IASB - Request for comment on FASB Financial Instruments Exposure Draft

On May 26, 2010, the US Financial Accounting Standards Board (FASB) released a proposed Accounting Standards Update that contains proposals for a new comprehensive standard on financial instruments. Under the FASB’s proposals, many financial assets and financial liabilities would be measured at fair value in the primary financial statements. This is different from the mixed measurement model that is used in IFRS 9 Financial Instruments for financial assets. The appendix to the FASB exposure draft contains a high level comparison of the boards’ respective approaches. The IASB is asking its constituents to submit comment letters on the FASB proposal. Because this project is part of the global convergence project, it is important for the FASB to receive feedback on the proposed model from the international community. (Read the IASB Web Announcement.)

IASB - IFRS Interpretations Committee Update

IFRS Interpretations Committee Update (known as IFRIC Update before March 31, 2010) is published as a convenience to the IASB’s constituents. All conclusions reported are tentative and may be changed or modified at future Interpretations Committee meetings. Decisions become final only after the Interpretations Committee has taken a formal vote on an Interpretation or Draft Interpretation, which is confirmed by the IASB. (Read the latest versions of IFRIC Update in either HTML or PDF document online.)

IASB - Updates for tentative decisions reached by the Board

Periodically, the International Accounting Standards Board (IASB) publishes a newsletter on its activities as a convenience to the IASB’s constituents. The reported conclusions are tentative and may be changed or modified at future meetings. (Read the latest versions of IASB Update in either HTML or PDF document online.)

IASB - User questionnaire for Fair Value Option

The International Accounting Standards Board (IASB) has produced a questionnaire for financial statement users on its May 2010 exposure draft “Fair Value Option for Financial Liabilities.” This questionnaire is targeted at analysts and forms part of a comprehensive program of outreach activities to IFRS constituents. Comments are requested from all parties, including users of financial statements, by July 16, 2010. (Read the IASB Web announcement and submit a response to the Exposure Draft User Questionnaire.)

US - Navigating IFRS: two-day executive training program

Deloitte (United States) will conduct two-day executive training programs covering key IFRS accounting principles and practical considerations related to IFRS implementation. Deloitte IFRS leaders will deliver course sessions that address important technical accounting changes, tax considerations, technology and systems questions. Dates and locations are: Chicago: June 22-23, 2010 and Houston: September 15-16, 2010. For more information, read the brochure Navigating IFRS: Two-day executive training program.

US - Potential System Impacts of an IFRS Conversion

As a company prepares to convert to International Financial Reporting Standards (IFRS), the impact to information technology (IT) and financial systems should be taken into consideration. Representatives from the company’s IT department should be involved throughout the planning process to evaluate how the proposed accounting changes will impact the financial systems (transactional or reporting). The impact can vary depending on a company’s existing structure and environment. This may include its IT and financial systems capability/integration, industry complexity, company size, relevance of business process/transaction, internal control structure, mergers & acquisitions process, and other attributes. For more information, read the AICPA white paper, Financial System Considerations in IFRS Conversion Projects, which explores IT implications of an IFRS conversion, implementation considerations and lessons learned from the European experience.

IASB - Fair value measurement of financial liabilities

The International Accounting Standards Board (IASB) has published for public comment its proposed changes to the accounting for financial liabilities. This proposal follows work already completed on the classification and measurement of financial assets (IFRS 9 Financial Instruments). The IASB is proposing limited changes to the accounting for liabilities, with changes to the fair value option. The proposals respond to the view expressed by many investors that volatility in profit or loss resulting from changes in the credit risk of liabilities that an entity chooses to measure at fair value is counter-intuitive and does not provide useful information. (Read the IASB Press Release.)

IASC Foundation - Trustees publish Second Part of the Constitution Review

The Trustees of the IASC Foundation have published a report on the changes to the Foundation’s Constitution made as a result of the second part of their 2008-2010 Constitution review. The report also describes how the Trustees responded to the comments received during their extensive consultations. (Read the IASB Web Announcement, listen to the podcast and download the report on Part 2 of the Constitution Review.)

IASB - Annual improvements to IFRS

The International Accounting Standards Board (IASB) has issued Improvements to IFRS - a collection of amendments to seven International Financial Reporting Standards (IFRS) - as its latest set of annual improvements. Unless otherwise specified, the amendments are effective for annual periods beginning on or after January 1, 2011, with earlier application permitted. (Read the IASB Press Release.)

UK - Where now for UK GAAP?

In February 2010, the comment period closed on the Accounting Standards Board’s initial proposals for fundamental reform of UK GAAP. A three-tier approach was envisaged. Publicly-accountable entities would follow International Financial Reporting Standards (IFRS); non-publicly accountable entities would be eligible to apply the IFRS for SMEs; and the Financial Reporting Standard for Smaller Entities would remain available to small entities. Over the summer, the board is expected to publish its final blueprint for this brave new world of IFRS-based financial reporting. What should be the guiding principles as it sets pen to paper in the next few months? (Read the article “Where now for UK GAAP?” at Accountancy Magazine online.)

Canada - Readiness for Transition to IFRS

Many executive CAs believe their companies are well positioned for Canada’s transition to International Financial Reporting Standards (IFRS) but some are still in the early stages of preparation, according to the latest CICA/RBC Business Monitor (Q1 2010). Of the respondents whose companies will need to adhere to IFRS, 79% indicated that it is very likely they will be ready for the changeover. Another 16% stated it is somewhat likely they will be ready. The move to IFRS is mandatory in 2011 for publicly-accountable enterprises. (Read the CICA Media Release.)

