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Monthly roundup - February 2009

Staying on top of developments

In this edition:

Monthly highlight: Standards Advisory Council comments on the direction of IFRS

The role of Standards Advisory Council (SAC) is to advise the IASB on its projects, agenda and other activities and has been recently reconstituted. The initial meeting of the reconstituted SAC was held on 23-24 February 2009 and contained a number of interesting observations which may see a possible change in direction for the IASB.

The SAC's views on the IASB's work plan mirror concerns widely expressed by others:

  • The IASB is fast-tracking a number of projects between now and mid-2011 and there is a need for assistance for constituents to 'cope' with the deluge of due-process documents (more than 46) slated for delivery during this time. There was a view that quality is better than quantity and that some projects could be deferred
  • The IASB's response to the global financial crisis also saw some criticism, with a view that the IASB had been 'slow out of the blocks' and communicated poorly
  • Interestingly, although the SAC acknowledged that whilst fair value has a lot of support in principle, the majority of members supported an enhanced role for amortised cost in the measurement of financial instruments, perhaps leaving fair value to 'traded' instruments only. The SAC Chairman noted that 'fair value was not the answer in the near to medium term' and there was a view that 'evolution rather than revolution' was the key to moving forward.

Where does this mean for the global standard-setting process? Recent standard-setting outcomes illustrates that the IASB has often held its course in the face of criticism and the effect of these sorts of observations is uncertain. However, the outcomes of the SAC meeting may be welcome news to some who believe that a hiatus period in major standard setting would be the best response to current economic circumstances.

More information: Deloitte observer notes from the SAC meeting, SAC meeting papers, SAC backgrounder.

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 financial reporting for December 2008 summary)

Australian Accounting Standards Board (AASB)
Pronouncement Key dates More information
ED 175 Post-implementation Revisions to AASB Interpretations
Proposes to amend Interpretation 9 Reassessment of Embedded Derivatives to exclude embedded derivatives in contracts acquired in combinations of entities or businesses under common control or in the formation of a joint venture and amend Interpretation 16 Hedges of a Net Investment in a Foreign Operation to allow entities to designate as a hedging instrument in a hedge of a net investment in a foreign operation an instrument that is held by the foreign operation that is being hedged
Comments closed on 25 February, IASB equivalent open for comment until 2 March 2009

ED 175 (PDF 186kb)

IAS Plus Update Newsletter (PDF 131kb)

ED 176 Proposed Amendments to Australian Accounting Standards - Borrowing Costs of Not-for-Profit Public Sector Entities
Proposes to reintroduce the option for not-for-profit public sector entities to expense borrowing costs attributable to the acquisition, construction or production of a qualifying asset pending the outcome of the New Zealand FRSB's work on the relationship between depreciated replacement cost and borrowing costs, the AASB's own deliberations on modifying IFRSs for application by not-for-profit entities and the IPSASB's borrowing costs project.
Open for comment until 3 April 2009

ED 176 (PDF 101kb)

Accounting alert 2009/01

Proposed Interpretation 10XX Australian Superannuation Contributions Tax for Defined Benefit Plans
Proposes that an employer sponsor of a defined benefit superannuation plan should include the impact of Australian taxes on future superannuation contributions when measuring a defined benefit obligation.
Open for comment until 31 March 2009

Proposed Interpretation (PDF 163kb)

Accounting alert 2009/01

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
AASB meeting 9 February 2009 New EDs were approved on post-implementation amendments to Interpretations 9 and 11 and borrowing costs by not-for-profit public sector entities and a Proposed Interpretation on Australian superannuation contributions tax for defined benefit plans was also approved.

Accounting alert 2009/01

AASB Action Alert (PDF 53kb)

IASB meeting 17 -20 February 2009 The IASB agreed to provide additional guidance on IFRS 7 disclosures in interim reports, countenanced the possibility that rate regulation can create assets or liabilities under the Framework and finalised its redeliberations in its IFRS for private entities project.

Australian meeting summary

Deloitte observer notes

IASB Update (PDF 86kb)

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 Newsletters )

IFRS publications
Other publications of interest
  • Deloitte (United Kingdom) has published Our Better Halves (PDF 1,246kb) - a survey of the half-yearly financial reports of 130 UK listed companies. Because UK listed companies must follow IFRSs, these reports conform to IAS 34 as well as other UK requirements
  • The Deloitte UK Insurance Centre of Excellence has published illustrative 2008 IFRS financial statements for an insurance group, Delto Insurance Group plc - Illustrative Financial Statements and Selected Disclosures for the Year Ended 31 December 2008 (PDF 676kb)
  • Deloitte (United States) published SEC Comment Letters on Foreign Private Issuers Using IFRSs: A Closer Look (PDF 555kb). This Special Report is designed to help financial statement preparers understand the items that the SEC staff has focused on during its review process over the past two years. It includes extracts from actual comment letters as well as forward-looking considerations
  • Deloitte (United States) has published a February 2009 edition of Heads Up Newsletter (PDF 115kb) explaining recent issues discussed by the FASB's Valuation Resource Group including the SEC's study into mark-to-market accounting and goodwill impairment testing.

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 )

  • The second meeting of the Financial Crisis Advisory Group (FCAG) was held in New York on 13 February 2009 ( Deloitte observer notes)
  • The AASB has issued an invitation to attend roundtable discussions on ITC 19 Request to Comment on IASB Discussion Paper Preliminary Views on Financial Statement Presentation, which are to be held in Melbourne (18 March), Sydney (24 March) and Canberra (26 March)

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