Showing posts with label IFRS Adoption. Show all posts
Showing posts with label IFRS Adoption. Show all posts

Thursday, April 15, 2010

Assessing Indonesia’s Readiness in Adopting IFRS by 2012

Indonesia is in the process of IFRS Convergence with gradual approach. By 2012 Indonesian Accounting Standard Board determines to eliminate material differences among Indonesian Accounting Standard and IFRS as per 1 January 2009 by. During 2009-2010, The Board has issued many new standards and interpretations to be effective in 2011 and 2012 and also has revoked many standards that are not in compliance with IFRS. Indonesia as one of G20 country members is required to achieve a global accounting standard; therefore the support from Indonesia’s regulators is imperative in achieving that goal.

Indonesian Institute of Accountants invites Indonesian regulators and authorities to explain their preparation in embracing IFRS Convergence.  The IASB Director for International  Activities, Wayne Upton, would also share information on IFRS Convergence progress around the world, in particular how regulatory bodies in other country have been preparing for IFRS Convergence.

This special event is very important for all key decision makers in the regulatory bodies, accountants, business practitioners and academics in Indonesia. The panel discussion among regulators in Indonesia would become the main agenda of the first day seminar.  On the second day, the seminar would discuss what are the challenges faced by Indonesian business entities in applying IFRS to date and beyond. In detail the agenda of two-day seminar will be held on 11 and 12 May 2010. Further detail in here

AICPA IFRS for SMEs-US GAAP Comparison Tool

The American Institute of CPAs (AICPA) staff have developed an IFRS for SMEs–US GAAP Comparison Tool, which is being added to collaboratively by those who use the tool. AICPA technical staff monitor and review the additions. Here is an excerpt of the AICPA's description:

The purpose of this Wiki is to provide a detailed and comprehensive comparison of the International Accounting Standards Board's International Financial Reporting Standard for Small-and Medium-Sized Entities ('IFRS for SMEs') with corresponding requirements of United States generally accepted accounting principles ('US GAAP'). But this is more than just a comparison resource, it is a Wiki. That means it is a collaborative, ongoing work in progress for anyone to contribute and use.

You can access the AICPA IFRS for SMEs – US GAAP Comparison Tool at http://wiki.ifrs.com/

Where to obtain IFRS for SMEs materials

Source : IFRS for SMEs Update – Issue 2010-2, 14 April 2010

Recent adoptions of the IFRS for SMEs

We try to keep track of jurisdictions that have adopted, or are planning to adopt, the IFRS for SMEs. Our list currently includes 60 jurisdictions. In a future Update we will include a summary. Meanwhile, in the past few weeks we have become aware of the following adoptions:

Argentina. On 19 March 2010, the Federación Argentina de Consejos Profesionales de Ciencias Económicas (the national professional accounting body in Argentina) issued an exposure draft proposing to adopt the IFRS for SMEs as an option for all entities not required to use full IFRSs. The SME exposure draft proposes that those private entities should also be permitted to use accounting standards that the Federation has issued or may issue in the future. Full IFRSs will be required in Argentina for all companies that publicly offer equity or debt securities starting in 2012, with an option to use IFRSs in 2011 or, in some cases, 2010.

Brazil. In December 2009, the Brazilian Accounting Pronouncements Committee (Comitê de Pronunciamentos Contábeis, or CPC) adopted a Portuguese version of the IFRS for SMEs as an option for SMEs in Brazil. By Resolution 1255 of 2009, the CPC's SME standard was endorsed by the Brazilian Federal Accounting Council (Conselho Federal de Contabilidade, or CFC), the national professional body. The standard is a temporary and unofficial translation of the IFRS for SMEs that is available on the CPC website pending completion of the official translation by the IFRS Foundation. It is anticipated that auditors will be able to report that financial statements that comply with the CPC's SME standard are in conformity with the IFRS for SMEs because there are no substantive differences between the unofficial Portuguese translation and the IFRS for SMEs. The estimated number of SMEs in Brazil (January 2009) was 5.9 million, representing 99 per cent of Brazilian enterprises. While many of them are expected to continue to follow a very simple accounting system permitted under the Brazilian SMEs law, many others are expected to switch to the Brazilian IFRS for SMEs equivalent. For example, the Brazilian National Development Bank (Banco Nacional de Desenvolvimento Econômico e Social, or BNDES) is expected to encourage or even require all of its borrowers (approximately 250,000 SMEs) to use the new standard.

