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Model IFRS financial statements in Danish

20 Jan 2006

Deloitte and Touche (Denmark) has published (IFRS Modelregnskab 2005) (PDF 537k). .

Deloitte and Touche (Denmark) has published (IFRS Modelregnskab 2005) (PDF 537k).

EFRAG (European Financial Reporting Advisory Group) (dk green) Image

EFRAG recommends endorsement of IFRIC 7

20 Jan 2006

The European Financial Reporting Advisory Group (EFRAG) has recommended that IFRIC 7 Applying the Restatement Approach under IAS 29 Financial Reporting in Hyperinflationary Economies be endorsed by the European Commission for use in Europe.

Click to download Endorsement Letter (PDF 85k). EFRAG has also posted on its Website:
  • A draft endorsement letter on the Adoption of an Amendment to IAS 21 - The Effects of Changes in Foreign Exchange Rates - Net Investment in a Foreign Operation (comments due 3 February 2006).
  • Preliminary views regarding the IASB Discussion Paper Management Commentary (comments due 24 March 2006).
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IASB issues segment reporting exposure draft

19 Jan 2006

The IASB has issued an Exposure Draft of an International Financial Reporting Standard (IFRS) ED 8 'Operating Segments'.

The proposals are part of the IASB's efforts to converge IFRSs and US GAAP.

ED 8 results from the IASB's comparison of IAS 14 Segment Reporting with the US standard SFAS 131 Disclosures about Segments of an Enterprise and Related Information.

The proposed IFRS would replace IAS 14 and align segment reporting with the requirements of SFAS 131. ED 8 would require an entity to adopt the 'management approach' to reporting on the financial performance of its operating segments.

Generally, the information to be reported would be what management uses internally for evaluating segment performance and deciding how to allocate resources to operating segments. Such information may be different from what is used to prepare the income statement and balance sheet. The proposals would therefore require explanations of the basis on which the segment information is prepared and reconciliations to the amounts recognised in the income statement and balance sheet.

The proposed IFRS would apply to the annual financial statements for periods beginning on or after 1 January 2007, with earlier application encouraged. Comment deadline is 19 May 2006.

Click for:


IFRIC (International Financial Reporting Interpretations Committee) (blue) Image

Report from the January 2006 IFRIC meeting

17 Jan 2006

The International Financial Reporting Interpretations Committee (IFRIC) met at the IASB's offices in London on Thursday and Friday 12 and 13 January 2006. Presented below are the preliminary and unofficial notes taken by Deloitte observers at the meeting.Notes from the IFRIC Meeting12-13 January 2006 Thursday 12 January 2006 Presentation on hedging inflation risk IFRIC received a presentation on whether inflation risk qualifies as a separable component for hedging purposes under IAS 39. The presentation considered why companies want to hedge inflation as a component of interest rate risk, gave an overview of inflation markets, and considered the relationship between inflation and interest rates (including the Fisher equation).

The presentation also went through a numerical example of hedging inflation risk as a component of a fixed-rate bond asset.

No decisions were made during this session.

D15 Reassessment of Embedded Derivatives

The purpose of this session was to go through the changes made to IFRIC D15 following the decisions made at the November meeting. A summary of the redrafting is given in the observer notes.

A scope section was added to IFRIC D15. This new section will be amended to reflect that contracts with embedded derivatives that have been acquired as part of a business combination accounted for in accordance with IFRS 3 are not within the scope of the interpretation.

The consensus wording will be amended so that the wording on whether there has been a change in the contract that has commercial substance is consistent with the wording in IAS 39.11A (rather than being consistent with IAS 16 and IAS 38). It was generally acknowledged that the basis for conclusions was too long, and often simply repeated what was in the interpretation. As a result, it was agreed to delete several paragraphs in the basis for conclusions. The deletions were partly as a result of changing certain aspects of the interpretation, and partly to remove repetitive paragraphs. Going forward, IFRIC agreed to try to keep future bases for conclusions as succinct as possible.

Subject to changes agreed in the meeting, and a few editorial changes, IFRIC agreed (with 1 exception) to put this interpretation to the IASB for approval. This would happen at either the January or February meetings.

IAS 27 Consolidated and Separate Financial Statements - Separate Financial Statements issued before Consolidated Financial Statements

The IFRIC discussed the practicalities affecting preparers and auditors where a jurisdiction requires separate financial statements of a parent to be issued before the consolidated financial statements as IAS 27 requires those separate financial statements to identify the consolidated financial statements to which they relate. IFRIC decided to proceed with the publication of the tentative agenda decision presented by the Staff although some IFRIC members believed additional clarity could be added to the rejection wording to assist constituents with the IAS 27 requirement.

