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Summary of the October 2012 DPOC meeting

24 Oct 2012

The IASB has posted to its website a summary of the 10 October 2012 Due Process Oversight Committee (DPOC) meeting.

The DPOC is responsible for approving due process and overseeing the IASB’s compliance with due process, and reviewing the Trustees’ fulfilment of their oversight function in accordance with the Constitution of the IFRS Foundation.

Please click for a summary of the meeting (link to IASB website).

IIRC announces 'integrated reporting examples database'

24 Oct 2012

The International Integrated Reporting Council (IIRC) has launched an 'Integrated Reporting Emerging Practice Examples Database', which contains integrated reporting examples from businesses around the world.

The database brings together extracts of reports which illustrate emerging practices in the integrated reporting principles and content elements. The examples have been chosen from publicly available reports, including those produced by the IIRC’s Pilot Programme organisations.

Each example is accompanied by a short description of relevant features aligned with the international integrated reporting framework being developed by the IIRC. The IIRC has indicated the examples database will continue to be developed as integrated reporting evolves.

Click for (links to IIRC website):

IFRS Advisory Council membership update

23 Oct 2012

The Trustees of the IFRS Foundation have announced the appointments of six new members to the IFRS Advisory Council.

The new Advisory Council members are:

  1. Mr Gavin Francis, Deputy Group Chief Accounting Officer, HSBC Holdings plc (representing the Institute of International Finance)
  2. Mr Ernesto López Mozo, Chief Financial Officer, Ferrovial S.A
  3. Mr Ricardo Piña Gutierrez, General Director of Market Supervision, Comision Nacional Bancaria y de Valores, Mexico
  4. Dr. Ghiath Shabsigh, Assistant Director, Monetary and Capital Markets Department, International Monetary Fund
  5. Ms Zinga Venner, Manager of the Financial Reporting and Analysis Unit, World Bank
  6. Mr René van Wyk, Head of Bank Supervision and Registrar of Banks, South African Reserve Bank (representing the Basel Committee on Banking Supervision)

The new members will replace retiring members Simon Bradbury, Judith Downes, Patrice Marteau, Sylvie Matherat, Kenneth Sullivan and Will Widdowson as of 1 January 2013.

In addition, Dr. Christoph Hütten has been appointed as Vice-Chairman of the Advisory Council, replacing Patrice Marteau.

In accordance with the IFRS Foundation Constitution, Advisory Council members are appointed for an initial term of three years and, depending upon the need to maintain a proper balance and for continuity, may be asked to remain for a further period of up to three years. A maximum period of service of six years is permitted.

Click for:

Notes from the October 2012 IFRS Advisory Council meeting

23 Oct 2012

The IFRS Advisory Council meeting was held in London on 22-23 October 2012. We have posted the Deloitte observer notes from the meeting.

Some of the highlights from the meeting include discussions on:

  • the preliminary proposal to establish an Accounting Standards Forum
  • rate-regulated activities and how the IFRS should reflect the effects of rate regulation
  • US SEC representative's comments regarding the current situation the SEC is in regarding the adoption of IFRSs in the US
  • the consistent application of IFRSs and whether the IASB current policy is sufficient

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

IASB podcast on insurance contracts

23 Oct 2012

The IASB has made available a podcast on the current state of debate in the IASB/FASB joint project on insurance contracts. The podcast, by Darrel Scott (IASB member) and Andrea Pryde (Technical Principal) report on developments in the project following the October 2012 joint IASB/FASB meeting.

This podcast focuses on the presentation of premiums and claims in the statement of comprehensive income (the ‘earned premium approach’), participating contracts, transitional requirements and time value of money in premium allocation approach.

To listen to the podcast, please click here (mp3, 14.3 MB, link to IASB website).

Trustees publish IFRS Foundation Staff Analysis of SEC Final Staff Report on IFRS

23 Oct 2012

The Trustees of the IFRS Foundation today published a staff analysis of the United States (US) Securities and Exchange Commission (SEC) Final Staff Report on International Financial Reporting Standards (IFRSs). Shortly after the SEC Staff Report was published, the Trustees asked the IFRS Foundation staff to conduct an analysis of the SEC Staff Report for the benefit of both the IASB and the international community.

