News

SEC (US Securities and Exchange Commission) (dark gray) Image

US SEC appoints financial reporting advisory committee

01 Aug 2007

The US Securities and Exchange Commission has announced the appointment of the members of the SEC Advisory Committee on Improvements to Financial Reporting.

The advisory committee, established last month, will hold its first meeting on 2 August 2007 at the SEC's Washington DC headquarters. Click for Press Release (PDF 51k). The committee will study the US financial reporting system with the goals of reducing unnecessary complexity and making information more useful and understandable for investors. The advisory committee will focus on the following areas:
  • the current approach to setting financial accounting and reporting standards;
  • the current process of regulating compliance by registrants and financial professionals with accounting and reporting standards;
  • the current systems for delivering financial information to investors and accessing that information;
  • other environmental factors that drive unnecessary complexity and reduce transparency to investors;
  • whether there are current accounting and reporting standards that impose costs that outweigh the resulting benefits, and
  • whether this cost-benefit analysis is likely to be impacted by the growing use of international accounting standards.
Members of the new advisory committee include J. Michael Cook, retired Chairman and Chief Executive Officer of Deloitte & Touche LLP, and James H. Quigley, Chief Executive Officer, Deloitte Touche Tohmatsu, New York, NY. Phil Laskawy, Chairman of the Trustees of the International Accounting Standards Committee Foundation, which oversees the IASB, is an observer.

 

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Update on financial reporting in Cuba

01 Aug 2007

We have added a Country Page for Cuba describing the background and current status of the accounting framework in Cuba.

In January 2006, the Cuban government issued, through the Cuban Accounting Standards Committee (Comité de Normas Cubanas de Contabilidad), a set of Cuban Financial Information Standards (Normas Cubanas de Informacion Financiera, or NCIF).

The Normas Cubanas de Informacion Financiera are composed of eight sections:

  1. Background and general information, including a preface to the NCIF, the purpose of the Cuban Accounting Standard Committee, and the conceptual framework related to the preparation and presentation of the financial statements.
  2. Cuban Accounting Standards, including measurement and disclosure standards, general standards, specific standards, and accounting interpretations.
  3. Standards relating to disclosure of forecasted activity (budget).
  4. Account descriptions.
  5. Deals with governmental accounting.
  6. Cuban standards for cost accounting.
  7. Glossary.
The measurement and disclosure standards and general standards in Section 2 are generally harmonised with International Financial Reporting Standards. The specific standards in Section 2 address economic issues not covered by the general standards that are unique to the local economic activity. Click here for Country Page for Cuba and Links to Other Jurisdiction Pages on IAS Plus. We have updated our Table Summarising Use of IFRSs.

 

IFRS Foundation (blue) Image

IASCF seeks members for two XBRL committees

31 Jul 2007

The Trustees of the IASC Foundation have invited applications for membership of two committees relating to the Foundation's work on XBRL – an XBRL Advisory Council (XAC) and an XBRL Quality Review Team (XQRT):

  • The XAC will provide strategic advice to the Trustees and the Foundation's London-based XBRL team on the future development and adoption of the XBRL Taxonomy for International Financial Reporting Standards (IFRSs). It will comprise ten members who should broadly reflect the diverse areas and professional interests affected by XBRL adoption and the implementation of IFRS taxonomies.
  • The XQRT will review the developed taxonomies and offer strategic advice and practical recommendations on the quality of the IFRS taxonomy.
XBRL (Extensible Business Reporting Language) is an XML-based language that is developed specifically for the automation of business information requirements, such as the preparation, sharing, and analysis of financial reports, statements, and audit schedules. The IASC Foundation has developed a high quality XBRL 'taxonomy' for IFRSs (in effect, a dictionary of data tags that explains what each tagged element is and how it should be treated under IFRSs) that will be maintained in line with the annual Bound Volume of IFRSs. Click for Press Release (PDF 24k).

 

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Updated background page on financial reporting in Hong Kong

31 Jul 2007

We have updated our comprehensive page of Background Information on Financial Reporting in Hong Kong.

On this page you can find information about mandatory and other sources of GAAP in Hong Kong, the Companies Ordinance, the Securities and Futures Commission, stock exchange requirements, requirements for banks and insurance companies, income tax requirements, and the Hong Kong Institute of CPAs.
Click for our Hong Kong jurisdiction page.

 

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New AICPA standard on valuation

30 Jul 2007

The Consulting Services Executive Committee of the American Institute of Certified Public Accountants (AICPA) announced today the release of a new professional standard on valuation services, Statement on Standards for Valuation Services No. 1 (SSVS No. 1) Valuation of a Business, Business Ownership Interest, Security, or Intangible Asset.

The 76-page standard provides guidelines to CPAs for developing estimates of value and reporting on the results. It applies to AICPA members who perform an engagement that estimates the value of a business, business interest, security, or intangible asset for a wide range of purposes, including financial reporting. SSVS No. 1 is effective for engagements accepted on or after 1 January 2008.

SSVS No. 1 specifies two types of engagements: valuation engagements and calculation engagements. For valuation engagements, two types of written reports are permitted – detailed reports and summary reports. For calculation engagements, one type of written report is permitted – calculation reports. Oral reports are allowed for all engagements under the standard.
Click for Press Release (PDF 62k).

