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Board-level overview of Australian equivalents to IFRSs

29 Jul 2004

Deloitte (Australia) has today released a new Discussion Paper: An Overview of Australian Equivalents to IFRS – A Guide for Boards and Audit Committees.

With the final versions of the Australian equivalents to International Financial Reporting Standards (A-IFRSs) having been issued by the Australian Accounting Standards Board last week, this publication is designed to assist boards and audit committees to quickly come to terms with the requirements of A-IFRSs and their immediate impacts on current financial reporting. The guide also includes a number of key questions that boards and audit committees can use to assess preparedness for the transition to A-IFRSs, as well as examples of the narrative disclosures that might be appropriate for disclosing the impact of adopting A-IFRSs. Click to (PDF 4,021k*). Because A-IFRSs are virtually identical to IFRSs, this publication is likely to be useful globally, not just in Australia. *Because of the large file size, a white screen may appear for a while when downloading.
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FASB considers convergence for unremitted foreign earnings

29 Jul 2004

At its meeting earlier this week, the US Financial Accounting Standards Board agreed to explore the possibility of converging with IAS 12 Income Taxes by removing the existing exception to comprehensive recognition of deferred taxes for unremitted earnings of foreign subsidiaries.

Under current US GAAP, a deferred tax liability is not recognised for taxes potentially payable on profits earned and held overseas. US accounting treatment follows the tax law, which taxes overseas earnings only when received as dividends or realised through sale of the investment. Under IAS 12, however, these deferred taxes are accrued.
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IOSCO report on Islamic capital markets

28 Jul 2004

The International Organization of Securities Commissions (IOSCO) has published Islamic Capital Market Fact Finding Report intended to assist regulators in assessing the extent of the development and potential regulatory issues relating to the Islamic capital market, as well as to gather information on Islamic financial products and activities.

Among the sections of interest from an IFRS perspective:
  • 3.3.1 Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI)
  • 4.3.2 Key issues relating to the Islamic capital market, which describes, among other things, how IFRSs are used by Islamic financial institutions.
Two excerpts relating to accounting:

"In some cases, Islamic financial institutions encounter accounting problems because the existing accounting standards such as International Accounting Standards (IASs), Generally Accepted Accounting Principles (GAAPs) or domestic standards, were developed based on conventional institutions, conventional product structures or practices, and may be perceived to be insufficient to account for and report Islamic financial transactions. Shariah compliant transactions may not have parallels in conventional financing and therefore, there may be significant accounting implications. For example, in the case of Mudharabah contracts, the transaction is neither equity nor liability in nature as the depositor does not assume the rights of an equity holder (i.e., shareholder) of the Islamic financial institution and neither is he guaranteed of returns. Hence, from an Islamic accounting viewpoint, a Mudharabah account may be presented as an 'investment account', appearing as a separate line item from equity or liability on the balance sheet."

"The current approach to developing financial standards for Islamic transactions is to benchmark against international standards such as International Accounting Standards (IASs) to ensure consistency with globally accepted standards and modifying them, where necessary, in order to ensure financial statements present fairly the financial position, financial performance and cash flows of the Islamic financial institution.... This can be seen as a response to the growth and increasing maturity of the Islamic capital market that requires more specific disclosure and standards that address the specific features of Islamic products and services. Hence, international Islamic financial institutions such as AAOIFI have begun to set international Islamic accounting standards for Islamic financial institutions which are likely to be used by the global Islamic financial services industry."

Click for Islamic Capital Market Fact Finding Report (PDF 611k).

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Revised agenda for IFRIC 29 July 2004 meeting

28 Jul 2004

The International Financial Reporting Interpretations Committee will hold a one-day meeting on 29 July 2004 at the IASB's offices in London.

The agenda below reflects a revision to the one originally announced by IFRIC, which we had noted on 20 July:

AGENDA OF THE IFRIC MEETING 29 JULY 2004

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Web-based technical update on IAS 32 and IAS 39

28 Jul 2004

The Deloitte London IFRS Centre of Excellence is running a monthly series of hour-long Internet-based IFRS technical updates, focusing on the most important international accounting standards and how they will affect UK companies.

