Monthly roundup - December 2011
Staying on top of developments
December 2011 edition
Issued 13 January 2011
In this edition:
- Monthly highlights
- New pronouncements
- Standard setter meetings
- New Deloitte publications
- Other developments
Preparing for the December reporting season
For those preparing for the December reporting season, we have released the following tools that may be of assistance to you
- What’s new in the December 2011 reporting cycle
- Illustrative financial statements (A-IFRS) , including general purpose, special purpose, reduced disclosure regime, management investment scheme
- Illustrative financial statements and disclosure checklists (IFRS).
The Australian Securities & Investment Commission (ASIC) has also released the results of its reviews of financial reports for the year ended 30 June 2011 and announced its areas of focus for 31 December 2011 financial reports. ASIC’s future focus areas will include
- asset values and going concern assessments, including adequate disclosure of material assumptions;
- consolidation decisions and off balance sheet arrangements; and
- proper disclosure of segment information in a manner that enables useful assessment of the separate businesses.
For the entities using non-IFRS information in their financial reports, director’s reports and market releases, it would be worthwhile to look into the recently issued ASIC Regulatory Guide 230 Disclosing non-IFRS financial information (PDF 383kb). ASIC intends to ensure proper balanced use of non-IFRS information, and will be monitoring financial reports and releases in this regard (Deloitte Accounting alert)
IASB developments and the year ahead
The IASB has released an updated work plan, dated 20 December 2011. A number of projects have been deferred, the expected timing of other projects more precisely defined and deadlines for the finalisation of IFRSs on leases and revenue recognition projects now not explicitly stated within the timeframes outlined (so now potentially not expected before the end of 2012). A review draft of general hedge accounting requirements is now expected in the first quarter of 2012 with the targeted issue of the revisions to IFRS 9 in the second quarter of 2012 (potentially too late for early adoption by entities with June 2012 year ends). Companies should continue to monitor the IASB progress on these major projects so they are in a position to take advantage of opportunities from early adoption in the case of hedge accounting or understand the potentially significant impacts on their organisations from the implementation of standards such as leases and revenue.
(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 2011 financial reporting cycle summary.)
International Accounting Standards Board (IASB)
|Pronouncement||Key dates||More information|
Exposure Draft ED/2011/7 Transition Guidance (Proposed amendments to IFRS 10)
Address the transition guidance in IFRS 10 Consolidated Financial Statements by clarifying when retrospective application is required.
|Comments due by 21 March 2012||
ED/2011/7 (PDF 170kb)
IFRS in Focus (PDF 68kb)
Offsetting Financial Assets and Financial Liabilities (Amendments to IAS 32)*
Address inconsistencies in current practice when applying the offsetting criteria in IAS 32 Financial Instruments: Presentation.
|Applicable to annual periods beginning on or after 1 January 2014||
Deloitte Podcast (26 mins 11.5 mbs)
IFRS in Focus (PDF 71kb)
Disclosures – Offsetting Financial Assets and Financial Liabilities (Amendments to IFRS 7)*
Aims to bridge differences in the offsetting reporting requirements of IFRSs and US GAAP by having common offsetting disclosure requirements
Expanded disclosures to include both the gross and the net amounts for items offset in accordance with legally enforceable netting arrangements and expanded information about the collateral pledged and held in such arrangements.
|Applicable to annual periods beginning on or after 1 January 2013||
Deloitte Podcast (26 mins 11.5 mbs)
IFRS in Focus (PDF 71kb)
Mandatory Effective Date of IFRS 9 and Transition Disclosures (Amendments to IFRS 9 and IFRS 7)*
Defers the mandatory effective date of both the 2009 and 2010 versions of IFRS 9 Financial Instruments to annual periods beginning on or after 1 January 2015
Instead of requiring restatement of comparative financial statements, entities are either permitted or required to provide modified disclosures on transition from IAS 39 to IFRS 9 on the basis of the entity's date of adoption and if the entity chooses to restate prior periods.
