AASB to enhance trans-Tasman harmonisation (ANT27/2010)
AASB releases ED 199 on fair value disclosures (ANT26/2010)
AASB releases Revenue ED (ANT 26/2010)
IASB proposes disclosure of fair value measurement uncertainty analysis (ANT25/2010)
New revenue recognition exposure draft (ANT24/2010)
New ED on valuation standards (ANT21/2010)
AASB to Improve presentation of OCI (ANT21/2010)
AASB releases Defined Benefits ED (ANT19/2010)
AASB issues financial liabilities ED (ANT19/2010)
IASB releases financial liabilities ED (ANT18/2010)
Defined benefit plans ED released (ANT17/2010)
New ED on service concession arrangements (ANT15/2010)
AASB issues Extractive Activities ITC (ANT14/2010)
Feedback on extractive activities discussion paper (ANT13/2010)
AASB releases Conceptual framework ED (ANT12/2010)
Service concession arrangements ED released (ANT10/2010)
IFRS Taxonomy 2010 ED available (ANT08/2010)
Differential Reporting ED now available – have your say! (ANT08/2010)
IASB and AASB re-expose liability proposals (ANT01/2010)
AASB’s differential reporting paper (ANT49/2009)
AASB issues ED on impairment of financial instruments (ANT47/2009)
IASB webcast on impairment and amortised cost (ANT44/2009)
Erratum IASB Improvements ED (ANT36/2009)
AASB ED – discount rate for employee benefits (ANT36/2009)
AASB issues ED on improvements to IFRSs (ANT35/2009)
IASB ED on improvements to IFRSs (ANT34/2009)
IASB ED on discount rates for employee benefits (ANT33/2009)
IASB Draft DP on extractive industries (ANT33/2009)
Rights issues ED issued (AASB) (ANT32/2009)
ED on classification of rights issues (ANT31/2009)
AASB issues ED 185 Rate-Regulated Activities (ANT30/2009)
IASC Foundation request for comments on IFRS Taxonomy (ANT29/2009)
IASB publishes proposals on rate-regulated activities (ANT29/2009)
AASB seeks comment on expected loss model (ANT29/2009)
AASB issues ED 184 Financial Instruments: Classification and Measurement (ANT29/2009)
AASB releases ED 183 Management Commentary (ANT29/2009)
IASB proposes improvements to financial instrument accounting and holds webcast (ANT28/2009)
Expected loss model for consideration in IAS 39 (ANT26/2009)
ITC 21 The IASB’s credit risk in liability measurement (ANT26/2009)
ED 180 Income from non-exchange transactions (ANT26/2009)
Comments submitted on revenue recognition (ANT26/2009)
AASB ED 183 and IASB ED 2009/6 Management Commentary (ANT25/2009 and ANT29/2009)
AASB ED 181 Fair Value Measurement (ANT25/2009)
ED 182 Minimum Funding Requirements (ANT24/2009)
AASB & IASB “Fair value” proposals released (ANT22/2009)
AASB to enhance trans-Tasman harmonisation
as reported in ANT27/2010
The Australian Accounting Standards Board (AASB) has released:
- ED 200-A Proposals to harmonise Australian and New Zealand Standards in relation to Entities applying IFRSs as adopted in Australia and New Zealand (PDF)
- ED 200-B Proposed Separate Disclosure Standards (PDF)
Although both Australia and New Zealand have adopted accounting standards based on IFRS, both countries have independently modified IFRSs for reasons relevant to each country. As part of a longer term project to harmonise accounting requirements in the two countries, these ED’s propose eliminating many of the IFRS-related differences between Australia and New Zealand.
These exposure drafts (ED’s) are open for comment until 8 October 2010.
Any resulting amendments will be effective for annual reporting periods beginning on or after 1 July 2011, with early adoption permitted.
AASB releases ED 199 on fair value disclosures
as reported in ANT26/2010
The AASB has released ED 199 Measurement Uncertainty Analysis Disclosure for Fair Value Measurements (Limited re-exposure of proposed disclosure) (PDF) for comment by 19 August 2010. The ED proposes improvements to the Level 3 fair value measurement disclosures that were proposed in ED 181 Fair Value Measurement published in June 2009 (see item 5 ANT25/2009).
More information is available on the AASB website.
AASB releases Revenue ED
as reported in ANT26/2010
In response to the IASB’s release of ED 2010/6 Revenue from contract with customers (see item 6 in ANT24/10), the AASB has now issued this document as ED 198 Revenue from contract with customers (PDF).
Comments to the AASB are requested by 24 September 2010 and to the IASB by 22 October 2010.
The new ED is a major joint project between the FASB and IASB. It requires entities to recognise revenue from contracts with their customers when it transfers goods or services to the customer. Revenue should then be measured at the amount of consideration the entity receives, or expects to receive, from the customers. It is intended to replace AASB 118 Revenue, AASB 111 Construction Contracts and related Interpretations.
IASB proposes disclosure of fair value measurement uncertainty analysis
as reported in ANT25/2010
The International Accounting Standards Board (IASB) has published for public comment further enhancements (PDF) to a disclosure proposal on Level 3 fair value measurements, ED/2010/7
Measurement Uncertainty Analysis Disclosure for Fair Value Measurements (Limited re-exposure of proposed disclosure). The proposals build on the original exposure draft ‘Fair Value Measurement’ (PDF) (see item 7 ANT22/09) by requiring the measurement uncertainty analysis disclosure to reflect the interdependencies between unobservable inputs used to measure fair value in Level 3.
