The move to International Financial Reporting Standards (IFRS) will necessitate significant changes in how financial professionals approach their work, according to renowned panelists at a recent industry forum.

One panelist compared Financial Accounting Standards Board Statement No. 133 – an 800-page guide on "Accounting for Derivate Instruments and Hedging Activities" – and the U.S. Constitution as examples of rules-based vs. principles-based approaches. IFRS represents a more principles-based approach to reporting.

Though IFRS could reduce the number of rules financial professionals must be familiar with, the new standards will also create a greater responsibility and require new ways of analyzing choices, the panelists noted.

The shift could place a greater emphasis on experience in the industry. To learn more about what these changes could mean to your company or organization, please call our experienced Audit Services team today.

WebCPA reports that the Financial Accounting Standards Board and the International Accounting Standards Board have agreed in broad terms on the definition of "fair value." Fair value will likely be defined as exit price and will be generally considered to be market-based according to reasonable pricing assumptions. The boards defined conditions under which an initial valuation might no longer hold and laid out scenarios under which markets might be considered "orderly." The full set of tentative decisions can be read here.

Fair Value is one of the biggest concerns the boards face as they race to "converge," or integrate, U.S. GAAP with International Financial Reporting Standards (IFRS) by June 2011.

Valuation of assets has always been a complex endeavor, but with the rapidly changing regulatory environment, we suggest being in regular contact with your financial professionals. If you have any questions about assets you're carrying or planning to acquire, please contact us today.

The International Accounting Standards Committee (IASC) Foundation recently issued free training materials on the International Financial Reporting Standards (IFRS), "a set of accounting standards developed by the London-based International Accounting Standards Board (IASB) that is becoming the global standard for the preparation of public company financial statements" (click here for more information on IFRS).

According to the International Accounting Standards Board, the new materials will assist small- to medium-size enterprises and will include 35 modules, the first third of which are available for download here.

IFRS has wide-ranging implications as it begins to supplant GAAP in a number of countries, including the U.S. If you have questions on its application within your company, please contact REDW's audit and consulting team today.

When the Financial Accounting Standards Board (FASB) met on January 27, 2010, they made some decisions affecting issues related to segment disclosures:

At its meeting today, the Board decided that an entity would also be required to disclose for each reportable segment:

1. A measure of operating cash flow. An entity would also be required to reconcile the sum of operating cash flows of its reportable segments to operating cash flow as reported in the statement of cash flows.

2. A measure of liabilities if that amount is reported to the chief operating decision maker.

3. A measure of operating assets and a measure of operating liabilities.

We would encourage you to review the entire summary of the most recent FASB decisions, and please contact REDW's audit and consulting team for help in evaluating what this means for your business.

If you are a business taxpayer with total assets in excess of $10 million, you should be aware that the IRS is considering making changes to the rules governing how you report uncertain tax positions. IRS Commissioner Doug Shulman drew attention to these proposed changes in the prepared remarks he recently made at the New York State Bar Association Taxation Section Annual Meeting:

Finally, I want to talk about Transparency….

We have been taking a hard look at transparency regarding business tax issues. Accounting for income taxes and tax risk has changed over the past several years. Accounting for uncertain tax positions is much more articulated now than in the past. And auditing firms are conducting much more extensive reviews of materials used to make decisions on tax reserves reflected in a taxpayer’s financial statement.

Several months ago, I announced that the IRS was studying these changes and was exploring ways to improve transparency regarding material tax issues so that we can achieve the three objectives of certainty, consistency, and efficiency for us and taxpayers.

The IRS is taking a major step towards transparency that I want to announce today related to changes we are proposing to reporting requirements regarding business taxpayers’ uncertain tax positions

The Announcement we are issuing today does two things. First, it describes proposed reporting requirement at the “time-of-filing.” Second, it highlights specific areas where we are requesting public comment and thus serves to further our continuing dialogue with practitioners, business taxpayers, and others regarding how to improve tax administration and compliance regarding many of our nation’s business taxpayers.

If after reviewing the full announcement you want to explore what this may mean for you, please contact REDW's tax services team.

The information contained in this blog is not intended to be tax advice, is of a general nature, and is based on authorities that are subject to change. Application to your specific situation should be determined in consultation with your tax advisor. IRS Circular 230 Disclosure: Any tax advice in this communication is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties that may be imposed on any taxpayer or (ii) promoting, marketing or recommending to another party any matters addressed herein.