The principal agenda item for the meeting is discussion of a staff draft of the Leases discussion paper (DP). The draft DP – which has not been approved by the FASB or the IASB – would express a preliminary view of the two Boards in favour of replacing the current lease accounting model with a new model. The current model classifies leases as finance leases or operating leases, with the former accounted for as, in substance, financed purchases of the leased asset. Under the proposed new model, a lessee would recognise as assets and liabilities all material rights and obligations arising in all lease contracts, including those rights and obligations that arise under leases currently classified as operating leases. Thus, a lessee would recognise:

• an asset representing its right to use the leased item for the lease term, and
• a liability for its obligation to pay rentals.

The operating and finance lease classifications would be eliminated. The observer note for the working group meeting includes a draft of the DP.

 

Accounting and valuation are among the following TC priorities:

• Greater international coordination for the oversight of credit rating agencies
• Safeguards for retail clients
• Firm risk management
• Prudential supervision
• Valuation and accounting

Click for Technical Committee Press Release (PDF 133k). More credit crunch information is Here.

The newsletter is developed by Deloitte's Global IFRS and Offerings Services (GIOS) team – Deloitte practitioners assisting non-US companies and non-US practice office engagement teams in applying US GAAP and IFRSs and in complying with the SEC's financial reporting rules.

Click to view US Reporting Newsletter for Non-US Based Companies September 2008 Edition (PDF 216k).

The GIOS Newsletter is an update on relevant GAAP, regulatory, and other matters, webcasts, and publications, with hyperlinks to source material.

 

The IASB has accelerated its work on these two issues in response to the recommendations of the Financial Stability Forum. The extra meeting will enable the staff to make faster progress on those projects.

2 October 2008, London IFRS 7 Amendments – Credit Crisis Consolidation – Disclosure of Off-balance sheet risk Because the meeting has been arranged at short notice, some Board members will be taking part via video conferencing facilities. To make allowance for the different time zones involved the meeting will be held in two sessions, one in the morning and the same topics of discussion repeated in the afternoon. The morning session will take place between 09:00am and 12:00 noon (London time, GMT +1), and the afternoon session between 15:00pm and 18:00pm (London time, GMT +1). Both sessions will be open to public observation and will be webcast.

 

The amendments would provide two additional exemptions from retrospective restatement for first-time adopters of IFRSs. The proposals are aimed at ensuring that entities applying IFRSs will not face undue cost or effort in the transition process. The exposure draft proposes:

• to exempt companies from retrospective application of IFRSs for oil and gas assets using the full cost method and for operations subject to rate regulation
• to exempt companies with existing leasing contracts accounted for in accordance with IFRIC 4 Determining whether an Arrangement contains a Lease from reassessing the classification of those contracts according to IFRSs when the same classification has previously been made in accordance with national GAAP.

The exposure draft Additional Exemptions for First-time Adopters (proposed amendments to IFRS 1) may be downloaded without charge from the IASB's Website. Comment deadline is 23 January 2009. Click for Press Release (PDF 48k).

 

The proposals are to revise the definition of discontinued operations and require additional disclosure about components of an entity that have been disposed of or are classified as held for sale. The proposals are the result of a joint project by the IASB and the US Financial Accounting Standards Board to develop a common definition of discontinued operations and require common disclosures about them. The FASB is publishing parallel proposals to amend its standards.

Click for Press Release (PDF 35k). The deadline for public comment is 23 January 2009. The ED may be downloaded without charge from IASB's Website.

 

Mr Kalavacherla will join the IASB as a full time member on 1 January 2009 for the period ending on 30 June 2013. Mr. Kalavacherla, born in India, is a partner at KPMG LLP serving both as reviewing partner for IFRS financial statements and filings with the US Securities and Exchange Commission. He has worked extensively in India and in Europe and has specialised in technology and biotechnology. Mr Kalavacherla is a member of both the Institute of Chartered Accountants of India and the American Institute of CPAs.

Click here for Press Release (PDF 181k).

 

Among other things, the statement urged more effective regulation. The G7 said: "We remain committed to full and rapid implementation of the Financial Stability Forum (FSF) recommendations to enhance the resilience of the global financial system for the longer term. We look forward to the FSF report this fall on progress made in strengthening prudential supervision and regulation, improving firms' risk management practices, enhancing disclosure and transparency, and strengthening accounting frameworks." Click to Download the G7 Statement (PDF 85k). Here is the link to our complete Credit Crunch Page.

 

In addition, IFRS 8 Operating Segments (which replaces IAS 14 Segment Reporting) was issued in November 2006. These new and revised Standards will not be effective until 2009. However, to provide the best guide to differences between IFRSs and US GAAP on an ongoing basis, the comparison table reflects the changes to these Standards and, in the case of IFRS 3 and IAS 27, the equivalent changes in US GAAP. Throughout the guide, we have also adopted the general terminology changes arising from IAS 1(2007). While this comparison is comprehensive, it does not attempt to capture all of the differences that exist or that may be material to a particular entity's financial statements. Our focus is on differences that are commonly found in practice. The significance of the differences enumerated in this publication – and others not included – will vary with respect to individual entities depending on such factors as the nature of the entity's operations, the industry in which it operates, and the accounting policy choices it has made. We are pleased to grant permission for accounting educators and students to make copies for educational purposes.

Click to view IFRSs and US GAAP – A Pocket Comparison (PDF 378k, 76 pages). There are permanent links to this and many other Deloitte IFRS publications on our Publications Page. There's also a link on our United States Page.

 

It discusses three exposure documents issued last week by the FASB proposing amendments to the derecognition guidance in Statement 140 and the consolidation model in Interpretation 46(R). The proposals would, among other things, eliminate 'qualifying special purpose entities' (QSPEs), modify the consolidation model in Interpretation 46(R), and expand the related required disclosures. The exposure drafts reflect the Board's response to the increased scrutiny by SEC, Congress, and financial statement users on the accounting and disclosures required by Statement 140 and Interpretation 46(R) in the wake of the recent deterioration in the global credit markets. Click to download the 22 September 2008 Heads Up (PDF 202k).