XBRL: Steps Toward an Implementation Plan

In May 2008, the US Securities and Exchange Commission (SEC) issued rule proposals that would require all companies applying US GAAP or IFRS to begin using XBRL within the next three years. As the proposed deadline for implementation nears, it is apparent there is a need for a greater awareness and deeper understanding about the costs and benefits XBRL offers. A new publication by PricewaterhouseCoopers (PwC) discusses what companies can do now to ensure they are prepared to implement XBRL. (Read the publication XBRL: Steps Toward an Implementation Plan.)

Global framework for communicating non-financial information

A new framework has been developed by the World Intellectual Capital Initiative (WICI) to improve communications between a company and its stakeholders about the nonfinancial factors contributing to its market value. WICI is a global business reporting network of public-sector and private-sector interests, of which the American Institute of Certified Public Accountants (AICPA) is a member through the Enhanced Business Reporting Consortium. WICI has also developed an eXtensible Business Reporting Language (XBRL) taxonomy to support the framework, which considers business strategy, personnel, research and development, customer base and other nontangible factors as part of business reporting. Read the AICPA's news release and view the WICI presentation.

AR Trends 2008 and CSR Trends 2008

Two surveys of current practice have recently been published. AR Trends 2008 surveys Canadian and global annual reports (view the presentation) and CSR Trends 2008 surveys Canadian and global corporate social responsibility reports (CSR)/sustainability reports (view the presentation). The surveys are available online.

Mandating IFRS: Its impact on the cost of equity capital in Europe

New research commissioned by the Association of Chartered Certified Accountants (ACCA) shows that economies where equity-based financing and high standards of accounting disclosure are common, have benefited most from the adoption of International Financial Reporting Standards (IFRS). The results show that IFRS has already brought significant effects, that they are not uniform across Europe, and variations are not in the direction which some expected. The major positive effects are in those countries, such as the UK, where an equity investor-friendly environment already exists. (Visit the ACCA webpage and read ACCA Research Report No. 105.)

IFRS Guidance for Federally Regulated Financial Institutions

On October 7, 2008, the Office of the Superintendent of Financial Institutions (OSFI) issued a letter providing further guidance on the content of the semi-annual reports to be filed by Federally Regulated Financial Institutions (FRFIs) on their progress transitioning to IFRS and commenting on the applicability of the CSA disclosure requirements for the changeover to IFRS. (Read the OSFI Letter.)

Implementation of IFRS in the UK, Italy and Ireland

The Institute of Chartered Accountants of Scotland (ICAS) has published a report on The Implementation of IFRS in the UK, Italy and Ireland. The report examines: the resultant changes in financial reporting, in terms of the additional disclosures and the impact of IFRS on profit and equity; the costs involved in implementation of IFRS; the most problematic international accounting standards for adopters; and the usefulness of the resulting IFRS information from the perspective of preparers and users. (Read the Executive Summary or the Full Report available on the ICAS website.)

Leading by Example: Key Developments in the First Seven Years of PIPEDA

The Office of the Privacy Commissioner of Canada recently released the publication Leading by Example. Reviewing leading cases, the 63-page book is designed to help businesses comply with the Personal Information Protection and Electronic Documents Act (PIPEDA) and improve their privacy practices.

Fair Value Accounting: Statement by Paul Cherry, Chair, Canadian Accounting Standards Board

The clarification issued this week by the US Securities and Exchange Commission's Office of the Chief Accountant and the staff of the Financial Accounting Standards Board in relation to fair value accounting requirements is consistent with Canadian accounting standards. In Canada, the Accounting Standards Board has already issued three staff commentaries to help companies apply fair value accounting requirements when dealing with this country's own liquidity crunch. These commentaries provided guidance on how to report to investors on their holdings of Asset-Backed Commercial Paper (ABCP). The first was issued almost a year ago. (View the CICA Media Release and ABCP Commentary.)

CSA Proposals in Response to the Credit Market Turmoil

The Canadian Securities Administrators (CSA) have issued a Consultation Paper outlining several securities regulatory proposals related to the Canadian non-bank sponsored asset-backed commercial paper (ABCP) market. Shortly after events in international credit markets led to a seizure of the non-bank sponsored portion of the ABCP market in Canada, the CSA took a number of immediate steps, which included the formation of an ABCP working group to address securities regulatory issues stemming from the credit market turmoil. Those issues are examined in the CSA Consultation Paper.

SEC Roundtable on Modernizing Disclosure Systems

On October 8, 2008, the US Securities and Exchange Commission (SEC) is holding a Roundtable on Modernizing the Securities and Exchange Commission's Disclosure Systems (view the list of panelists & detailed agenda). A related SEC Notice/Request for Comment on the “21st Century Disclosure Initiative” proposes an entirely new model for the SEC’s disclosure system, including the “Company File System” approach (view the FAQ’s and Strategic Plan).

XBRL Around the World

XBRL is evolving everywhere, driven by various stakeholders such as governments, stock exchanges, banks and other industry sectors. While the Securities and Exchange Commission (SEC) has been finalizing its proposed rule requiring public companies and mutual funds to file their financial reports in interactive data, this article puts the progress in a global context. (Read the Journal of Accountancy article XBRL Around the World.)

Under the Spotlight: The Transition of Environmental Risk Management

In a recent survey, 320 risk managers around the world were asked to provide current thinking around environmental risk management and the approaches that companies are taking to identify, assess and manage the risks that they face within their organization and among their broader partner networks and supply chain. The key findings include: (1) Environmental risk is frequently managed in an ad hoc fashion. (2) There is no clear consensus about who should be responsible for environmental risk. (3) Many companies conduct strategic activities without a formal assessment of environmental risk. (4) Compliance with environmental legislation is a key strength. (5) Managing environmental risks associated with suppliers and partners is a key area of weakness. (6) Better reputation with customers and investors is seen as the main benefit of environmental risk management. (7) Climate change is an opportunity as well as a risk. (8) Lack of certainty about the impact of environmental liabilities and the future scope of legislation are the main obstacles to effective environmental risk management. (Read the report Under the Spotlight: The Transition of Environmental Risk Management.)

Clarifications on Fair Value Accounting

The current market environment makes the determination of fair value particularly challenging for preparers, auditors and users of financial information. In the United States, the Securities and Exchange Commission (SEC) and the Financial Accounting Standards Board (FASB) have engaged in extensive consultations with participants in the capital markets including investors, preparers and auditors, on the application of fair value measurements. The FASB will propose additional interpretative guidance on fair value measurement under US GAAP later this week. (Read the SEC Press Release.)