Costa Rica. The Costa Rican Institute of Certified Public Accountants Colegio de Contadores Publicos de Costa Rica is, by law, the accounting standard setter in Costa Rica. Currently, all companies follow IFRSs with the exception of some regulated entities (banks and finance entities, stockbrokers, and pension funds), which follow accounting policies adopted by the regulators. The Institute has adopted the IFRS for SMEs, to be effective for financial years beginning 1 January 2010. However, the Institute is still deliberating which entities will qualify as SMEs, and are therefore eligible to use the IFRS for SMEs.

Dominican Republic. In the Dominican Republic, the Instituto de Contadores Publicos Autorizados de la Republica Dominicana (Institute of CPAs of the Dominican Republic, or ICPARD) has had the legal power to establish accounting standards in accordance with article 31 of Law 479-08 since July 2009. In February 2010 the ICPARD adopted two resolutions:

  • Listed companies. Resolution 001 requires the use of full IFRSs for companies whose shares are quoted on the Stock Exchange of the Dominican Republic starting in 2014 (some individual IFRSs will be mandatory starting in 2010).
  • Other companies. Resolution 002 requires the use of the IFRS for SMEs for all companies whose shares are not quoted on the stock exchange (other than government-regulated companies). The resolution provides for a two-step implementation of the IFRS for SMEs, requiring some sections as mandatory starting in 2010, while the remaining sections become mandatory in 2014. In addition, the resolution allows unlisted companies that currently prepare financial statements in accordance with US GAAP to continue to do so up to 2014, when they will need to switch to the IFRS for SMEs. If the IFRSs for SMEs does not address an accounting question, Resolution 002 requires companies to follow full IFRSs and then US GAAP.

Namibia. By Resolution of its Council, the Institute of Chartered Accountants of Namibia has adopted the IFRS for SMEs for use in Namibia for financial statements authorised for issue after 17 February 2010. Applicability is as follows:

  1. The Council of the Institute has decided that the IFRS for SMEs may be applied by: a 'public company' or a 'private company', as defined in the Companies Act, 1973, if it does not have public accountability as defined in Section 1 of the IFRS for SMEs.
  2. For entities other than companies where the founding document or other regulation requires compliance with a 'fair presentation framework' as contemplated by the International Federation of Accountants ('IFAC') the IFRS for SMEs may be applied, if the entity does not have public accountability as defined in Section 1 of the IFRS for SMEs, except in the circumstances described in 4 below.
  3. For entities where legal provisions or other regulations require compliance with a specific financial reporting framework (other than the IFRS for SMEs), such an entity may not apply the IFRS for SMEs even if it does not have public accountability as defined in Section 1 of the Statement of IFRS for SMEs.
  4. For entities whose financial reporting framework is not set out by legal provisions, the founding statement or other regulations, if such an entity does not have public accountability, as defined in Section 1 of the Statement of IFRS for SMEs, it should assess whether it is appropriate to apply the IFRS for SMEs.

Philippines. The IFRS for SMEs has been adopted in the Republic of the Philippines effective 1 January 2010. It is known as the Philippine Financial Reporting Standard for SMEs (PFRS for SMEs). In the Philippines, listed companies, large unlisted companies, financial institutions, and public utilities are all required to use full PFRSs, which are nearly identical to full IFRSs. The PFRS for SMEs must be used by any other entity that has total assets of between P3,000,000 and P350,000,000 (US$70,000 to $8,000,000) or total liabilities of between P3 million and P250 million (US$70,000 to $5,500,000). Entities below those thresholds (so-called 'micro entities') may use the PFRS for SMEs or 'another acceptable basis of accounting'.

Source : IFRS for SMEs Update – Issue 2010-2, 14 April 2010)

Saturday, February 20, 2010

IASC Foundation publishes proposed IFRS Taxonomy 2010

(19 February 2010) The International Accounting Standards Committee (IASC) Foundation today published for public comment an exposure draft of the International Financial Reporting Standards (IFRSs) Taxonomy 2010. The proposed taxonomy is consistent with IFRSs and the IFRS for Small and Medium-sized Entities (SMEs).

The proposed taxonomy contains significant architectural improvements when compared with the 2009 version; in particular the proposed architecture integrates IFRSs and the IFRS for SMEs into a single taxonomy. Other proposed improvements include an extended use of axes (dimensions) in the taxonomy, reconsideration of the IASC Foundation's approach for concept naming and of its principle of deleting redundant (deprecated) concepts.