More information is available in the IASB media release as well as the project page.
New revenue recognition exposure draft
as reported in ANT24/2010
The IASB in association with the US FASB has published for public comment exposure draft ED/2010/6 Revenue from Contracts with Customers (PDF) aimed at improving and aligning the financial reporting of revenue from contracts with customers and related costs. The proposals require entities to recognise revenue from contracts with their customers when transfer goods or services to the customer in the amount of consideration the entity receives, or expects to receive, from the customers.
If adopted, the new standard would supersede IAS 18 Revenue and IAS 11 Construction Contracts, and would create a single revenue recognition standard common to both IFRS and US GAAP.
The IASB has provided accompanying materials to aid interested members wishing to make a submission. More information is also available in the media release (PDF), with comments sought by 22 October 2010.
New ED on valuation standards
as reported in ANT22/2010
The International Valuation Standards Committee (IVSC) has published an exposure draft (PDF) of proposed new International Valuation Standards (IVS). These standards will provide guidance on valuations for most types of assets, including, for the first time, financial instruments. The proposals reflect developments in IFRS which increasingly require assets and liabilities to be valued, and will most likely be adopted in 2011.
The IVSC has also made available an overview document (PDF) aimed at interested members wishing to make a comment on the exposure draft. This document sets out a number of questions for respondents to consider when preparing a submission.
Comments are encouraged and should be forwarded to the IVSC by 3 September 2010. Readers should also be aware that the proposed standards are not endorsed by the IASB nor are they otherwise authoritative, but they do ensure a high level of consistency in future valuations.
AASB to Improve presentation of OCI
as reported in ANT21/2010
The AASB has published for public comment an exposure draft ED 197 Presentation of Items of Other Comprehensive Income (proposed amendments to AASB 101) (PDF), which is aimed at improving the consistency of the presentation of items contained in the Statement of Other Comprehensive Income (OCI). This follows the exposure draft released by the IASB which can be accessed from its website. Comments should be submitted to the AASB by 2 August 2010 and to the IASB by 30 September 2010 via the submissions portal.
The proposals will require entities to present profit or loss and other comprehensive income in separate sections of a continuous statement. Furthermore, the new presentation will require entities to group items in OCI on the basis of whether they will eventually be ‘recycled’ into the profit or loss section of the income statement.
AASB releases Defined Benefits ED
as reported in ANT19/2010
The AASB has issued as ED 195 Defined Benefits Plan (proposed amendments to AASB 119) (PDF) the IASB’s ED 2010/3 of the same title (see item 3 of ANT 17/10). The ED’s proposals will fundamentally reform the recognition, presentation and disclosure requirements imposed on defined benefit plans by AASB 119 Employee Benefits in order to resolve a range of significant deficiencies identified in the current requirements. Comments to the AASB are due by 9 August 2010 to enable them to meet the IASB comment deadline of 6 September 2010.
In particular, the ED proposes:
- Immediate recognition for all estimated changes in the cost of providing these benefits and all changes in the value of plan assets (i.e. removal of the corridor approach);
- A revised presentation model that would clearly distinguish between different components of the cost of the defined benefit plan; and
- Clearer disclosure of information about the characteristics and risks associated with defined benefit plans.
AASB issues financial liabilities ED
as reported in ANT19/2010
The AASB has issued as ED 196 Fair Value Options for Financial Liabilities (PDF) the IASB’s ED 2010/4 of the same name (see item 4 of ANT18/10)
The ED represents the completion of phase 1 of the International Accounting Standards Board’s (IASB) proposals to revise the recognition and measurement requirement of IAS 39 Financial Instruments which were partially completed late last year, with the release of AASB 9 Financial Instruments (refer to ANT 49/09). Comments on the ED should be submitted to the AASB by 2 July 2010 to enable it to comply with the IASB’s comment deadline of 16 July 2010.
The ED proposes only minor changes to the liability requirements currently imposed by IAS 39, focusing on the use of the fair value option. This reflects the finding so of the IASB’s extensive consultation process which identified these requirements as most in need of change. The new ED proposes that all gains and losses resulting from changes in the credit risk of a financial liability that is measured at fair value must now be transferred to other comprehensive income, no longer affecting profit and loss. The change will primarily affect those entities which choose to apply the fair value option to their financial liabilities, especially large financial institutions, reducing profit volatility while still ensuring investors have access to the information they require about an entity’s credit risks.
IASB releases financial liabilities ED
as reported in ANT18/2010
The IASB has released for public comment its proposed changes to the classification and measurement rules for financial liabilities. The new ED represents the missing piece from Phase 1 of its project to revise IAS 39 Financial Instruments which was partially completed in November 2009 with the release of IFRS 9 Financial Instruments (refer to ANT 45/09). However this new standard only introduced new classification and measurement rules for financial assets, with the IASB advising that liability requirements were still under discussion.
This discussion and consultation process has now been completed and the new ED 2010/4 titled Fair Value Option for Financial Liabilities is open for comment until July 16 2010. It proposes only limited change from the requirements currently contained in IAS 39 in relation to the use of the fair value option. It is supported by a high-level snapshot document which provides an overview of the changes.
