Audit News January 2009

7/29/2019 Audit News January 2009

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Snapshot

Accounting Pronouncements

Accounting Standard for Local Bodies (ASLB) 3 on

Revenue from Exchange Transactions

ASLB 4 on Borrowing Costs

Auditing Pronouncements

Revised Standard on Auditing (SA) 250 on

Consideration of Laws and Regulations in an Audit

of Financial Statements

SA 260 on Communication with Those Charged

with Governance

SA 570 on Going Concern

SA 560 on Subsequent Events

SA 230 on Audit Documentation

Exposure Draft of Revised SA 210 on Agreeing the

Terms of Audit Engagement

Exposure Draft of SA 720 on The Auditors

Responsibility in Relation to Other Information in

Documents Containing Audited Financial Statements

Exposure Draft of Revised SA 320 on Materiality in

Planning and Performing an Audit

Exposure Draft of Revised SA 450 on Evaluation of

Misstatements Identified During the Audit Exposure Draft of Revised SA 610 on Using the

Work of Internal Auditors

Standard on Internal Audit (SIA) 8 on Terms of

Internal Audit Engagement

SIA 9 on Communication with Management

SIA 10 on Internal Audit Evidence

SIA 11 on Consideration of Fraud in an Internal

Audit

Exposure Draft of SIA on Enterprise Risk

Management

Exposure Draft of SIA on Internal Control Evaluation

Exposure Draft of SIA on Using The Work Of AnExpert

Exposure Draft of SIA on Internal Audit in an

Information Technology Environment

Exposure Draft of SIA on Knowledge of the Entity

and its Environment

Other Pronouncements of ICAI

Internal Auditor can not be appointed as a Tax

Auditor

Technical Guide on Review and Certification of

Investment Risk Management Systems and Processes

of Insurance Companies

Implementation Guide to Risk-based Audit of

Financial Statements

Handbook on Foreign Trade Policy and Guide to

Export and Import

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Book on Principles and Practice of Life Insurance

Book on Principles and Practice of General Insurance

Book on Risk Management and Reinsurance

Book on Business Strategic Planning and Information

Technology for Insurance Sector

Recent Developments

Peer Review of Audit Work Papers of Listed

Companies

Amendments to Clause 49 of the Listing Agreement

with Stock Exchanges

Modifications in the Valuation Norms of Debt

Securities by Mutual Funds

Classification of Loans to Housing Finance

Companies (HFCs) as Priority Sector Lending

Prudential Norms for Off-Balance Sheet Exposure of

Banks

Buyback / prepayment of Foreign Currency

Convertible Bonds (FCCBs)

US GAAP

FASB Staff Position (FSP)

Emerging Issues Task Force (EITF) Issue No.08-6 on Equity Method Investment Accounting

Considerations

EITF Issue No. 08-7 on Accounting for Defensive

Intangible Assets

EITF Issue No. 08-8 on Accounting for an Instrument

(or an Embedded Feature) with a Settlement Amount

that is based on the Stock of an Entitys Consolidated

Subsidiary

Securities and Exchange Commission (SEC) releases

new Financial Reporting Manual

SEC Issues Interpretation on References to Third-Party

Experts and Consents

International Financial Reporting Standards

Restructured version of International Financial

Reporting Standard (IFRS) 1

Reclassification of Financial Assets Amendments to

IAS 39 and IFRS 7

IFRIC 17 on Distributions of non-cash assets to

owners

Final report of the IASBs Expert Advisory Panel on

valuing financial instruments when markets are no

longer active


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Accounting Pronouncements

Accounting Standard for Local Bodies (ASLB) 3

on Revenue from Exchange Transactions

The ICAI has issued the above Standard, the Exposure

Draft of which was published in the July 2008 edition of

Audit News. The Standard will be mandatory for local

bodies in a state from the date specified in this regard

by the concerned State Government.

Accounting Standard for Local Bodies (ASLB) 4

on Borrowing Costs


Draft of which was published in the July 2008 edition of

Audit News. The Standard will be mandatory for local

bodies in a state from the date specified in this regard

by the concerned State Government.

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Consideration of Laws and Regulations in an

Audit of Financial Statements


Draft of which was published in the April 2008 edition

of Audit News. The Exposure Draft was named as

The Auditors Responsibilities Relating to Laws and

Regulations in an Audit of Financial Statements The

Standard is effective for audits of financial statements

for periods beginning on or after 1 April 2009.


