2010-01-04 Closing the GAAP: New IFRS Pronouncements Affecting 2010 Financial Statements (updated to December 31, 2009)

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This Newsletter presents a summary of new IFRS pronouncements relevant to financial statements prepared for 2010 (updated to December 31, 2009).

The following summarizes IFRS pronouncements that must be applied, if applicable, for the first time in 2010 to a company with a calendar year-end that is preparing financial statements in accordance with IFRS.

The listing includes the following pronouncements:

International Financial Reporting Standards ("IFRS")
International Financial Reporting Interpretations Committee ("IFRIC") Interpretations

The International Accounting Standards Board ("IASB") has a number of projects in progress. Information on these projects is available on the IASB website at http://www.iasb.org/Current+Projects/IASB+Projects/IASB+Work+Plan.htm.

Information on IFRIC projects is available at http://www.iasb.org/Current+Projects/IFRIC+Projects/IFRIC+Projects.htm.

This Newsletter will be updated quarterly.

Reference	Pronouncement and Effective Date
IFRS 1	Additional exemptions for first-time adopters Amends IFRS 1, First-time Adoption of International Financial Reporting Standards, to exempt entities using the full cost method from retrospective application of IFRSs for oil and gas assets, and to exempt entities with existing leasing contracts from reassessing the classification of those contracts in accordance with IFRIC 4, Determining whether an Arrangement contains a Lease. Effective for years beginning on/after January 1, 2010.
IFRS 2	Group cash-settled share based payment transactions Amended to provide guidance on determining the classification of share based payment awards in both consolidated and separate financial statements. Also amended to (i) incorporate IFRIC 8, Scope of IFRS 2, and IFRIC 11, Group and Treasury Share Transactions, into IFRS 2; (ii) expand the guidance given in IFRIC 11 to address plans that were not considered therein, and (iii) amend certain definitions to remove inconsistencies between Appendix A to IFRS 2, and the main body of IFRS 2. Effective for years beginning on/after January 1, 2010.
IFRS 3/ IAS 27 (revised)	New standards on business combinations and consolidated and separate financial statements These standards replace the former IFRS 3, Business Combinations and IAS 27, Consolidated and Separate Financial Statements, and establish new requirements related to accounting for business combinations and non-controlling interests. The revised IFRS 3 is effective for business combinations for which the acquisition date is on/after the beginning of the first annual reporting period beginning on/after July 1, 2009. The revised IAS 27 is effective for years beginning on/after July 1, 2009.
IAS 39	Eligible hedged items Amended to clarify how the principles that determine whether a hedged risk or portion of cash flows is eligible for designation should be applied in particular situations. In particular, these amendments prohibit (i) designating inflation as a hedgeable component of a fixed rate debt and (ii) including time value in the one-sided hedged risk when designating options as hedges. Effective for years beginning on/after July 1, 2009.

Reference

Pronouncement and Effective Date

Annual improvements
project
2009

Annual improvements 2009

Improves existing standards and amends 12 standards, basis of conclusions and guidance. The improvements include changes in presentation, recognition and measurement plus terminology and editorial changes. The improvements are generally effective for 2010 calendar years but reference should be made to the effective date of each amendment in the IFRS affected.

IFRS	Subject of amendment
IFRS 2 Share-based Payment	Scope of IFRS 2 and revised IFRS 3
IFRS 5 Non-current Assets Held for Sale and Discontinued Operations	Disclosures of non-current assets (or disposal groups) classified as held for sale or discontinued operations
IFRS 8 Operating Segments	Disclosure of information about segment assets
IAS 1 Presentation of Financial Statements	Current/non-current classification of convertible instruments
IAS 7 Statement of Cash Flows	Classification of expenditures on unrecognised assets
IAS 17 Leases	Classification of leases of land and buildings
IAS 18 Revenue	Determining whether an entity is acting as a principal or as an agent
IAS 36 Impairment of Assets	Unit of accounting for goodwill impairment test
IAS 38 Intangible Assets	Additional consequential amendments arising from revised IFRS 3 Measuring the fair value of an intangible asset acquired in a business combination
IAS 39 Financial Instruments: Recognition and Measurement	Treating loan prepayment penalties as closely related embedded derivatives Scope exemption for business combination contracts Cash flow hedge accounting
IFRIC 9 Reassessment of Embedded Derivatives	Scope of IFRIC 9 and revised IFRS 3
IFRIC 16 Hedges of a Net Investment in a Foreign Operation	Amendment to the restriction on the entity that can hold hedging instruments

IFRIC 17

Distributions of non-cash assets to owners

Clarifies how an entity should measure distributions of assets, other than cash, when it pays dividends to its owners. Effective for years beginning on/after July 1, 2009.

While we have attempted to make this Newsletter as complete as possible, it may not include all changes or modifications to existing authoritative literature that may affect a particular enterprise.

International Financial Reporting Standards (IFRS)The transition to IFRS can be complicated.

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Of further interest

For an indepth analysis of the most notable financial reporting developments, read our bi-annual review, Financial Reporting Release.

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