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Monthly roundup - October 2009

Staying on top of developments

In this edition:

Monthly highlight: October AASB meeting provides significant boost to cross-Tasman convergence

The AASB's October meeting was held on 28-29 October. Most of the meeting was devoted to a joint meeting with the New Zealand Financial Reporting Standards Board (FRSB), where substantial progress was made on a plan for convergence in financial reporting 'across the Tasman'.

There was a significant amount of goodwill from both Boards to achieve convergence in financial reporting. A number of short and medium term projects were identified which seek to achieve a unified framework which would produce equivalent outcomes in financial reporting on both sides of the Tasman. The outcome of this project could see many changes in accounting standards in both countries.

The AASB also progressed its differential reporting project and decided to issue non-mandatory guidance for those entities that elect to issue GAAP-GFS financial statements.

More information: Accounting alert 2009/10.

We've released the December 2009 edition of our What's new in financial reporting series. The guide provides a high level overview of new and revised financial reporting requirements that need to be considered for financial reporting periods ending on 31 December 2009. Entities can use this listing to perform a quick check that all the new financial reporting requirements have been fully considered as part of their December reporting close process. Click here to access the guide.

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 2009 financial reporting cycle summary)

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

AASB 2009-09 Amendments to Australian Accounting Standards - Additional Exemptions for First-time Adopters

Provides additional exemptions and modifications on transition to Australian Accounting Standards in relation to certain oil and gas and lease assessments under Interpretation 4.

Applies to first-time adopters for annual reporting periods beginning on or after 1 January 2010 IAS Plus Update Newsletter (PDF 78kb)

AASB 2009-10 Amendments to Australian Accounting Standards - Classification of Rights Issues

Amends AASB 132 Financial Instruments: Presentation to require a financial instrument that gives the holder the right to acquire a fixed number of the entity's own equity instruments for a fixed amount of any currency to be classified as an equity instrument if, and only if, the entity offers the financial instrument pro rata to all of its existing owners of the same class of its own non-derivative equity instruments. Before this amendment, rights issues (rights, options, or warrants) denominated in a currency other than the functional currency of the issuer were accounted for as derivative instruments.

Applies to annual reporting periods beginning on or after 1 February 2010

AASB 2009-10 (PDF 78kb)

IAS Plus Update Newsletter (PDF 52kb)

AASB Erratum General Terminology Changes

The Erratum makes a number of additional terminology-related and editorial changes consequent to the issue of AASB 2009-6 Amendments to Australian Accounting Standards. The changes are not expected to have a material effect.

Applies to annual reporting periods beginning on or after 1 January 2009 that end on or after 30 June 2009 Erratum (PDF 21kb)
International Accounting Standards Board (IASB)
Pronouncement Key dates More information

Classification of Rights Issues - Amendment to IAS 32

Amends IAS 32 Financial Instruments: Presentation as outlined under AASB 2009-10 above.

Applies to annual periods beginning on or after 1 February 2010 IAS Plus Update Newsletter (PDF 52kb)

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 meetings 6, 15-16 and 19-23 October 2009

The October series of IASB meetings included substantial fast-tracked debate on the shape and form of the new classification and measurement requirements for financial instruments, redeliberating the proposals in response to constituent comment and working towards the issue of the final standard in November 2009.

Other highlights included advancement of other projects responding to the global financial crisis, a possible amendment to IAS 1 to require one comprehensive income statement, a decision not to amend IAS 19 to require a discount rate based on corporate bond rates and a project plan to partially re-expose the liabilities project (elimination of the probability recognition criteria for liabilities and requiring a weighted probability approach to measurement).

Australian meeting summary

Deloitte observer notes: 6 October, 15 October, 16 October, 19-23 October.

IASB Updates: 6 October, 15-16 October, 19-23 October.

Joint IASB/FASB meeting 26-28 October 2009

The joint meeting discussed the way forward on revenue recognition (segmentation), discontinued operations (definitions), financial instruments (principles of convergence), consolidation, liabilities and equity (new approach to equity), insurance and leases (lessor accounting).

Of particular interest is the likely decision to effectively abandon the income tax project in favour of short-term amendments to IAS 12 (particularly around recognition exceptions) and agreement to proceed with a proposal to amend IAS 1 to require a single comprehensive income statement with separate sections for profit or loss and other comprehensive income (OCI).