|Applicable to annual periods beginning on or after 1 January 2015; early application permitted||
Deloitte Podcast (12 mins 5.5 mbs)
IFRS in Focus (PDF 67kb)
* Equivalent pronouncement not yet issued by the AASB
Australian Accounting Standards Board (AASB)
|Pronouncement||Key dates||More information|
Tier 2 Supplement to ED 222 Revenue from Contracts with Customers
Sets out the disclosures proposed in AASB ED 222 from which it is proposed entities applying Tier 2 reporting requirements should be exempt.
|Comments due to the AASB by 9 February 2012||
Tier 2 Supplement to ED 222 (PDF 261kb)
ED 223 Superannuation Entities
A further step in the comprehensive review of the general purpose financial reporting requirements applicable to superannuation entities being conducted in light of developments in the superannuation industry since AAS 25 Financial Reporting by Superannuation Plans was originally promulgated and the introduction of International Financial Reporting Standards (IFRSs).
|Open for comment until 30 April 2012||ED 223 (PDF 868kb)|
ED 224 Transition Guidance (proposed amendments to AASB 10 Consolidated Financial Statements)
Incorporates IASB ED/2011/7 and proposes amendments to AASB 10 Consolidated Financial Statements with the objective of providing clarification regarding the transition requirements upon implementation of AASB 10.
|Comments due to the AASB by 22 February 2012 and to the IASB by 21 March 2012||ED 224 (PDF 297kb)|
AASB 2011-13 Amendments to Australian Accounting Standard – Improvements to AASB 1049
Clarifies some of the requirements in AASB 1049 Whole of Government and General Government Sector Financial Reporting
|Effective for annual periods beginning on or after 1 July 2012, with early application permitted||AASB 2011-3 (PDF 668kb)|
(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
7-8 December 2011
Topics discussed in detail include:
|AASB alert (PDF 282kb)|
|IASB regular meeting
13-16 December 2011
Topics discussed were as follows (click on the links for direct access to the Deloitte observer notes for that topic):
Tuesday, 13 December 2011
Wednesday, 14 December 2011
Thursday, 15 December 2011
Friday, 16 December 2011
|Detailed Deloitte Observer notes
IASB update (PDF 229kb)
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)
- Managed Investment Scheme (MIS) Half Year Illustrative Financial Statements for December 2011 – an updated guide to best practice disclosures in half-year reports for 31 December 2011 or later periods for entities in Australian jurisdiction
- IFRS in Focus — Closing out 2011 (PDF 81kb) provides an overview of new and revised International Financial Reporting Standards and IFRS Interpretations that are either mandatorily effective for December 2011 calendar year-ends and subsequent accounting periods or can be early adopted
- IFRS on Point — IFRS Accounting Developments and Information: November 2011 (PDF 84kb) highlights the month’s important IFRS developments and information
- IFRS Industry Insights: The Revenue Recognition Project — An update for the software industry (PDF 88kb) provides an overview of the recently issued revised exposure draft Revenue from Contracts with Customers and the potential implications of the proposals on the software industry
- IFRS Industry Insights — Accounting for revenue in the telecommunications industry (PDF 470kb) provides an overview of the recently issued revised exposure draft Revenue from Contracts with Customers and the potential implications of the proposals on the telecommunications industry
- Updated IASB Project Insights: Leases (PDF 153kb) Revenue recognition (PDF 324kb), Insurance Contracts (PDF 445kb), Financial Instruments: Deferral of mandatory effective date of IFRS 9 (PDF 56kb),Financial Instruments — Impairment (PDF 232kb), Financial Instruments — asset and liabilities offsetting (PDF 44kb), Financial Instruments: Classification & Measurement (PDF 176kb), Financial Instruments — Hedge Accounting (PDF 264kb).
