01 Intro LG

2010IFRSBaseline
Module Name: Introduction

Module Time: 85 minutes
Instructor Notes
Learning 1. Introduce and Describe IFRS Accreditation requirements as per KAM

Obje
ctive 2. Discuss IASB and IFRSs, history and their work programme
s 3. Examine purpose and scope of IFRS Framework
4. Discuss KPMG and IFRS resources available.
IFRS Introduction/LG/1
2010IFRSBaseline
Module Outline
Section Applicable
Reference Topic Time Format Learning Objectives
A Introduction, 15 minutes Lecture 1
IFRS Accreditation
requirements
IASB and IFRSs 20 minutes Lecture 2
IFRS Framework 20 minutes Lecture 3
KPMG and IFRSs 30 minutes Lecture 4
Total time 85 minutes
Module overview:
This module discusses IFRS accreditation policies per KAM followed by a brief outline of the course.
The module then discusses the IASB history, its objectives and work programme in brief. It then
provides and overview of the SEC position towards IFRS, EC regulation and current US GAAP
IFRS convergence.
The module will then discuss the preface to IFRSs and IFRS Framework.
The module further discusses the KPMG IFRS network and roles of ISG, IFRS Topic Teams, IFRS
Panel, National DPPs and topic teams, followed by the process for an IFRS query.
2010IFRSBaseline
Instructor Preparation and Reference Materials
Instructor You will need to:

prep
arati ReferTR/01NotetoInstructors.
on
PleaseensurethattheIFRSBaselineTrainingfeedbackformishandedoutto
participantsattheendofthecourseseePM1.
TheintroductionandIFRSaccreditationtopicsarerequiredtobediscussed.The
Instructor should assess the amount of information to be discussed with
participantsfortheremainingtopics.
At the time you are presenting this module, please check the Global Audit
Learning and Development (GALD) teams microweb
https://portal.ema.kworld.kpmg.com/audit/GlobalAuditTraining/Pages/default.asp
x to ensure you are using the latest version of the training material.
If you have any questions or comments on this lecture guide, please contact Global
Audit Team by email (go-fmglobaudittrain@kpmg.com). Technical queries should
be addressed to your countrys or regions Department of Professional Practice
(DPP).
Reference In addition to the technical resource included in this leaders guide, instructors must be
mate familiar with the following materials:
rials
IASB Standards
KPMGs Insights into IFRS
KPMGs IFRS Illustrative Financial Statements 2009
KPMGs IFRS Disclosure checklist 2009
Section A 2010 IFRS Baseline
Section A: Introduction
Section Time: 85 minutes
Topic: Introduction, IFRS Accreditation

requirements
Topic Time: 15 minutes
Overview:
Welcomeparticipantstothecourseandinformsthemofthelogisticsforthecourse,includingthe
roomsetup(breakoutrooms),approachtotraining(paperlessand/usingCD).Askparticipantsto
introducethemselvesandsharetheirIFRSexperiencesorwhattheywanttoachievefromthecourse.
DiscussIFRSaccreditationpoliciesasperKAMandexplainthetrainingrequirements.Providea
briefcourseoutline.
WIIFM Tell the participants to introduce themselves, and then we will discuss IFRS accreditation
policies per KAM and a brief outline of the course.
Introduction
Slide 1 Introduction
Welcome participants to the course and introduce the instructors, briefly describing their
past experiences.
Agenda
Slide 2 - Agenda
Participant
Introductions
Slide 3 Participant Introductions
Ask participants to introduce themselves. Tell participants that you would like to know
their:
Name
Office they are coming from
Industry focus
Level of involvement in the audits of IFRS clients
Expectations (objectives) from the course.
Write down participants objectives/expectations on the flipchart to refer to them later

when official course objectives are introduced and course outline is presented.
Baseline Policy
Slide 4 Baseline Policy
Refer the participants to Handout 1: KAM Alert 2009/04: Revisions to the