The IFRS Taxonomy 2010 is a translation of IFRSs as issued at 1 Janaury 2010 into XBRL (eXtensible Business Reporting Language). XBRL is rapidly becoming the format of choice for the electronic filing of financial information - particularly within jurisdictions reporting under IFRSs - because it facilitates simpler and faster filing and comparison of IFRS financial data by companies, regulators, investors, analysts and other users of the IFRS Taxonomy.

Interested parties are invited to comment on the exposure draft of the IFRS Taxonomy 2010 and accompanying materials by 22 April 2010. The proposed taxonomy and related material can be accessed here. The final version is expected to be released at the end of April 2010.

Kind regards,
IASC Foundation XBRL Team
www.iasb.org/xbrl

Thursday, February 18, 2010

2010 IFRSs Bound Volume

Below is the e-IFRS email alerted by IASB.org :

The IASCF is pleased to announce that the "2010 International Financial Reporting Standards (IFRSs)" Bound Volume will be published soon, in March 2010.

This edition includes the latest version of International Financial Reporting Standards (IFRSs), International Accounting Standards (IASs), IFRIC and SIC Interpretations and the supporting documents - illustrative examples, implementation guidance, bases for conclusions and dissenting opinions - as issued by the IASB at 1 January 2010.

For convenience, this RED book edition is presented in two parts:

  • Part A (the requirements) contains the latest version of International Financial Reporting Standards (IFRSs), International Accounting Standards (IASs), and IFRIC and SIC Interpretations.
  • Part B contains the accompanying documents, such as illustrative examples, implementation guidance, bases for conclusions and dissenting opinions.

Copies are priced at £60 each, plus shipping. Discounts are available for:

  • academics/students
  • middle income and low income countries
  • multiple orders.

The 2010 IFRSs Bound Volume (978-1-907026-60-7) (Product code 10201) is priced at £60 per copy, plus shipping. Further information can be found on our Webshop. Please register your interest in this product if you wish to be notified of its publication.

If you need any further information, please contact our customer services by email or telephone: +44 (0)20 7332 2730.

Kind regards,

IASC Foundation Publications Department
publications@iasb.org
www.iasb.org

Tuesday, February 16, 2010

Access to the whole content of IFRSs for free

The IASC Foundation provides access free of charge to the current year’s consolidated unaccompanied IFRSs in English as issued by the IASB and published in the Bound Volume (as of 1 January 2009).

Access to the accompanying documents, illustrative examples, implementation guidance, and bases for conclusions is available through subscription-based services or by purchasing print versions of IFRSs via our store.

All rights, including copyright, in the content of these web pages are owned or controlled by the IASC Foundation.

To access the unaccompanied IFRSs you need to be a registered user.  Registration is free and takes only a few minutes.  It allows you to access the unaccompanied IFRSs, the IFRS for SMEs, to register for email alerts, submit comment letters or register as an observer.

Here is the link to the source : http://www.iasb.org/IFRSs/IFRs.htm

Saturday, January 9, 2010

2009 Russian translation of IFRS

I’ve just got an alerted email from IASB.org regarding on the publication of 2009 Russian translation of IFRS.

The IASC Foundation is pleased to announce the publication of the following:

2009 Russian translation of International Financial Reporting Standards

These Russian files correspond to the text used for the adoption of IFRSs into law, and do not include the accompanying material such as the Bases for Conclusions and Implementation Guidance.

Access the documents online

  • The Russian translation can be accessed online via the "IFRS" section on www.iasb.org. You will need to be a registered user to access the translation - to register click here.
  • eIFRS/Comprehensive subscribers can access the Russian translation in the secure eIFRS subscriber area after logging in with their username and password and then navigating to the Latest Additions section.

Saturday, November 7, 2009

IASB and FASB reaffirm to improve IFRS and U.S.GAAP and to bring about their convergence

At their joint meeting last week, the International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB) reaffirmed their commitment to improve International Financial Reporting Standards (IFRS) and U.S. generally accepted accounting principles (U.S. GAAP) and to bring about their convergence. The Boards also agreed to intensify their efforts to complete the major joint projects described in their 2006 Memorandum of Understanding (MoU), as updated in 2008.

