Monthly Roundup - April 2011

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

April 2011 edition
Issued Monday, 2 May 2011

In this edition:

• Monthly highlights
• New pronouncements
• Standard setter meetings
• New Deloitte publications
• Other developments

Monthly highlights 

Updated resources for the June 2011 reporting season

We’ve recently made available the following resources for the June 2011 reporting season:

• What's new in financial reporting for June 2011 – a guide to new and revised accounting pronouncements and other financial reporting considerations for the June 2011 reporting season
• Model financial statements for 30 June 2011 – illustrative best practice disclosures for general purpose financial statements, incorporating recent changes in pronouncements.

IASB and FASB publish progress report on convergence, defer convergence timetable

The International Accounting Standards Board (IASB) and Financial Accounting Standards Board (FASB) have published a progress report (PDF 80kb) on improvements to International Financial Reporting Standards and US generally accepted accounting practices and their convergence. The report notes that the boards have:

• Completed five projects - the IASB will be issuing new standards on consolidation, joint ventures, and disclosures in May (near final drafts of these standards were made available to IASB subscribers during April)
• Given priority to the three remaining MoU projects and insurance accounting - the boards have made substantial progress on their projects on financial instruments, leases, revenue recognition, and insurance projects
• Extended the timetable on convergence projects - the convergence projects are now scheduled for completion in the second half of 2011.

In conjunction with the release of the progress report, a revised IASB work plan has also been made available. The work plan reveals ‘targets’ of completing the projects on financial instruments (with the exception of portfolio hedging) in the third quarter of 2011, with all other major projects (leases, revenue recognition and insurance) scheduled for completion by the fourth quarter of 2011. The IASB and FASB are also undertaking a survey on the effective dates of these pronouncements, which must be completed by Friday 6 May 2011.

Upcoming Dbriefs webcast on IFRS policy implications

An upcoming Dbriefs webcast will discuss the significant public policy implications of the move to a single set of global accounting standards.

The topics to be covered include:

• The effect that the forthcoming change in IASB leadership may have on the IASB
• The IFRS Foundation governance and strategy reviews
• Public policy debates taking place worldwide, including the SEC's consideration of IFRS for U.S. registrants.

The webcast is scheduled to be held on Wednesday, 11 May 2011, 9:00-10:00am London time (NSW/QLD/VIC/TAS 6:00-7:00pm, SA/NT 5:30-6:30pm, WA 4:00-5:00pm). Registration is available via the Dbriefs website.

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 June 2011 financial reporting cycle summary.)

International Accounting Standards Board (IASB)

* 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)

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

• What's new in financial reporting for June 2011 - a guide to new and revised accounting pronouncements and other financial reporting considerations for the June 2011 reporting season
• Model financial statements for 30 June 2011 – illustrative best practice disclosures for general purpose financial statements, incorporating recent changes in pronouncements.
• IFRS on Point - IFRS Accounting Developments and Information: March 2011 (PDF 80kb)
• Updated IASB Project Insights: Financial Instruments - Hedge Accounting (PDF 176kb), Financial Instruments - Impairment (PDF 202kb), Insurance contracts (PDF 110kb), Leases (PDF 124kb), Revenue Recognition (PDF 95kb)
• IFRS Industry Insights: The Revenue Recognition Project — An update for the telecommunications industry (PDF 75kb)
• IFRS Industry Insights: The Leases Project — An update for the energy and resources industry (PDF 94kb)
• IFRS Industry Insights: The Leases Project — An update for the manufacturing industry (PDF 98kb)
• IFRS Industry Insights: The Leases Project — An update for the shipping industry (PDF 70kb)
• Extracting Value Issue 11 (PDF 269kb) - an update on the IASB's leasing project for resources companies
• Q&A report IFRS: Important Developments (PDF 30kb): contains a summary of audience questions submitted during the recent Deloitte global financial reporting Dbriefs webcast, together with suggested answers
• iGAAP Newsletter Quarterly edition March 2011 (PDF 179kb) with focus on hedge accounting, Impairment of financial assets and UK GAAP roundup
• Insurance Accounting Newsletter — Issue 20, April 2011 (PDF 93kb) — this issue is titled "Project timetable extended by a few additional months" and provides a summary of the recent joint FASB/IASB meetings held to discuss the Insurance Contracts project.