 

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

IFRIC agenda project pages updated

30 Jul 2007

We have updated the following IFRIC agenda project pages to reflect discussions and decisions at IFRIC's meeting in July 2007.

Deloitte Comment Letter Image

We support enlarging IFRIC to 14 members

28 Jul 2007

Deloitte has submitted a Letter of Comment to the Trustees of the IASC Foundation supporting their Proposal to increase the size of the International Financial Reporting Interpretations Committee from 12 to 14 voting members.

In doing so, we agree with the Trustees that the IFRIC would benefit from a greater diversity of members with practical experience in the application of IFRSs and analysis of financial reports using IFRSs. Our letter notes our concern that enlarging the IFRIC may have some adverse effects on its work. However we are aware that the IFRIC has more staff resources than it had historically and note that the IASCF's 2008 budget reiterates the Trustees' commitment to ensuring that the IFRIC 'has the capacity to respond to interpretation issues in an efficient manner'. Consequently, we are willing to accept the Trustees' assessment that, within reason, any effect on the IFRIC's efficiency should be outweighed by the benefit of greater participation by preparers and users of IFRS financial reports.
Click to view our Letter of Comment to the Trustees of the IASC Foundation (PDF 108k). Click here for links to all Past Deloitte Comment Letters to IASC, IASB, SIC, IFRIC, and the IASCF.

 

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Three new jurisdiction pages added

27 Jul 2007

We have added pages for Albania, Botswana, and Jordan describing each jurisdiction's financial reporting framework and explaining the extent to which IFRSs are used.

The information has been extracted from Reports on Standards and Compliance (ROSC) – Accounting and Auditing prepared by the World Bank. You will find links to all of our pages of information by jurisdiction Here.

 

PCAOB (US Public Company Accounting Oversight Board) (dark gray) Image

SEC approves PCAOB's new internal control audit standard

26 Jul 2007

The US Securities and Exchange Commission has approved Auditing Standard No. 5 An Audit of Internal Control Over Financial Reporting That Is Integrated with An Audit of Financial Statements.

AS 5 was adopted by the Public Company Accounting Oversight Board in May 2007. AS 5 replaces the PCAOB's previous internal control auditing standard, Auditing Standard No. 2. With SEC approval in place, audit firms registered with the PCAOB are required to use the new standard for all audits of internal control no later than for fiscal years ending on or after 15 November 2007. The PCAOB has announced that it intends to undertake several initiatives to support the successful implementation of the new standard. Click for:

 

IVSC (International Valuation Standards Council) (lt green) Image

Views sought on format of International Valuation Standards

26 Jul 2007

The International Valuation Standards Committee (IVSC) has issued for comment the report of a group brought together to undertake a critical review of the structure and format of International Valuation Standards (IVS).

Concurrently the IVSC is engaged in a project to modernise its own organisational structure (see our News Story of 19 April 2007). The report on IVSs, titled Review of the International Valuation Standards (PDF 128k), sets out the review group's views on the format of an 'ideal' set of international valuation standards. The report raises a number of specific questions on which views are sought (see below). The comment deadline is 31 October 2007.

Issues on which IVSC is seeking comment

Question 1
The Group recommends that the IVS be principles-based and interprets this as meaning that the standards should contain the requirements to be complied with together with essential explanatory material to make the requirements understandable by an experienced professional valuer. Do you agree with this recommendation?

Question 2
Valuations are performed in a variety of contexts – from financial reporting, lending purposes, business acquisitions to tax and litigation services. The Group believes that the same concepts, definitions and principles apply to all valuations whatever their purpose although there may be differences in their application and reporting. Do you agree with the Group?

Question 3
The Group believes that the primary role of the IVS is as a body of international standards in their own right to meet the needs of the global market place and to provide a basis for the convergence of national standards to international valuation standards. It therefore recommends that the IVS should not cover areas that are still subject to significant national regulation, for example valuation for taxation purposes.... Do you agree with the Group?

Question 4
The Group acknowledges that different jurisdictions will take different routes to the same destination of a single set of global valuation standards. While this is understandable, the Group recommends that the IVSC should seek to introduce a similar requirement to that of the International Financial Reporting Standards; i.e. that valuation reports should not be said to comply with IVS unless they comply with all the requirements of IVS. Do you agree that the IVSC should introduce such a requirement?

Question 5
 Do you agree that the proposed structure for the IVS will provide for clear navigation through the standards to determine the valuation and reporting bases for a particular asset/liability and purpose?

Question 6
 A number of specific questions have been raised by the Group on the proposed structure for the IVS on which comment is sought:

  • 6(a) The forthcoming eighth edition of IVS will define 'fair value' in International Valuation Standard 2 Valuation Bases other than Market Value. Do you consider that this is sufficient or should the IVSC develop a Standard on Fair Value as a separate basis of valuation?
  • 6(b) The proposed structure for the IVS discusses the application of GAVP and the basis of valuation to specific asset and liability types before considering their application to the specific purposes of valuation. Some members of the Group believed that this order should be reversed. What are your views?
  • 6(c) A number of topics have been proposed to be covered by additional more detailed guidance notes. Do you agree with the list? Are there other issues that should be considered?
Questions 7 and 8 [These relate to the format of IVSs and recommendations for clarity of the standards.]

 

 

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