Monthly roundup - July 2009
Staying on top of developments
In this edition:
- monthly highlight: July AASB meeting outcomes
- new pronouncements
- standard-setter meetings
- new Deloitte publications
- other developments.
The AASB's July meeting was held last week, on 29-30 July. This was the first meeting of the AASB with Kevin Stevenson as its new Chairman, replacing Bruce Porter who has been Acting Chairman for the past eight months.
The big ticket item was the ongoing discussion on differential reporting. Whilst no groundbreaking decisions were made, there was debate about whether the 'reporting entity concept' has a continuing role to play in the Australian reporting framework and this is to be explored further in a white paper. Many will find this a welcome development, but is unclear how the AASB's 'umbrella' concept of the reporting entity is intended to apply, as the view seems to be that regulators should use the concept to determine who should report, rather than the AASB.
There also appears to be a suggestion that perhaps IFRS for SMEs is not necessarily appropriate for Australia, at least not in all cases (such as subsidiaries of listed companies).
It is early days in the AASB's reconsideration of these issues and much time, and probably many more meetings, will pass before final decisions are made. It's a case of 'watch this space'.
Read our high-level summary of the meeting outcomes, with links to supporting documents and other analysis in Accounting alert 2009/08.
|We're holding a live webcast on 6 August 2009 where Deloitte will be challenging the IASB on their proposals to replace IAS 39 Financial Instruments: Recognition and Measurement, the international equivalent to AASB 139 Financial Instruments: Recognition and Measurement. The live event is being held on 6 August 2009 from 14:00 - 15:00 British Summer Time (equivalent Australian times: 11:00pm EST, 10:30pm CST, 9:00pm WST). If you would like to join the live webcast, please click here to pre-register. For those unable to attend the live event a recording will be subsequently available on www.iasplus.com.|
(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 2009 financial reporting cycle summary)
Australian Accounting Standards Board (AASB)
|Pronouncement||Key dates||More information|
|ED 183 Management Commentary
Proposed non-mandatory guidance for preparing and presenting a 'management commentary' - sometimes called 'management's discussion and analysis' or 'operating and financial review'.
|Comments are due to the AASB by 31 December 2009 and to the IASB by 1 March 2010||
ED 183 (PDF 259kb)
IAS Plus Update Newsletter (PDF 62kb)
|ED 184 Financial Instruments: Classification and Measurement
Proposes to amend the classification and measurement requirements in AASB 139/IAS 39 Financial Instruments: Recognition and Measurement. All financial instruments would be measured at either amortised cost or fair value. The 'available for sale' and 'held to maturity' categories would be eliminated and a new category, 'fair value through other comprehensive income', introduced. The requirement to separately account for certain embedded derivatives would also be removed.
|Comments are due to the AASB by 17 August 2009 and the IASB by 14 September 2009||
ED 184 (PDF 807kb)
IAS Plus Update Newsletter (PDF 383kb)
|ED 185 Rate-regulated Activities
Proposes to introduce specific accounting for rate-regulated activities. The objective of the proposals is to establish whether and how assets and liabilities resulting from rate-regulated activities should be recognised and measured under International Financial Reporting Standards (IFRSs).
|Comments are due to the AASB by 9 October 2009 and to the IASB by 20 November 2009 (see below)||
ED 185 (PDF 570kb)
Heads Up Newsletter (PDF 106kb)
AASB 2009-6 Amendments to Australian Accounting Standards
These amendments have no major impact on the requirements of the amended pronouncements.
|Applies to annual reporting periods beginning on or after 1 January 2009 that end on or after 30 June 2009|
AASB 2009-7 Amendments to Australian Accounting Standards
These editorial amendments have no major impact on the requirements of the amended pronouncements.
|Applies to annual reporting periods beginning on or after 1 July 2009|
International Accounting Standards Board (IASB)
|Pronouncement||Key dates||More information|
|ED/2009/7 Financial Instruments: Classification and Measurement
This is the IASB exposure draft that is incorporated in ED 184 issued by the AASB (see above). Proposes to amend the classification and measurement requirements in IAS 39 Financial Instruments: Recognition and Measurement.
|Comments are due to the IASB by 14 September 2009||
IAS Plus Update Newsletter (PDF 383kb)
|ED/2009/8 Rate-regulated Activities
This is the IASB exposure draft that is incorporated into ED 185 issued by the AASB (see above). Proposes to introduce specific accounting for rate-regulated activities.
|Comments are due to the IASB by 20 November 2009||
IASB Press Release (PDF 107kb)
International Financial Reporting Standard for Small and Medium-sized Entities (IFRS for SMEs)
This Standard provides an alternative framework that can be applied by eligible entities in place of the full set of International Financial Reporting Standards (IFRSs) on issue.
