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Comment deadline on IFRIC D18

23 Mar 2006

We remind you that the deadline is 31 March 2006 for commenting on IFRIC D18 Interim Financial Reporting and Impairment.

IFRIC D18 proposes that an entity shall not reverse an impairment loss recognised in a previous interim period in respect of goodwill or an investment in an equity instrument or a financial asset carried at cost.
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Two PCAOB releases on audit firm quality controls

23 Mar 2006

The US Public Company Accounting Oversight Board has issued two Releases concerning the Board's implementation of a provision of the Sarbanes-Oxley Act of 2002 that gives registered accounting firms an incentive to address quality control criticisms in Board inspection reports within 12 months after the Board issues the reports.

The Act provides that "no portions of the inspection report that deal with criticisms of or potential defects in the quality control systems of the firm under inspection shall be made public if those criticisms or defects are addressed by the firm, to the satisfaction of the Board, not later than 12 months after the date of the inspection report."
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Uruguay requires IFRSs

22 Mar 2006

We have created a new Country Page for Uruguay.

Two governmental decrees – 2004 #162/004 and 2005 #90/005 – require that all Uruguayan companies must follow those IFRSs in existence at 19 May 2004. The auditor's report refers to conformity with Uruguayan GAAP because of the 19 May 2004 cut-off. We have updated our List of Jurisdictions Using IFRSs accordingly.
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New Australian Accounting Alert on IFRIC 9

22 Mar 2006

Deloitte (Australia) has published IFRIC 9 Reassessment of Embedded Derivatives (PDF 52k).

It is expected that the Australian Accounting Standards Board (AASB) will adopt this Interpretation and release UIG 9, an Australian equivalent of IFRIC 9, at the next meeting of the AASB. Links to all past Australian Accounting Alerts are Here.
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FSF Asia-Pacific forum supports convergence efforts

21 Mar 2006

The Financial Stability Forum (FSF) held its fourth Asia-Pacific regional meeting on 16 March 2006 in Sydney, Australia.

Senior representatives from finance ministries, central banks, and supervisory and regulatory authorities from 10 FSF member economies and 8 regional non-member economies attended the meeting. Senior officials from international institutions represented on the FSF, as well as the Asian Development Bank, also took part. Participants exchanged views on a broad range of issues, including accounting standards.

The Report of the FSF Asia-Pacific Forum 2006 (PDF 72k) states:

Progress toward convergence and harmonisation in international accounting standards is underway, with growing participation from countries in the region. Efforts by the IASB to produce a set of standards for small and medium sized enterprises and by regulators and audit oversight authorities to promote more effective cooperation and enhancements to audit quality were welcomed.

 

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Update on Bulgaria and Slovak Republic

21 Mar 2006

An accounting update for Bulgaria and Slovak Republic.

In Bulgaria, since 2003, all listed companies and financial institutions have been required to use IFRSs for their consolidated financial statements. Starting in 2005, IFRSs have been extended also to individual company financial statements and to large unlisted companies. Small companies are permitted but not required to use IFRSs.

In the Slovak Republic, listed companies must use IFRSs for their consolidated financial statements under the EU Accounting Regulation. Starting in 2006, the IFRS requirement has been extended to large unlisted companies.

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India moving to align its GAAP with IFRSs

21 Mar 2006

The Prime Minister of India Manmohan Singh has announced that his government will introduce comprehensive new company legislation that will include aligning Indian accounting standards with IFRSs.

The new law the existing 50-year-old companies law with the objective of promoting greater transparency and efficient governance, the Prime Minister said.

 

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Deloitte views on initial measurement paper

20 Mar 2006

On 17 November 2005, the IASB published for public comment a Discussion Paper Measurement Bases for Financial Reporting - Measurement on Initial Recognition.

The Discussion Paper, prepared by staff of the Canadian Accounting Standards Board (AcSB), analyses possible bases for measuring assets and liabilities on initial recognition. These include: historical cost, current cost, fair value, net realisable value, value in use, and deprival value. We have posted the Deloitte (PDF 30k). This project is currently on the Board's research agenda. The main points of our comments:

It is not clear to us how this discussion paper fits into the current agenda of the International Accounting Standards Board (IASB). The IASB should have indicated how it believes this discussion paper is intended to complement its work on the fair value measurement and concepts projects, if at all. It appears that the discussion paper has been overtaken by events elsewhere in the IASB's agenda. In addition, the discussion paper deals with the narrow issue of measurement on initial recognition after making the presumption that assets and liabilities should be measured as of the date they are initially recognised (paragraph 415). The issue of when initial recognition should take place is deferred to a different analysis that is yet to be undertaken. Given the interdependencies between the question of 'when' initial recognition should take place and 'what' should be recognised with the initial measurement issue discussed in the paper, we are of the view that the issues related to 'when' and 'what' should have been thoroughly researched first. The issue of 'how' to measure assets and liabilities follows from there. This approach may have highlighted issues that could have lead to less uncertainty about the discussions and proposals in the discussion paper. We imagine that when the IASB deals with the 'when' and 'what' issues, some parts of the discussion paper may become irrelevant....

We are of the view that existing measurement guidance within various International Financial Reporting Standards (IFRS) is inconsistent and that a project to address these issues is overdue in light of the developments in theory and practice. However, as the IASB is in the process of finalising an exposure draft on fair value measurement, we reserve our comments on the specific questions set out in the discussion paper.

Furthermore, we have not responded to the request for comments on the differences between the proposed measurement hierarchy in the discussion paper and the equivalent guidance in the Financial Accounting Standards Board's (FASB) exposure draft as set out in the third paragraph of the Introduction (on page 6 of the discussion paper). The discussion paper fails to identify which version of the FASB exposure draft constituents should base their comments. In addition, no effort has been made to highlight the significant areas of difference between the two documents.

All past Deloitte letters of comment to the IASC and the IASB are
Here.
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Deloitte views on management commentary proposals

20 Mar 2006

On 27 October 2005, the IASB published a discussion paper on Management Commentary – information presented outside the financial statements in the form of management's explanation of the enterprise's financial condition, changes in financial condition, results of operations, and causes of changes in material line items.

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