Communication with Those Charged with

Governance


Draft of which was published in the July 2008 edition

of Audit News. The Standard is effective for audits of

financial statements for periods beginning on or after

1 April 2009.

Revised Standard on Auditing (SA) 570 on Going

Concern

The ICAI has issued the above Standard, the ExposureDraft of which was published in the October 2007

edition of Audit News. The Standard is effective for

audits of financial statements for periods beginning on

or after 1 April 2009.


Subsequent Events


Draft of which was published in the October 2006

edition of Audit News as Exposure Draft of Revised

AAS 19. The Standard is effective for audits of financial

statements for periods beginning on or after 1 April2009.

Revised Standard on Auditing (SA) 230 on Audit

Documentation

The ICAI has issued the above Standard which is

effective for audits of financial statements for periods

beginning on or after 1 April 2009. The Standard

replaces the earlier Auditing and Assurance Standard

(AAS) 3 on Documentation.

The Standard deals with the auditors responsibility to

prepare audit documentation for an audit of financial

statements. It does not limit the specific documentation

requirements contained in other Standards or required

by any laws and regulations.

The Standard defines the following terms:

Audit Documentation - It is a record of the audit

procedures performed, relevant audit evidence obtained

and conclusions reached.

Audit File - It comprises of one or more folders or other

storage media, in physical or electronic form containing

the records that comprise the audit documentation for a

specific engagement.

Experienced Auditor - He is an individual (whether

internal or external to the firm) who has practical audit

experience, and reasonable understanding of:

Audit processes;

Standards on Auditing and applicable legal and

regulatory requirements;

Business environment in which the entity operates;

and

Auditing and financial reporting issues relevant to theentitys industry.

The Standard identifies the following purposes of audit

documentation:

Evidence of the auditors basis for a conclusion

reached about the achievement of the overall audit

objective and planning and performance of the audit

in accordance with the Standards on Auditing and

the applicable legal and regulatory requirements.

Assisting the engagement team in planning and

performing the audit.

Facilitating the supervision and review of the audit

work.

Enabling the engagement team to be accountable

for its work.

Retaining a record of matters of continuing

significance to future audits.

Enabling the conduct of quality control reviews

and external inspections in accordance with the

applicable legal, regulatory and other requirements.

Auditing Pronouncements


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The Standard provides detailed guidance in respect of

the following matters:

Timely preparation of audit documentation.

Form, content and extent of documentation.

Documentation where there are departures from a

relevant requirement.

Documentation of matters arising after the date of

the audit report.

The auditor should assemble the audit documentation

in an audit file and complete the assembling of final

audit file on a timely basis which is recommended to be

within 60 days of the date of the auditors report. Once

the final file is assembled, the auditor should not delete

or discard audit documentation of any nature before the

end of its retention period which is recommended to be

not shorter than ten years from the date of the auditors

report, or, if later, the date of the group auditors report.

Exposure Draft of Revised SA 210 on Agreeingthe Terms of Audit Engagement

The Exposure Draft of the SA deals with the auditors

responsibilities in agreeing the terms of the audit

engagement with the entity and also to respond to a

request by the entity to change the terms of an audit

engagement.

The salient features of the Exposure Draft are as follows:

An auditor should accept an audit engagement only

when the preconditions for an audit and the common

understanding between him and the client exist.

An auditor should not accept engagements where

the management or those charged with governance

imposes limitations on the scope of the engagement

that leads to a disclaimer of opinion by the auditor,

unless required by law.

The auditor should discuss with the Management

and those charged with governance when there is

a conflict between the financial reporting standards

and the additional requirements of the applicable

laws and regulations and provide effect of the same

in the audit opinion.

In case of recurring audits, the auditor should look

at various factors before deciding whether a revised

letter of engagement needs to be issued.

The SA provides detailed guidance on the Financial

and General Reporting Framework and its

acceptability that the auditor should consider while

accepting the audit engagement.

Exposure Draft of SA 720 on The Auditors

Responsibility in Relation to Other Information

in Documents Containing Audited Financial

Statements


responsibilities in relation to the other information in

documents containing audited financial statements and

the auditors report thereon.


Other Information for the purpose of this SA is

defined as financial and non- financial information

(other than the financial statements and auditors

report thereon) which is included either by law,

regulation or custom, in a document containing

audited financial statements and the auditors report

thereon.

The auditor is not required to give his opinion on the

other information or to determine whether or not

other information is properly stated unless there is a

specific requirement.