The IFRS for SMEs is a self-contained Standard, incorporating accounting principles that are based on full IFRSs but that have been simplified to suit the entities within its scope (known as SMEs). By removing some accounting treatments permitted under full IFRSs, eliminating topics and disclosure requirements that are not generally relevant to SMEs, and simplifying requirements for recognition and measurement, the IFRS for SMEs reduces the volume of accounting requirements applicable to SMEs by more than 90 per cent when compared with the full set of IFRSs.
|The IASB has not set an effective date for the Standard because the decision as to whether to adopt the IFRS for SMEs (and also, therefore, the timing for adoption) is a matter for each jurisdiction||
IAS Plus Update Newsletter (PDF 86kb)
The complete IFRS for SMEs can be downloaded free from the IASB website
|Additional Exemptions for First-time Adopters - Amendments to IFRS 1
Provides additional exemptions and modifications on transition to IFRS in relation to certain oil and gas assets in development or production, decommissioning, restoration and similar liabilities related to those assets, and IFRIC 4 assessments made under equivalent requirements of pre-transition GAAP.
|The amendments apply to an entity's first IFRS financial statements that are for a period beginning on or after 1 January 2010.||IASB Press Release (PDF 104kb)|
(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)
|IFRIC meeting 9 July 2009||IFRIC confirmed its agenda rejection statement on the meaning of 'significant or prolonged' in IAS 39, referred the issue of rights issues denominated in foreign currencies to the IASB and decided to develop an Interpretation on how to account for debt to equity swaps||
IFRIC Update (PDF 104kb)
|IASB meeting 20-24 July 2009 (including a meeting with EFRAG and joint meeting with FASB)||The IASB agreed to fast-track amendments to two standards (changes to the measurement of employee benefits under IAS 19 and accounting for rights denominated in foreign currencies under IAS 32/39), reached agreement on a number of annual improvement proposals, and continued its deliberations in a number of projects.|
|AASB meeting 29-30 July 2009||The big ticket item arising from the July AASB meeting was the ongoing discussion on differential reporting (see our Monthly highlight above).||
AASB Action Alert (PDF 146kb)
(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 Newsletters)
- IAS Plus Update Newsletter - IASB seeks views on the role of credit risk in liability measurement (PDF 72kb)
- July 2009 Issue of the Insurance Accounting Newsletter (PDF 198kb) - among other things, this issue reports on decisions made by the IASB in June, particularly the important conclusion, in line with FASB, to abandon the Current Exit Price model
- Special July 2009 Issue of the Insurance Accounting Newsletter (PDF 116kb) - reports on the meeting of the IASB's Insurance Working Group on 29-30 June 2009
- Issue 1 of the Insurance Accounting Insight Newsletter (PDF 88kb) - this issue sets out the issues and challenges to be considered by insurers' tax and accounting managers in light of recent developments in the formulation of the new accounting standard for insurance liabilities (IFRS 4 Phase II) and the Exposure Draft that proposes to change income tax accounting (IAS 12 Income Taxes)
- Property Intellectual (PDF 1.24MB) - research & development - are you maximising your tax benefit?
Other publications of interest
- Accounting Roundup: Second Quarter in Review-2009 (PDF 327kb) - 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 the second quarter of 2009 by standard setters and regulators including FASB, EITF, AICPA, SEC, FASAB, PCAOB, GASB, IASB, IFRIC, and IAASB
- US Reporting Newsletter for Non-US Based Companies May-June 2009 Edition - includes news through 15 July 2009 (PDF 123kb)
Deloitte comment letters
- Deloitte Comment Letter (PDF 102kb) on the IASB's proposals in its Discussion Paper Leases: Preliminary Views
- Deloitte Comment Letter (PDF 26kb) on IASCF exposure draft Due Process Handbook for XBRL Activities
- Deloitte Comment Letter (PDF 50kb) on the IASB Exposure Draft ED/2009/4 Prepayments of a Minimum Funding Requirement (Proposed Amendments to IFRIC 14)
- Deloitte Comment Letter (PDF 198kb) on the IASB Exposure Draft Derecognition - Proposed Amendments to IAS 39 and IFRS 7.
(A brief listing of other financial reporting developments during the month. A full summary of all IFRS-related developments can be found in our July historical summary on IAS Plus)
- We have recently updated the following modules of Deloitte's IFRS e-Learning programme to reflect recent amendments to the standards: IAS 1, IAS 12, IAS 16, IAS 18, IAS 19, IAS 23, IAS 29, IAS 32/39 (three modules), IAS 36, IAS 38, IAS 40, IAS 41, IFRS 2, and IFRS 5 (all e-learning modules are available free of charge at http://www.deloitteifrslearning.com/)
- The International Public Sector Accounting Standards Board (IPSASB) of the International Federation of Accountants has launched an improvements project with the release of Exposure Draft (ED) 42 Improvements to IPSASs (access the ED)
- The Australian Stock Exchange has released Companies Update 09/03, covering Profit warnings and other announcements of expected material differences in financial results, Appendix 4D and appendix 4E (presentation of documents), dividend and distribution information, forthcoming non-business days (timetabling issues), updating entity details on ASX Online and updated fees (access the Companies Update)