2012

IAASB feedback statement on disclosure consultation

11 Jan 2012

The International Auditing and Assurance Standards Board (IAASB) has released a 'Feedback Statement' on the responses to its January 2011 Discussion Paper 'The Evolving Nature of Financial Reporting: Disclosure and Its Audit Implications'. The Discussion Paper solicited views and perspectives of different stakeholder groups on the challenges arising as financial reporting continues to evolve to meet the changing needs of users.

The Feedback Statement presents a summary of the range of views on some of the more significant challenges faced by participants across the entire financial reporting supply chain, including the impact of trends in financial reporting, applying materiality to disclosures, evaluating misstatements generated by disclosures, the availability of audit evidence to support disclosures, and work effort.

To address some of the issues identified respondents have called for more auditing guidance in certain identified areas. However, the majority of the respondents were of the view that some of the more important issues could not be addressed by the IAASB on its own, but would require international collaboration and cooperation, particularly with both the accounting standard setters—including the International Accounting Standards Board (IASB) and US Financial Accounting Standards Board (FASB), and regulators.

The need for a 'Disclosure Framework' is a recurring theme in recent times. For instance, our comment letter (PDF 126k) on the IASB's Agenda Consultation noted the "development of a clear framework for disclosures in financial statements is critical and urgent".

Click for IAASB press release (link to IFAC website).

New ICAEW website on auditing

11 Jan 2012

The Institute of Chartered Accountants of England and Wales (ICAEW) has launched a new website dedicated to auditing and its possible reform.

The website contains high-level information about the nature and value of auditing, possible options for change, details of current reviews, and a question and answer section.

The website can be accessed at www.trueandfair.org.uk.

IFRS Advisory Council membership update

10 Jan 2012

The Trustees of the IFRS Foundation have announced the appointments and reappointments to the IFRS Advisory Council for memberships that ended 31 December 2011.

The new terms begun on 1 January 2012 and are between one and three years to enchance continuity.

In addition, Paul Cherry has been reappointed for another two years as Chairman of the Advisory Council. Patrice Marteau has been reappointed for one year and Charles Macek has been reappointed for three years, both as Vice-Chairmen of the Advisory Council.

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AOSSG survey on Islamic accounting

10 Jan 2012

The Islamic Finance Working Group of the Asian-Oceanian Standard Setters Group (AOSSG) has issued a survey on Islamic accounting.

The purpose of the survey is to highlight the importance of current Islamic accounting and the need to have the IASB consider Islamic financial transactions when discussing ongoing and future projects.

The survey was run between 1 July and 15 October 2011. The survey was sent to national standard-setters in Asia-Oceania and the National Standards Setters (NSS) members. Responses from 24 participating standard-setters were used in developing this report.

Several main conclusions from the survey are:

  • entities using Islamic accounting are not subject to a common set of accounting standards.
  • ’Islamic accounting standards‘does not imply there is a consistent set of standards used globally. Instead, the term implies that there are different sets of religiously-influenced standards, the different regulations can treat similar transactions with significantly different results.
  • an overwhelming majority of respondents believed there should not be a separate Islamic accounting standards because it was likely it would be incompatible with IFRS convergence.

Based off the survey results, AOSSG Islamic Finance Working Group may need to expand its work to jurisdictions without their own identifiable accounting standard-setters and continue their efforts to promote consistent reporting in jurisdictions with a significant Islamic finance presence.

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Outcomes from recent Capital Markets Advisory Committee meeting

09 Jan 2012

The IASB has released a summary of the Capital Markets Advisory Committee (CMAC) meeting which was held in London on 12 October 2011. 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:

  • XBRL. The CMAC considered the IFRS taxonomy, custom tags and the Thomson Reuters taxonomy model
  • Risk free rate of return. There was a general view among the participants that the determination of the risk free rate was not the responsibility of the IASB, discussion also included when 'synthesised' risk free rates may be appropriate (e.g. entities operating in the Eurozone or multi-nationals)
  • Impairment of financial instruments. The CMAC considered the IASB's current impairment model ('three bucket approach') and considered matters such as 'day one losses', information needs, and the use of expected values
  • Transition disclosures. The CMAC discussed disclosures made when an IFRS is issued but is not yet mandatory, a preference for IFRS 1 type disclosures when a new standard is applied for the first time, and related matters
  • Other. The CMAC discussed the usefulness of project-specific case studies for accounting proposals, and the IASB's agenda consultation.

