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The International Accounting Standards Board (IASB) is reviewing accounting issues emerging from the global financial crisis, including those identified by the G20 and other international bodies such as the Financial Stability Board. Committed to a global approach, the IASB is working closely with the US Financial Accounting Standards Board.
IASB activities relating to the crisis
Financial Crisis Advisory Group |
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Objective : The high level advisory group set up by the IASB and FASB will consider financial reporting issues arising from the global financial crisis. Results will feed into the work of related projects and additional measures may be undertaken.
- Click here to view the Financial Crisis Advisory Group pages
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Accounting for off balance sheet vehicles
Relevant project 1: Consolidation |
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Issue: Some entities may not have accounted for all other entities they control, especially some special purpose entities (SPEs) used for securitisation transactions.
What are we doing: The IASB has accelerated this project, which it started before the global financial crisis. It is looking to: tighten up the definition of control so that entities account for all other entities that they control, review how the control notion applies to structured entities (such as SPEs) and improve disclosure requirements for entities that rightly remain off balance sheet.
Click here to view the project page |
Relevant project 2: Derecognition |
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Issue: Some entities may have stopped accounting for assets they still control. This gives readers an incomplete picture. Users also require more information on an entity’s risk exposure related to assets that are rightly off balance sheet.
What we are doing: The IASB has accelerated this project, which it started before the financial crisis. It is looking to review and clarify when entities should stop accounting for assets transferred to other entities and is reviewing the disclosure requirements.
Click here to view the project page |
Disclosures
Relevant project: IFRS 7 |
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Issue: Users of financial statements may need further information on how entities estimated the fair value of their financial instruments when there are only limited market data to support those estimates. In addition, existing disclosure requirements for liquidity risk do not focus on essentials (issue identified by the round tables).
What we are doing:
Improving disclosures about fair value measurements of financial instruments and about liquidity risk.
Improving disclosures about investments in debt instruments. |
Fair value
Relevant measure: Expert Advisory Panel |
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Issue: The financial crisis has raised concerns that it may be difficult to estimate fair value in illiquid markets.
What we are doing: The IASB created an external Expert Advisory Panel in May 2008 to consider issues relating to measuring fair value in illiquid markets. The panel met seven times. |
Relevant project 1: Fair Value Measurement |
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Issue: Guidance on how to measure fair value is dispersed across standards and in some cases inconsistent. This project was on the Board’s agenda before the financial crisis.
What are we doing: Creating a single standard clarifying how to measure fair value where existing standards require or permit fair value.
Click here to view the project page
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Relevant project 2: Financial Instruments / IAS 39 |
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Issue: The standard deals with the recognition and measurement of financial instruments. The existing standard is complex and does not always produce the most useful information.
What are we doing: This is a project to replace IAS 39 with the objective of improving the decision usefulness of financial statements for users. It should also result in the simplification of the requirements for the accounting for financial instruments. In response to the crisis, the project will take into consideration possible results of the Financial Crisis Advisory Group (FCAG).
Click here to view the project page
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