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Monthly roundup - March 2011

Staying on top of developments

Author: Deepesh Malik, Frank Betkowski and Debbie Hankey, Accounting Technical Group

March 2011 edition
Issued 01 April 2011

In this edition:

Monthly highlights

IASB updates work plan

The International Accounting Standards Board (IASB) has released an updated work plan, revealing delays compared to the previous plans:

  • Financial instruments, leases, revenue recognition and insurance contracts – whilst a ‘ballot’ draft of the standards for these projects is expected before the end of June this year, the final standards are only likely to be published early in the second half of the year (possibly during the June reporting season)
  • Consolidation, joint ventures, post-employment benefits, financial statement presentation (other comprehensive income) – final standards on these topics are expected in April
  • New exposure drafts are expected before the end of June on investment companies and annual improvements, together with consultation on the IASB's agenda.
ASIC consults on ‘non-conforming financial information’

ASIC has released for consultation a draft regulatory guide on use of non-conforming financial information. The paper, Disclosing financial information other than in accordance with accounting standards (PDF 297kb), includes ASIC’s proposals in relation to financial reports, information related to financial reports and transaction documents (including pro-forma information).

The proposals would require that where non-conforming financial information is disclosed in documents accompanying the financial report (e.g. the directors’ report), market announcements, presentations to investors and briefings to analysts, accompanying disclosure should include why the information is required, the basis of its preparation, and reconciliations to statutory information. The proposals also discuss additional information in financial reports themselves, such as additional line items and subtotals.

Feedback on the proposals is requested by 12 May 2011. The finalised Regulatory Guide is expected to be issued by 30 June 2011. Accordingly, entities providing additional financial information should carefully monitor developments and be prepared to adopt the new requirements if necessary.

ASIC has also issued new regulatory guides on aimed at improving disclosure and decision-making in related party transactions and enhancing the reliability and quality of expert reports.

IASB asks Scotland and New Zealand standard setters to look at IFRS disclosures

In response to a request from the IASB, the Institute of Chartered Accountants of Scotland (ICAS) and the New Zealand Institute of Chartered Accountants (NZICA) have launched a project with the aim of reducing the volume of disclosure requirements in IFRSs.

Whilst the project will not consider disclosures arising under the IASB’s existing project, it may offer the possibility of some disclosure relief under other standards.

The project is expected to report to the IASB by 30 June 2011. More information can be found in this IAS Plus article.

From this month, we’re moving to a new approach to bringing you the latest developments in financial reporting. Our email coverage of developments will be streamlined to cover only significant developments, with all developments for the month summarised in our Monthly Roundup publication. You can keep up-to-date with the latest developments on our IAS Plus website and at www.deloitte.com/au/Accounting, both of which are updated as events occur.


New pronouncements

(A listing of new accounting standards, interpretations, exposure drafts, discussion papers and similar documents issued during the month by the AASB and IASB/IFRIC, along with other IFRS-related documents by other bodies that may be of interest and related links to Deloitte publications and alerts. See also our What’s new in the December 2010 financial reporting cycle summary.)

Australian Accounting Standards Board (AASB)
Pronouncement Key dates More information

IFRS Practice Statement Management Commentary

A broad, non-binding framework for the presentation of narrative reporting to accompany financial statements prepared in accordance with IFRSs.

Management commentary is a narrative report that accompanies but is presented outside of the financial statements, setting out management's explanation of the enterprise's financial condition, changes in financial condition, results of operations, and causes of changes in material line items.

Note: The AASB has made this IFRS Practice Statement available to Australian constituents as guidance for entities to consider when presenting narrative reporting to accompany general purpose financial statements prepared in accordance with Australian Accounting Standards. The AASB acknowledges other guidance on management commentary already exists in Australia, and that existing guidance might take precedence over the IFRS Practice Statement. Entities are still required to comply with all applicable laws and regulations.

Application is not mandatory

An entity may apply the IFRS Practice Statement to management commentary presented prospectively from 8 December 2010

IFRS Practice Statement Management Commentary (link to AASB website)

AASB press release

IFRS in Focus newsletter (PDF 91kb)

IAS Plus summary of the Statement

Tier 2 Supplement to ED 208 Hedge Accounting

Sets out the disclosures proposed in AASB ED 208 (which incorporates IASB ED/2010/13 Hedge Accounting) from which it is proposed entities applying Tier 2 reporting requirements should be exempt.

The supplement is also accompanied by an analysis of the proposed disclosure requirements.

