News

IASB re-exposes liability measurement proposals

05 Jan 2010

The IASB has published for comment a revised exposure draft (ED/2010/1) of one section of a replacement for IAS 37 'Provisions, Contingent Liabilities and Contingent Assets'.

That section deals with measurement of liabilities that are within the scope of IAS 37. IAS 37 applies to liabilities not covered by other accounting standards, including liabilities to decommission assets, environmental liabilities, obligations under onerous contracts, and liabilities arising from legal disputes. In June 2005, the IASB had published Proposals to amend IAS 37, including revised measurement requirements. In the light of the comments received, the IASB has decided to issue revised proposals that include more guidance on measurement. Comment deadline is 12 April 2010. The IASB intends to replace IAS 37 in the third quarter of 2010. Click for IASB Press Release (PDF 100k).

Main provisions of the revised liability measurement ED:

IAS 37 currently requires an entity to record an obligation as a liability only if it is probable (likelihood greater than 50%) that the obligation will result in an outflow of cash or other resources from the entity. The revised ED does not include the 'probability of outflows' criterion. Instead, an entity would account for uncertainty about the amount and timing of outflows by using a measurement that reflects their expected value, namely the probability-weighted average of the outflows for the range of possible outcomes.
Liabilities within the scope of IAS 37 would be measured at the amount that the entity would rationally pay at the measurement date to be relieved of the liability. Normally, this amount would be an estimate of the present value of the resources required to fulfil the liability, which would take into account the expected outflows of resources, the time value of money, and the risk that the actual outflows might ultimately differ from the expected outflows.
If the liability is to pay cash to a counterparty (for example to settle a legal dispute), the outflows would be the expected cash payments plus any associated costs, such as legal fees.
If the liability is to undertake a service (for example, to decommission plant) at a future date, the outflows would be the amounts that the entity estimates it would pay a contractor at the future date to undertake the service on its behalf.

FCAG progress report to G-20

05 Jan 2010

The Financial Crisis Advisory Group (FCAG), an independent advisory body to the IASB and FASB, has sent a Letter to G-20 Participants updating them on the progress of the IASB and the FASB toward a single set of global financial reporting standards.

An excerpt:

Although conditions may have improved somewhat in various markets around the globe, the FCAG believes it remains critically important to achieve a single set of high quality, globally converged financial reporting standards that provide consistent, unbiased, transparent and relevant information across geographical boundaries. We are encouraged by the Boards' progress to date in developing such standards....

The next several months are likely to see a number of key developments, including:

the US Securities and Exchange Commission's response to the comments it has received regarding its proposed roadmap for the potential use of International Financial Reporting Standards (IFRS) by domestic US reporting companies;
the European Union's endorsement decision regarding the completed first part of the IASB's financial instruments project, IFRS 9 Financial Instruments: Classification and Measurement;
the constituent feedback on the IASB's proposed standard from the second part of its financial instruments project, Financial Instruments: Amortized Cost and Impairment, and the issuance of its proposal on hedge accounting, the third and final part of its financial instruments project; and
the issuance by the FASB of its comprehensive financial instruments proposals on classification and measurement, impairment, and hedge accounting.

In light of all of this, the FCAG expects to meet again in the fourth quarter of 2010 to review the Boards' further progress and any relevant external developments.

Click for: Letter to G-20 Participants (PDF 26k)

Concerns about implementation of IFRS 8

05 Jan 2010

The United Kingdom Financial Reporting Review Panel (FRRP) has issued a Statement FRRP Highlights the Challenge of Implementing New Segmental Reporting Requirements expressing concern about how companies are reporting the performance of key parts of their business in the light of the introduction of IFRS 8 Operating Segments.

