News

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IVSC guidance on valuing investment property

18 Feb 2010

The International Valuation Standards Council (IVSC) has released a new Guidance Note (GN 17) 'The Valuation of Investment Property under Construction'.

The need for guidance when estimating the market value of investment property under construction was highlighted when the IASB amended IAS 40 Investment Property to require entities to disclose the fair value of investment property under construction.

Click for IVSC Press Release (PDF 23k). Guidance Note 17 itself may be downloaded from IVSC's Website.

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New EU Commissioner comments on accounting

18 Feb 2010

Michel Barnier, who took office last week as the European Commissioner responsible for Internal Market and Services, commented briefly on international accounting standards during a presentation to the Ecofin Council (the council of economic and finance ministers of EU Member states).

Mr Barnier's presentation was titled Acting Without Delay to Clean Up Financial Markets. Here is an excerpt:

One of the strongest conclusions of the G20 was the shared commitment to reform together and to ensure convergence of accounting standards at an international level. To this end, we need to find the right balance between a faithful representation of a company's financial situation and wider financial stability. This issue will be at the centre of our discussions in the coming months.
Click to Download Mr Barnier's Remarks (PDF 28k).
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Deloitte paper on 'cap and trade programs'

18 Feb 2010

Deloitte's Climate Change and Sustainability Services team has published a paper on Cap and Trade Programs for Greenhouse Gas.

Concern for the potential implications of climate change is leading governments to consider policies and programs designed to reduce greenhouse gas emissions. Cap and trade programs are one option that is considered to be effective in creating a financial incentive for emissions reductions for large emitters in industrial sectors. The purpose of the paper is to present the key characteristics of greenhouse gas emissions cap and trade programs. A knowledge of cap and trade mechanisms is essential to understanding the impact on business, including carbon management, accounting, and tax implications.

The IASB's Emissions Trading Schemes Project

The IASB has on its agenda a project on Emissions Trading Schemes. The goal of that project, being conducted jointly with the US FASB, is to develop comprehensive guidance on the accounting for emissions trading schemes. The Board has decided tentatively that if an entity receives emission allowances free of charge from the government:

  • The entity should recognise the allowances as assets and measure them initially at fair value.
  • Because the entity incurs an obligation to reduce its emissions below the level represented by those allowances (ie its cap), the entity should recognise a liability that represents its promise to pay allowances throughout the commitment period. The liability exists irrespective of whether the entity has already emitted.
Click to download Cap and Trade Programs for Greenhouse Gas (PDF 1,123k).
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Francoise Flores named as new EFRAG TEG Chair

17 Feb 2010

The Supervisory Board of the European Financial Reporting Advisory Group (EFRAG) has named Francoise Flores of France as the new chair of the EFRAG Technical Expert Group (TEG) effective 1 April 2010. She will replace Deloitte Denmark Partner Stig Enevoldsen as TEG chair.

Ms Flores has been a member of TEG for six years and its vice-chair for two years. Mike Ashley of the UK has been appointed vice-chair of TEG. The Supervisory Board also announced several reappointments and several new appointments to TEG, including Deloitte UK Partner Andy Simmonds. TEG's responsibilities include providing a coordinated European response to IASB discussion documents and proposals and making a recommendation to the European Commission regarding acceptance or rejection of an IASB standard or interpretation for use in the EU. The complete TEG membership as of 1 April 2010 will be:

Voting members:

  • Francoise Flores, Industry, France, EFRAG TEG Chair
  • Mike Ashley, Auditor, UK, EFRAG TEG Vice-Chair
  • Alan Dangerfield, Industry, Switzerland
  • Gabi Ebbers, Insurance specialist, Germany
  • Nicklas Grip, Banking and financial instruments specialist, Sweden
  • Araceli Mora, Professor, Spain
  • Nicolas de Paillerets, Industry, France
  • Hans Schoen, former Auditor, The Netherlands
  • Andy Simmonds, Auditor, UK (appointed)
  • Anna Sirocka, Auditor, Poland
  • Andrea Toselli, Auditor, Italy
  • Carsten Zielke, User, Germany

Non-voting members:

  • Liesel Knorr – German Accounting Standards Board
  • Jerome Haas – Autorité des Normes Comptables (French standard setter)
  • Ian Mackintosh – UK Accounting Standards Board

 

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Notes from February 2010 IASB meeting day 2

17 Feb 2010

The IASB is holding its February 2010 monthly Board meeting at its offices in London on Monday to Friday, 15-19 February 2010.