accreditation policies and guidance for engagement teams reporting on financial
statements or financial information prepared in accordance with IFRS.
Handout 1:
KAM Alert Mention that the objective of the policies and guidance in the Alert is to determine that
2009/04 engagement teams in countries where IFRS is not the applicable reporting framework
who are assigned to engagements to perform procedures related to financial statements
prepared in accordance with IFRS (hereinafter referred to as IFRS assignments) have the
necessary experience and training.
Refer the participants to Handout 2: List of Countries to indicate those jurisdictions,

where IFRS is an applicable reporting framework.
The revised policy distinguishes primarily between reporting under IFRS to:
Handout 2: List
of Countries (a) other than a KPMG member firm (level A); and
(b) a KPMG member firm (level B).
Emphasize that, at the same time, when referring work to a KPMG non-IFRS member
firm whose work will be relied upon in forming the opinion on the financial statements of
a parent company, each group engagement partner specifies the necessary level of
experience and training requirements for the partner(s) and manager(s) of the
engagement team performing the work as part of the instructions to that KPMG member
firm. Thus although reporting to another KPMG member firm, for significant
components of a larger group, it is possible that the group engagement partner may
require the partner and manager to have level A accreditation.
State that the baseline policy for engagement partners and managers, as approved by the
Global Quality and Risk Management Steering Group and the Global Audit Steering
Group, is as follows:
Practice management adopts procedures that provide reasonable assurance that the
individual receives the KPMG International IFRS Baseline and annual update courses
released by GALD and ISG.
Each engagement audit checklist for an IFRS engagement requires the engagement
quality control reviewer, when one is required, the engagement partner and the
engagement manager to document that they have met the necessary experience and
training requirements.
InmemberfirmswhereIFRSisthepredominantfinancialreportingframeworkthe
localriskmanagementpartnerinconsultationwiththeheadoftrainingforthatmember
firm is responsible for determining training content. This is done considering the
contentoftheIFRSbaselineandannualupdatecoursesreleasedbyGlobalALDand
ISG.
State that the policy does not affect policies regarding the IFRS Reviewing Partner or the
engagement quality control partner.
Also, emphasize that the group engagement partner determines that the engagement team
servicing IFRS assignments (including KPMG specialists) collectively has the necessary
experience and training to fulfill their responsibilities.
Mentionthatthepolicydoesnotapplyto:
Engagement teams where the only basis of reporting is local GAAP and the
engagement team does not carry out an IFRS assignment;
Engagement teams that are requested to audit the Companys reporting package
under local GAAP; and
Other independent auditors.
Although still covered by the policy, for level C assignments (when KPMG member
firms in non-IFRS countries perform referred audit procedures on elements of financial
statements and the procedures are not specific to IFRS (e.g., inventory observations))
there are no minimum IFRS experience or training requirements.
Engagement
Levels
Slide 5 Engagement Levels
State that the policy identifies three general levels of IFRS assignments that in turn
determine the minimum training and experience requirements. The levels are:
Handout 1: A The member firm issues an audit, review or other report on an entity that reports in
KAM Alert accordance with IFRS to someone other than a KPMG member firm. Alternatively, in a
2009/04 group situation, when a subsidiary has been identified as a significant component and the
group engagement partner has requested Level A.
Explain the meaning of a significant component to the participants as being one
identified by the group engagement team that is either of individual financial
significancetothegrouporthat,duetoitsspecificnatureorcircumstances,islikelyto
includesignificantrisksofmaterialmisstatementofthegroupfinancialstatements.
B Audit and review reports issued only to referring KPMG member firms on the
financial statements of other entities that report in accordance with IFRS and reporting
packages for entities that report in accordance with IFRS (unless the entity is deemed to
be a significant component).
C All non-opinion IFRS work including specified audit procedures on elements of
financial statements and reviews of financial information.
Minimum
Requirements
Slide 6 Minimum Requirements
Introduce the table summarizing minimum requirements to the participants. Emphasize