The IASB has advised that most of the feedback obtained from its consultation and discussion on the liability requirements indicated that the current requirements were workable. The exception was the use of the fair value option, which created unacceptable profit volatility when changes in the credit risk of a financial liability (referred to in the ED as “own credit”) occurred. As a result the new ED proposes that all gains and losses resulting from changes in the credit risk of a financial liability that is measured at fair value must now be transferred to other comprehensive income, no longer affecting profit and loss. This change will have most effect on those entities which choose to apply the fair value option to their financial liabilities, primarily large financial institutions, reducing profit volatility while still ensuring investors have access to the information they require about an entity’s credit risks.
Defined benefit plans ED released
as reported in ANT17/2010
The International Accounting Standards Board (IASB) has published for public comment its exposure draft Defined benefit plans. The exposure draft proposes amendments to IAS 19 Employee Benefits, which will fundamentally reform the recognition, presentation and disclosure requirements imposed on defined benefit plans in order to improve a range of significant deficiencies identified in the current requirements. It is open for comment until 6 September 2010, with the Board intending to issue a revised standard in mid-2011.
The major changes require:
- Immediate recognition for all estimated changes in the cost of providing these benefits and all changes in the value of plan assets (i.e. removal of the corridor approach);
- A revised presentation model that would clearly distinguish between different components of the cost of the defined benefit plan; and
- Clearer disclosure of information about the characteristics and risks associated with defined benefit plans.
To assist readers understand the revised proposals, the ED is accompanied by a 12-page high level summary (PDF) of the proposals and a more detailed project summary that is available on the project webpage (PDF). The IASB is also offering an email alert service to keep readers up to date on this project with more details on how to register on the project page.
More information is available on the IASB website.
New ED on service concession arrangements
as reported in ANT15/2010
The Australian Accounting Standards Board (AASB) has released ED 194 Service Concession Arrangements: Grantor (PDF), which mirrors the International Public Sector Accounting Standards Board’s (IPSASB) ED of the same name (see item 7 of ANT10/2010).
In particular, the AASB seeks comments on whether there will be any regulatory issues arising in the Australian environment that may affect the implementation of the proposal, the overall effects it will have on financial statements that would be useful for users and whether the proposal is in the interest of both the Australian and New Zealand economies.
Comments are due to the AASB by 24 May 2010 and to the IPSASB by 30 June 2010. The Institute will be making a submission on this ED and would welcome any comments readers may have. They can be submitted via email to techsubmissions@charteredaccountants.com.au.
AASB issues Extractive Activities ITC
as reported in ANT14/2010
The AASB has now issued its discussion paper ITC 23 Extractive Activities of the same name, issued by the International Accounting Standards Board (IASB) last week (see item 3, ANT 13/10).
The paper contains the findings of an international research project charged with determining the appropriate content for a future standard on extractive activities to replace IFRS 6 Exploration for and Evaluation of Mineral Resources (and its Australian equivalent AASB 6), which were developed as interim standards in 2004.The discussion paper represents only the views of the project teams and the IASB will use feedback received to determine whether to add this project to its active agenda.
Comments should be submitted to the AASB by 2 July 2010 to enable the AASB to prepare a response to the IASB ahead of its 30 July 2010 deadline.
Feedback on extractive activities discussion paper
as reported in ANT12/2010
The International Accounting Standards Board (IASB) has published as a Discussion paper for public comment the findings of an international research project charged with determining the appropriate content for a future standard on extractive activities to replace IFRS 6 Exploration for and Evaluation of Mineral Resources. The DP is also supported by a Snapshot summary document and a working draft of this DP was released in August last year (refer to item 7 in ANT 33/09).
The current standard IFRS 6 Exploration for and Evaluation of Mineral Resources, issued as an interim measure in 2004, does not deal adequately with accounting for the development and production of minerals or oil and gas properties and does not include specific disclosure requirements that would help users to assess the nature and extent of the risks involved in the extractive activities. This lack of guidance has caused considerable worldwide variation in accounting treatment. The DP discusses how a possible standard on extractive activities could address these issues, which is intended to contribute significantly to improving the relevance and comparability of financial statements worldwide.
The discussion paper represents only the views of the project teams and the IASB will use feedback received to determine whether to add this project to its active agenda. Comments are open until 30 July 2010 and should be lodged via the IASB’s comment portal.
AASB releases Conceptual framework ED
as reported in ANT12/2010
The Australian Accounting Standards Board (AASB) has now released as ED 193 Conceptual Framework for Financial Reporting: the Reporting Entity (PDF), the IASB’s recently released ED2010/2 of the same title (refer item 8) of ANT 10
This exposure draft represents the International Accounting Standards Board’s (IASB) joint work with the United States Financial Accounting Standards Board (FASB) on phase D of their conceptual framework and the term “reporting entity” in this context refers to the boundaries that define an “entity” for general purpose reporting requirements and includes discussion of the concept of control, and hence the need for consolidation within that context.
The AASB requests comments by 21 June 2010 to allow sufficient time to meet the IASB deadline of 16 July 2010
For more information, see the AASB website .
Service concession arrangements ED released
as reported in ANT10/2010
As anticipated in item 6 ANT02/2010, the International Public Sector Accounting Standards Board (IPSASB) has now formally released for comment its ED ‘Service Concession Arrangements: Grantor' (PDF), which is open for comment until 30 June 2010.
The ED presents requirements and guidance on how grantors recognise, account for and disclose assets in service concession arrangements and comments can be submitted online. Its proposals mirror the requirements of AASB/IFRIC Interpretation 12 Service Concession Arrangements.
IFRS Taxonomy 2010 ED available
as reported in ANT08/2010
The IASC Foundation has published for public comment an exposure draft of the IFRSs Taxonomy 2010. The taxonomy is a translation of IFRS (as issued at 1 January 2010) into eXtensible Business Reporting Language (XBRL). This year it also includes the IFRS for SME standard, as well as other significant architectural improvements over the 2009 version.