IFRS 8 requires companies to provide an analysis of profit, assets, and liabilities so that investors can see the performance of the principal operations or 'segments'. The FRRP reviewed a sample of 2009 interim accounts and 2008 annual accounts and has asked a number of questions about the implementation of IFRS 8, in particular, where:

only one operating segment is reported, but the group appears to be diverse with different businesses or with significant operations in different countries;
the operating analysis set out in the narrative report differs from the operating segments in the financial statements;
the titles and responsibilities of the directors or executive management team imply an organisational structure which is not reflected in the operating segments; or
the commentary in the narrative report focuses on non-IFRS measures whereas the segmental disclosures are based on IFRS amounts.

In its statement, the Panel encourages Boards of Directors to test their initial conclusions about their segmental reporting by considering the following questions:

What are the key operating decisions made in running the business?
Who makes these key operating decisions?
Who are the segment managers (as defined in the standard) and who do they report to?
How are the group's activities reported in the information used by management to review performance and make resource allocation decisions between segments?
Is any proposed aggregation of operating segments into one reportable segment supported by the aggregation criteria in the standard, including consistency with the core principle?
Is the information about reportable segments based on IFRS measures or on an alternative basis?
Have the reported segment amounts been reconciled to the IFRS aggregate amounts?
Do the accounts describe the factors used to identify the reportable segments including the basis on which the company is organised?

Click for Statement FRRP Highlights the Challenge of Implementing New Segmental Reporting Requirements (PDF 36k).

Agenda for 7-8 January 2010 IFRIC meeting

05 Jan 2010

The International Financial Reporting Interpretations Committee (IFRIC) will meet at the IASB's offices in London on Thursday and Friday 7 and 8 January 2010 (morning only on 8 January).

The meeting is open to the public and will be webcast. The tentative agenda is shown below.

Agenda for the IFRIC MeetingThursday and Friday, 7 and 8 January 2010
Thursday 7 January 2010 (10:00-18:15h) Introduction IAS 16 Property, Plant and Equipment – Accounting for production phase stripping costs in the mining industry IFRS 2 Share-based Payment – Vesting and non-vesting conditions Review of Tentative Agenda Decisions published in November 2009 IFRIC Update IAS 38 Intangible Assets – Amortisation method IFRS 2 Share-based Payment – Contingent manner of settlement IAS 27 Consolidated and Separate Financial Statements – Presentation of comparatives when applying the 'pooling of interests' method IAS 27 Consolidated and Separate Financial Statements – Combined Financial Statements and Redefined Reporting Entities IAS 18 Revenue – Receipt of a dividend of treasury shares IFRS 4 Insurance Contracts and IAS 32 Financial Instruments Presentation – Scope issue for investments in REITs IAS 32 Financial Instruments: Presentation – 'Fixed for fixed' condition Annual Improvements – Deliberation of Comments Received IFRS 1 First-time Adoption of IFRSs – Revaluation basis as deemed cost IAS 27 – Impairment of investments in subsidiaries, jointly controlled entities and associates in the separate financial statements of the investor IFRS 3 Business Combinations – Measurement of non-controlling interests IFRS 3 – Transition requirements for contingent consideration from a business combination that occurred before the effective date of the revised IFRS IFRS 7 Financial Instruments: Disclosures – Disclosures about the nature and extent of risks arising from financial instruments IAS 28 Investments in Associates – Partial use of fair value for measurement of associates IAS 39 Financial Instruments: Recognition and Measurement – Bifurcation of embedded foreign currency derivative IAS 39 – Application of the fair value option IAS 34 Interim Financial Reporting – Significant events and transactions Friday 8 January 2010 (09:00-12:30h) Staff Recommendations for Tentative Agenda Decision IFRS 8 Operating Segments and IAS 36 Impairment of Assets – Transition provisions for IFRS 8 amendment IAS 21 The Effects of changes in Foreign Exchange Rates – Determination of functional currency of investment holding company IAS 32 Financial Instruments: Presentation – Debt/equity classification of instruments with obligation to deliver cash at the discretion of shareholders IFRS 1 First-time adoption of International Financial Reporting Standards – Accounting for costs included in self-constructed assets on transition IAS 39 Financial Instruments Recognition and Measurement – Unit of account for forward contracts with volumetric optionality Administrative Session – IFRIC work in progress