Canada - Interpreting the IFRS world

Under Canadian generally accepted accounting principles, the interpretations issued in the abstracts of the Emerging Issues Committee (EIC) of the Accounting Standards Board (AcSB) have been an essential part of Canada’s accounting standards. In the future, publicly accountable enterprises will be required to prepare financial statements using International Financial Reporting Standards (IFRS). To be effective, a single set of standards needs only one designated interpreter, and for IFRS that’s IFRIC. (Read the article “Interpreting the IFRS world” in the May 2010 issue of CAmagazine, also available as an online, interactive Digital Edition.)

Canada - Countdown IFRS transition newsletter by Deloitte

Deloitte Canada has published its Countdown IFRS transition newsletter for April 2010. It discusses practical issues Canadian companies are facing in IFRS transition and provides an update on recent IFRS events. Articles in this issue include: The Opening Act - our perspectives on the Opening IFRS Balance Sheet; The Real Deal - Practical application tips and examples from LightYear on the Opening IFRS Balance Sheet; and An update on international standard setting activities. (For previous issues of the newsletter, visit the Deloitte Canada website.)

IASC Foundation and IASB enhance investor participation

The Trustees of the International Accounting Standards Committee (IASC) Foundation and the International Accounting Standards Board (IASB) have launched a program to enhance investor participation in the development of International Financial Reporting Standards (IFRS). The program builds on actions recently taken to help ensure the IASB meets the needs of the investor community. In January 2009 the Trustees reconstituted the Standards Advisory Council to include representatives from eight leading investor organizations and established a special subgroup of these members. In January 2010 the Trustees changed the Constitution to identify investors as a target audience for financial information. (Read the IASB Press Release.) (Read the IASB Press Release.)

IASB - Audio recordings on Financial Instruments and Leases

The IASB Financial Instruments project team has received various queries relating to one particular issue in its recently published exposure draft Financial Instruments: Amortised Cost and Impairment. Some people questioned why the ED proposes that initial credit loss estimates are included in the effective interest rate calculation. An audio recording of a response to that question is now available on the project website accompanied by a short written explanation and a simple numerical example. A recording of questions and answers about the proposed Lease project is also available. The recording follows on from the Lease webcasts that were broadcast on March 31, 2010, and addresses frequently asked questions on the proposed Lease accounting model. (For more information, refer to the IASB web announcement.)

IASB and ASBJ meet to discuss convergence of IFRS in Japan

The International Accounting Standards Board (IASB) and the Accounting Standards Board of Japan (ASBJ) held their 11th meeting to review preparations for the convergence with IFRS in Japan. The meeting took place on April 27-28, 2010 in Tokyo. The IASB and the ASBJ have accelerated their work towards convergence of IFRS and Japanese generally accepted accounting principles by June 2011, as described by their Memorandum of Understanding (known as the Tokyo Agreement). This is consistent with requests by the Group of 20 Leaders (G20) to complete convergence of global accounting standards by this date. (Read the IASB Press Release.)

Canada - Developments in Canadian GAAP

On May 4, 2010, Canada's Accounting Standards Board (AcSB) hosted a a webinar called AcSB Update: Stay informed about developments in Canadian GAAP. The webinar highlighted current activities for each financial reporting framework in Canadian GAAP and identifed resources available to assist stakeholders during this period of transition. It covered:

• International Financial Reporting Standards, the new standards and interpretations to consider on transition;
• Accounting standards for private enterprises, how these standards will be maintained;
• Not-for-Profit Organizations, the exposure draft to develop standards for this sector; and
• Pension Plans, the standards now included in the Handbook and the proposal to expand their scope.

Financial statement preparers, advisors and users were provided with insights into the ongoing development of Canadian GAAP. The PowerPoint slides and the link to the CPD Quiz are available under the "Resources" tab at the bottom of the webinar page.

Canada - Conceptual Framework: The Reporting Entity

Canada's Accounting Standards Board (AcSB) has issued an Exposure Draft (ED) Conceptual Framework for Financial Reporting: The Reporting Entity. It corresponds with the International Accounting Standards Board (IASB) ED on this topic. Comments are requested by July 16, 2010.

Canada - AcSB Decision Summary April 9, 2010

Canada's Accounting Standards Board (AcSB) has issued a Decision Summary for its meeting on April 9, 2010. At the meeting, the AcSB addressed international activities regarding: Consolidation – Investment Company Exemption; Fair Value Measurement; and Financial Instruments – Replacement of IAS 39). It also discussed the User Advisory Council. (Decision summaries for other AcSB meetings are available online.)

IASB - Adopt, adapt, converge?

Many jurisdictions have cultural, legal or political obstacles to an immediate full adoption of IFRS. In light of those obstacles, some countries decide on strategies of continuous convergence with IFRS. The IASB respects the reasons why those jurisdictions reach that decision, and works with them to support their convergence process. However, the ultimate objective is to make full adoption of IFRS possible. As a result of the second Constitution Review in January 2010, the Trustees emphasized that convergence is not an objective in itself but is a means to achieve the adoption of IFRS. (Read the IASB feature article Adopt, adapt, converge?)

IASB - Call for interest to Public Companies listed in the US who file in IFRS

XBRL (eXtensible Business Reporting Language) is rapidly becoming the global standard for electronic financial reporting. The IASC Foundation has played an important role in encouraging the development of online financial reporting using XBRL. In December 2008, the US Securities and Exchange Commission (SEC) adopted rules that require all US-listed Foreign Private Issuers (FPIs) to submit their financial reports, including their periodic reports, in Interactive Data format, and specifically in XBRL. FPIs, which will be mandated to file with XBRL in IFRS from June 15, 2011, are invited to participate in a pilot initiative being coordinated by the IASC Foundation. The pilot will focus on FPI use of the IFRS Taxonomy 2010 to tag SEC filings in XBRL. (Read the Call for interest to Public Companies listed in the US who currently file financial reports with the US SEC in IFRS.)