Monthly roundup - February 2011Staying on top of developments |
February 2011 edition
Issued 1 March 2011
In this edition:
- Monthly highlight: Quick recap of recent developments
- New pronouncements
- Standard setter meetings
- New Deloitte publications
- Other developments.
Monthly highlight: Quick recap of recent developments
Key developments this month include:
- Leases – the IASB and FASB’s redeliberations on their joint lease accounting proposals have resulted in new positions being tentatively decided on many of the more contentious proposals, e.g. leases may be classified in ‘financing’ (amortised cost) and ‘other than financing’ (straight line expensing), lease renewals may be included less often. Whilst it is early days yet, some of the more difficult to implement features of the original proposals may be substantially ‘watered down’ in response to constituent feedback. Similar outcomes occurred in the revenue project
- Consolidation and joint ventures – a suite of five new standards is expected to be released in March, implementing the new consolidation and joint venture requirements. The IASB agreed this month the new standards will apply to annual reporting periods beginning on or after 1 January 2013
- Effective dates – a paper (PDF 36kb) considered at the February IASB meeting, whilst inconclusive and premature, points to the major forthcoming changes (leases, revenue, insurance) being implemented from 2014 or perhaps as late as 1 January 2015. The IASB is expected to debate effective dates and transition during its March series of meetings.
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New guide to accounting for service concession arrangements A new global Deloitte publication, IFRIC 12 Service concession arrangements – A pocket practical guide (PDF 241kb) has been released, intended to serve as an illustrative tool in the application of IFRIC 12 Service Concession Arrangements. The guide provides analysis of the requirements of IFRIC 12 and practical guidance with examples that address some of the more complex issues around service concession arrangements. Click for IFRIC 12 Service concession arrangements – A pocket practical guide (PDF 241kb). |
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.)
International Accounting Standards Board (IASB)
| Pronouncement | Key dates | More information |
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New editorial corrections to IFRSs* This batch includes editorial corrections and changes to Bound Volume (Red Book) 2010, Bound Volume (Blue Book) 2011, Improvements to IFRSs (issued May 2010), The Conceptual Framework for Financial Reporting (issued September 2010), Disclosures—Transfers of Financial Assets (issued October 2010), IFRS 9 Financial Instruments (issued October 2010), Deferred Tax: Recovery of Underlying Assets (issued December 2010) and Severe Hyperinflation and Removal of Fixed Dates for First-time Adopters (issued December 2010). |
As minor editorial corrections, these changes are effectively immediately applicable under IFRS |
Editorial Corrections to IFRSs (PDF 30kb) |
* Equivalent pronouncement not yet issued by the AASB
Australian Accounting Standards Board (AASB)
| Pronouncement | Key dates | More information |
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ED 210 Financial Instruments: Impairment (incorporating IASB Supplement to ED/2009/12) ED 210 contains further IASB proposals, in addition to ED 189, specifically related to the credit impairment of financial assets measured at amortised cost that are managed on an open portfolio basis. The updated proposals would replace the incurred loss impairment model in AASB 139 with an expected loss impairment model including separate approaches to recognising expected losses for performing assets in a "good book" and for troubled assets in a "bad book". Expected credit losses in the "good book" would be recognised under a time-proportional approach based on the weighted average age and expected life of the assets in the portfolio, but subject to a minimum allowance of at least those credit losses expected to occur in the foreseeable future (a period of not less than twelve months from the reporting date). When assets are transferred from the "good book" to the "bad book" the proposals would require the expected credit loss to be immediately recognised. Also includes separate IASB-only proposals on impairment of financial assets specifically addressing scope, presentation and disclosure. |
Comments are due to the AASB by 16 March 2011 and to the IASB by 1 April 2011 |
ED 210 (PDF 456kb) ED 189 (PDF 515kb) IFRS in Focus newsletter (PDF 75kb) |
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ED 209 Offsetting Financial Assets and Financial Liabilities (proposed amendments to AASB 7 and AASB 132, and proposal relating to Tier 2 disclosure requirements) ED 209 incorporates IASB ED/2011/1, and seeks input on the proposed requirements to qualify for netting of financial assets and financial liabilities on the balance sheet, and proposed disclosures relating to those financial instruments that qualify for netting. ED 209 also includes a proposal relating to Tier 2 disclosure requirements and is relevant for Tier 2 entities that are planning to adopt the proposed amendments in this exposure draft. It is not expected that this proposal will have a significant impact in the Australian context, as the proposal emanates from a joint IASB-FASB project to bring US-GAAP more closely in line with existing IFRS requirements. |
Comments relating to both Tier 1 and Tier 2 entities are due by 11 April 2011 |
ED 209 (PDF 287kb) Proposed disclosure analysis (PDF 24kb) IFRS in Focus newsletter (PDF 57kb) |
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Tier 2 Supplement to ED 195 Defined Benefit Plans (proposed amendments to AASB 119) ED 195 was issued in May 2010, before the AASB issued AASB 1053 Application of Tiers of Australian Accounting Standards and had in place its Tier 2 reporting requirements. The comments received on this Tier 2 Supplement will assist the AASB in determining the disclosure requirements among those included in ED 195 that should be required of entities reporting under the reduced disclosure requirements. |
Comments are due by 9 May 2011 |
Tier 2 Supplement to ED 195 (PDF 164kb) ED 195 (PDF 567kb) |