Agenda for the IFRIC MeetingThursday and Friday, 7 and 8 January 2010

Thursday 7 January 2010 (10:00-18:15h)

Introduction
IAS 16 Property, Plant and Equipment – Accounting for production phase stripping costs in the mining industry
IFRS 2 Share-based Payment – Vesting and non-vesting conditions
Review of Tentative Agenda Decisions published in November 2009 IFRIC Update
- IAS 38 Intangible Assets – Amortisation method
- IFRS 2 Share-based Payment – Contingent manner of settlement
- IAS 27 Consolidated and Separate Financial Statements – Presentation of comparatives when applying the 'pooling of interests' method
- IAS 27 Consolidated and Separate Financial Statements – Combined Financial Statements and Redefined Reporting Entities
- IAS 18 Revenue – Receipt of a dividend of treasury shares
- IFRS 4 Insurance Contracts and IAS 32 Financial Instruments Presentation – Scope issue for investments in REITs
- IAS 32 Financial Instruments: Presentation – 'Fixed for fixed' condition
Annual Improvements – Deliberation of Comments Received
- IFRS 1 First-time Adoption of IFRSs – Revaluation basis as deemed cost
- IAS 27 – Impairment of investments in subsidiaries, jointly controlled entities and associates in the separate financial statements of the investor
- IFRS 3 Business Combinations – Measurement of non-controlling interests
- IFRS 3 – Transition requirements for contingent consideration from a business combination that occurred before the effective date of the revised IFRS
- IFRS 7 Financial Instruments: Disclosures – Disclosures about the nature and extent of risks arising from financial instruments
- IAS 28 Investments in Associates – Partial use of fair value for measurement of associates
- IAS 39 Financial Instruments: Recognition and Measurement – Bifurcation of embedded foreign currency derivative
- IAS 39 – Application of the fair value option
- IAS 34 Interim Financial Reporting – Significant events and transactions

Friday 8 January 2010 (09:00-12:30h)

Staff Recommendations for Tentative Agenda Decision
- IFRS 8 Operating Segments and IAS 36 Impairment of Assets – Transition provisions for IFRS 8 amendment
- IAS 21 The Effects of changes in Foreign Exchange Rates – Determination of functional currency of investment holding company
- IAS 32 Financial Instruments: Presentation – Debt/equity classification of instruments with obligation to deliver cash at the discretion of shareholders
- IFRS 1 First-time adoption of International Financial Reporting Standards – Accounting for costs included in self-constructed assets on transition
- IAS 39 Financial Instruments Recognition and Measurement – Unit of account for forward contracts with volumetric optionality
Administrative Session – IFRIC work in progress

Argentina requires IFRSs starting 2012

04 Jan 2010

Argentina's Comisión Nacional de Valores (CNV, the National Securities Commission, an agency of the Argentine Ministry of Economics and Public Finance) has adopted a requirement that all companies that publicly offer equity or debt securities must prepare their financial statements using IFRSs, beginning with financial statements for the year ended 31 December 2012.

Companies may voluntarily file their financial statements in accordance with IFRSs starting in January 2011. Argentine companies that are currently preparing IFRS financial statements on a supplemental basis may adopt IFRSs starting in 2010. The new requirements were adopted by Resolución General No. 562 (Spanish, PDF 509k – also available on CNV's website here).

Another record year for IAS Plus

01 Jan 2010

In 2009 IAS Plus had 2,210,000 visitors. Thank you for making us, once again, the #1 source on the Internet for information about international financial reporting.

We wish you a very happy new year. Here are a few more statistics about IAS Plus in 2009:

Total page views: 6,810,000
Total website file size: 1,330mb
Total number of files: 6,619 files, including
- 775 HTML web pages
- 4,610 downloadable files (4,563 PDF, 30 ZIP, and 17 DOC)
- 1,220 graphics files

Argentina will require IFRSs in 2012

31 Dec 2009

Companies may voluntarily file their financial statements in accordance with IFRSs starting in January 2011. Argentine companies that are currently preparing IFRS financial statements on a supplemental basis may adopt IFRSs starting in 2010. The new requirements were adopted by Resolución General No. 562 (PDF 509k – also available on CNV's website Here).