Comments on the exposure draft should be submitted by 22 April 2010. The proposed taxonomy can be accessed on the IASB website.
Differential Reporting ED now available – have your say!
as reported in ANT08/2010
The Australian Accounting Standards Board (AASB) has now finalised and released as ED 192 Revised Differential Reporting Framework (PDF) the formal exposure draft outlining its differential reporting proposals.
The ED gives practical application to the proposals contained in its Consultation Paper Differential Financial Reporting – Reducing Disclosure Requirements (PDF) released late last year (refer to item 4 ANT 49/09 and which are discussed in detail in an article on page 64 of March Charter.
Under the proposal, publicly accountable for-profit private entities will continue to apply full IFRS. The ED explains the type of organisations that are publicly accountable in the Australian context. The key changes from the current framework relate to private entities (or non-publicly accountable entity). A reduced disclosure regime is proposed which will reduce the current reporting burden on SMEs currently producing general purpose accounts.
However, the proposals also remove the ability for private companies reporting under the Corporations Act to produce special purpose financial accounts. These companies will have the option of applying the reduced disclosure regime (in contrast to full IFRS adoption). However this will involve a substantial increase in disclosures and compliance with full recognition and measurement of all accounting standards.
Public sector entities (except for all levels of Government and universities) would also be able to apply the reduced disclosure regime.
Comments on the ED are requested by 23 April 2010.
The Institute encourages its members to provide comments on this ED directly to the AASB at standard@aasb.gov.au or to the Institute at techsubmissions@charteredaccountants.com.au. We are also particularly interested in comments on whether you consider that IFRS for SMEs should be available in Australia. We would be happy to discuss this issue with you further either through email rahelpline@charteredaccountants.com.au or on the Reporting and Assurance helpline number.
IASB and AASB re-expose liability proposals
as reported in ANT01/2010
The International Accounting Standards Board (IASB) has released an exposure draft to re-expose revised proposals dealing with the measurement of contingent liabilities under IAS 37 Provisions, Contingent Liabilities and Contingent Assets. In light of this, the AASB has issued ED 191 Measurement of Liabilities in AASB 137.
Changes to this standard were originally exposed in 2005 and the IASB is well progressed on most of the principles to be contained in the new IFRS on this topic. However following consideration of the feedback received on the ED, it determined that more guidance was necessary in the area of measurement, especially for such liabilities as asset decommissioning and legal disputes, and that these new proposals should be subject to formal re-exposure
Comments on the proposed changes are due to the AASB by 15 March 2010 (by 12 April 2010 to IASB) and the exposure drafts are available on the respective websites (IASB, AASB). We encourage members to respond to the exposure draft either directly to the relevant boards or send comments to techsubmissions@charteredaccountants.com.au to be considered for inclusion in the Institute’s submission.
To assist readers to view the changes proposed above in context, a working draft of the entire new standard reflecting all its decisions is expected to be available on the IASB website in February 2010. The Board currently plans to issue the new IFRS in the third quarter of 2010 and more details on the entire project can be obtained on the IAS 37 project page.
AASB’s differential reporting paper
as reported in ANT49/2009
The AASB has released a consultation paper (PDF) outlining proposals that seek to establish a reduced disclosure regime for some entities producing general purpose financial statements. The Institute supports differential reporting for the private sector. However, we believe that the AASB consultation paper does not adequately examine all the options available, given that the needs of users of private company accounts are often different from the needs of participants in the capital markets.
The two main proposals in the paper are:- The removal of the ability for companies to prepare special purpose financial statements when reporting in accordance with the Corporations Act; and
- The introduction of a second tier of general purpose financial statements using a reduced disclosure model prepared by the AASB, requiring full recognition and measurement in accordance with full International Financial Reporting Standards (IFRS) combined with reduced disclosures.
Note that the AASB is not advocating the use of the IFRS for SMEs for the second tier.
The Institute believes that the first of these changes may significantly increase the compliance burden for many entities currently lodging special purpose financial reports.
The AASB’s reduced disclosure regime would apply to:- Non-publicly accountable entities (including entities that are not listed and/or do not hold assets in a fiduciary capacity);
- The not-for-profit private sector; and
- Certain public sector entities other than federal, state and territory, local governments and universities.
The media release can be accessed on the AASB website.
The closing date for comments will be given once the AASB finalises a companion ED that demonstrates the intended application of the proposals. However, members are encouraged to make submissions on the general direction of the proposals as early as possible. The Institute will be working to gather input to the submission as well as communicating directly with government and the AASB.
AASB issues ED on impairment of financial instruments
as reported in ANT47/2009
Following the release of the International Accounting Standards Board’s (IASB) ED 2009/12 Financial Instruments: Amortised Cost and Impairment, the Australian Accounting Standards Board (AASB) has followed suit and released ED 189 (PDF). This ED seeks to clarify the amortised cost model and to improve the approach to measuring and reporting impairment for a financial asset measured at amortised cost.
Comments are requested to reach the AASB by 17 May 2010 while the IASB submission is due on the 30 June 2010. The Institute will be making a submission to both bodies and interested members may forward their comments to techsubmissions@charteredaccountants.com.au.
