Exposure Draft published on Annual Improvements to IFRSs - 12/07/2012


Welcome to this edition of the IFRS Newsletter of Deloitte Luxembourg prepared by the Deloitte Luxembourg IFRS Centre of Excellence with contributions from the professionals of our firm.

So far our newsletter includes the summaries of new and revised Standards and Interpretations, Exposure Drafts and discussion documents, including summaries of the documents and consideration of the principal amendments/proposals, this edition also includes articles which have an actuality in Luxembourg, and which present topics tailored to the Luxembourg economic environment.

In this issue:

Recent change in the organisation of our IFRS Centre of Excellence in Luxembourg

We are very pleased to announce that three excellent persons within our firm become new team members of our IFRS Centre of Excellence in Luxembourg.

Exposure Draft published on Annual Improvements to IFRSs 2010 - 2012 Cycle

The International Accounting Standards Board (IASB) has published on 3 May 2012, an exposure draft (ED) of proposed amendments to eleven IFRSs under its annual improvements project. The IASB uses the annual improvements project to make necessary, but non-urgent, amendments to IFRSs that will not be included as part of another major project.

Amendment issued on IFRS 1 regarding government loans

On 12 March 2012, the IASB has issued Government Loans (Amendments to IFRS 1). This amendment addresses how a first-time adopter would account for a government loan with a below-market rate of interest when transitioning to IFRSs.

Impacts of revised Exposure Draft on Revenue from Contracts with Customers on the insurance industry

This newsletter highlights aspects of the recently issued revised exposure draft Revenue from Contracts with Customers, the interaction of the proposals with the insurance project and the potential effects of the proposals on the insurance industry.

Modernisation of Accounting Law in Luxembourg

Draft Law 6376 issued in January 2012 reforms the Commission des normes comptables (CNC – Accounting Standards Commission) and amending various provisions relating to companies’ accounting and annual accounts and to the consolidated accounts of certain types of companies.

Final Endorsement Advice on new IFRS on business combinations issued by EFRAG

Based on the European requirements on the application of international accounting standards, EFRAG provided on 30 March 2012 its opinion on IFRS 10 Consolidated Financial Statements, IFRS 11 Joint Arrangements, IFRS 12 Disclosure of Interests in Other Entities, IAS 27 Separate Financial Statements and IAS 28 Investments in Associates and Joint Ventures. In particular, EFRAG recommends the mandatory effective date of the Standards to be 1 January 2014 with early adoption permitted.

IASB/FASB discussions on the application of an expected credit loss model to trade receivables

In April 2012, the boards discussed whether an expected credit loss model should be applied to trade receivables. The boards tentatively agreed that an expected loss model should be applied to trade receivables that do not have a significant financing component (as defined in the Exposure draft on Revenue from Contracts with Customers), including a practical expedient that a provision matrix can be used.

IASB and FASB agree on lease accounting approach

In the framework of the convergence between IFRS and US GAAP standards, the IASB and the FASB agreed on the approach for accounting for leases expenses. This joint IASB-FASB project seeks to improve the accounting for leases by developing an approach that is more consistent with the conceptual framework definitions of assets and liabilities.The Boards intend to issue a re-exposure draft in 2012 which will result in a replacement of IAS 17 Leases expected in 2013.

All the topics mentioned above are detailed in the attached PDF.

For additional information on these topics and on services we could provide to your entity, contact us at luifrsdesk@deloitte.lu. Deloitte has a range of tools and publications to assist in implementing and reporting under IFRS.

We hope you find this issue useful. As always, we value and welcome your comments and feedback.