Monthly roundup - September 2011

Author: Deepesh Malik and Debbie Hankey, Accounting Technical Group

September 2011 edition
Issued 04 October 2011

In this edition:

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

Monthly highlights

Forward thinking companies putting Integrated Reporting on their agendas

The importance of combining the different strands of reporting by a company (financial, management commentary, governance and remuneration, and sustainability reporting) into a coherent whole that explains an organisation's ability to create and sustain value has received renewed focus with the issue on 12 September 2011 of the International Integrated Reporting Committee’s (IIRC) Discussion Paper Towards Integrated Reporting – Communicating Value in the 21st Century. The focus of an Integrated Report is a broader explanation of performance than traditional reporting, by describing and measuring the material components of value creation and, more importantly, demonstrating the links between an organisation's financial performance and the social, environmental and economic context in which it operates. The IIRC was formed in August 2010 and aims to create a globally accepted framework for an integrated format of reporting. The IIRC is working towards presenting an integrated reporting proposal to the G20 later in 2011.

The IIRC brings together a cross section of representatives from civil society and the corporate, accounting, securities, regulatory, NGO, IGO and standard-setting sectors. It comprises a Steering Committee and a Working Group. The Steering Committee is chaired by Sir Michael Peat, Principal Private Secretary to TRH The Prince of Wales and the Duchess of Cornwall. Membership of the IIRC Steering Committee includes Hans Hoogervorst (IASB Chairman), Leslie Seidman (FASB Chairperson), Maria Helena Santana, (Chairperson, IOSCO Executive Committee), Göran Tidström (IFAC President), Jim Quigley (former global Chief Executive Officer of Deloitte), and many others.

The work of the IIRC is supported by the Global Reporting Initiative (GRI) which is a network-based organisation that developed a widely used sustainability Reporting Framework, together with accompanying Sustainability Reporting Guidelines, providing guidance on how organisations can disclose their sustainability performance. The GRI has recently called for comments on the proposed 'fourth generation' of its Sustainability Reporting Guidelines ("G4"). The GRI has also recently issued guidance on how to apply GRI's Reporting Framework and Guidelines in the construction and real estate sectors. Specific issues covered in the new Construction and Real Estate Supplement include building and materials certification, CO2 emissions, management and remediation of contaminated land and labour, health and safety issues.

Forward thinking companies have put sustainability reporting and integrated reporting on their agendas, in many cases not due to regulatory requirements but market forces. Non government players can these days easily create havoc for companies who do not focus on sustainability but even more important for companies, it is investors who are driving the focus on sustainability and integrated reporting. The United Nations Principles for Responsible Investment (UNPRI) estimates that US $22 trillion is invested in socially responsible funds, representing 10 percent of global capital markets.

AASB releases new standard on Fair value and amended standard on Employee benefits

The AASB has issued a new standard on determining fair value: AASB 13 ‘Fair Value Measurement’ as well as amending standards on other comprehensive income: AASB 2011-9 ‘Amendments to Australian Accounting Standards – Presentation of Items of Other Comprehensive Income’ and employee benefits: AASB 119 ‘Employee Benefits’ (2011). These standards incorporate the recent IFRSs issued by the IASB as discussed in our May and June editions of  Monthly Roundup. Related Reduced Disclosure Requirement standards or exposure drafts have also been issued setting out the AASB’s application of these standards to entities applying the Reduced Disclosure Regime in Australia. Links to related newsletters and articles can be found in the tables below.

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.)

Australian Accounting Standards Board (AASB)

International Accounting Standards Board (IASB)

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, IFRS in Focus Newsletters, Webcasts, and Podcasts)

IFRS publications

• IFRS in Focus — International Integrated Reporting Committee issues Discussion Paper on Integrated Reporting (PDF 74kb) provides an overview of the IIRC's Discussion Paper Towards Integrated Reporting — Communicating Value in the 21st Century
• IFRS on Point — IFRS Accounting Developments and Information: August 2011 (PDF 67kb)
• IFRS Industry Insights: The new joint arrangements standard - insights for the real estate industry (PDF 115kb)
• IFRS Industry Insights: The Leases Project – An update for the consumer business industry (Issue 2) (PDF 94kb)
• IFRS Industry Insights: The new consolidation standard - insights for the real estate industry (PDF 101kb)
• Updated checklist of the requirements of IAS 34 Interim Financial Reporting IAS 34 Compliance Checklist 2011 (PDF 88kb) formatted to allow the recording of a review of interim financial statements, with a place to indicate yes/no/not-applicable for each item
• Updated summary of new and amended pronouncements that provides a high level overview of new and revised accounting pronouncements that should be considered for financial reporting periods ending on or after 30 September 2011
• Updated IASB Project Insights: Leases (PDF 123kb), Revenue recognition (PDF 86kb), Insurance Contracts (PDF 138kb), Financial Instruments — Impairment (PDF 159kb), Financial Instruments — asset and liabilities offsetting (PDF 47kb),  Financial Instruments — Hedge Accounting (PDF 79kb)
• Update on the revised proposals from the New Zealand Minister of Commerce and External Reporting Board (XRB) for New Zealand's statutory financial reporting framework, focusing on implications for various entities: Implications for 'for-profit entities' (PDF 160kb), Implications for 'public sector entities' (PDF 153kb), and Implications for 'not-for-profit entities' (PDF 158kb)