key explanatory points:
Handout 1: The experience requirement refers to the hours incurred by the individual partner
KAM Alert and manager with primary responsibility.
2009/04
The requirements are met as follows:
- the experience is gained within the 12-month period or three year period
ending on the date of the commencement of the engagement (typically
the planning meeting)
- the required training is completed no more than 12 months prior to the

commencement of the substantive field work
For an assignment that involves the audit of the financial statements prepared
under local GAAP with a reconciliation to IFRS, hours for purposes of meeting
these requirements include all hours worked on the engagement not just those
relating to the IFRS element.
Those professionals who are promoted to manager or admitted to the partnership

and have gained the relevant experience and attended appropriate IFRS training
(IFRS Baseline course 2010 released by Global ALD and for the subsequent years
global IFRS Partner and Manager 2010 course released by ISG) in their previous
role can apply their prior experience and IFRS training to the minimum
requirements. For partners and managers joining the firm, previous experience and
training from prior organizations may be carried forward into KPMG to
demonstrate compliance with this policy. The relevance of prior non-KPMG
experience is to be approved by the Risk Management Partner.
Briefly mention that in limited circumstances exceptions in experience requirements are

possible for partners and managers working on Level A and B assignments. In such
situations approval of the local risk management partner is obtained for any waiver of
the experience requirement and the group engagement partner is informed.
Emphasize that a waiver of the training requirements is not permitted.
Refer the participants to Handout 1 for further details.
Course Outline
Slides 7-9 Course Outline
State that this course was designed on the basis of the IFRS Baseline training course
syllabus prepared and maintained by Global ALD and reviewed by the International
Standards Group in London. The course covers the majority of Standards and
Interpretations.
IFRS Baseline is a classroom based course intended for all audit professionals required
to achieve IFRS accreditation (as discussed in KAM 2075.30 to 2075.55).
Introduce the course agenda emphasizing that the course is built around individual
Standards and Interpretations or groups of Standards and Interpretations and is
structured along the components of financial statements.
Discuss the Tailorable v/s Optional modules approach for 2010. The total Course
Length available is 7.5 days classroom training comprising:
Tailorable Modules: 6 days (including certain optional components of 1 day)
Optional Modules: 1.5 day (includes Optional Industry Specific modules)
All attendees should receive the tailorable modules.
The tailorable modules include some optional content. The decision to deliver/opt out of
optional modules/content should be based on individual country requirements.
The optional modules (including optional industry specific modules) are noted. All other
modules are assumed to be tailorable.
Go throughtheparticipantsmaterials,explainingwhathas beenincluded in them.

Emphasizethecourseevaluationsandinformtheparticipantsthattheyaretocomplete
andsubmitthempriortotheendofthecourseonthelastday.
Depending on the instructor choice, he/she may discuss the logistics and administrative
matters at the very end or beginning of the module. Key topics to be discussed include:
Starting and finishing times
Lunch and coffee breaks
Restrooms
Messages and e-mail
Turn off cell phones
Notwithstanding the timing choice, it is advisable that the instructor prepares a summary
flipchart with the above information before the beginning of the module and posts it in
the lecture room for the duration of the course.
Close the introductory session by asking if the participants have any questions.
Topic: IASB and IFRSs

Overview:
DiscussIASBhistory,itsobjectivesandworkprogrammeinbrief.
DiscussinbrieftheSECposition,ECregulationandcurrentUSGAAPIFRSconvergencewitha
timelineofmajorprojectsinprogress.
WIIFM Tell participants that we will discuss the IASB history, its objectives and work
programme in brief. We will then discuss the SEC position towards IFRS, EC regulation
and current US GAAP IFRS convergence.
Agenda
Slide 10 - Agenda
IASB and its