Other publications of interest

• Accounting Roundup First Quarter in Review 2011 (PDF 469kb) - an update from Deloitte (United States)
• Toward greener pastures: How to leverage sustainability initiatives for finance transformation (PDF 132kb) – identifies six key areas in which sustainability initiatives can trigger finance transformation and ways that those triggers can create opportunities to improve reporting, transparency, and business performance, as well as mitigate business risk
• The Bruce Column ‘Cluttering Up the Materiality Arguments’
• The Bruce Column ‘Headline: IFRS and the House of Lords’
• US Heads Up A Summary of the March 24 Meeting of the PCAOB’s Standing Advisory Group
• US Heads Up Troubleshooting – FASB addresses troubled debt restructuring (TDRs)
• US Heads Up Amendments Proposed to Guidance on Impairment Testing
• US Heads Up Implementation Issues Related to FASB’s Guidance on Deferred Acquisition Costs

Deloitte comment letters

• Deloitte Comment Letter (PDF 115kb) on Supplement to Exposure Draft ED/2009/12 Amortised Cost and Impairment
• Deloitte Comment Letter (PDF 71kb) on Exposure Draft ED/2011/01 Offsetting Financial Assets and Financial Liabilities

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 April 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 proposals for an overhaul of prospectuses, designed to make them easier for retail investors to use and improve the quality of information on the proposed business model and the associated risks. The proposals are contained in two documents: Consultation Paper 155 [CP 155] Prospectus disclosure: Improving disclosure for retail investors, and an accompanying draft regulatory guide. Comments close on 9 June 2011 (media release)
• The Accounting Professional & Ethical Standards Board (APESB) has released a revised APES 220 Taxation Services (PDF 286kb) and APES 350 Participation by Members in Practice in Due Diligence Committees in Connection with a Public Document (PDF 421kb) effective 1 May 2011
• The Australian Prudential Regulation Authority (APRA) has released an updated version of the audit report (343 kb) it requires under Section 35C of the Superannuation Industry Supervision (SIS) Act 1993. The new report applies for financial periods commencing on or after 1 July 2010 (website)

International Accounting Standards Board

• IASB is seeking more feedback from users of financial statements about the adoption dates and transition requirements that should be applied to its major projects currently nearing finalisation. The survey specifically focuses on the leases, revenue recognition, financial instruments and insurance projects (IAS plus article)
• IASB and FASB have issued a progress report (PDF 80kb) on convergence programme, and the IASB has released an updated work plan. The progress report notes the projects completed and the extension of the convergence timeline for completion of the joint priority projects on leases, revenue, financial instruments and insurance to the end of 2011 from the original 30 June 2011 deadline (announcement, press release)
• The IASB SME Implementation Group has published for public comment three questions and answer documents (Q&A) - Draft Q&A 2011/02 Captive insurance subsidiaries (PDF 60kb), Draft Q&A 2011/03 Interpretation of 'traded in a public market' (PDF 61kb)and Draft Q&A 2011/04 Investment funds with only a few participants (PDF 54kb) on draft guidance related to the implementation of the IFRS for Small and Medium-sized Entities (SMEs) (IAS plus article)
• The IFRS Foundation has published a set of 12 illustrative examples to help preparers understand how to apply eXtensible Business Reporting Language (XBRL) to IFRS financial statements (press release)

Other global news

• IFAC’s Public Accountants in Business (PAIB) Committee recently published the results of a survey titled ‘Risk Management and Internal Control Survey’ designed to determine what is needed to strengthen risk management and internal control on a global basis
• The Accounting Standards Board (ASB) of the UK Financial Reporting Council (FRC) has published a report titled Cutting Clutter: Combating clutter in annual reports (PDF 465kb). It addresses how “clutter” i.e. immaterial disclosures and unnecessary explanatory information contained in annual reports can be removed, and hopes to stimulate debate and action on this issue
• International Public Sector Accounting Standards Board (IPSASB) has three consultation documents, on its draft Public Sector Conceptual Framework, open for comment (website)
• The push towards the more widespread adoption of sustainability reporting continues, with two recent developments from the Global Reporting Initiative (GRI) and 'Carbon Action' (a new investor led initiative from the Carbon Disclosure Project (CDP)) (IAS plus article)