Service Concession Arrangements

Approach and key milestones

The IFRIC considered a paper setting out a proposed framework that the staff believes will address much of the concerns expressed by respondents to the exposure drafts. The proposed broader framework would provide guidance for operators on the accounting treatment of service concession arrangements for each of three categories: lessee, service provider (e.g. construction, funding and operation and maintenance services) and owner. Under these proposals, the interpretations would contain guidance on:

  • Classification of arrangements: expand the interpretations by building off the guidance in D12 to include classification guidance for the each of the above three categories.
  • Application of IFRS: expand the interpretations by building off the guidance in D13-14, to provide application guidance for each of the above three categories.
  • Disclosure: expand the interpretations by building off existing IFRSs disclosure requirements (eg SIC-29, IASs 11, 23 and the financial instruments standards). Because determination of the appropriate accounting treatment (ie classification) is based on professional judgement, disclosure of the distinguishing factors of the arrangements will help users understanding of an entity's financial statements.

IFRIC discussed the extent to which the proposed approach would result in the actual broadening of the scope of this project.

There seemed to be general consensus that IFRIC should avoid 'scope creep' on this project. Regarding the proposed approach, IFRIC decided not to expand the scope of the service concessions project but to provide sufficient guidance in order to adequately set the context in which the Interpretations should be applied by considering some of the varied forms of these arrangements and how the Interpretations apply or do not apply to them.

Staff indicated that the proposed approach may lead to final draft interpretations in Quarter 3 of 2006 - this being dependent on whether there is any actual broadening of the scope of the Interpretations (which is not intended) and an evaluation at that time whether re-exposure of the draft Interpretations is necessary.

Intangible asset model - D14

At the September 2005 meeting, the IFRIC directed staff to prepare a paper addressing the double recognition of revenue issue as well as the recognition of profit during the construction phase. The staff presented three views for discussion:

  • View 1 - An exchange takes place
  • View 2 - No exchange takes place
  • View 3 - The exchange transaction takes place at inception

The IFRIC discussed the merits of each of these alternatives with some IFRIC members re-iterating their discomfort with the double recognition of revenue. IFRIC decided (7/12) to proceed with View 1 above as this is believed to best reflect the economic consequences of these arrangements. Some IFRIC members noted however that the discomfort of other IFRIC members was a result of the inappropriate application of the 'intangible asset model' to an arrangement that in essence should be accounted for under a 'financial asset model' within the context of the newly devised approach. The staff was asked to explore how the distinction could be clarified to ensure there is no inappropriate classification.

Friday 13 January 2006

Information: Due to a discussion at the IFRIC Agenda Committee (Wednesday 11 January 2005), the paper on IFRS 3 Business Combinations - Puts held by minority interests, was taken off the agenda for today's meeting.

IFRIC Handbook - Staff proposals for a draft Handbook

IFRIC received a presentation on the draft for an IFRIC due process handbook. The handbook is based on the current preface to International Financial Reporting Interpretations Committee and is revised based on a review made last year. The staff commented that the purpose of the IFRIC due process handbook is similar to the due process handbook for the IASB.

The staff presented two questions for the IFRIC to consider:

  • Would the IFRIC add additional items or change the current agenda criteria for deciding whether an item should be added to the agenda or not?
  • As meetings for the IFRIC Agenda Committee currently are closed for the public, would the IFRIC like to change this and for the future keep the Agenda Committee meetings in public?

The IFRIC debated the agenda criteria as set out in the paper (not available to observers). The staff had amended the current version of the preface with additional criteria taken from EITF procedures.

The IFRIC considered specifically the criteria on convergence, and some of the members expressed that convergence as a criterion would be useful for decision-taking. The Chair opposed this suggestion, and stated that the primary intention of the IASB is to develop high quality standards and interpretations, and not necessarily focus on convergence as the primary goal, as should this neither be one of the primary criteria for the IFRIC.

Another criterion discussed was the criterion for deciding whether the IFRIC should consider issues 'expected to be completed in the near future'. After a debate the IFRIC suggested that this paragraph could be amended to clarify and reflect the fact that issues is considered whether they should be dealt with even if the IASB have an ongoing project on their agenda.

Next the IFRIC considered the question whether IFRIC Agenda Committee meetings should be held in public or if they should proceed to keep these meetings closed.

There was a lengthy discussion where IFRIC members considered advantages and disadvantages of keeping the Agenda Committee meetings in public. One of the concerns expressed was that public meetings would increase the pressure for all IFRIC members (also those not part of the IFRIC Agenda Committee) to participate in the meetings. A vote indicated that 7 members were pro keeping Agenda Committee meetings in public, while 4 members voted against this (some members indifferent).

The draft will be amended, with the comments from members, and is expected to be presented to the Board and then further to the trustees by March.

Customer Loyalty Cards/Programmes - Staff proposal for a draft interpretation

The IFRIC considered a paper setting out accounting and measurement on loyalty cards/programmes. This paper is a revisited draft based on the discussion the IFRIC had at the November session.

This paper raised two issues for the IFRIC to discuss:

  • The first issue was to consider when to apply paragraph 13 or when to apply paragraph 19 of IAS 18 for recognition.
  • The second issue was how to measure the amount of 'deferred' revenue in cases where paragraph 13 of IAS 18 would be applied.

The IFRIC discussed the scope of the presented paper. The debate brought forward that the IFRIC wanted to clarify the scope to make sure that the paper did not exclude too many schemes from being included within the definition of loyalty cards/programmes. As a result of the debate on the scope, some also suggested that there should be a broadening of the scope as it was presented in its current form.

