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Monthly roundup - April 2010

Staying on top of developments

In this edition:

Monthly highlight: April AASB meeting

The AASB’s March meeting was held 28-29 April 2010 and progressed projects such as differential reporting, superannuation, possible extension of the exemption from consolidation and GAAP/GFS harmonisation.

Whilst the AASB did not make any decisions on its differential reporting proposals, a verbal report was given by staff on the comment letters received on ED 192 Revised Differential Reporting Framework. Over 70 submissions were received with initial analysis indicating majority support for the proposed Reduced Disclosure Regime (RDR) over the possible Australian adoption of the IFRS for SMEs. This may be an early indicator in favour of the AASB proceeding with its proposals.

Deliberations also continued on ED 179 Superannuation Plans and Approved Deposit Funds. The AASB also decided to consider the (potentially substantial) impact of the IASB’s current proposals for an ‘investment company’ exemption from consolidation separately from the ED 179 redeliberations.

The AASB also appears to be developing an increasingly negative view of the IASB’s impairment model for financial assets, considering it to be a function of revenue recognition (i.e. why should interest income received be ‘deferred’ in an impairment allowance account during the life of a receivable?)

More information: Accounting alert 2010/04, AASB Action alert (PDF 70kb)

Need to refresh your skills in accounting for income taxes?

During May and June, Deloitte is presenting, on behalf of the Institute of Chartered Accountants, a series of basic and advance workshops on applying AASB 112 Income Taxes. These practical courses represent a great way to refresh and enhance your skills in applying what can be a complex and difficult standard. For more information and registration, refer to these links: Sydney, Melbourne, Perth, Brisbane, Adelaide.

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 2010 financial reporting cycle summary)

International Accounting Standards Board (IASB)
Pronouncement Key dates More information

IASB Discussion Paper DP/2010/1 Extractive Activities

The Discussion Paper deals with specific financial reporting issues associated with the exploring for and finding minerals, oil and natural gas deposits, developing those deposits and extracting minerals, oil and natural gas, sometimes referred to as ‘upstream’ activities. It does not consider ‘downstream’ activities (e.g. processing and refining), nor does it consider matters of ‘general application’ such as revenue recognition, depreciation, inventory accounting, joint arrangements, decommissioning liabilities and so on.

Whilst in some cases the Discussion Paper proposes approaches producing outcomes similar to existing industry practice, there are a number of interesting issues and considerations arising – such as potentially mandating capitalisation of exploration expenditure and much more information about reserves and resources.

Comments to the IASB close on 30 July 2010 (AASB by 2 July 2010, see below)

IASB DP/2010/1

AASB ITC 23 (PDF 1395kb)

Extracting Value (discusses draft DP issued in August 2009)

IASB ED/2010/3 Defined Benefit Plans (Proposed amendments to IAS 19)*

Proposes that entities should recognise all changes in defined benefit obligations and in the fair value of plan assets when those changes occur, eliminating the ‘corridor’ option currently available under IAS 19.

Also proposes a new presentation approach for changes in defined benefit obligations and the fair value of plan assets. Entities would split changes in the defined benefit obligation and the fair value of plan assets into three components: service cost (presented in profit or loss), finance cost (also presented in profit or loss) and a remeasurement component (presented in other comprehensive income).

Comments to the IASB close on 6 September 2010 IASB ED/2010/3

IASB Staff Paper Recognising liabilities arising from lawsuits*

This staff paper discusses one aspect of the working draft IFRS that would replace IAS 37 Provisions, Contingent Liabilities and Contingent Assets. The paper explains:

  • How the recognition criteria in the working draft IFRS differ from those in the existing IAS 37
  • How the new criteria would apply to liabilities arising from lawsuits
  • Why the IASB is changing the criteria
Not open for comment in its own right. IASB ED/2010/1 Measurement of Liabilities in IAS 37 is open for comment until 19 May 2010 IASB staff paper (PDF 60kb)

* equivalent pronouncement not yet issued by AASB

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

ED 194 Service Concession Arrangements: Grantor

Effectively a request for comment on the International Public Sector Accounting Standards Board ED 43 with the same title. The AASB has not discussed the proposals in IPSASB ED in detail and has not reached any preliminary views on the proposals.