The third Webcast was run on Thursday 22 July 2004 and covered certain aspects of IAS 32 Financial Instruments: Disclosure and Presentation and IAS 39 Financial Instruments: Recognition and Measurement. To access the recording Click Here. The recording of each session will be available on this website for a period of at least 3 to 4 weeks from the date of the presentation. Links to past sessions may be found on our United Kingdom Page.The recording is no longer available online.
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Reminder of two approaching comment deadlines

28 Jul 2004

The comment deadlines on the following two IASB exposure drafts are 31 July 2004: Proposed Amendments to IAS 19 Employee Benefits: Actuarial Gains and Losses, Group Plans and Disclosures Proposed Amendments to IFRS 3 Business Combinations: Combinations by Contract Alone or Involving Mutual Entities .

The comment deadlines on the following two IASB exposure drafts are 31 July 2004:

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ICAEW guidance on audit implications of IFRSs

28 Jul 2004

The Institute of Chartered Accountants in England and Wales has published guidance on (PDF 93k) intended to assist auditors in assessing the state of their clients' readiness for the transition to IFRSs and to prepare for the auditing implications.

The guidance warns against complacency that there are not many differences between UK GAAP and IFRSs:

It is easy to make a high-level comparison of UK GAAP and IFRS and conclude that there are few major differences; however there are many important detailed differences, many of which will be discovered only by a thorough analysis of a company's transactions and exposures. Matters that need to be considered include:

  • changes brought by the move to IFRS will mean a major change in the actual format of the accounts;
  • differences in definitions may mean that items previously classified in one way will need to be classified differently;
  • some items that are not recognised under UK GAAP are recognised as assets or liabilities under IFRS, whilst others may cease to be recognised;
  • some items may have to be measured differently in the accounts of an individual subsidiary and in the consolidated accounts;
  • more extensive disclosure requirements will result in greater data capture needs; and
  • some changes in accounting policies may require accounting systems to give different information.
Click for (PDF 36k).
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Comment letters to IASB on IAS 39 fair value option

27 Jul 2004

The IASB has Posted on its Website the 81 comment letters it has received on the Exposure Draft of Proposed Amendments to IAS 39 Financial Instruments: Recognition and Measurement: The Fair Value Option. .

The IASB has Posted on its Website the 81 comment letters it has received on the Exposure Draft of Proposed Amendments to IAS 39 Financial Instruments: Recognition and Measurement: The Fair Value Option.

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EFRAG posts final and draft comment letters

26 Jul 2004

The European Financial Reporting Advisory Group (EFRAG) has submitted to the IASB its final comments on three IASB proposals and one draft interpretation.

Also, EFRAG has invited comments on its draft comment letters on two additional documents:
Final comment letters to IASB:
Draft comment letters: (download from EFRAG's website www.efrag.org)
  • ED of Amendments to IAS 39: Financial Guarantee Contracts and Credit Insurance (comments due 24 September 2004)
  • IFRIC D9 Employee Benefit Plans with a Promised Return on Contributions or Notional Contributions (comments due 27 August 2004)

 

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US SEC begins assessment of the benefits of 'tagged data'

23 Jul 2004

The US Securities and Exchange Commission is assessing the benefits of tagged data and its potential for improving the timeliness and accuracy of financial disclosure and analysis of Commission filings.

The Commission will seek public comment on alternative methods and the costs and benefits associated with tagged data. In addition, the Commission will consider a staff proposal to accept voluntary supplemental filings of financial data using eXtensible Business Reporting Language (XBRL). This voluntary program would enable the Commission staff to further investigate the types of data tagging currently available in the marketplace. The Commission may propose a rule this fall that would, if adopted, establish the voluntary program beginning with the 2004 calendar year-end reporting season.
  • Click for SEC Press Release.
  • Information about XBRL (a system for tagging data) can be found on the XBRL International Website. IASB commercial director Kurt Ramin chairs the XBRL International Steering Committee.
  • An exposure draft dated 15 June 2004 International Financial Reporting Standards (IFRS) General Purpose Financial Reporting for Profit-Oriented Entities (GP) can be found Here.
  • Other XBRL financial reporting taxonomies can be found Here.
  • The 10th XBRL International Conference, Financial Reporting Goes Global: XBRL and IFRS Working Together, will be held 15-17 November 2004 in Brussels. Click for More Information.
  • The European Commission has granted €1,000,000 to accelerate the development and adoption of XBRL in Europe. Press Release (PDF 110k).

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