News

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FASB decides to eliminate QSPEs and modify consolidation model

20 Jun 2008

The US FASB has decided to amend its Statement No. 140 'Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities and Interpretation No. 46(R) Consolidation of Variable Interest Entities' to make the following important changes, among others:

  • Remove the concept of a qualifying special-purpose entity (QSPE) from Statement 140 and the related scope exceptions from Interpretation 46(R)
  • Changes the derecognition provisions in paragraph 9 of Statement 140
  • Modify the consolidation model in Interpretation 46(R)
As a result, if those decisions become final, previously unconsolidated entities may have to be consolidated. Also, because of the potential modifications to the existing Interpretation 46(R) model, enterprises involved with variable interest entities (VIEs) (even VIEs that are not structured finance vehicles) will need to rethink their previous consolidation conclusions. The FASB is expected to issue an Exposure Draft for public comment on the amendments to Statement 140 and Interpretation 46(R) in IQ 2008. All of the details are in Heads Up Newsletter 18 June 2008 (PDF 182k) from Deloitte & Touche LLP (United States).

 

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Notes from the third day of the June 2008 IASB meeting

20 Jun 2008

The IASB held its June 2008 meeting at its offices, 30 Cannon Street, London, on 17-20 June 2008.

Click here to go to the Preliminary and Unofficial Notes Taken by Deloitte Observers at the meeting.

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Updated EFRAG endorsement status report

20 Jun 2008

The European Financial Reporting Advisory Group (EFRAG) has updated its report showing the status of endorsement, under the EU Accounting Regulation, of each IFRS, including standards, interpretations, and amendments.

Click to download the Endorsement Status Report as of 19 June 2008 (PDF 34k). Currently, the following IASB pronouncements have not yet been endorsed for use in Europe:
  • IFRS 1 and IAS 27 Cost of an Investment in a Subsidiary, Jointly-Controlled Entity, or Associate
  • IFRS 2 Share-based Payment: Vesting Conditions and Cancellations
  • IFRS 3 Business Combinations (2008)
  • IAS 1 Presentation of Financial Statements (revised September 2007)
  • IAS 23 Borrowing Costs (revised March 2007)
  • IAS 27 Consolidated and Separate Financial Statements (2008)
  • IAS 32 and IAS 1 Amendments for Puttable Instruments and Obligations Arising on Liquidation
  • IFRIC 12 Service Concession Arrangements
  • IFRIC 13 Customer Loyalty Programmes
  • IFRIC 14 IAS 19 – The Limit on a Defined Benefit Asset, Minimum Funding Requirements, and their Interaction
  • Improvements to IFRSs – 2007 (affects various standards)

 

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Securities regulators support creation of an IASCF monitoring group

19 Jun 2008

The world's securities authorities – represented by IOSCO, as well as the European Commission, the Japan Financial Services Agency and the US Securities and Exchange Commission, the securities authorities in the world's three largest capital markets – welcome the proposal to create an IASC Foundation Monitoring Group.

That proposal is part of the 2008 Constitution Review currently being conducted by the IASCF. A Joint Announcement (PDF 34k) by the securities regulators said:

We are pleased at the progress being made in advancing interaction between securities authorities and the IASCF. The increased adoption and use of IFRS in capital markets around the world necessitates strengthening the accountability of the Foundation to the authorities responsible for setting financial disclosure requirements by public companies. In organizing the upcoming roundtable, the Foundation acknowledges the need to create a mechanism for interaction between securities authorities and the IASCF that approximates the historical relationship between securities authorities and national standard setters. This, in turn, will enable securities authorities that allow or mandate the use of IFRS to discharge their mandates relating to investor protection, market integrity and capital formation effectively.

 

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EU bank regulators report on valuing instruments in illiquid markets

19 Jun 2008

The Committee of European Banking Supervisors (CEBS) has published a report on issues relating to the valuation of complex and illiquid financial instruments.

The report puts forward a set of issues that should be addressed by institutions and accounting and auditing standard setters in order to improve the reliability of the values ascribed to these instruments.

The analysis focuses on the following valuation related aspects:

  • challenges for the valuation of complex financial instruments or instruments for which no active markets exist;
  • transparency on valuation practices and methodologies as well as related uncertainty; and
  • auditing of fair value estimates.
Click for:
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iGAAP 2008 Financial Instruments: IAS 32, IAS 39 and IFRS 7

19 Jun 2008

Deloitte & Touche LLP (United Kingdom) has developed iGAAP 2008 Financial Instruments: IAS 32, IAS 39 and IFRS 7 Explained (Fourth Edition), which has been published by LexisNexis.

This publication is the authoritative guide for financial instruments accounting under IFRSs. The 2008 edition expands last year's edition with further interpretations, examples, discussions from the IASB and the IFRIC, and updates on comparisons of IFRSs with US GAAP for financial instruments. It also includes extracts from 2007 annual reports illustrating IFRS 7 Financial Instruments Disclosures. iGAAP 2008 Financial Instruments: IAS 32, IAS 39 and IFRS 7 Explained (Fourth Edition) (851 pages, June 2008) can be purchased through www.lexisnexis.co.uk/deloitte.
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Notes from the second day of the June 2008 IASB meeting

18 Jun 2008

The IASB held its June 2008 meeting at its offices, 30 Cannon Street, London, on 17-20 June 2008.

Click here to go to the Preliminary and Unofficial Notes Taken by Deloitte Observers at the meeting.

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AICPA calls for 3 to 5 year timeline for IFRSs in US

18 Jun 2008

Barry C Melancon, president and CEO of the American Institute of Certified Public Accountants, speaking at a forum of accounting and finance authorities on international accounting, called for a reasonable and clear-cut time frame of three to five years for the US accounting profession to adopt International Financial Reporting Standards.

Click for AICPA News Release (PDF 48k).

 

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Notes from the first day of the June 2008 IASB meeting

18 Jun 2008

The IASB held its June 2008 meeting at its offices, 30 Cannon Street, London, on 17-20 June 2008.

Click here to go to the Preliminary and Unofficial Notes Taken by Deloitte Observers at the meeting.

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EC 'effect studies' on IFRIC 14 and IAS 1

18 Jun 2008

The European Commission has published 'effect studies' of the impact of two IASB pronouncements awaiting endorsement for use in Europe:

The Commission's effect studies relied, in turn, on effect studies undertaken by EFRAG. The Commission Services (EC staff) concluded that both pronouncements will have positive cost-benefits effects and that they should, therefore, be endorsed in the EU without delay.

 

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