Comments are due by 2 June 2011

Tier 2 Supplement to ED 208 (PDF 46kb)

Analysis (PDF 35kb)

IFRS in focus newsletter (PDF 86kb)

ED 211 Proposed Amendments to AASB 1049 Whole of Government and General Government Sector Financial Reporting

ED 211 arises from the AASB’s post-implementation review of AASB 1049 Whole of Government and General Government Sector Financial Reporting, and has regard to the experiences, at an operational level, of each jurisdiction in applying AASB 1049 to its 2008-09 or earlier financial year. In developing the proposals in this ED, the Board noted that the post-implementation review work to date has not identified any major flaws in the Standard. However, the Board identified a number of aspects of AASB 1049 where improvements could be made, including clarification of some of the requirements.

One of the main proposals in ED 211 aims to provide relief from the current requirement to adopt the latest version of the Australian Bureau of Statistics Government Finance Statistics Manual (the ABS GFS Manual).

Comments relating to the relief from adopting the latest version of the ABS GFS Manual (and related disclosures) are due by 6 April 2011.

Comments on the other proposals are due by 6 June 2011.

ED 211 (PDF 120kb)

Tier 2 Supplement to ED 210 Financial Instruments: Impairment 

It sets out the manner in which the AASB intends to apply its reduced disclosure regime principles to the range of disclosures proposed in ED 210.

The supplement is also accompanied by an analysis which compares the proposals with the existing disclosures on this topic in the IFRS for SME standard.

Open to comment until 27 June 2011

Tier 2 Supplement to ED 210 (PDF 88kb)

Comparative analysis (PDF 95kb)

IFRS in focus newsletter (PDF 75kb)


International Accounting Standards Board (IASB)
Pronouncement Key dates More information

Editorial Corrections to IFRSs (March 2011)*

Makes editorial corrections and changes to IFRS 9 Financial Instruments (issued October 2010), Bound Volume (Blue Book) 2011 and Bound Volume (Red Book) 2011.

As minor editorial corrections, these changes are effectively immediately applicable under IFRS

Editorial Corrections to IFRSs (PDF 75kb)

IAS Plus article

* Equivalent pronouncement not yet issued by the AASB

Standard setter meetings

(A listing of meetings of various standard setters during the month or where documents were issued during the month in respect of the previous month’s meetings, with links to our analysis, agenda papers and so on)

Meeting Highlights More information
IASB meeting
1-2 March 2011

Topics discussed were as follows (click on the links for direct access to the Deloitte observer notes for that topic):

Tuesday, 1 March 2011

Wednesday, 2 March 2011

Detailed Deloitte Observer notes
IFRIC meeting
10-11 March 2011

Some of the major issues discussed are listed below (click on the links for direct access to the Deloitte observer notes for that topic):

Detailed Deloitte Observer notes

IFRIC Review: March 2011 (PDF 74kb)

Australian meeting summary

IASB meeting
14-18 March 2011

Topics discussed were as follows (click on the links for direct access to the Deloitte observer notes for that topic):

Monday, 14 March 2011

Tuesday, 15 March 2011

Wednesday, 16 March 2011

Detailed Deloitte Observer notes
AASB meeting
16-17 March 2011

Part of the meeting was a joint session with the New Zealand Financial Reporting Standards Board (FRSB). Highlights include:

  • An intention to issue AU-NZ convergence standards by 30 June 2011
  • The restructuring of NZ standard setting arrangements
  • Consideration of not-for-profit modifications to forthcoming IASB standards on revenue, consolidation and fair value measurement
  • A report on the AASB’s Differential Reporting Project and confirmation of the existing process for making Reduced Disclosure Requirements (RDR) amendments to IASB proposals, including using ‘supplements’ in some cases
  • Finalisation of an exposure draft on GAAP/GFS harmonisation
  • Updates on various projects and AASB/FRSB comment letters
Action alert (PDF 85kb)
IASB meeting
21-23 March 2011

Topics discussed were as follows (click on the links for direct access to the Deloitte observer notes for that topic):

Monday, 21 March 2011

Tuesday, 22 March 2011

Wednesday, 23 March 2011

Detailed Deloitte Observer notes

 

New Deloitte publications

(Key IFRS-related and other publications issued by Deloitte during the month, not covered elsewhere. You can find full details and back issues of our various publications by following these links: Accounting alerts, IAS Plus publications and IFRS in Focus Newsletters)