The auditor should read the other information to

identify material inconsistencies and assess whether,

as a result thereof, the financial statements or other

information needs to be revised.

If material inconsistencies are identified prior to

the date of the audit report which requires revisionof the financial statements and the Management

refuses to make the revisions, the auditor should

modify his opinion. If the revision of the other

information is necessary, and the revision is

refused by the management, the auditor should

communicate the matter to those charged with

governance and also provide paragraph in auditors

report on other matter or withdraw from the

engagement.

If any material inconsistencies are identified

subsequent to the date of the audit report, and

revision of audited financial statements is necessary,

the auditor should perform the procedures as

provided in SA 560 on Subsequent Events.


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The other information should be obtained prior

to the date of the auditors report or as soon as

practicable.

Exposure Draft of Revised SA 320 on Materiality

in Planning and Performing an Audit


responsibility to apply the concept of materiality

in planning and performing an audit of financial

statements. The Standard defines Performance

Materiality as the amount or amounts set by the auditor

at less than materiality for the financial statements as

a whole to reduce to an appropriately low level the

probability that the aggregate of uncorrected and

undetected misstatements exceeds materiality for the

financial statements as a whole.

The key changes envisaged in the Exposure Draft are as

follows:

The auditor should determine the materiality for the

financial statements as a whole and also for one

or more particular classes of transactions, account

balances or disclosures after considering the risksof material misstatement, in specific circumstances.

The materiality should be revised if circumstances so

warrant.

The above aspects should be adequately and

appropriately documented.

Exposure Draft of Revised SA 450 on Evaluation

of Misstatements Identified During the Audit

The Exposure Draft of SA deals with the auditors

responsibilities to evaluate the effect of identified

misstatements on the audit and of uncorrectedmisstatements, if any, on the financial statements.


The auditor should accumulate misstatements

identified during the audit, other than those that are

clearly trivial and evaluate the nature thereof.

The auditor should consider the impact of the

identified misstatements as the audit progresses to

determine whether the overall audit strategy and

audit plan needs to be revised.

The auditor should communicate all misstatements

on a timely basis to the appropriate level of

management, request the management to correct

the same and in case management refuses for the

correction, obtain understanding of managements

reasons for not making corrections.

The auditor shall evaluate the effect of uncorrected

misstatements and determine whether the materiality

needs to be revised.

The auditor should request a written representation

from the management and where appropriate, those

charged with governance whether they believe the

effects of uncorrected misstatements are immaterial,

individually and in the aggregate, to the financial

statements as a whole and a summary thereof

should be attached to the representation.

The auditor should document the amount below

which misstatements would be clearly regarded

as trivial, all misstatements identified during the

audit and whether they have been corrected

and a conclusion as to whether the uncorrected

misstatements are material, individually or in

aggregate, and the basis for that conclusion.

Exposure Draft of Revised SA 610 on Using the

Work of Internal Auditors

The Exposure Draft of SA deals with the external auditors

responsibilities regarding the work of internal auditors

when the external auditor has determined that the

internal audit function is likely to be relevant to the audit.

The Exposure Draft deals with the following matters:

Determining whether and to what extent to use the

work of the Internal Auditors.

Using specific work of the Internal Auditors

Documentation of the conclusions and the audit

procedures performed.

Standard on Internal Audit (SIA) 8 on Terms of

Internal Audit Engagement


Draft of which was published in the October

2008 edition of Audit News. The Standard is

recommendatory in nature.

Standard on Internal Audit (SIA) 9 on

Communication with Management




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Standard on Internal Audit (SIA) 10 on Internal

Audit Evidence





Standard on Internal Audit (SIA) 11 on

Consideration of Fraud in an Internal Audit





Exposure Draft of SIA on Enterprise Risk

Management

The purpose of the SIA is to establish standards

and provide guidance for review of an entitys risk

management initiatives during an internal audit or such

other review exercise with the objective of providing anassurance thereon.

The nature of the internal audits responsibilities should

be adequately documented and approved by those

charged with governance. The internal auditor should not

manage any of the risks on behalf of the management

or take risk management decisions. The internal

auditor should not assume any accountability for risk

management decisions taken by the management. The

internal auditor should review the structure, effectiveness

and maturity of an enterprise risk management system

and ensure that a risk management policy setting outRoles and responsibilities and framing a Risk management

activity calendar has been framed. The internal

auditor should also review whether the enterprise risk

management coordinators in the entity report on the

results of the assessment of key risks at the appropriate

levels viz. Risk Management Committee, Enterprise

Business and Unit Heads and Audit Committee.