Click for more information (link to IASB website).

IFRS Foundation translations update

09 Jan 2012

The IFRS Foundation has announced the publication of the following translations:

  • Japanese translation of exposure draft Revenue from Contracts with Customers. The Japanese translation is available on the IASB's Comment on a proposal webpage.
  • Spanish translations of the Basis for Conclusions of IAS 19 Employee Benefits and IFRIC 20 Stripping Costs in the Production Phase of a Surface Mine. The Spanish translations are available on the Spanish New and Revised Standards page (eIFRS subscribers only).
  • Arabic translation of IFRS for SMEs training Module 30 Foreign Currency Translation. The Arabic translation is available on the IASB's Arabic-language training modules webpage.

Upcoming global and regional standard setter events in Malaysia

08 Jan 2012

The IASB has recently formally announced a IFRS conference in Kuala Lumpur, Malaysia, adding to a number of standard-setter events to be held in Malaysia during March 2012.

The events include:

  • 6th IFRS Regional Policy Forum, 26–27 March 2012. Attendance at the forum is by invitation only and representatives from the international accounting standard-setters community, securities exchanges, central banks, financial market regulators, tax authorities, governments, audit practitioners and academia are usually invited (more information)
  • Asia-Oceania IFRS conference, 28 March 2012. A joint event between the Malaysian Accounting Standards Board (MASB) and IFRS Foundation (more information)
  • 2012 International Forum of Accounting Standard Setters (IFASS), 29–30 March 2012. The IFASS, formerly known as National Standard Setters (NSS), is a grouping of national accounting standard-setters from around the world (more information).

The IASB is also holding a roundtable on its investment entities proposals in Kuala Lumpur on 27 March 2012 (see our earlier story).

Agenda for January 2012 IFRS Interpretations Committee meeting

07 Jan 2012

The IFRS Interpretations Committee will meet at the IASB's offices in London on Tuesday and Wednesday 17 and 18 January 2012.

The meeting is open to the public and will be webcast. The tentative agenda is shown on our meeting note page for the meeting.

Deloitte comment letter on investment entities

05 Jan 2012

Deloitte's IFRS Global Office has submitted a letter of comment to the International Accounting Standards Board (IASB) on its Exposure Draft ED 2011/4 – Investment Entities.

In the comment letter, we agree with the views in the exposure draft that for certain entities the measurement of investments in controlled subsidiaries at fair value provides the most relevant information, but we believe that criteria should be developed which better defines 'investment entities'. However, we disagree with the proposal that a non-investment entity parent of an investment entity should consolidate all entities it controls through its consolidated investment entity subsidiary. The following is an excerpt from the letter:

We believe that it is appropriate to establish a clear principle and criteria at the investment entity level that carries-over to the consolidated financial statements of a non-investment entity parent, rather than to prohibit the retention of investment entity accounting, or to impose barriers or restrictions that would result in differing accounting at the investment entity and consolidated levels.

Further, our comment letter expresses concern about the number of differences in the proposed accounting requirements between the IASB's exposure draft and the FASB's proposed guidance.

Click for our comment letter on Exposure Draft ED 2011/4 — Investment Entities.

Voluntary application of IFRSs in Colombia

04 Jan 2012

On 30 December 2011, the President of the Republic of Colombia decreed that large and medium-sized entities can voluntarily apply IFRSs.

The impacts from the change to IFRSs will be analysed by the various authorities solely for the purpose of measuring whether IFRSs are effective or appropriate for the local entities in Colombia and to determine the regulatory measures to be taken, so that at the end of the exercise the obligations set are reasonable and consistent with the economic reality of the country. Entities that decide to invoke the voluntary testing of IFRS, must meet certain conditions, including full implementation of IFRSs. Click for government decree (Spanish; link to the website of the President of Colombia).

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