Other publications of interest

• Integrated Reporting — A better view? (PDF 1,213kb) provides a brief history of reporting trends, a discussion of common challenges, and some practical recommendations for the adoption of integrated reporting
• The Bruce Column 'Going Global, and Positive'
• The Bruce Column 'Going for Long-Term Value’

Deloitte comment letters

• Deloitte Comment Letter (PDF 42kb) on IASB Exposure Draft ED/2011/2 Improvements to IFRSs

Deloitte Webcasts and Podcasts

• Sustainability Reporting Update: One Big Global Family? [07/09/11] (first time registration required) – a Deloitte US webcast: discuss the significant progress being made in global efforts to develop integrated sustainability reporting guidelines, covering the work of the International Integrated Reporting Committee (IIRC), the Global Reporting Initiative (GRI), Carbon Disclosure Project, and other topics
• Leases: A Comprehensive Update on the Joint Project [09/09/11] (first time registration required) – a Deloitte US webcast: discuss recent deliberations and tentative decisions of the IASB and FASB in the leases project, how the boards' decision to re-expose their proposals will impact the timeline to finalise the project, and the boards' next steps
• Moving ahead in an IFRS world - 2011 IFRS third-quarter technical update [27/09/11] (first time registration required) – a Deloitte Canada IFRS webcast : discuss some of those IFRS requirements that are effective for 2011 as well as a review of recently and soon to be issued IFRSs, changes to the IASB project plan, and an update on regulatory matters
• Quarterly Accounting Roundup: An Update of Important Development [29/09/11] (first time registration required) – a Deloitte US webcast: discuss accounting, standard setting, and reporting developments for the quarter, recent positions on accounting and reporting of the FASB, IASB, SEC, and PCAOB, and other hot topics

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 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)

Australian-specific topics

• The Australian court case (Centro) highlights the importance of directors' responsibilities for compliance with Accounting Standards (ASIC announcement)
• The ASIC has released a Report 252 Overview of decisions on relief applications (February to May 2011) (PDF 226kb) outlining decisions on relief applications between 1 February to 31 May 2011. The report provides examples of decisions that demonstrate how ASIC has applied its policy in practice, which it expects will be of particular interest for participants in the capital markets and financial services industry. The report includes an appendix detailing the relief instruments ASIC executed (ASIC media release)
• Australia will host its first ever IFRS Foundation conference on 25 November 2011 in Melbourne

International Accounting Standards Board

• The IASB has posted to its website a  marked-up version of IAS 19  Employee Benefits highlighting the amendments made to the previous version of IAS 19 to match the requirements in IAS 19 as issued in June 2011
• The IASB’s latest work plan as of 30 Sepetember has been released and shows revised 'current best estimates' for its progress. In the latest update, the IASB has announced a more definitive timing of the expected release of documents from a number of its current projects (IAS Plus article)
• The IASB has released the cost benefit analysis documents for IFRS 10 and 12 (PDF 828kb) setting out the IASB’s findings concerning the potential impact of the new requirements. An analysis for IFRS 11 Joint Ventures (PDF 246kb) was released in August 2011
• The SME Implementation Group has published for public comment five questions and answer documents (Q&A) on draft guidance related to the implementation of the International Financial Reporting Standard for Small and Medium-sized Entities (IFRS for SMEs) (IAS Plus article)

External webcasts and Podcasts

• IFRIC September meeting podcast - summary of IFRIC September 2011 meeting

Other global news

• The US Financial Accounting Standards Board (FASB) has amended its impairment rules to make it easier for US companies to test goodwill for impairment. The change per Accounting Standards Update No. 2011-08 Intangibles – Goodwill and Other (Topic 350): Testing Goodwill for Impairment (PDF 268kb) introduces a qualitative concept for goodwill impairment testing, which permits the entities to first assess qualitative factors in order to determine whether it is necessary to perform the current quantitative goodwill impairment test

Related links

• Monthly roundup archive
• Assurance & Advisory QuickLinks
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• IFRS
• IAS Plus website