The internal audit plan should be approved by the audit

committee and should be based on the risk assessment

as well as on issues highlighted by the audit committee

and the senior management.

The internal auditor should submit his report to the

Committee of the Board delineating the information on

Assurance rating, Test conducted, Samples covered and

Detailed assurance comments.

Exposure Draft of SIA on Internal Control

Evaluation

The purpose of the SIA is to establish standards and

provide guidance on the procedures to be followed by

the internal auditor in evaluating the system of internal

control in an entity and for communicating weaknesses

therein to those charged with governance.

The internal auditor should examine and contribute to

the ongoing effectiveness of the internal control system

through evaluation and recommendations.

The internal auditor should obtain an understanding of

the significant processes and internal control systems

sufficient to plan the engagement and develop an

effective audit approach. He should also understand and

document the design and operations of internal control

to evaluate the effectiveness of the control environment.

The following aspects need to be considered whilstevaluating the internal control system in an entity:

Ascertaining whether the entity has a mission

statement and written goals and objectives.

Assessing risks at the entity and the process level.

Completing a Business Controls Worksheet for

each significant process / activity in each function/

department with documentation of the associated

controls and their degree of effectiveness and also

identifying the control gaps.

The Internal auditor should ensure that in general

adequate segregation of duties exists and in case of a

small department size he should ensure that a detailed

supervisory review of related activities is in practice, as a

compensating control activ ity.

While evaluating the information technology controls in

a system-driven environment, the internal auditor should

determine whether the entity uses tools that protect

confidential or sensitive information from unauthorized

individuals, back-up and restore facility, virus protection

software and passwords that restrict user access to

networks, data and applications.

The internal auditor should evaluate whether the

internal controls are designed and operating as


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contemplated in the preliminary assessment of control risk

and whether same were in use throughout the period.

He should identify internal control weaknesses that

have not been corrected and make recommendations

to correct the same. He should also document the

rational in deciding which audit recommendations

should be followed up on and when, in contrast with

recommendations where no follow-up is needed.

The internal auditor, in his report to the management,

should provide a description of the significant deficiency

or material weakness in internal control and his opinion

on the possible effect of such weakness on the entitys

control environment.

Exposure Draft of SIA on Using The Work Of An

Expert

The purpose of the SIA is to establish standards and

guidelines in cases where the internal auditor uses the

work performed by an expert.

An internal auditor should obtain technical assistanceand advice from experts if the internal audit team does

not possess the necessary knowledge, skills, experience

or expertise needed to perform all or part of internal

audit engagement.

An expert is defined as a person, firm or association of

persons possessing special skill, expertise, knowledge

and experience in a particular field.

The following are the various aspects which need to be

considered before an internal auditor decides to use the

work performed by an expert: The independence of the expert.

Skills, competence and objectivity of the expert

The materiality, nature and complexity of the item on

which advice or assistance is sought.

Evaluating the work of the expert

The SIA provides that the internal auditor should not,

normally, refer to the work of an expert in the internal

audit report. In case of referring to work of the expert,

the internal auditor should outline the assumptions,

broad methodology and conclusion of the expert. The

Internal Auditor should obtain prior consent of the

expert in case his identity is disclosed in the report.

Exposure Draft of SIA on Internal Audit in an

Information Technology Environment

The purpose of the SIA is to establish standards on

procedures to be followed when an internal audit

is conducted in an information technology (IT)

environment.

The internal auditor should evaluate the extent to which

the IT environment is used to record, compile, process

and analyse information and study the internal control

system in existence. He should also consider whether he

has the necessary skills and competence to work in an

IT environment or else he should seek the assistance of

an expert.

The internal auditor should obtain an understanding of

the IT environment at the planning stage to determine

the nature, timing and extent of audit procedures to

be performed and also evaluate the nature of inherent

and control risks which are prevalent. He should also

perform audit procedures based on the review of the

robustness of the IT environment. The extent of reliance

which can be placed when the information is processedby an outsourced agency together with the risks

associated thereon should also be considered.

The internal auditor should document the internal audit

plan, the nature, timing and extent of audit procedures

performed and the conclusions drawn from the

evidence obtained. He should also satisfy himself that

evidence in the electronic form is adequately and safely

stored and is retrievable in its entirety when required.

Exposure Draft of SIA on Knowledge of the

Entity and its EnvironmentThe purpose of the SIA is to establish standards and

guidelines on the knowledge of the entitys business and

the techniques to be adopted by the internal auditor

in acquiring such knowledge about the client entity

and its environment, prior to commencing the audit

engagement and subsequently thereafter, at all stages

of the internal audit process.

