide the views of professional investors on financial reporting issues.

The topics discussed at the meeting included:

  • EFRAG/FASB disclosure framework project — the committee was given a status update from the EFRAG and FASB on their respective disclosure framework project. Both have scheduled to release separate discussion papers in the second quarter of 2012.
  • Financial instruments — the committee shared their views on the IASB's and FASB's current tentative decision on the 'three-bucket' approach for the impairment of financial assets measured at amortised cost.
  • Leases — the committee voted on which of the three approaches on subsequently measuring lessee's right-of-use asset will be the most approriate. The votes were divided amongst the members with a slight edge going to the 'underlying asset' approach, which treats a lease contract as being equivalent to the purchase of the underlying asset being leased and is financed separately.
  • ESMA's materiality consultation paper — a presentation was given by the ESMA on their November 2011 consultation paper Considerations of materiality in financial reporting. The CMAC responded with a concerned whether the materiality guidance would challenge existing accounting requirements.
  • Investment entities — an overview of proposals on investment entities was given to the CMAC.
  • Revenue recognition — CMAC members were updated on the status of the revenue recognition project. Examples of proposed disclosures and results from a Securties Analysts Association of Japan's survey were given. The committee discussed the need for the boards to better understand the types of information on revenue that entities can provide at a reasonable cost.
  • Post-implementation review of IFRS 8 — the committee discussed whether IFRS 8 achieved its stated objectives and whether it has improved financial reporting.
  • IFRSs 10-12 effective date — The general view of CMAC members was that it would not be significantly detrimental to add an additional year to the effective dates.

Click for more information (link to IASB website).

EFRAG conducts joint field-test on the general hedge accounting review draft

19 Apr 2012

The European Financial Reporting Advisory Group (EFRAG), along with National Standard Setters in Europe, are conducting a joint field-test of the IASB's Review Draft on general hedge accounting.

According to EFRAG, the "main purposes of the field-test are to test the operationality of the proposals, whether the standard will operate as intended, and gather information to assess the quality and effects of the future accounting standard and the usefulness of the information that will result from applying the requirements, as well as to assess the level of effort required to implement and apply the requirements."

The IASB is expecting to issued the Review Draft by the end of June 2012. Parties interested in participating in the field-test should contact the EFRAG staff or their national point of contact by 30 June.*

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* The IASB previously indicated that the issuance of the Review Draft was expected in April 2012. The EFRAG originally had a participation deadline of 30 April to coincide with the issuance of the Review Draft, but updated the timing of the field test in early May 2012.

Further notes from April IASB meeting

19 Apr 2012

The IASB is holding its regular monthly meeting on 16 – 19 April 2012 in London, part of it a joint meeting with the FASB. We have posted Deloitte observer notes from the session held on Tuesday.

Click through for direct access to the notes:

Tuesday, 17 April 2012

Notes from the remaining sessions held on Wednesday and Thursday will be posted soon.

You can also access the preliminary and unofficial notes taken by Deloitte observers for the entire meeting.

Securities Analyst Association of Japan reconfirms support for move to IFRSs

19 Apr 2012

The Business Accounting Council of Japan (BAC) met on 17 April to continue its deliberations over the use of IFRSs in Japan. Principal topics discussed were 1) investors-issuer communication and 2) impact on regulatory environment. No decisions were made during this session.

On topic 1), the Security Analyst Association of Japan (SAAJ) expressed support for IFRSs as an infrastructure for investor-issuer communication in today’s globalised environment on basis of a member survey conducted in June 2010. The SAAJ also explained members’ concerns over certain aspects of standards and setting process, even though they are solvable. It confirmed its preference for IFRSs being used by all public companies in Japan in their consolidated financial statements and suggested a gradual adoption of IFRSs by all public companies over a sufficient period of time as a practical measure. The BAC members responded with various views ranging from support to disagreement. Certain members of the BAC, in particular those representing and/or close to business, are not in full agreement with the SAAJ’s idea of mandatory adoption by all public companies in Japan. They prefer a scoped mandatory adoption and multiple sets of accounting standards available for use.