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 |
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IASB meeting 1-2 February 2011 |
Topics discussed were as follows (click on the links for direct access to the Deloitte observer notes for that topic): Tuesday, 1 February 2011
Wednesday, 2 February 2011
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AASB meeting 9-10 February 2011 |
Highlights include the AASB deciding to eliminate the Australian-specific disclosures from AASB 124 Related Party Disclosures (with a two-year transitional period) and to extend the exemptions from consolidation in AASB 127 Consolidated and Separate Financial Statements and related standards (in two steps, pre and post RDR). | Action Alert (PDF 73kb) |
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IASB meeting 15-18 February 2011 |
Topics discussed were as follows (click on the links for direct access to the Deloitte observer notes for that topic): Tuesday, 15 February 2011 (IASB only) Wednesday, 16 February 2011 (IASB-FASB) Thursday, 17 February 2011 (IASB-FASB)
Friday, 18 February 2011 (IASB-FASB) |
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
- IFRS on Point IFRS Accounting Developments and Information: January 2011 (PDF 121kb)
- Updated IASB Project Insights: Insurance contracts (PDF 79kb), Consolidation (PDF 57kb), Joint arrangements (PDF 63kb), Post-employment benefits (PDF 88kb), Financial instruments - impairment (PDF 228kb), Leases (PDF 99kb)
- IFRS Insights: February 2011 (PDF 288kb)
- Insurance Accounting newsletter Gearing up for the last mile (PDF 135kb) provides a summary of the recent roundtables and IASB/FASB joint Board meetings held to discuss the Insurance Contracts project
- Property Intellectual Issue 41 Investment Property at fair value – IAS 12 amendments
- Property Intellectual Issue 42 Tax breaks for green buildings
- The Bruce Column ‘Clarity and Thought in Brussels’
Other publications of interest
- Survey on the FASB's proposed changes to lease accounting standards (PDF 352kb)
- Impairment of Financial Assets: A Closer Look at How the IASB and FASB Considered Feedback (PDF 128kb) on the supplement to the IASB's original exposure draft ED/2009/12 Financial Instruments: Amortised Cost and Impairment.
- Heads Up newsletter Boards Consider Feedback on Leases ED (PDF 165kb)
- Heads Up newsletter FASB Proposes Guidance on Balance Sheet Offsetting for Financial Assets and Financial Liabilities (PDF 153kb)
- Heads Up newsletter Boards Propose Changes to Impairment; FASB Tentatively Changes Measurement Approach for Financial Assets (PDF 188kb)
- Heads Up newsletter FASB Invites Comments on IASB's Hedge Accounting Proposals (PDF 127kb)
- Financial Reporting Alert 11-1, SEC's Focus on Compliance With Loss Contingency Disclosures (link to Deloitte (United States) website)
- Accounting Roundup: January 2011 (PDF 321kb)
- Accounting Roundup - Special Edition: First Wave of Accounting Changes Coming (PDF 231kb) – update on joint FASB/IASB convergence projects and FASB-only projects that will affect future financial reporting.
Deloitte comment letters
- Deloitte Comment Letter (PDF 80kb) on IFRS Foundation Trustees' Public Consultation: Status of Trustees' Strategy Review
- Deloitte Comment Letter (PDF 25kb) on IFRS Interpretations Committee tentative agenda decision: IAS 37 Provisions, Contingent Liabilities and Contingent Assets – Inclusion of own credit risk in the discount rate
- Deloitte Comment Letter (PDF 23kb) on IFRS Interpretations Committee tentative agenda decision: IAS 8: Accounting Policies, Changes in Accounting Estimates and Errors – Application of the IAS 8 hierarchy
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 February 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
- The AASB has made a submission (PDF 196kb) to the IASB on the IASB Request for Views on Effective Dates and Transition Methods. The submission supports a single date approach, following an appropriate implementation period to maintain comparability between annual reporting periods, for the relevant IFRSs
- The AASB has launched an online survey of preparers, advisors, auditors and regulators on the initial accounting for intangible assets acquired under IFRS 3 Business Combinations (AASB 3) and IAS 38 Intangible Assets (AASB 138) (or similar GAAP). The survey is a part of research being undertaken by AASB staff into the accounting for intangible assets under the aegis of the National Standard Setters (NSS) group (AASB press release)
- The Chairman of the AASB has written to the IASB seeking recognition of the 'Reduced Disclosure Regime' (RDR) within the broader IFRS framework. AASB letter to IASB (PDF 189kb)
- The Federal Government’s executive remuneration reforms bill Corporations Amendment (Improving Accountability on Director and Executive Remuneration) Bill 2011 (PDF 83kb) has been tabled in Parliament. It implements the Government's response to the recommendations made by the Productivity Commission in its recent inquiry into Australia's remuneration framework. The Government intends the new laws to take effect from 1 July 2011.
International Accounting Standards Board
- The IFRS Foundation Monitoring Board has released for public comment a document Consultative Report on the Review of the IFRS Foundation's Governance (PDF 344kb)
- The IFRS Foundation Education Initiative has published the 2011 edition of International Financial Reporting Standards – A Briefing for Chief Executives, Audit Committees and Boards of Directors (IAS plus article)
- IFRS Foundation to establish Asia-Oceania liaison office in Tokyo (press release)
- The Trustees of the IFRS Foundation have announced the appointment of Takatsugu (Tak) Ochi as a member of the IASB for an initial five-year term from 1 July 2011 (IAS Plus article)
- The IASB has announced an additional meeting on 1-2 March 2011 (details)
Other global news
- The 2011 Annual Meeting of the World Economic Forum (WEF), discussed the merits and challenges of adopting a new framework for an integrated corporate reporting system (IAS Plus article)
- The International Valuation Professional Board, an independent technical body of the International Valuation Standards Council (IVSC), has released for comment an exposure draft of Technical Information Paper 2 Depreciated Replacement Cost (IAS Plus article)