Today, as a further affirmation of that commitment, the IASB and FASB issued a joint statement describing their plans and milestone targets for completing the major MoU projects in 2011. The statement, which is available by clicking here [PDF] also describes the values and principles underpinning the Boards’ collaboration and significant successes achieved thus far.

In affirming their commitment to developing a common set of high quality standards, the Boards took note of the support of the leaders of the Group of 20 nations, the Financial Crisis Advisory Group of the FASB and IASB, and the Monitoring Board of the International Accounting Standards Committee (IASC) Foundation for the joint convergence efforts underway.

Commenting on the update, Sir David Tweedie, chairman of the IASB, said:

The two boards are committed to improving financial reporting internationally by completing the convergence programme described in the Memorandum of Understanding. The statement published today describes a series of important and concrete steps that will help us to achieve our June 2011 targets.

Robert Herz, chairman of the FASB, said:

Our successful joint meeting with the IASB in late October demonstrated that improvements in financial reporting and convergence are very much on track. Our joint efforts have and will continue to produce significant benefits to investors and the economy at large. We will continue our dual objectives of working toward global convergence while addressing reporting issues of critical importance to U.S. investors and financial markets.

In the interest of timely and continued progress, the two Boards also committed to monthly joint meetings and to provide transparency and accountability by providing quarterly updates on their progress on convergence projects.

The IASB and the FASB will hold their next joint meeting via videoconference later this month.

The Trustees of the IASC Foundation and the Trustees of the FAF also issued a statement of support today available by clicking here [PDF].

Source : IASB.org

Thursday, April 23, 2009

Get Ready for IFRS

This article was quoted from the International Financial Reporting Standards (IFRS), an AICPA Backgrounder, released by AICPA through its IFRS resources Web site : www.IFRS.com

The growing acceptance of IFRS as a basis for U.S. financial reporting represents a fundamental change for the U.S. accounting profession. Today, approximately 113 countries require or allow the use of IFRS for the preparation of financial statements by publicly held companies. In the United States, the Securities and Exchange Commission (SEC) has been taking steps to set a date to allow U.S. public companies to use IFRS, and perhaps make its adoption mandatory. In fact, on November 14, 2008, the SEC released for public comment a proposed roadmap with a timeline and key milestones for adopting IFRS beginning in 2014.

IFRS-09 The international standard-setting process began several decades ago as an effort by industrialized nations to create standards that could be used by developing and smaller nations unable to establish their own accounting standards. But as the business world became more global, regulators, investors, large companies and auditing firms began to realize the importance of having common standards in all areas of the financial reporting chain.

The globalization of business and finance has led more than 12,000 companies in more than 100 countries to adopt IFRS. In 2005, the European Union (EU) began requiring companies incorporated in its member states whose securities are listed on an EU-regulated stock exchange to prepare their consolidated financial statements in accordance with IFRS. Australia, New Zealand and Israel have essentially adopted IFRS as their national standards. Canada, which previously planned convergence with US. GAAP, now plans to require IFRS for publicly accountable entities in 2011. The Accounting Standards Board of Japan (ASBJ) and the International Accounting Standards Board (IASB) plan convergence by 2011. On November 11, 2008, Mexico announced it would adopt IFRS for all listed entities starting in 2012.

In another part, AICPA reported that even great strides have been made by the FASB and the IASB to converge the content of IFRS and U.S. GAAP, yet several significant differences between the U.S. GAAP and IFRS still remain. For example :

  1. IFRS does not permit LIFO as an inventory costing method
  2. IFRS uses a single-step method for impairment write-downs rather than the two-step method used in U.S. GAAP, making write-downs more likely.
  3. IFRS has a different probability threshold and measurement objective for contingencies.
  4. IFRS does not permit curing debit covenant violations after year-end
  5. IFRS guidance regarding revenue recognition is less extensive than U.S. GAAP and contains relatively little industry-specific instruction.

Further, it said that perhaps the greatest difference between IFRS and U.S. GAAP is that IFRS provides much less overall detail.

Go here >> to download the complete publication.

Tuesday, April 14, 2009

How IFRS 1 rules the accounting for Business Combinations ?

IFRS 1 First-time Adoption of International Financial Reporting Standards applies to an entity that presents its first IFRS financial statements. It specifies the requirement that an entity must follow when it first adopts IFRS as the basis for preparing its general-purpose financial statements. IFRS 1 refers to these entities as first-time adopter.