The document published today summarises the IFRS Foundation staff’s assessment of the observations included in the SEC final staff report Work Plan for the Consideration of Incorporating IFRSs into the Financial Reporting System for U.S. Issuers published on 13 July 2012.

The Trustees had asked especially that:

  • In order to maximise the benefit of the analysis to both the IASB and the international community, IFRS Foundation staff should evaluate the US research within an international context.
  • Staff should draw upon other credible sources of information. This should include academic research, as well as relevant documentation and experience from other jurisdictions that have already completed their own transitions to IFRS.
  • Staff should identify opportunities to further enhance the activities of the IFRS Foundation and the IASB on the basis of the findings of both the SEC staff report and the other studies.

While acknowledging that many points in the SEC report are correct and welcoming the comments made, the IFRS Foundation staff makes additional points that supplement or in some cases even contradict the findings by the SEC staff. Among these points are following:

Funding: At least 69 jurisdictions provide financial support for the work of the IFRS Foundation, not "fewer than 30 jurisdictions", as maintained in the SEC report. Furthermore, the staff of the IFRS Foundation points out that the United States contribution to the operational budget of the IFRS Foundation seems to be calculated too favourably and should be corrected down. Ultimately, the lack of public funding in the US which is made out in the SEC report would be something that can only be resolved by the US authorities themselves, directly or indirectly, and should not be laid at the IFRS Foundation's door.

Comprehensiveness: In response to the SEC staff's belief that industry guidance should not be removed from US GAAP until the IASB has had the ability to evaluate fully such guidance and to address any voids in IFRS, the staff of the IFRS Foundation points out that the IASB has always advocated financial reporting requirements that account for transactions and activities across industries, rather than developing industry-specific guidance. It is also pointed out that, in 2008, the SEC published the findings of the Pozen Report, which recommended that industry-guidance should be eliminated from US GAAP to reduce avoidable complexity.

National standard-setters: In response to the SEC staff's recommendation that the IASB should extend and formalise its involvement with national standard-setters, the staff of the IFRS Foundation points out that the IASB has begun preparatory work to establish an Accounting Standards Forum (the Forum) comprising national standard-setters and other regional bodies as envisaged in the IFRSF Trustees’ Strategy Review Report.

Issues related to adoption, endorsement and transition: In response to various issues related to incorporating IFRS into US GAAP included in the SEC staff report, the staff of the IFRS Foundation points out that many IFRS jurisdictions have dealt with different issues while adopting IFRS and have shown that there are that there are no insurmountable obstacles for adoption of IFRSs by individual jurisdictions and the experience of the international community of making the transition to IFRS would provide the provide SEC with an important resource to draw upon.

Although the IFRS Foundation staff's report makes the above comments on the findings in the SEC staff's report, it also agrees with many other findings and welcomes the contribution the SEC staff has made to ensuring the continued success of the IFRS Foundations work:

In conducting this analysis, the IFRS Foundation staff have concluded that the SEC Staff Report provides a valuable contribution to the already extensive body of research and information on IFRS. It not only informs the discussion in the US on whether, and if so, how IFRS could be incorporated into the US financial reporting system, but it makes an important contribution to the IFRS Foundation’s evaluation of its own strategy, governance and activities.

Please click for the following documents on the IASB website:

Final notes from the October IASB meeting

22 Oct 2012

The IASB's October meeting was held in London on 15-19 October 2012, some of it a joint meeting with the FASB. We have posted the remaining Deloitte observer notes from the session on insurance contracts on Friday afternoon.

The IASB discussed financial instruments with participating features and the transitional requirements of the fianl insurance standard and their interaction with the requirements and effective date of IFRS 9 'Financial Instruments'.

