Monthly roundup - June 2012
Staying on top of developments
June 2012 edition
Issued 04 July 2012
In this edition:
- Monthly highlights
- New pronouncements
- Standard setter meetings
- New Deloitte publications
- Other developments
Preparing for the June reporting season
For those preparing for the June reporting season, we have released the following tools that may be of assistance to you
The Australian Securities & Investment Commission (ASIC) has also released the results of its reviews of financial reports for years and half-years ended 31 December 2011, and announced its areas of focus for 30 June 2012 financial reports. ASIC’s future focus areas will include
- revenue recognition and expense deferral policies;
- asset values and the disclosure of associated assumptions;
- off-balance sheet arrangements; and
- going concern assessments.
For the entities disclosing non-IFRS information in their financial reports, director’s reports and market releases, it would be worthwhile to look at the ASIC Regulatory Guide 230 Disclosing non-IFRS financial information (PDF 383kb). ASIC intends to ensure proper balanced use of non-IFRS information, and will be monitoring financial reports and releases in this regard (Deloitte Accounting alert).
Lease accounting: IASB and FASB agree on the approach
During the June 2012 IASB-FASB meeting, the boards reached an agreement on an approach to accounting for lease expense as part of their project to change the lease accounting guidance under IFRSs and U.S. GAAP. The lease expense recognition pattern as proposed in the 2010 exposure draft (ED/2010/9) had received a lot of comments that the pattern was not fully reflective of the substance of the different lease arrangements, and the respondents had urged the boards to re-deliberate on this issue.
Under the agreed-upon approach, leases over one year in length would be included on the balance sheet. In regards to the classification and pattern of expense recognition in the income statement, the boards tentatively decided there should be two different types of leases for lessee accounting (excluding short-term leases) – an accelerated expense approach and a straight-line approach. The underlying principle in distinguishing between the types of leases would be based on whether the lessee acquires and consumes more than an insignificant portion of the underlying asset over the lease term. For further details, refer our Lease project insights.
It is to be noted that these are preliminary decisions, and the boards plan to release a joint exposure draft in the fourth quarter of this year.
(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 June 2012 financial reporting cycle summary.)
International Accounting Standards Board (IASB)
|Pronouncement||Key dates||More information|
Consolidated Financial Statements, Joint Arrangements and Disclosure of Interests in Other Entities: Transition Guidance (Amendments to IFRS 10, IFRS 11 and IFRS 12)*
Clarifies the transition guidance in IFRS 10 Consolidated Financial Statements
Provides transition relief in IFRS 10, IFRS 11 Joint Arrangements and IFRS 12 Disclosure of Interests in Other Entities, limiting the requirement to provide adjusted comparative information to only the preceding comparative period
Removes the requirement to present comparative information in relation to unconsolidated structured entities for periods before IFRS 12 is first applied.
|Effective for annual periods beginning on or after 1 January 2013|
*Equivalent pronouncement not yet issued by the AASB
Australian Accounting Standards Board (AASB)
|Pronouncement||Key dates||More information|
No new significant pronouncements were issued by the AASB in June 2012.
(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)
|AASB regular meeting
6-7 June 2012
Key issues discussed include:
|AASB alert (PDF 347kb)
|IASB regular meeting
12-15 June 2012
Topics discussed were as follows (click on the links for direct access to the Deloitte observer notes for that topic):
|Deloitte Observer notes
IASB update (PDF 46kb)
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, IFRS in Focus Newsletters, Webcasts, and Podcasts)
- IFRS on Point — IFRS Accounting Developments and Information: May 2012 (PDF 75kb) highlights the month’s important IFRS developments and information
- IASB Project Insights provide a quick overview of the current status of the key projects of the IASB. New updates posted in June 2012 include: Leases (PDF 166kb), Consolidation: Investment entities (PDF 86kb), Financial Instruments: Classification and Measurement (PDF 72kb) and Insurance Contracts (PDF 201kb)
- IFRS in Focus — IFRS Interpretations Committee issues Draft Interpretation on put options written on non-controlling interests (PDF 87kb)
- IFRS in Focus — IFRS Interpretations Committee issues Draft Interpretation on the accounting for levies (PDF 85kb).
- Deloitte comment letter (PDF 37kb) responding to the European Financial Reporting Advisory Group's (EFRAG's) and the UK Accounting Standards Board's (ASB's) Discussion Paper, Improving the Financial Reporting of Income Tax.
Other publications of interest
- Making investment grade — The future of corporate reporting (PDF 1.89MB) provides a comprehensive look at sustainability and integrated reporting through the eyes of thought leaders, key industry players and others (IAS Plus article).
Deloitte Webcasts and podcasts
- Insurance webcast 30 'Direction is getting clearer but major concerns remain on the table' (link to IAS Plus) - reports on the insurance project joint meetings between the IASB and the FASB during June 2012, providing a summary of progress and key 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 June 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)
- The Australian Financial Reporting Council (FRC) has released a report 'Managing Complexity in Financial Reporting' (PDF 366kb), that explores the issue of complexity in financial reporting from an Australian perspective.
International Accounting Standards Board
- The International Accounting Standards Board (IASB) has released a revised work plan (8th June 2012) updating the expected timing of various due process steps in its projects.
External Webcasts and podcasts
- May 2012 IFRIC meeting podcast (mp3): provides an overview of the issues discussed in the May 2012 IFRIC meeting. The topics covered include IAS 39 Financial Instruments: Recognition and Measurement – Accounting for different aspects of restructuring Greek Government Bonds, IAS 37 Provisions, Contingent Liabilities and Contingent Assets – Determining when to recognise a liability for levies and IAS 32 Financial Instruments: Presentation – Put options written over non-controlling interests
- Insurance contracts (mp3): IASB podcast on the current state of debate in the IASB/FASB joint project on insurance contracts, and in particular focuses on measurement of 'earned premiums'.
Other global news
- The European Financial Reporting Advisory Group (EFRAG) has issued a supplementary study on the impact of IFRS 10 on the consolidation of special purpose entities (SPEs) (IAS Plus article)
- The International Integrated Reporting Council (IIRC) has released a summary of feedback received on its 2011 Discussion Paper 'Towards Integrated Reporting—Communicating Value in the 21st Century' and committed to publishing its 'Integrated Reporting Framework' by the end of 2013 (IAS Plus article)
- The International Public Sector Accounting Standards Board (IPSASB) has released a Consultation Paper 'Public Sector Combinations' that aims to present a principles-based approach to developing guidance for public sector entities accounting for such combinations (IAS Plus article)
- The importance of sustainability reporting acknowledged in the recent global meetings - United Nations Conference on Sustainable Development (Rio+20) and The Group of 20 (G20) (IAS Plus article)
- The Group of 20 (G20) reaffirmed its support for the convergence to a single set of high-quality accounting standards and sustainability reporting (IAS Plus article)
- The UK Financial Reporting Council (FRC) has issued a further 'Update to Directors of Listed Companies: Responding to heightened country and currency risk in interim financial reports' (IAS Plus article).