IASB webcast on impairment and amortised cost
as reported in ANT44/2009
On 5 November 2009, the IASB conducted a webcast introducing the exposure draft (ED) on the amortised cost measurement and impairment of financial instruments. The ED is open for comment until 30 June 2010, to allow time for the IASB to conduct extensive outreach activities to ensure that views are obtained from a broad range of interested parties. Refer to the IASB page to access the ED, a snapshot summary document and the project page.
The Institute attended the webcast and noted the following points:
- The objective of the ED is to establish principles for the measurement at amortised cost
- The proposed impairment model for financial assets at amortised cost is the expected cash flow (ECF) approach
- The main outcomes of the ECF approach (compared to the current incurred loss approach) include earlier recognition of the impairment loss and a better reflection of the underlying economics
- Final standard is expected in 2010
- Effective date is expected to be three years after the final standard is issued, with early application permitted
The Institute will be responding to the ED and comments or contact details for individuals of organisations that would like to discuss this with us further can be sent to techsubmissions@charteredaccountants.com.au.
Erratum IASB Improvements ED
as reported in ANT36/2009
Last week’s ANT announced the release by the AASB of ED 188 Improvements to IFRSs (PDF), incorporating the IASB’s ED 2009/11 Improvements to IFRSs (Proposed amendments to International Financial Reporting Standards). The item stated that the ED addresses eleven proposed amendments to IFRSs. In fact, the ED contains fifteen amendments to IFRS that affect eleven different standards.
A full list of the issues that are being exposed for comment and the standards they affect is contained in ED 188 and also on the IASB website (PDF). Key ones were highlighted in item 7 ANT 34/2009, which discussed the release of IASB 2009/11.
AASB ED – discount rate for employee benefits
as reported in ANT36/2009
The AASB has released for public comment ED 187 Discount Rate for Employee Benefits (PDF). ED 187 adopts the proposed amendments introduced by the IASB’s ED 2009/10, Discount Rate for Employee Benefits (see item 6 ANT 34/2009), namely the elimination of the use of yields on government bonds to determine the discount rate applied to employee benefits.
The Joint Accounting Bodies’ preliminary view does not support the proposal. In our view, a better approach would be for the IASB to introduce a rebuttable presumption that the discount rate be based on an estimate of market yields on high quality corporate bonds. This presumption could be rebutted on initial adoption of this amendment and the government bond rate could then be used, but only when use of the government bond rate would result in information that is more relevant than that derived from an estimate of market yields on high quality corporate bonds.
Comments to the AASB are requested by 14 September 2009 and to the IASB by 30 September 2009. As well as submitting directly to the AASB and IASB, members are can send comments on our preliminary view to techsubmissions@charteredaccountants.com.au
AASB issues ED on improvements to IFRSs
as reported in ANT35/2009
Following item 7 ANT 34/2009 (see below), the AASB has now issued – for public comment – ED 188 Improvements to IFRSs (PDF), incorporating the IASB’s ED 2009/11 Improvements to IFRSs (Proposed amendments to International Financial Reporting Standards).
The ED addresses eleven proposed amendments to IFRSs and may involve consequential changes to others. They include:
- IFRS 1 First-time Adoption of International Financial Reporting Standards
- IFRS 3 Business Combinations
- IFRS 5 Non-current Assets Held for Sale and Discontinued Operations
- IFRS 7 Financial Instruments: Disclosures
- IAS 1 Presentation of Financial Statements
- IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors
- IAS 27 Consolidated and Separate Financial Statements
- IAS 28 Investments in Associates
- IAS 34 Interim Financial Reporting
- IAS 40 Investment Property
- IFRIC 13 Customer Loyalty Programmes
Comments to the AASB are requested by 30 October 2009 and to the IASB by 24 November 2009.
IASB ED on improvements to IFRSs
as reported in ANT34/2009
The IASB has published for public comment ED 2009/11 Improvements to IFRSs (Proposed amendments to International Financial Reporting Standards) (PDF), which covers a collection of non-urgent but necessary amendments to IFRSs. The ED includes a chapter for each IFRS for which an amendment is proposed (eleven in total). Some proposed amendments involve consequential changes to other IFRSs, example of which include:
IFRS 3 Business Combinations
- Transition requirements for contingent consideration
- Measurement of non-controlling interests
- Share-based payment awards
IAS 27 Consolidated and Separate Financial Statements
- Impairment of investments in associates in separate financial statements
- Transitional requirements
IAS 34 Interim Financial Statements
- Significant events and transactions
IFRIC 13 Customer Loyalty Programs
- Fair-value of award credit
A full list of amendments can be found on the IASB website (PDF) along with the media release. Comments are to be received by the IASB by 24 November 2009.
IASB ED on discount rates for employee benefits
as reported in ANT33/2009
The IASB has published for public comment exposure draft ED 2009/10 Discount Rate for Employee Benefits (proposed amendments to IAS 19) which contains proposals to amend the discount rate for measuring employee benefits. The proposals respond to calls from stakeholders to address a problem that the global economic downturn has highly as increasingly significant.
The media release and further details of the project are available on the IASB website. Comments are to be received by the IASB by 30 September 2009.
IASB Draft DP on extractive industries
as reported in ANT33/2009
The IASB has released a draft discussion paper on the accounting for entities engaged in minerals and oil & gas extractive activities. At this stage, the paper is for information purposes only. The IASB expects to release it as a formal discussion paper in Q1 2010, at which time it will be open for comment.
The discussion paper constitutes the first step in the IASB’s plan to develop a new standard on accounting for extractive assets, which will replace the current IFRS 6 Exploration for and evaluation of mineral resources (the equivalent of AASB 6 Exploration for and evaluation of mineral resources).