Deloitte observer notes

Deloitte press release 'Deloitte welcomes rethink of accounting for income taxes, but warns against complacency'

AASB meeting 28-29 October 2009 Most of the meeting was devoted to a joint meeting with the New Zealand Financial Reporting Standards Board (FRSB), where substantial progress was made on a plan for convergence in financial reporting 'across the Tasman'. The AASB also progressed its differential reporting project and decided to issue non-mandatory guidance for those entities that elect to issue GAAP-GFS financial statements.

Accounting alert 2009/10

AASB Action alert (PDF 69kb)

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 IAS Plus Update Newsletters)

IFRS publications
  • IFRS model financial statements for the year ended 31 December 2009 are now available: PDF version (PDF 613kb), Word version (ZIP 684k)
  • IFRS Compliance Questionnaire for 2009 - summarises the recognition and measurement requirements in IFRSs issued on or before 30 June 2009 (Word version (ZIP 730kb), PDF version (PDF 2,184kb))
  • IFRS Presentation and Disclosure Checklist for 2009 - formatted to allow the recording of a review of financial statements, with a place to indicate yes/no/not-applicable for each presentation and disclosure item. (Word version (ZIP 431kb), PDF version (PDF 596kb))
  • Issue 8 of the Insurance Accounting Newsletter (PDF 115kb), titled The New Accounting Model Takes Shape and focusing on the key decision made by the IASB in September 2009 to adopt (by a bare majority vote of 8 out of 15) the 'Updated IAS 37 Model' rather than the 'Current Fulfilment Value Model'
  • Property Intellectual Edition 30 - research & development - what does the tax concession really mean to my business?
Other publications of interest
  • Accounting Roundup: Third Quarter in Review-2009 (PDF 384kb), prepared by the Accounting Standards and Communications Group of Deloitte LLP (USA). This newsletter provides brief descriptions of pronouncements affecting accounting, financial reporting, and corporate governance issued during 3Q-2009 by standard setters and regulators including FASB, EITF, AICPA, SEC, FASAB, PCAOB, GASB, IASB, IFRIC, and IAASB
  • Deloitte United States has published a Heads Up Newsletter (PDF 198kb) titled An Update on the FASB's and IASB's Joint Project on Financial Instruments
  • Deloitte United States has published a Heads Up Newsletter (PDF 144kb) on Reconfiguring the Scope of Software Revenue Recognition Guidance under US GAAP
  • Deloitte United States has published a Heads Up Newsletter (PDF 158kb) on the EITF's recently finalised Issue 08-1, which will significantly change the accounting for revenue recognition for arrangements with multiple deliverables
  • US Reporting Newsletter for Non-US Based Companies June-August 2009 Edition - includes news through 15 August 2009 (PDF 182kb)
  • Deloitte China has published Accounting for Investment Properties Under Construction - A Practical Guide (PDF 219kb) - this guide explains the May 2008 amendment to IAS 40 that brings property under construction or development for future use as an investment property within the scope of IAS 40.
Deloitte comment letters
  • Deloitte comment letter (PDF 22kb) on IFRIC Draft Interpretation D25 Extinguishing Financial Liabilities with Equity Instruments
  • Deloitte comment letter (PDF 38kb) on IASB Exposure Draft ED/2009/10 Discount Rate for Employee Benefits - note that the IASB has decided not to proceed with these amendments at this time.

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 October historical summary on IAS Plus)

  • The IASC Foundation has published A Guide through International Financial Reporting Standards IFRSs July 2009. The 3,008-page guide may be purchased for £90 plus shipping on the IASB's Website
  • Kevin Stevenson, AASB Chairman, has announced the appointment of Co- Deputy Chairs of the AASB; Bruce Porter (Deloitte Accounting Technical partner) and Ian McPhee (Auditor General of Australia) (press release)
  • ASIC launched civil penalty proceedings in the Federal Court of Australia against current and former directors and a former Chief Financial Officer of various entities within the Centro Properties Group and Centro Retail Group - central to ASIC's action is the responsibility of company directors and chief financial officers to take reasonable steps to ensure that information contained in financial reports and disclosed to the market, is accurate, complies with relevant accounting standards, and is not misleading (press release)
  • At an IFRS conference sponsored by the IASC Foundation and the AICPA in New York this week, IASB Chairman Sir David Tweedie and FASB Chairman Robert H Herz announced that the IASB and the FASB have agreed to meet monthly, for at least two days a month, starting in January 2010, to achieve the goal of converging IFRSs and US GAAP to the greatest extent possible by June 2011.

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