The internal auditor whilst performing an internal audit

should obtain knowledge of the entitys business and

its operating environment to enable him to review the

key risks, processes, systems, procedures and controls.

The standard deals with the information that internal

auditor should obtain prior to and after acceptance of

an engagement.


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In case of FCCBs issued under the automatic route,

the buyback value should be at a minimum discount

of 15% of the book value, the funds whereof shall

be out of the existing foreign currency funds held

either in India or abroad or out of fresh ECBs raised.

In case of FCCBs issued under the approval route,

the buyback value shall be at a minimum discount of

25% of the book value, the funds whereof shall be

out of internal accruals as certified by the Statutory

Auditor and the total amount shall not exceed USD

50 million per company.


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guidance because of the significant changes to the

guidance on business combinations and subsidiary

equity transactions and the increased use of fair value

measurements as a result of these Statements.

The Task Force reached a consensus that:

An entity should determine the initial carrying value

of an equity method investment by applying the cost

accumulation model described in paragraphs D3D7

of Statement 141(R).

An entity should use the other-than-temporary

impairment model of Opinion 18, not some other

method that disaggregates the investment into the

individual assets of the investee, when testing equity

method investments for impairment.

However, investors should adjust any impairments

recorded by an investee for existing differences between

the investors basis and the underlying investees basis

in such impaired assets. Share issuances by the investee

should be accounted for as if the equity method investorhad sold a proportionate share of its investment (i.e.,

any gain or loss is recognized in earnings).

When an investment is no longer within the scope of

equity method accounting and instead is within the

scope of cost method accounting or Statement 115,

the investor should prospectively apply the provisions

of Opinion 18 or Statement 115 and use the current

carrying amount of the investment as its initial cost.

To coincide with the effective dates of Statements

141(R) and 160, the consensus is effective fortransactions occurring in fiscal years, and interim periods

within those fiscal years, beginning on or after

15 December 2008. Early adoption is not permitted.

EITF Issue No. 08-7 on Accounting for Defensive

Intangible Assets

The Task Force reached a consensus that

an acquired defensive asset should be accounted

for as a separate unit of accounting (i.e., an asset

separate from other assets of the acquirer);

an acquired research and development asset is

outside this Issues scope and should be accounted

for pursuant to paragraph 16 of Statement 142;

the useful life assigned to an acquired defensive asset

should be based on the period during which the

asset would diminish in value; and

it would be rare for an entity to conclude that a

defensive asset has an indefinite life.

The Issue includes examples illustrating how to

determine the assets amortization period.

To coincide with the effective date of Statement 141(R),

the consensus is effective for defensive intangible assets

acquired in fiscal years beginning on or after

15 December 2008.

EITF Issue No. 08-8 on Accounting for an

Instrument (or an Embedded Feature) with a

Settlement Amount that is based on the Stock of

an Entitys Consolidated Subsidiary

Reporting entities that enter into freestanding financial

instruments (or instruments that

contain embedded features) for which the payoff to the

counterparty is indexed to thestock of a consolidated subsidiary.

The Task Force reached a consensus that freestanding

financial instruments or embedded features) that

are indexed to, in whole or in part, the stock of a

consolidated subsidiary are considered indexed to

the entitys own stock in the consolidated financial

statements if the requirements of Issue 07-5 are met

and the subsidiary is a substantive entity.

This Issue requires that any subsidiary referenced in

the freestanding instrument (or embedded feature) besubstantive to ensure that entities cannot receive equity

classification for a financial instrument referenced to

a subsidiary that has no business purpose (e.g., the

subsidiary was formed to hold a derivative instrument or

a commodity).

The Task Force also reached a consensus that an equity-

classified instrument (including

an embedded feature that is separately recorded

in equity) within the scope of this Issue should be

presented as a component of non controlling interest

in the consolidated financial statements in a manner

consistent with the conclusions in Statement 160.

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However, if an equity-classified instrument within the

scope of this Issue is entered into by the parent and

expires without being exercised, the carrying amount of

the instrument at expiration would be reclassified from

non controlling interest to controlling interest.

To coincide with the effective date of Statement 160,

the consensus is effective for fiscal years, and interim

periods within those fiscal years, beginning on or after

15 December 2008. At transition, the carrying value

of the instrument (or separated embedded feature)

previously classified as a liability will be reclassified to

non controlling interest. Early adoption is not permitted.