On the second issue, the IFRIC considered the measurement approach in the paper. It was debated whether the paper should address measurement at all, as the main focus of this paper should be recognition. After a discussion it seemed to be general consensus among IFRIC members, that measurement should be addressed, but that the guidance provided had to be revisited.

After a lengthy discussion, the chair sums up. It was decided that the staff would consider the comments made and should revise the paper before it was brought back to IFRIC at a later stage.

This summary is based on notes taken by observers at the IFRIC meeting and should not be regarded as an official or final summary.

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IASB January meeting agenda - two days

16 Jan 2006

The International Accounting Standards Board will hold its Board monthly meeting at its offices in London on Tuesday and Wednesday, 24 and 25 January 2006. The agenda for the meeting is noted below.

The Board will meet only on the afternoons of those two days and will not meet on Thursday or Friday 26 or 27 January.


24 and 25 January 2006, London

Tuesday 24 January 2006 (afternoon only)

  • Business Combinations II – analysis of comment letters on ED
  • Update from the Recent Financial Instruments and Insurance Working Group Meetings

Wednesday 25 January 2006 (afternoon only)

  • Short-term Convergence: Borrowing Costs – transition
  • Performance Reporting – segment A 'sweep issues'
  • Accounting standards for Small and Medium-sized Entities – staff will present to the Board a preliminary draft of major sections of an exposure draft
  • Earnings per Share – treasury stock method
  • IFRIC Update
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Trustees seek Board member candidates

16 Jan 2006

The International Accounting Standards Committee Foundation is seeking applications for four full-time IASB Board member positions for terms beginning 1 July 2006. The terms of four IASB members will end on 30 June 2006 – Hans-Georg Bruns, Warren McGregor, Geoffrey Whittington, and Tatsumi Yamada.

All are eligible for reappointment, but Professor Whittington is not seeking reappointment. Board member qualifications are listed in the Annex of the IASC Foundation's Constitution. Successful new applicants will be asked to serve a five-year term and will be expected to reside in London, where the IASB is located. Interested candidates should send a cover letter and curriculum vitae by 28 February 2006 to Philip Laskawy, Chairman of the Nominating Committee, IASC Foundation, 30 Cannon Street, London EC4M 6XH or by email to Tom Seidenstein, Director of Operations, at Click for IASCF Announcement (PDF 92k).
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Singapore 2005 model financial statements

13 Jan 2006

Deloitte & Touche (Singapore) has published model financial statements and a presentation and disclosure checklist under Singapore Financial Reporting Standards for 2005: (PDF 1,034k, 74 pages) (PDF 1,032k, 137 pages) (PDF 867k, 207 pages) .

Deloitte & Touche (Singapore) has published model financial statements and a presentation and disclosure checklist under Singapore Financial Reporting Standards for 2005:

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United Kingdom page updated

13 Jan 2006

We have updated our United Kingdom Page to reflect the activities of the Accounting Standards Board and Auditing Practices Board in the fourth quarter of 2005. The update notes that the European Commission has adopted Standard Wording for European companies to refer to compliance with IFRSs in audit reports and notes to the financial statements.

This wording differs slightly from the one published by the APB in Bulletin 2005/04 Auditor's Reports on Financial Statements in Great Britain and Northern Ireland. Both wordings are acceptable and the electronic versions of the two Bulletins will be amended to include the EC wording as an alternative by way of a footnote.
IFRIC (International Financial Reporting Interpretations Committee) (blue) Image

IFRIC Interpretation on scope of IFRS 2

12 Jan 2006

The International Financial Reporting Interpretations Committee (IFRIC) has issued a final Interpretation – IFRIC 8 'Scope of IFRS 2'.

IFRIC 8 clarifies that IFRS 2 Share-based Payment applies to arrangements where an entity makes share-based payments for apparently nil or inadequate consideration.

IFRIC 8 explains that, if the identifiable consideration given appears to be less than the fair value of the equity instruments granted or liability incurred, this situation typically indicates that other consideration has been or will be received. IFRS 2 therefore applies.

IFRIC 8 is effective for annual periods beginning on or after 1 May 2006. Earlier application is encouraged. Click for Press Release (PDF 59k).


IFRIC (International Financial Reporting Interpretations Committee) (blue) Image

IFRIC draft on interim financial reporting and impairment

12 Jan 2006

The International Financial Reporting Interpretations Committee (IFRIC) has released for public comment a draft Interpretation D18 'Interim Financial Reporting and Impairment'.

The proposed Interpretation would clarify the interaction between IAS 34 Interim Financial Reporting and two other standards, IAS 36 Impairment of Assets and IAS 39 Financial Instruments: Recognition and Measurement, and the effect of that interaction on subsequent interim and annual financial statements.

The proposed Interpretation clarifies that an entity cannot reverse an impairment loss recognised in a previous interim period in respect of goodwill, an investment in an equity instrument or a financial asset carried at cost.

Click for Press Release (PDF 53k).


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