Click through for direct access to the notes: Insurance contracts (IASB only)

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

IASB updates work plan for October meeting decisions

21 Oct 2012

The International Accounting Standards Board (IASB) has publicly released a revised work plan reflecting changes as a result of decisions made at its October 2012 meeting. The project on IAS 8 effective dates and transition has been removed, and a new project on revenue-based methods of depreciation under IAS 16 and IAS 38 added (splitting it out from the annual improvements 2011-2013 cycle).

Background to the changes

At its October meeting, the IASB tentatively decided that the ballot draft on amendments to IAS 8 to be withdrawn and the narrow scope project removed from the IASB work plan.  Issues arising from the project may instead be dealt with in an upcoming disclosure forum and as part of the Conceptual Framework project.

At the meeting, the IASB also discussed the forthcoming exposure draft on the 2011-2013 annual improvements cycle and noted concerns of the Due Process Oversight Committee within the last Trustees meeting that the amendments to IAS 16 and IAS 38 regarding revenue-based depreciation may not meet the annual improvements criteria.  Accordingly, the Board decided to expose the proposals on IAS 16 and IAS 38 as a separate exposure draft.

Due process documents expected before the end of 2012

The following due process documents are expected to be issued by the end of 2012 (this includes those items already noted above in some cases):

Click for IASB work plan as of 19 October 2012 (link to IASB website). We have updated our project pages to reflect the updated work plan and other known developments.

Further notes from the October 2012 IASB meeting

19 Oct 2012

The IASB's October meeting was held in London on 15-19 October 2012, some of it a joint meeting with the FASB. We have posted Deloitte observer notes from Wednesday's joint session on Insurance contracts, Thursday's joint session on Revenue recognition and Friday's sessions on IFRIC update, Due process papers, and IAS 8.

Click through for direct access to the notes:

Wednesday, 17 October 2012

Thursday, 18 October 2012
Friday, 19 October 2012

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

Deloitte releases new IFRS e-learning modules

19 Oct 2012

Deloitte’s Global Audit Learning group have released three new e-learning modules on IFRS 9 'Financial Instruments: Classification and Measurement', IFRS 10 'Consolidated Financial Statements' and IFRS 11 'Joint Arrangements'. These modules are additions to the extensive catalog of IFRS e-learning content made freely available by Deloitte.

Deloitte’s e-learning on IFRS has been a leading educational resource on IFRS since it was initially released in 2004, with over 5.6 million modules downloaded to date and a range of corporate, educational and professional organisations using the content as their primary tool for IFRS education.

Three new modules have recently been released:

  • IFRS 9 Financial Instruments: Classification and Measurement - covering the requirements of classification and measurement of financial assets and liabilities under IFRS 9 as modified by the IASB’s  "Mandatory Effective Date and Transition Disclosures".
  • IFRS 10 Consolidated Financial Statements - covering the requirements of IFRS 10 with a focus on the control definition, how to apply the principle of control in various real life situations and applying the accounting requirements for the preparation of consolidated financial statements.
  • IFRS 11 Joint Arrangements - covering the requirements of IFRS 11 with a focus on the various ways in which joint ventures can be structured and how the structure impacts the accounting treatment and also transactions between joint ventures.

Note: You may be requested to register to access the above modules - no personally identifying information is requested in the registration process.

There are also further modules in development, which are expected to be released in the near future:

  • IFRS 9: Derecognition,
  • IAS 32 and Offsetting, and
  • IFRS 13: Fair Value Measurement.

There are now 40 modules are available, tackling the key extant and new standards issues by the IASB.  The modules have been designed to help users develop their knowledge and application of the basic principles and concepts of the IFRSs and IASs. Each module provides:

  • Real life scenarios to demonstrate application of the standards
  • "Coach me" sections to explain the principles and theory
  • Worked examples to show aspects of the standards in action
  • Reference materials to support learning
  • A printable certificate if you pass the assessment at the end of each module

The IFRS e-learning modules are available free of charge and may be used and distributed freely, without alteration from the original form and subject to the terms of the Deloitte copyright over the material.

Click to go to Deloitte’s IFRS e-learning.

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