The paper proposes 5 key recommendations:
- A single financial reporting model should be available for all mining and oil & gas activities
- Reserves and resources definitions should be the definitions developed by the Committee for Mineral Reserves International Reporting Standards
- Mineral and oil & gas assets should be recognised when an entity has acquired the legal right to explore
- Mineral and oil & gas assets should continue to be measured at historical cost, supplemented by disclosure of the volume and current value of reserves
- Significantly more detailed disclosures should be required about a range of matters (e.g. reserve quantities)
The discussion paper is currently available as a working draft (PDF) only.
Rights issues ED issued (AASB)
as reported in ANT32/2009
The AASB has issued ED 186 (PDF) Classification of Rights Issues (proposed amendment to AASB 132 Financial Instruments: Presentation), the Australian equivalent of IASB ED/2009/9 Classification of Rights Issues (proposed amendment to IAS 32) issued by the IASB last week (refer to item 4 ANT31/2009 - see below).
Comments are requested to the AASB by 24 August 2009 and to the IASB by 7 September 2009. The Institute will be preparing a submission and member input is encouraged. Comments should be emailed to techsubmissions@charteredaccountants.com.au by 21 August 2009.
ED on classification of rights issues
as reported in ANT31/2009
Further to its meeting of 20-24 July, the IASB this week released ED 2009/9 Classification of Rights Issues (PDF) containing a proposal to amend IAS 32 Financial Instruments: Presentation.
The amendment is to clarify the classification of instruments that give the holders the right to acquire an entity’s own equity instruments at a fixed price when that price is stated in a currency other than the entity’s functional currency.
Comments are requested to the IASB by 7 September 2009. The Institute will be preparing a submission and member input is encouraged. Comments should be emailed to techsubmissions@charteredaccountants.com.au by 21 August 2009.
AASB issues ED 185 Rate-Regulated Activities
as reported in ANT30/2009
The AASB this week issued ED 185 Rate-regulated Activities (PDF), which reflects the IASB’s ED 2009/8 Rate-regulated Activities.
As discussed in item 8 ANT 29/2009, the ED proposes to establish how assets and liabilities resulting from rate-regulated activities should be recognised and measured under IFRS.
Comments to the AASB are requested by 9 October 2009 and to the IASB by 20 November 2009. The Institute will be preparing a submission and member input to this process is encouraged. Comments should be emailed to techsubmissions@charteredaccountants.com.au before 2 October 2009.
IASC Foundation request for comments on IFRS Taxonomy
as reported in ANT29/2009
The International Accounting Standards Committee (IASC) Foundation has published two Requests for Information relating to the IFRS Taxonomy for comment by 14 August 2009:The IFRS Taxonomy is a translation of IFRSs as at 1 January 2009 into XBRL (eXtensible Business Reporting Language), and has been revised and improved in response to comments received from the exposure draft released in January 2009. The new taxonomy will allow companies, regulators, investors, analysts and other users of the IFRS Taxonomy 2009 and XBRL technology worldwide to benefit from easier filing and improved access to, and comparison of financial data.
Although the architecture in both the 2008 and 2009 versions of the IFRS Taxonomy have remained unchanged, recent practical issues arising from the implementation of the taxonomy have required the IASC Foundation’s XBRL Team to consider amending the architecture of the IFRS Taxonomy.
The IFRS taxonomy feeds into Australia’s Standard Business reporting project, led by the Commonwealth Treasury. To view the media release and download the Requests for Information, go to the IASB website.
IASB publishes proposals on rate-regulated activities
as reported in ANT29/2009
The IASB this week released ED 2009/8 (PDF) Rate Regulated Activities. It proposes to establish how assets and liabilities resulting from rate-regulated activities should be recognised and measured under IFRS. If adopted, the proposed IFRS would:- Define regulatory assets and regulatory liabilities;
- Set out criteria for their recognition;
- Specify how they should be measured; and
- Require disclosures about their financial effects.
The ED is of particular importance for businesses such as utilities, whose charges are subject to regulation. Comments to the IASB are requested by 20 November 2009.
AASB seeks comment on expected loss model
as reported in ANT29/2009
As part of the second phase of the IASB’s comprehensive review of IAS 39 Financial Instruments: Recognition and Measurement a Request for Information titled Impairment of Financial Assets: Expected Cash Flow Approach (Expected Loss Model) has been published (see item 7 ANT 26/2009).
Rather than seeking views on the relative advantages and disadvantages of alternative impairment approaches, the Request instead seeks information on the feasibility of an expected cash flow approach.
The AASB asks constituents to respond to both the AASB and the IASB. More information can be obtained on the AASB website and comments should be submitted to the AASB by 17 August 2009.
AASB issues ED 184 Financial Instruments: Classification and Measurement
as reported in ANT29/2009
The AASB this week issued ED 184 (PDF) Financial Instruments: Classification and Measurement, which reflects the IASB ED 2009/7 (PDF) Financial Instruments: Classification and Measurement.
Item 7 ANT 28/2009 outlined the main proposals of ED 2009/7, which intended to reduce the classifications of financial instruments to just two; those carried at amortised cost and those carried at fair value. It will also simplify the accounting for embedded derivatives and seeks to streamline accounting for equity investments.
Comments to the AASB are requested by 17 August 2009. The Institute will be preparing a submission on this exposure draft and member input to this process is encouraged. Comments should be emailed to techsubmissions@charteredaccountants.com.au before 7 August 2009.