IFRS publications
Other publications of interest
Deloitte comment letters

Other developments

(A brief listing of other financial reporting developments during the month. A full summary of all IFRS-related developments can be found in our March historical summary on IAS Plus. You can also subscribe to our Deloitte IAS Plus RSS feed to be kept informed of developments as they happen)

Australian-specific topics
  • ASIC has released for consultation a draft regulatory guide on use of non-conforming financial information (press release, consultation document [PDF 297kb])
  • ASIC has updated guidance that is aimed at enhancing the reliability and quality of expert reports that are commissioned to assist security holders and others to make major decisions, including on takeover bids, schemes of arrangement and related party transactions (press release)
  • ASIC has released new guidance that is aimed at bringing a substantial improvement in disclosure by public companies and registered managed investment schemes (MISs) about related party transactions (press release)
  • European Commission recognises ASIC’s auditor oversight function (press release)
International Accounting Standards Board
  • The IASB and FASB have tentatively announced an additional joint meeting to be held on 5-6 April 2011. Confirmation of this additional meeting and the agenda will be announced closer to the tentative meeting date
  • IFRS Foundation’s conference in Europe to be held in Switzerland on Tuesday 5 July 2011 and Wednesday 6 July 2011 (IAS plus article)
  • Conclusions of the February 2011 Trustees' meeting (PDF 37 kb) have been released
  • The IASB and FASB plan to host public round-table meetings for the financial asset and financial liability offsetting project in May 2011, as a means of gaining feedback from a broad spectrum of interested parties (announcement and details)
  • The IFRS Foundation is establishing a task force to examine detailed XBRL (eXtensible Business Reporting Language) tagging in IFRS financial statements, and is looking to work directly with preparers from listed companies from different industries and regions (press release)
  • The IASB’s latest work plan has been released with a revised timetable for final standards
  • In response to a request from the International Accounting Standards Board (IASB), the Institute of Chartered Accountants of Scotland (ICAS) and the New Zealand Institute of Chartered Accountants (NZICA) have launched a project with the aim of reducing the volume of disclosure requirements in IFRSs (IAS Plus article)
  • The IASB has published a transcript of a speech given by Sir David Tweedie to a US Chamber of Commerce Event. The speech, 'The Future of Financial Reporting: Convergence or Not?', covers a wide range of topics including the case for US convergence with IFRS, the structure and governance of the IASB and its governing bodies (compared and contrasted with the FASB), how the US might implement IFRS (mentioning the approach taken in Australia), the difficulties of moving from a rule based to principle based accounting regime, progress with key projects, and other topics (transcript)
Other global news
  • New Zealand has indicated a move towards two sets of accounting standards – one set of accounting standards would be applied by entities with a for-profit objective, and the other would be applied by 'public benefit entities' (PBEs). (IAS plus article, ASRB notice)
  • IFAC has released the second edition of its Sustainability Framework, which incorporates integrated reporting (press release)

Related links

Related links

  • Monthly roundup - October 2012
    Financial reporting developments during October 2012. Monthly highlights discuss the recently issued investment entity consolidation amendments by the IASB; and the developments in the IASB lease project
  • Monthly roundup - July 2012
    Financial reporting developments during July 2012. Monthly highlights discuss the financial reporting implications of tax ruling on frankable dividends, IASB revised work plan and Transitional relief and guidance on IFRS 10, IFRS 11, and IFRS 12
  • Monthly roundup - November 2011
    Financial reporting developments during November 2011. Monthly highlight is the discussion on the revised exposure draft on revenue
  • Monthly roundup - July 2013
    Financial reporting developments during July 2013. Monthly highlights discuss the ASIC areas of focus for July 2013 reporting period.
  • Monthly roundup - June 2013
    Financial reporting developments during June 2013. Monthly highlights discuss the ASIC areas of focus for June 2013 reporting period.
  • Monthly roundup - March 2011
    Financial reporting developments during March 2011. Monthly highlight discusses the updated IASB work plan, ASIC's proposed guidance on additional financial information and a joint UK/NZ project to reduce disclosures under IFRS.
  • Monthly roundup - March 2009
  • Monthly roundup - November 2010
    Financial reporting developments during November 2010. Monthly highlight discusses resources available for the December reporting season and the IASB's updated work plan issued late in the month.
  • Monthly roundup - August 2010
    Summary of developments in financial reporting during August 2010. Monthly highlight discusses the possible impact of changes in the IASB and FASB chairs on global standard setting.
  • Monthly roundup - June 2010
    Summary of developments in financial reporting during June 2010. Monthly highlight discusses recent financial reporting reform.

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