As reported in this month’s roundup, Japan’ influence in the IFRS convergence debate is growing. By Nick Topazio, reporting specialist, CIMA.
Japan joins leaders in IFRS adoption
Further evidence of Japan’s growing influence in the global IFRS convergence debate emerged this month. Japan joined Australia and New Zealand as the only countries so far to have adopted IFRS 9, the IASB’s new financial instruments standard.
The decision by the Japanese authorities will maintain the pressure on the International Accounting Standards Board (IASB) to increase the number of its board positions held by Japanese nationals. The largest economy so far to have adopted IFRS 9 only has one representative on the board.
European Parliament votes to ease accounting burden on micro-entities
The fourth and seventh directives lay down minimum legal requirements for accounting in Europe including the need to produce annual financial statements. Following a recommendation from the European Commission the Parliament has voted to allow member states to grant exemption to the directives to micro-entities. For the purpose of this exemption, micro-entities will have:
- balance sheet total under euro 500,000 and turnover under euro 1m and/or
- no more than ten employees on average during the year.
Micro-entities would still be required to maintain records of financial transactions and financial position.
The Parliamentary vote will still need to be ratified by the European Council before it becomes EU law.
Read the press release.
Guidance on valuation of intangible assets
The International Valuation Standards Council (IVSC) has published guidance on the valuation of intangible assets. The note identifies the principal techniques for the valuation of intangibles such as brands, intellectual property and customer relationships and gives guidance on their application.
The significance of intangible asset valuation has increased as the adoption of IFRS has spread around the world. IFRS require that the purchase price in a business combination is allocated between tangible and intangible assets based upon the fair values and in respect of the intangible element, assets other than goodwill need to be considered.
The guidance note is available from the IVSC.
More small business standard training materials
The IASB has released the second batch of training materials on the IFRS for SMEs. It is designed to assist companies and practitioners in applying the standard.
Download the training material.
Standard setters update their timetable
The latest timetable from the IASB shows a number of projects completing in 2010 and 2011. The majority of these projects are required as part of the convergence plans with the US and so pressure will be on the board to hit these deadlines. Notable IFRS expected in this time span include:
- replacement of IAS 27
- de-recognition
- fair value measurement guidance
- replacement of IAS 39
- discontinued operations
- presentation of other comprehensive income
- joint ventures
- revenue recognition
- insurance contracts.
Access the complete work plan. It contains links to the various project pages on the IASB website.
IASB considers the reporting entity
Together with the Financial Accounting Standards Board, the IASB has published the next stage in the long running revision of its conceptual framework. This exposure draft considers fundamental questions such as:
- what is a reporting entity?
- when does one entity control another entity (so resulting in consolidated accounts)?
- can a portion of an entity be a reporting entity?
The board is seeking comments by 16 July. Readers are invited to comment via CIMAsphere where there is a specific discussion thread for this consultation.
Board extends deadline on liabilities standard changes
The comment period for the exposure draft ‘Measurement of liabilities’ in IAS 37 has been extended to 19 May 2010. This is to give respondents more time to understand the recognition requirements of the standard that will replace IAS 37. You can comment on this exposure draft via CIMAsphere.