Year-end Newsletter – Closing Out 2009

30 Dec 2009

Deloitte's IFRS Global Office has published an IAS Plus Update Newsletter – 'Closing Out 2009'.

The newsletter (PDF 159k) provides a high level overview of new and revised Standards and Interpretations that are effective for December 2009 and later accounting periods. Where applicable, the newsletter includes hyperlinks to past Deloitte newsletters dealing with the specific Standard or Interpretation in more detail. Those past newsletters are all available on here on IAS Plus. As always, entities should refer to the Standards and Interpretations themselves to identify all of the changes that may affect their particular circumstances.

New and revised Standards for 2009

30 Dec 2009

The following is a comprehensive list of new and revised IASB Standards and Interpretations that are effective for 31 December 2009 year ends and later periods.

All of the newsletters referred to may be downloaded without charge on our Newsletter Page. See also the news story immediately below for our comprehensive year-end IAS Plus Update Newsletter – Closing Out 2009.

New pronouncements effective for 31 December 2009 year ends
New Standards		Effective for annual periods beginning on or after	IAS Plus newsletter issued
IFRS 8	Operating segments	1 January 2009	December 2006
IFRS for SMEs	IFRS for Small and Medium-sized Entities	Available immediately	July 2009
Amendments to Standards
IFRS 1 and IAS 27	Cost of an Investment in a Subsidiary, Jointly Controlled Entity or Associate	1 January 2009	May 2008
IFRS 2	Vesting Conditions and Cancellations	1 January 2009	January 2008
IFRS 7	Enhancing disclosures about fair value and liquidity risk	1 January 2009	March 2009
IAS 1	Presentation of Financial Statements	1 January 2009	September 2007
IAS 23	Borrowing cost	1 January 2009	April 2007
IAS 32 and IAS 1	Puttable Financial Instruments and Obligations Arising on Liquidation	1 January 2009	February 2008
IAS 39	Clarification regarding assessment of embedded derivatives	Annual periods ending on or after 30 June 2009	March 2009
IAS 39 and IFRS 7	Reclassification of financial assets	1 July 2008	October 2008
Various	Improvements to IFRSs	Various	May 2008
New Interpretations
IFRIC 13	Customer Loyalty Programmes	1 July 2008	June 2007
IFRIC 15	Agreements for the Construction of Real Estate	1 January 2009	July 2008
IFRIC 16	Hedges of a Net Investment in a Foreign Operation	1 October 2008	July 2008
IFRIC 18	Transfers of Assets from Customers	Transfers made after 1 July 2009	February 2009

IAS 32 amendment endorsed for use in Europe

28 Dec 2009

The European Commission has completed the process of endorsing, for use in Europe, the October 2009 amendment to IAS 32 Financial Instruments: Presentation – Classification of Rights Issues.

The amendment provides that when an entity issues rights denominated in a currency other than the entity's functional currency, and those rights are issued pro rata to the entity's existing shareholders for a fixed amount of cash, they should be classified as equity even if their exercise price is denominated in a currency other than the issuer's functional currency. Click for the Commission Regulation (EC) No 1293/2009 (PDF 819k), the endorsement Regulation published in the Official Journal of the European Union on 24 December 2009.

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News

IASB re-exposes liability measurement proposals

FCAG progress report to G-20

Concerns about implementation of IFRS 8

Agenda for 7-8 January 2010 IFRIC meeting

Argentina requires IFRSs starting 2012

Another record year for IAS Plus

Argentina will require IFRSs in 2012

Year-end Newsletter – Closing Out 2009

New and revised Standards for 2009

IAS 32 amendment endorsed for use in Europe

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