Click here to go to the preliminary and unofficial Notes Taken by Deloitte Observers at the meeting.

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Irish CAs support IFRS for SMEs in place of FRSs

17 Feb 2010

Chartered Accountants Ireland has announced its support for changes in accounting standards proposed by the Accounting Standards Board (ASB) that would see Irish and UK GAAP replaced by a three-tiered approach, whereby companies would apply one of the following:

  • EU-endorsed IFRSs - for 'publicly accountable' entities
  • IFRS for SMEs - for non-publicly accountable entities
  • Financial Reporting Standard for Smaller Entities (FRSSE) – optional for 'small' entities as defined in the Companies Acts

The proposal is contained in a Consultation Document issued by the ASB in August 2009. In announcing support for the IFRS for SMEs, Aidan Lambe, Chartered Accountants Ireland Director of Technical Policy, said: "The position whereby we have had differing accounting frameworks in use in Ireland since the adoption of IFRS was ultimately unsustainable in the long run. By producing this standard, the IASB has greatly facilitated the ASB in attempting to resolve this issue." Click for CAI Press Release (PDF 95k).

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Notes from February 2010 IASB meeting day 1

16 Feb 2010

The IASB is holding its February 2010 monthly Board meeting at its offices in London on Monday to Friday, 15-19 February 2010.

Click here to go to the preliminary and unofficial Notes Taken by Deloitte Observers at the meeting.

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IASCF Trustees complete Constitution Review Part 2

15 Feb 2010

The Trustees of the IASC Foundation, the oversight body of the IASB, have completed part two of the 2008-2010 Constitution Review – announcing a number of changes aimed at enhancing public accountability, stakeholder engagement, and operational effectiveness.

The changes include:

  • Introduction of three-yearly public consultations on the IASB's technical agenda: In addition to consulting the Trustees and its advisory council annually on the existing and future agenda, the IASB will undertake a three-yearly public consultation on its future technical agenda.
  • Emphasis on adoption of IFRSs: The Constitution will emphasise that convergence is a strategy aimed at promoting and facilitating the adoption of IFRSs, but is not an objective by itself.
  • A commitment to a 'principle-based' approach: The Constitution will call for IFRSs 'based upon clearly articulated principles'.
  • Specific designation of investors: The new Constitution specifically identifies investors as a target audience for financial information (in addition to other participants in the world's capital markets and other users of financial information).
  • A requirement for due process and the introduction of an emergency procedure: The Constitution will include a provision for an accelerated due process only in the most exceptional circumstances and only after approval by at least 75 per cent of the Trustees.
  • Creation of vice chairs for both the Trustees and the IASB: The new Constitution will establish the possibility of two vice chairs for both the Trustees and the IASB. This will both ease the burden on the chair, and give the option of wider geographical distribution in the leadership.
  • Improved language to account for a broad range of stakeholders, both by type and location: The Constitution will note the need to 'take account of, as appropriate, the needs of a range of sizes and types of entities in diverse economic settings'.
  • Reduction in duration of possible second term of IASB members to ensure practical experience: While the Constitution will still permit the possibility of a second term for IASB members, the Trustees have reduced the second term from five years to three for IASB members not serving as the chair or a vice chair.
  • Names in use across the organisation to be streamlined: The names in use across the organisation will be more closely aligned with the standards. The IASC Foundation will become the IFRS Foundation, as soon as the practical arrangements can be made. The interpretations committee and advisory council will be known as the IFRS Interpretations Committee and IFRS Advisory Council, respectively. Stakeholders supported retaining the name of the IASB, and the Trustees concurred.

The changes take effect 1 March 2010. Click for IASCF Press Release (PDF 109k).

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We disagree with three IFRIC draft agenda decisions

13 Feb 2010

In letters to the International Financial Reporting Interpretations Committee, Deloitte Touche Tohmatsu has disagreed with the IFRIC's tentative decisions, in January 2010, not to take onto the IFRIC's agenda three requests for an interpretation, as follows:

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Japan moves toward full IFRS adoption

13 Feb 2010

In our News Story of 10 February we reported on a conference on international developments in accounting and auditing that was hosted by the European Commission in Brussels on 8 February 2010. One of the presenters at that conference was made by Mr Masamichi Kono, Deputy Director General of the Supervisory Bureau of the Financial Services Agency of Japan.

He explained the Japanese step-by-step roadmap toward the full adoption of IFRSs for listed companies by 2015 or 2016, including the voluntary early adoption that has already started from 1 April 2009. Click to Download Mr Kono's Presentation (PDF 145k).

 

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