How IFRS 1 rules the financial statement presentation of business combination for an entity as the first-time adopter ?

A first-time adopter need not apply IFRS 3 Business Combinations retrospectively. Should it restate any business combination to comply with IFRS 3, then all later business combinations must also be restated.

A first-time adopter may elect not to apply IFRS 3 Business Combinations retrospectively to past business combinations (business combinations that occurred before the date of transition to IFRSs). However, if a first-time adopter restates any business combination to comply with IFRS 3, it shall restate all later business combinations and shall also apply IAS 27 (as amended in 2008) from that same date. For example, if a first-time adopter elects to restate a business combination that occurred on 30 June 20X6, it shall restate all business combinations that occurred between 30 June 20X6 and the date of transition to IFRSs, and it shall also apply IAS 27 (amended 2008) from 30 June 20X6 (IFRS 1 Appendix B par. B1).

Where a first-time adopter has accounted for a business combination as an acquisition and recognized an item as an intangible asset under IAS 38 Intangible Assets that item should be reclassified as goodwill.

The carrying amount of goodwill in the opening IFRS balance sheet should be its carrying value under previous GAAP adjusted for any intangible asset that does not meet the IAS definition and additional evidence that is now available with respect to any contingent purchase consideration. In addition, irrespective of whether there is any indication of impairment, IAS 36 Impairment of Assets should be applied to test the carrying value of goodwill at the date of transition.

Where previous GAAP required or permitted goodwill to be disclosed as a deduction from equity, it should not be recognized in the opening balance sheet, nor should the goodwill be transferred to the income statement on disposal of the subsidiary.

If under previous GAAP, the first-time adopter did not consolidate a subsidiary, but IFRS would require it to be consolidated the accounting treatment is as follows :

The carrying amounts of the subsidiary’s assets and liabilities should be adjusted to those required by IFRS. The deemed goodwill will equal the difference between the parent’s cost of investment in the subsidiary and its interest in those assets and liabilities.

An entity shall apply IFRS 1 if its first IFRS financial statements are for a period beginning on or after 1 January 2004.  Earlier application is encouraged  (IFRS 1 par. 47).

Monday, March 9, 2009

Several Guidelines for the First-time Adoption of IFRS

IFRS 1 regarding on First-time Adoption of International Financial Reporting Standards.

Per IFRS 1, an entity must apply the standard in its first IFRS financial statements and in each interim financial report it presents under IAS 34 for a part of the period covered by its first IFRS financial statements. For example, if 2006 is the first annual period for which IFRS financial statements are being prepared, the quarterly or semiannual statements for 2006, if presented, must also comply with IFRS.

IFRS 1 stipulates that in preparing an opening IFRS statement of financial position, the first-time adopter (an entity is referred to as a first-time adopter in the period in which it presents its first IFRS financial statements) is to use the same accounting policies as it has used throughout all periods presented in its first IFRS financial statements.

Furthermore, the standard requires that those accounting policies must comply with each IFRS effective at the “reporting date” for its first IFRS financial statements, except under certain defined circumstances wherein the entity claims targeted exemptions from retrospective application of IFRS, or is prohibited by IFRS from applying IFRS retrospectively.

In other words, a first-time adopter should consistently apply the same accounting policies throughout the periods presented in its first IFRS financial statements and these accounting policies should be based on “latest version of the IFRS” effective at the reporting date.

If a new IFRS has been issued on the reporting date, but application is not yet mandatory, although reporting entities have been encouraged to apply it before the effective date, the first-time adopter is permitted, but not required, to apply it as well.

In general, IFRS 1 requires an entity to comply with each IFRS effective at the end of its first IFRS reporting period. In particular, the IFRS requires an entity to do the following in the opening IFRS statement of financial position that it prepares as a starting point for its accounting under IFRSs :

a) Recognize all assets and liabilities whose recognition is required by IFRSs;

b) Not recognize items as assets or liabilities if IFRSs do not permit such recognition;

c) Reclassify items that it recognized under previous GAAP as one type of asset, liability or component of equity, but are a different type of asset, liability or component of equity under IFRSs; and

d) Apply IFRSs in measuring all recognized assets and liabilities.

An entity is required to apply the IFRS if its first IFRS financial statements are for a period beginning on or after 1 January 2004. Earlier application is encouraged (IN6 IFRS 1)

To be continued (this is the first part of two articles)