AASB releases ED 183 Management Commentary
as reported in ANT29/2009
The Australian Accounting Standards Board (AASB) has released ED 183 (PDF) Management Commentary, which incorporates International Accounting Standards Board (IASB) ED 2009/6 (PDF) Management Commentary (a proposed non-mandatory framework).
As outlined in item 6 ANT25/2009, the proposals in the ED are aimed at helping entities prepare and present a narrative report, often referred to as a ‘management commentary’. The ED seeks comments on whether this framework would improve the usefulness of the information provided in an entity’s financial reporting and help users make decisions in their capacity as capital providers. Details of the proposals are also available on the Institute website.
Comments are due to the AASB by 31 December 2009 and to the IASB by 1 March 2010. The Institute will be preparing a submission on this exposure draft and member input to this process is encouraged. Comments should be emailed to techsubmissions@charteredaccountants.com.au before 30 November 2009.
IASB proposes improvements to financial instrument accounting and holds webcast
as reported in ANT28/2009
The IASB this week announced the release of ED 2009/7 Financial Instruments: Classification and Measurement as phase one of its three-part comprehensive review of financial instrument accounting. Along with the media release it has released a Snapshot (PDF), which contains a high-level summary of the proposals (8 pages only). The website contains a copy of the exposure draft, basis for conclusions and changes required to other standards. More details on the financial instruments project as a whole can be found on the Financial Instruments project page.
The proposals are in response to the recommendations by the G20 and other international bodies and will significantly reduce the complexities surrounding IAS 39 Financial Instruments: Classification and Measurement by making it easier for investors to understand financial statements and address how financial instruments are classified and measured.
In conjunction with the release, the IASB also held two live web presentations introducing the ED, which is accessible via the IASB website. These recordings will be available on the IASB website in due course.
The Institute attended the live web presentations and noted the following points:- The objective is to have one converged standard with the US FASB, although the FASB are currently working on their own separate proposals
- In order to simplify current proposals only two measurement models are proposed, being amortised cost (use subject to conditions being met) and fair value
- One impairment model is being developed to apply those financial assets held at amortised cost
- For equity instruments held for trading fair value must be taken through profit or loss
- For equity instruments not held for trading a choice is available, determined instrument by instrument at the date of inception to take all movements (including dividends, realised/unrealised profits, losses etc.) through profit or loss or to take them through to other comprehensive income; no significant or prolonged impairment test will exist
- The new proposals will be available for early adoption for 31/12/2009 year-ends, with mandatory adoption not until years commencing 1/1/2012.
Comments to the IASB on ED 2009/7 are requested by 14 September 2009. The Institute will be preparing a submission during the month of August, therefore would appreciate comments or relevant contact details if you would like to discuss the proposals, being forwarded to techsubmissions@charteredaccountants.com.au.
Expected loss model for consideration in IAS 39
as reported in ANT26/2009
As part its revision of IAS 39, the IASB is reviewing the current impairment requirements of this standard. It has issued a request for information on the feasibility of adopting an “expected loss model” for the impairment of financial assets and seeks input on the practical implications of such a proposal.
Such a model would require an entity to make an ongoing assessment of expected credit losses, which may require earlier recognition of credit losses and therefore better reflect the way that financial assets are priced and the way some companies manage their business. It contrasts with the incurred loss model contained in the current IAS 39, which requires an entity to account for credit losses in financial assets only if an event (or a combination of events) has occurred that has a negative effect on future cash flows and that effect can be reliably estimated.
The Request for Information titled Financial Instruments: Impairment of Financial Assets (PDF) is open for comment until 1 September 2009. An ED on this topic is anticipated as part of stage 2 of the financial instruments project in October 2009.
On July 3 and July 6, the IASB Staff will present the next in a series of short live webcasts on the progress of the project to replace IAS 39, focussing on this Request for Information. For more details and to register visit the IASB website.
ITC 21 The IASB’s credit risk in liability measurement
as reported in ANT26/2009
The IASB’s ITC 21 Credit risk in liability measurement, as outlined in item 6 ANT 24/2009, can be downloaded from the AASB website (PDF) and comments are requested by 7 August 2009 to enable compliance with the IASB’s 1 September 2009 deadline.
ED 180 Income from non-exchange transactions
as reported in ANT26/2009
ED 180 (PDF) is a joint ED between AASB and the Financial Reporting Standards Board of the New Zealand Institute of Chartered Accountants on reporting income from non-exchange transactions.
The ED has been based on IPSAS 23 Revenue from non-exchange transaction (taxes and transfers) and acknowledges the importance of accounting for government grants, donations and similar non-exchange transactions to not-for-profit entities (NFPE) and public benefit entities (PBE). It proposes that entities analyse a non-exchange transaction to determine the assets and liabilities to be recognised. Income would then be recognised as the difference between the amounts of those assets and liabilities. This ED is an intended replacement for AASB 1004 Contributions.
There is also support for the view that grant monies received under a binding agreement, but in advance of the period for which the grant is intended to be used, should be recognised by the transferee upon receipt as income, unless the transferee has to satisfy performance obligations during that designated period. Comments to the AASB are requested by 30 November 2009.
Comments submitted on revenue recognition
as reported in ANT26/2009
The AASB has also submitted its comments (PDF) to the IASB on Discussion Paper Preliminary Views on Revenue Recognition in Contracts with Customers.