Securities and Exchange Commission (SEC)

releases new Financial Reporting Manual

The SECs Division of Corporation Finance released

its updated Financial Reporting Manual. The new

manual supersedes the Division of Corporation

Finances Accounting Disclosure Rules and Practices:

An Overview (also known as the SEC Staff Training

Manual), which had not been updated since 2000. The

Financial Reporting Manual provides helpful insight intohow the SEC staff applies SEC rules and regulations to

topics such as SEC registrants and acquired businesses

financial statements, pro forma financial statements,

MD&A, and non-GAAP measures.

SEC Issues Interpretation on References to Third-

Party Experts and Consents

The SECs Division of Corporation Finance issued

several new and revised Compliance and Disclosure

Interpretations (C&DIs) on Securities Act sections. The

following are two notable new questions from the

C&DIs:

Question 141.01, which indicates that a registration

statement that describes or includes an investment

bankers fairness opinion must also include the bankers

consent to being named in the registration statement.

Question 141.02, which addresses whether a registrant

that chooses to refer to a third-party expert must name

the third party and obtain the third partys consent.

It also distinguishes between statements of the

registrant, which do not require a consent, and

statements attributed to a third-party expert, which

would require a consent.

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Restructured version of International Financial

Reporting Standard (IFRS) 1

The International Accounting Standards Board (IASB)

has released a restructured version of IFRS 1 on First-

time Adoption of International Financial Reporting

Standards. IFRS 1 was first issued in June 2003, and

since then it has been amended frequently. As a result,

the Standard has become more complex and less clear.

In 2007, therefore, the Board proposed, as part of its

annual improvements project, to change IFRS 1 to make

it easier for the reader to understand and to design it to

better accommodate future changes. This new version

of IFRS 1 retains the substance of the previous version,

but within a changed structure. It replaces the previous

version and is effective for entities applying IFRSs for the

first time for annual periods beginning on or after 1 July

2009. Earlier application is permitted.

Reclassification of Financial Assets

Amendments to IAS 39 and IFRS 7

The IASB has issued amendments to International

Accounting Standard (IAS) 39 on Financial

Instruments: Recognition and Measurement and IFRS7 on Financial Instruments: Disclosures that permit

reclassification of some financial assets out of the fair

value through profit or loss-category and out of the

available-for-sale-category as defined in IAS 39. The

amendments introduce into IFRSs the same possibility

of reclassifications that is already permitted under US

GAAP in certain circumstances. Reclassifications made

under the amendment require additional disclosures in

accordance with IFRS 7.

The amendments are effective on 1 July 2008. Any

reclassification made on or after 1 November 2008 takeseffect from the date of reclassification. However, any

reclassification before 1 November 2008 can take effect

from 1 July 2008 or a subsequent date. A reclassification

cannot be applied retrospectively before 1 July 2008.

IFRIC 17 on Distributions of non-cash assets to

owners

The International Financial Reporting Interpretations

Committee (IFRIC) has issued IFRIC 17 on Distributions

of Non-cash Assets to Owners. IFRIC 17 aims to provide

accounting guidance when a distribution to owners is

not in cash. The interpretation clarifies:

a dividend payable should be recognised when the

dividend is appropriately authorised and is no longer

at the discretion of the entity.

an entity should measure the liability for the dividend

payable at the fair value of the net assets to be

distributed.

an entity should recognise the difference between

the dividend paid and the carrying amount of the net

assets distributed in profit or loss when the dividend

is distributed.

an entity should provide additional disclosures about

the net assets being held for distribution to owners

when the entity is committed to distribute them.

The scope section clarifies that only pro-rata

distributions in non-common control situations are

within the scope of the IFRIC 17. IFRIC 17 is applicable

prospectively for annual periods beginning on or after

1 July 2009 with earlier application permitted.

Final report of the IASBs Expert Advisory Panel

on valuing financial instruments when markets

are no longer active

The IASB has published educational guidance on the

application of fair value measurement when markets

become inactive. The report is a summary of seven

meetings held by the IASBs Expert Advisory Panel.

While not mandatory, the document aims to provide

useful information and educational guidance about the

processes used and judgements made when measuring

and disclosing fair value.

International Financial

Reporting Standards


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collected from various sources, specifically mentioned in the report, contain general information only.

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any person who relies on this publication.

2009 Deloitte Haskins & Sells

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Audit News January 2009

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Transcript of Audit News January 2009