On topic 2), a bank representative explained potential impacts of IFRsS on loan covenants that are based on reported financial figures such as net assets. He pointed out that banks will have to respond appropriately as there will be a need for contract amendments to certain extent.

In addition to the above two topics, the Financial Services Agency of Japan reported the results of its own survey with regard to the use of IFRS around the world.

The handouts for the meeting (in Japanese only) are available on the FSA website.

The next session, which is expected to cover the rest of topic 2) above and voluntary early adoption situation, is yet to be scheduled. The voluntary early adoption is the last one among the 11 specific aspects to be discussed that were identified in the BAC paper of August 2011.

IFRS Foundation translation update

18 Apr 2012

The IFRS Foundation has announced the publication of the Arabic translation of IFRS for SMEs training Module 33 Related Party Disclosures.

The Arabic translation is available on the IASB's Arabic-language training modules webpage.

XBRL Detailed Tagging Task Force — Call for participants

17 Apr 2012

The IFRS Foundation intends to establish a voluntary XBRL Detailed Tagging Task Force and is looking for participants.

Together with the Industry Practice Project, the IFRS Foundation is establishing a task force to examine detailed XBRL tagging in IFRS financial statements, and is looking to work directly with preparers from public companies from different industries and regions. The IFRS Foundation is seeking participation from preparers of financial statements for public companies who report in IFRS. Participation from companies operating in all industries and geographical regions is encouraged.

Companies interested in participating in the task force should express their interest by 30 April. Participants will be chosen and notified by 7 May. The first meeting will take place on 14 May by teleconference.

For further information please go to the press release on the IASB's website.

XBRL Industry Practice Project — Call for participants

17 Apr 2012

The IASB intends to establish a voluntary XBRL Industry Practice Project and is looking for participants.

In 2010 and 2011, the IFRS Foundation has been interacting with companies from various countries and industries to identify and develop extra concepts to the IFRS taxonomy reflecting common practices. The IFRS Foundation is now establishing a new project to examine and develop common industry practice concepts for the IFRS Taxonomy, and is looking to work directly with stakeholders across different industries and regions in order to increase comparability, reduce the number of XBRL extensions, and lower the burden on preparers. The process will be conducted by a joint programme of empirical analysis and interaction with industry representatives.

For 2012, the project will be limited to the following industries:

  • Financial Institutions,
  • Insurance Entities,
  • Extractive Industries (Mining, Oil & Gas).

The IASB is looking for participation from the following groups:

  • Preparers,
  • Users (Investors and Analysts),
  • Industry groups,
  • Regulators and Supervisors.

Application from all geographical regions is encouraged.

Companies interested in participating in this project should express their interest by 30 April. Participants will be chosen and notified by 7 May. The first meeting will take place on 18 May.

For further information please go to the press release on the IASB's website.

New Kazakh and Hebrew translations of IASB pronouncements

17 Apr 2012

The IFRS Foundation has announced the publication of Kazakh and Hebrew translations of IASB pronouncements.

There is a Kazakh translation of the IFRS for SMEs that is available free of charge on the IASB's IFRS for SMEs website.

There are Hebrew translations of three standards that are available to eIFRS subscribers:

  • Offsetting Financial Assets and Financial Liabilities (Amendments to IAS 32) issued by the IASB in December 2011;
  • IFRIC Interpretation 20: Stripping Costs in the Production Phase of a Surface Mine issued by the IASB in October 2011; and
  • Presentation of Items of Other Comprehensive Income (Amendments to IAS 1) issued by the IASB in June 2011.

Correction list for hyphenation

These words serve as exceptions. Once entered, they are only hyphenated at the specified hyphenation points. Each word should be on a separate line.