Monthly roundup - September 2012
Staying on top of developments
September 2012 edition
Issued 09 October 2012
In this edition:
- Monthly highlights
- New pronouncements
- Standard setter meetings
- New Deloitte publications
- Other developments
Hedge accounting draft: A closer reflection of risk management
The International Accounting Standards Board (IASB) has published a draft of the general hedge accounting requirements that will be added to IFRS 9 Financial Instruments. The draft is based on the proposals in Exposure Draft ED/2010/13 Hedge Accounting published in December 2010 and the tentative decisions the IASB has made during its redeliberations of the Exposure Draft.
The draft includes amendments to hedge accounting requirements, made in response to the criticism of IAS 39 which was often viewed as too stringent and not capable of reflecting risk management policies.
The finalised requirements, which would represent a significant change to the current hedge accounting approach under IAS 39, are expected to be issued in late December 2012/early January 2013.
The overall effect will be more opportunities to apply hedge accounting and consequently less profit or loss volatility arising from risk management activities. The flexibility of the new accounting requirements is counter-balanced by enhanced disclosure requirements about an entity’s risk management activities.
The intended effective date of the hedge accounting chapter is annual periods beginning on or after 1 January 2015 with earlier application permitted. The requirements are to be applied prospectively (with limited exceptions).
For further details, related news and publications, please check our Hedge Accounting Project page on IAS plus.
ASIC draft guidance - effective disclosure in an operating and financial review (OFR) in the directors’ report
On 17 September 2012, the Australian Securities and Investments Commission (ASIC) issued Consultation Paper 187 Effective Disclosure in an Operating and Financial Review (OFR) in order to obtain feedback from stakeholders on its proposed draft new regulatory guide for directors on providing useful and meaningful information to investors when preparing an OFR in a directors’ report of a listed entity.
The proposed guidance is principle based and outlines considerations that will assist directors to practically apply the OFR requirements under s.299A of the Corporations Act 2001 and may result in additional detail in OFRs. It provides commentary on the current use, perhaps over-use, of the unreasonable prejudice exemption, and is accompanied by more prescriptive guidance on its application.
The comment period ends on 23 November 2012 with the regulatory guidance expected to be released by March 2013 effective for June 2013 year ends.
For further details, please refer Deloitte Accounting alert (PDF 404kb).
(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.)
Australian Accounting Standards Board (AASB)
|Pronouncement||Key dates||More information|
AASB 2012-6 Amendments to Australian Accounting Standards – Mandatory Effective Date of AASB 9 and Transition Disclosures
Amends the mandatory effective date of AASB 9 Financial Instruments so that AASB 9 is required to be applied for annual reporting periods beginning on or after 1 January 2015 instead of 1 January 2013
Modifies the relief from restating prior periods by amending AASB 7 Financial Instruments: Disclosures to require additional disclosures on transition from AASB 139 Financial Instruments: Recognition and Measurement to AASB 9 in some circumstances.
|Applicable to annual periods beginning on or after 1 January 2013||
AASB 2012-6 (PDF 387kb)
AASB 2012-7 Amendments to Australian Accounting Standards arising from Reduced Disclosure Requirements
Amends reduced disclosure requirements for entities preparing general purpose financial statements under Australian Accounting Standards – Reduced Disclosure Requirements. These amendments relate to amended disclosures in the following Standards:
|Applicable to annual periods beginning on or after 1 July 2013||
AASB 2012-7 (PDF 325kb)
Exposure draft ED 227 Proposed Amendments to AASB 1049 – Extension of Transitional Relief for the Adoption of Amendments to the ABS GFS Manual relating to Defence Weapons Platforms
Proposes to amend AASB 1049 Whole of Government and General Government Sector Financial Reporting to provide a further 2 year period of transitional relief from the requirement to adopt Chapter 2 Amendments to Defence Weapons Platforms of the Australian Bureau of Statistics (ABS) publication 'Amendments to Australian System of Government Finance Statistics, 2005' in financial statements prepared in accordance with AASB 1049.