objectives
Slide11IASBanditsobjectives
InformtheparticipantsthattheIASBisanindependentprivatelyfundedaccounting
standard setter based in London. In March 2001, the International Accounting
StandardsCommittee(IASC)Foundationwasformedasanotforprofitcorporation
incorporatedintheStateofDelaware,USA.TheIASCFoundationistheparententity
oftheIASB.
Effective 1 April 2001, the IASB assumed accounting standard setting responsibilities
from its predecessor body, the IASC. This was the culmination of a restructuring based
on the recommendations of the report Recommendations on Shaping IASC for the
Future. New standards are called International Financial Reporting Standards (IFRSs).
This is also the collective term for the body of standards and interpretations.
IASB Structure
Slide12IASBStructure
BrieflycommentonthestructureoftheIASB(thebackgroundoftheparticipantsmay
affect how detailed the presentation should be). See the IASBs homepage at
www.iasb.orgformoredetails.
The International Accounting Standards Committee Foundation comprises 21

individuals, of diverse geographic and functional backgrounds, responsible for
appointingmemberstotheIASB,StandardsAdvisoryCouncil(SAC)andtheIFRS
Interpretations Committee (formerly IFRIC). They also monitor the IASBs
effectiveness,raisefunds,approvebudgetsandhaveresponsibilityforconstitutional
changes.
The Board members are appointed on the basis of their technical expertise; there are 15
members. Publication of a standard, exposure draft or IFRIC interpretation requires
approval by 9 members.
The SAC is comprised of individual members or representatives of organizations
interested in developing high quality international financial reporting standards.
Members are appointed for a renewable term of three years and have diverse
geographicalandfunctionalbackgrounds.TheobjectiveoftheSACistogiveadviceto
theBoardandtrusteesandinformingviewsoftheorganizationsandindividualsonthe
Councilonmajorstandardsettingprojects.
The IFRIC was constituted in December 2001, as a result of the Standing

InterpretationsCommittee(SIC)restructuring.TheIFRICsnamewaschangedtoIFRS
InterpretationsCommitteeinMarch2010.Informtheparticipantsthatwewilldiscuss
theIFRSInterpretationsCommitteeanditsactivitiesindetaillater.
Also mention that in organizing the conduct of its work, the IASB may outsource
detailedresearchorotherworktonationalstandardsettersorotherorganizations,as
wellasformspecialistadvisorygroupstogiveadviceonmajorprojects.
Gerrit Zahm is the chairman of the IASC Foundation.
IASB due
process and
IFRIC
Slide13IASBdueprocessandIFRIC
The information below is provided in detail. The instructor should assess the level of
details presented.
IASBdueprocess
IFRSs are developed through an international due process that involves several
organizationsfromaroundtheworld.Theprocessforthedevelopmentofastandard
involves6stepsdescribedintheDueProcessHandbookoftheIASBwhichwas
adoptedinMarch2006.Thisprocessinvolves:
Settingtheagenda
Planningtheproject
Developingandpublishingthediscussionpaper
Developingandpublishingtheexposuredraft
Developingandpublishingthestandard
Processafterthestandardisissued
Voting rights: each IASB member has one vote on technical and other matters.
Publication of a standard, exposure draft or final IFRIC interpretation requires
approval by 9 of 14 members. Other decisions require simple majority.
Openness of meetings: Meetings of the IASB, the SAC, and the IFRIC are open to
public observation. However, certain discussions are, at the Board and the IFRICs
discretion, held in private. The IASB, the SAC and the IFRIC are using internet, the
web site and electronic observation of meetings to overcome geographical barriers
and the logistical problems for members of the public in attending open meetings. For
example, since January 2004 the meeting of the IASB are broadcast on a live web-
cast.
WhentheIASBpublishesastandarditalsopublishesabasisforconclusionsto
explainpubliclyhowitreacheditsconclusionsandtogivebackgroundinformation
that may help users of the standards to apply them in practice. The IASB also
publishesdissentingopinions.
Comment period: Exposure drafts of standards and discussion documents have, in