Other publications of interest
- Insurance Accounting Newsletter — Refining divergent positions and a gleam of hope from IFRS 9 planned revisions (PDF 474kb) discusses the targeted improvements for IFRS 9 Financial Instruments as agreed in November 2011 meeting of the IASB
- Accounting Roundup: Year in Review — 2011 (PDF 275kb) - a publication by Deloitte (United States) that discusses the FASB and IASB continued efforts to converge U.S. GAAP and IFRSs, and progress in other joint projects
- Accounting Alert — Staying on top of developments (PDF 604kb) provides information about a number of recent developments in New Zealand financial reporting
- Deloitte 2011 Corporate Responsibility Report (PDF 3,227kb) reflects Deloitte's wider outlook on corporate responsibility
- Robert Bruce Column '2011: A Year of Growing Optimism Over IFRS' discusses the growing acceptance for convergence in accounting standards that makes particular reference to the recent ACCA (the Association of Chartered Certified Accountants) report Toward Greater Convergence: Assessing CFO and Investor Perspectives on Global Reporting Standards.
Deloitte comment letters
- Deloitte Comment Letter (PDF 32kb) to the SME Implementation Group on its Third batch of SME Implementation Group questions and answer documents
- Deloitte Comment Letter (PDF 29kb) to the IFRS Interpretations Committee on its tentative decision not to take onto the Committee's agenda requests for Interpretations of IAS 19 Employee Benefits , with respect to providing guidance on the classification of 'Altersteilzeit' (ATZ) plans under the revised version of IAS 19 issued in June 2011
- Deloitte Comment Letter (PDF 83kb) to the International Integrated Reporting Council (IIRC) on its Discussion Paper Towards Integrated Reporting — Communicating Value in the 21st Century
- Deloitte Comment Letter (PDF 31kb) to the International Accounting Standards Board (IASB) on its Exposure Draft ED 2011/5 Government Loans — Proposed amendments to IFRS 1.
Deloitte Webcasts and Podcasts
- Integrated reporting podcast (18:30 mins 8 mbs) discuss the concept of 'integrated reporting' and the International Integrated Reporting Council's (IIRC) Discussion Paper Towards Integrated Reporting – Communicating Value in the 21st Century
- Deferral of the effective date of IFRS 9 (12 mins 5.5 mbs) podcast on the deferral of mandatory effective date IFRS 9 Financial Instruments to annual periods beginning on or after 1 January 2015
- Offsetting financial assets and liabilities (26 mins 11.5 mbs) discuss the recently issued amendments relating to offsetting of financial assets and financial liabilities
(A brief listing of other financial reporting developments during the month. A full summary of all IFRS-related developments can be found in our December 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 Accounting Standards Board (AASB) has issued tentative agenda decisions dealing with accounting issues arising from a proposed 'Mineral Resource Rent Tax' (MRRT) and extension of 'Petroleum Resource Rent Tax' (PRRT) that are currently being considered by the Australian Parliament (IAS plus article)
- The federal government issued a discussion paper (PDF 945kb) that considers the stakeholders concerns over the changes made to the Corporations Act by the Corporations Amendment (Corporate Reporting Reform) Act 2010. The discussion paper explores certain options for amending the Dividend Test (solvency). It also considers if there is any need for amendments to the parent entity reporting requirements, and the conditions for changing the financial year of a company to correct some inconsistency in the Act.
International Accounting Standards Board
- The SME Implementation Group (SMEIG) has published two final questions and answers (Q&As) on the IFRS for SMEs (IAS plus article)
External webcasts and Podcasts
- Revenue from Contracts with Customers
- Insurance contracts podcast (22 mins mp3) on the current state of debate and the discussion held in the recent IASB meeting in December 2011
- IASB meeting podcast (20 mins mp3) for the December 2011 board meeting. The topics covered include IFRS 9 impairment, classification and measurement, leases and insurance contracts.
Other global news
- The European Financial Reporting Advisory Group (EFRAG) in its letter to the IASB, has called for the deferral of the effective date of the 'suite of standards' on consolidation, joint ventures and disclosures (IAS Plus article)
- International Valuation Standards Council (IVSC) update of recent developments (IAS Plus article)
- The European Financial Reporting Advisory Group (EFRAG) and the Financial Reporting Council's Accounting Standards Board (UK ASB) have issued discussion paper Improving the Financial Reporting of Income Tax (IAS Plus article)