|Comments due by 19 November 2012||
ED 227 (PDF 207kb)
International Accounting Standards Board (IASB)
|Pronouncement||Key dates||More information|
No new significant pronouncements were issued by the IASB in September 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
5 - 6 September 2012
Key issues discussed include:
|AASB alert (PDF 308kb)
|IFRIC regular meeting
18 – 19 September 2012
Key issues discussed include:
|Deloitte observer notes
IFRIC update (PDF 51kb)
|IASB regular meeting
24 - 28 September 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 podcast (link to website)
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: August 2012 (PDF 70kb) 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 update posted in September 2012: Leases (PDF 166kb)
- IFRS in Focus — IASB issues a Request for Information on the post-implementation review of IFRS 8 describes the IASB’s public consultation to assess the effect of the application of IFRS 8 'Operating Segments' on financial reporting
- Accounting Roundup: Third quarter in review — 2012 summarises the key financial reporting developments in the third quarter of 2012
- Hedge accounting (following publications/articles released):
- IFRS in Focus — Hedge accounting draft: A closer reflection of risk management (PDF 100kb) describes the IASB’s draft of the new hedge accounting requirements which will form part of IFRS 9 Financial Instruments which will ultimately replace IAS 39 Financial Instruments: Recognition and Measurement
- A Closer Look — Hedge accounting with financial options and structured derivatives (PDF 430kb) provides an analysis of the changes proposed in the IASB's draft of the new hedge accounting requirements. It contains examples contrasting the current IAS 39 requirements with the new proposals
- A Closer Look — More opportunities to hedge account non-financial items (PDF 370kb) highlights the practical effect of some of the new proposals to the current IAS 39 hedge accounting requirements, providing a series of contrasting examples
- The Bruce Column — Towards a better understanding of risk supports the IASB draft of hedge accounting proposals as a move in right direction towards transparency and a greater understanding of risk.
Deloitte Webcasts and podcasts
- Deloitte IFRS podcast – IASB's draft IFRS on general hedge accounting (link to IAS plus) discusses the proposed changes in the staff draft of the hedge accounting section of IFRS 9 and how they compare to the previous exposure draft as well as provide insight into the likely effect they will have in practice.
Deloitte comment letters
- Deloitte comment letter (PDF 14kb) to the IFRS Interpretations Committee (IFRIC) on tentative agenda decision: IAS 18/IAS 38/IAS 39 — Regulatory assets and liabilities
- Deloitte comment letter (PDF 14kb) to the IFRIC on tentative agenda decision: IAS 39 — Scope of paragraph AG5
- Deloitte comment letter (PDF 45kb) to the International Accounting Standards Board (IASB) on Draft IFRIC Interpretation DI/2012/2 'Put Options Written on Non-controlling Interests'
- Deloitte comment letter (PDF 55kb) to the IASB on Draft IFRIC Interpretation DI/2012/1 — 'Levies Charged by Public Authorities on Entities that Operate in a Specific Market'
- Deloitte comment letter (PDF 66kb) to the IASB on its Exposure Draft ED/2012/1 — 'Annual improvements to IFRSs 2010–2012 cycle'
- Deloitte comment letter (PDF 116kb) to the IFRS Foundation on the proposed IFRS Foundation Due Process Handbook that was published for public comment in May 2012.
(A brief listing of other financial reporting developments during the month. A full summary of all IFRS-related developments can be found in our September 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 Securities Exchange (ASX) has released a consultation paper (PDF 480kb) which aims to improve the disclosures of the reserves and resources of ASX-listed mining and oil & gas exploration and production companies
- The Australian Securities and Investments Commission (ASIC) released a Consultation Paper 187 'Effective Disclosure in an Operating and Financial Review (OFR)' in order to obtain feedback from stakeholders on its proposed draft new regulatory guide (discussed in monthly highlight above).
International Accounting Standards Board
- The International Accounting Standards Board (IASB) has released a draft (link to website) of the general hedge accounting section of IFRS 9 'Financial Instruments'. The draft is based on the proposals in Exposure Draft ED/2010/13 'Hedge Accounting' published in December 2010 and the tentative decisions the IASB has made during its redeliberations of the Exposure Draft (discussed in monthly highlight above).
- September 2012 IASB meeting podcast (link to website): topics covered include Leases, insurance contracts, accounting for macro hedges, classification and measurement of financial instruments, impairment, revenue recognition, investment entities, rate regulated activities, bearer biological assets and the conceptual framework.
Other global news
- The New Zealand Financial Markets Authority (FMA) has issued its final guidance note (link to website) on disclosing non-GAAP financial information (including 'underlying profit')
- The New Zealand Accounting Standard Board (NZASB) has recently released an exposure draft which explores the practical difficulties in dealing with differences between public sector and private sector accounting standards being set by the IASB and IPSASB (IAS Plus article).