The IPSASB ED mirrors the principles set out in the IFRIC Interpretation 12 (and therefore AASB Interpretation 12) for accounting for service concession arrangements by operators. Additional proposals are included in the ED to address aspects relevant only to grantors.

Comments are due to the AASB by 24 May 2010 and to the IPSASB by 30 June 2010 ED 194 (PDF 582kb)

AASB Invitation to Comment ITC 23 Request for Comment on IASB Discussion Paper DP/2010/1 'Extractive Activities'

AASB request for comment on the IASB Discussion Paper noted above.

Comments are due to the AASB by 2 July 2010 and to the IASB by 30 July 2010

IASB DP/2010/1

AASB ITC 23 (PDF 1395kb)

Extracting Value (discusses draft DP issued in August 2009)

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 April meetings (8, 20-23 April 2010)

(included a special meeting and joint meetings with the FASB)

Highlights include:

  • Early warning on new standards and exposure drafts on annual improvements, termination benefits, leases, financial statements, financial liabilities, fair value measurement and consolidation
  • Substantial progress on the leases project, with impairment by lessors an outstanding issue
  • Much discussion on the insurance project
  • Development of criteria for classification as an ‘investment company’ eligible for exemption from consolidation.

Australian meeting summary

Deloitte observer notes: meeting 8 April, meeting 20-23 April.

AASB meeting 28-29 April 2010) The AASB progressed projects such as differential reporting, superannuation and GAAP/GFS harmonisation

Accounting alert 2010/04

AASB Action alert (PDF 70kb)

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
Other publications of interest
Deloitte comment letters

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 April historical summary on IAS Plus)

Australian-specific matters
  • The AASB is holding roundtables on its proposals in ED 192 Revised Differential Reporting Framework and the related Consultation Paper Differential Financial Reporting – Reducing Disclosure Requirements in Sydney (5 May) and Melbourne (7 May) (AASB press release)
  • The ASX Corporate Governance Council has released for public comment proposed changes to the Corporate Governance Principles and Recommendations in relation to diversity, remuneration, trading policies and analyst briefings (ASX press release, PDF 40kb)
  • The Federal Government has responded to the Productivity Commission report on Executive Remuneration, supporting nearly all of the recommendations (press release)
  • The Minister for Financial Services, Superannuation and Corporate Law, Chris Bowen MP, has released an exposure draft of legislation giving effect to the Government's decision to reverse the High Court decision in Sons of Gwalia v Margaretic (press release)
  • ASIC has advised that a listed company may accept proxy votes for general meetings that are lodged by electronic means without amending its constitution to expressly permit it (ASIC press release)
  • ASIC has released a consultation papers aimed at improving disclosure to retail investors by infrastructure entities (including listed and unlisted companies and registered managed investment schemes) and agricultural schemes (ASIC press releases: Infrastructure, Agriculture)
International Accounting Standards Board
  • IASB staff will host separate live web presentations introducing the recently published Exposure Draft on defined benefit plans (6 May) and the Discussion Paper on extractive activities (7 May) (more information: defined benefit plans, extractive activities)
  • The International Accounting Standards Board (IASB) has produced a questionnaire for financial statement users on amortised cost measurement and impairment of financial instruments – closes on 30 June 2010 (more information)
  • The IASB has tentatively scheduled a special joint meeting with the FASB on Tuesday 4 May 2010
  • The IASB and the FASB have published a quarterly progress report as of 31 March 2010 on their work to improve and achieve convergence of IFRSs and US GAAP (report, PDF 69kb)
Other global news
  • The International Public Sector Accounting Standards Board (IPSASB) has published exposure draft ED 44 Improvements to International Public Sector Accounting Standards (IPSASs). ED 44 includes proposals to maintain alignment of IPSASs with IFRSs, as well as other general improvements (IPSASB press release, PDF 20kb)
  • Deloitte (United States) will conduct a two-day training workshop titled Oil & Gas IFRS in Houston on 16-17 June 2010 (registration information)



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