AASB ED 183 and IASB ED 2009/6 Management Commentary
as reported in ANT25/2009 and ANT29/2009
In July, the Australian Accounting Standards Board (AASB) released ED 183 (PDF) Management Commentary , which incorporates IASB ED 2009/6 (PDF) Management Commentary (a proposed non-mandatory framework) released in June. The exposure draft was released to help entities prepare a narrative report in accordance with IFRSs, often referred to as a ‘management commentary’.
The proposals presented in the exposure draft will not result in an IFRS and hence the final document produced will be a non-mandatory framework. The ED seeks comments on whether this framework would:- Improve the usefulness of the information provided in an entity’s financial reporting
- Help users make decisions in their capacity as capital providers
As such, it is considered to encompass reports such as management’s discussion and analysis (MD&A), operating and financial review (OFR) or management’s report. Consequently, the exposure draft does not introduce any significant new matters that have not already been addressed to some extent by many reports that currently accompany financial statements. However, the exposure draft is an attempt to draw a common framework around such reports by setting out attributes that they would be expected to contain. These include:- A timeframe that looks not only at the present but also at the past and the future, with particular emphasis on the inclusion of forward-looking information
- Reporting from the perspective of management, including the performance measures and indicators that management uses to manage the entity
- Disclosure of principal risk exposures, management’s plans and strategies for bearing or mitigating risks and the effectiveness of risk management strategies
- Management’s explanations about how success will be measured and over what period of time it should be assessed
The exposure draft deliberately excludes application guidance or illustrative examples as the IASB was concerned that these could be regarded as either the minimum or only requirement.
In particular, the ED addresses three issues:- Whether the development of a guidance document for the preparation and presentation of management commentary instead of an IFRS is appropriate
- Whether the content elements prescribed are necessary for the preparation of a decision-useful management commentary
- Whether or not the Board should include detailed application guidance and illustrative examples in the final management commentary guidance document
Comments are due to the AASB by 31 December 2009 and to the IASB by 1 March 2010. The exposure draft is available for download from the AASB website (PDF) and the IASB website (PDF). Given this, the Institute’s aim for the present is merely to make members aware of the existence of the exposure draft and its potential implications. A call for input from members on the Institute’s formal response to the exposure draft will be made later in the year after members have had the opportunity to consider the exposure draft in the light of their experience in the current reporting season.
AASB ED 181 Fair value measurement
as reported in ANT25/2009
The AASB has released ED 181 Fair Value Measurement, incorporating IASB ED 2009/5 Fair Value Measurement.
Key features of the ED:- Defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price)
- In the absence of an actual transaction at the measurement date, a fair value measurement assumes a hypothetical transaction in the most advantageous market for the asset or liability
- In four cases, fair value measurement at initial recognition might differ from the transaction price. Accordingly, an entity would recognise any resulting gain or loss, unless the relevant IFRS for the asset or liability requires otherwise
- A fair value measurement requires an entity to determine:
- The particular asset or liability that is the subject of the measurement (consistently with its unit of account)
- For an asset, the valuation premise that is appropriate for the measurement (consistently with its highest and best use)
- The most advantageous market for the asset or liability
- The valuation technique(s) appropriate for the measurement, taking into consideration the availability of data with which to develop inputs that represent the assumptions that market participants would use in pricing the asset or liability
- The level of the fair value hierarchy within which the inputs are categorised.
ED 181 is available for download from the AASB website (PDF). Comments are requested by the 28 August to enable the AASB to comply with the IASB's 28 September deadline.
ED 182 Minimum Funding Requirements
as reported in ANT24/2009
The AASB has released as ED 182 (PDF) the IASB’s recent exposure draft on the proposed amendments to IFRIC 14 – IAS 19 The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction.
The proposed amendments are aimed at correcting an unintended consequence of IFRIC 14, an interpretation of IAS 19 Employee Benefits. As a result of the interpretation, entities are in some circumstances not permitted to recognise as an asset some prepayments for minimum funding contributions.
ED 182 is available for download from the AASB website and was open for comment until 13 July 2009.
AASB & IASB “Fair value” proposals released
as reported in ANT22/2009
The International Accounting Standards Board (IASB) has released for public comment an exposure draft ED 181 Fair Value Measurement, which incorporates the IASB’s ED 2009/5 of the same name. The project forms an integral part of the Board’s long term project to align IFRS with US GAAP and also responds to calls from the G20 summit to align requirements in this area.
The ED proposes replacing the fair value measurement guidance contained in many individual International Financial Reporting Standards (IFRSs) with a single, unified definition of fair value, as well as further authoritative guidance on the application of fair value measurement in inactive markets. It does not extend the use of fair value; rather, it deals with how it should be measured when it is already required by existing standards.
The definition of fair value is identical to that contained in the American guidance on this topic SFAS 157 Fair Value Measurements and the supporting guidance is largely consistent with US GAAP. It also incorporates the recent guidance on fair value measurement published by the US Financial Accounting Standards Board (FASB) and exposed for comment by the IASB late March (item 4 ANT 12/2009) and is consistent with a report of the IASB’s Expert Advisory Panel published in October 2008 on fair value measurement in illiquid markets.
The ED is open for comment until 28 September 2009. The IASB will hold a webcast to introduce the proposals in the ED and will announce details on its website in due course. For more information and to download the ED, go to the IASB website.
In light of the IASB’s release, the Australian Accounting Standards Board (AASB) has also released ED 181 (PDF), inviting comments on any of the proposals requested by the IASB.
Submissions to the AASB are due by 28 August 2009. |
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