general, 120 days as comment period. However, the Board may propose shorter
periods. Draft IFRIC Interpretations are normally exposed for 60 days.
Public hearings and field tests: the IASB may use public hearings to discuss proposed
standards and field tests to ensure that proposals are practical and workable around
the world.
In an addition to its previous procedures, the IASB has recently set up public
meetings round-table discussions to discuss specific issues.
An Annual Improvements Programme has been established to enhance the quality of
standards. This process includes eliminating differences between standards, clarifying
standards and bringing them up to date (for example due to changes in accounting
terminology).
IFRIC
TheIFRICwasconstitutedinDecember2001,asaresultoftherestructuringofits
predecessor body the Standing Interpretations Committee (SIC) and has the
followingmandate:
interpret the application of IFRSs and provide timely guidance on financial

reportingissuesnotspecificallyaddressedinIFRSs,inthecontextoftheIASBs
Framework,andundertakeothertasksattherequestoftheBoard;
publishdraftinterpretationsforpubliccomment;and
reporttotheBoardandobtainapprovalforfinalinterpretations.
In case the IFRIC Agenda Committee decides not to draft an interpretation on a

specificissue(becauseIFRICisoftheopinionthatIFRSsareclearenough),itwillbe
removedfromtheIFRICagendaandreasonsforthatdecisionwillbeprovided the
IFRICmeetsasandwhenrequiredandtenvotingmemberspresentinpersonorby
telecommunications shall constitute a quorum : and deals with issues of reasonably
widespreadimportance,notissuesofconcerntoonlyasmallnumberofentities.
Theinterpretationscoverboth:
mature issues (areas where there is unsatisfactory practice within the scope of
existing IFRSs), and
emerging issues (new topics relating to an existing IFRSs but not considered when the
Standard was developed).
IFRIC comprises 14 voting members from various countries (including individuals from
the accountancy profession, preparer groups and user groups) and a non-voting
Chairman, all appointed by the Trustees. Additionally, IOSCO and the European
Commission participate as non-voting observers.
All interpretations must be complied with in order to comply with IFRSs. IFRIC has
issued 19 interpretations up to 31 December 2009.
Note that in January 2007 IFRIC issued the Due Process Handbook for the IFRIC. This
handbook explains the suggested operating procedures of IFRIC and can be downloaded
IAS1.7 from the IASB website:
http://www.iasb.org/NR/rdonlyres/24B1613A-FBD2-43EA-87EF-
72E0F526D35C/0/DueProcessHandbook_January2007.pdf.
IFRSs around
the world
Slide 14 IFRSs around the world
The IASB is supported by the following key constituents to realize its convergence aim:
International Organization of Securities Commissions (IOSCO)
European Commission
United States Securities and Exchange Commission (U.S. SEC)
IFRS and
global standard
setting
Slide 15 IFRS and global standard setting

The goal of the IASC Foundation and the IASB is to develop, in the public interest, a
single set of high-quality global accounting standards. In pursuit of this goal, the IASB
works in close cooperation with stakeholders around the world, including investors,
national standard-setters, regulators, auditors, academics, and others who have an
interest in the development of high-quality global standards.
Progress toward this goal has been steady. Since 2001 more than 100 countries have
required or permitted the use of International Financial Reporting Standards (IFRSs),
while the remaining major economies have established timelines for convergence with, or
adoption of, IFRSs.
CommentbrieflyonthedevelopmentwithintheEuropeanUnion.
TheECsaimistoimprovetheefficiencyandcosteffectivenessofitscapitalmarkets.
Italsoaimsatprotectinginvestorsandmaintainingtheirconfidenceinthefinancial
marketstoenabletheECtocompeteonalevelplayingfieldforthefinancialresources
availablebothintheECandworldcapitalmarkets.
TheEC(asoutlinedinRegulation1606/2002)statedthatinordertocontributetoa
betterfunctioningofitscapitalmarkets,publiclytradedcompaniesmustberequiredto
applyasinglesetofhighqualityinternationalaccountingstandardsforthepreparation
oftheirconsolidatedfinancialstatements.
To accomplish this goal, on 12 March 2002 the European Parliament endorsed the
Commission's proposal that all EU companies listed on a regulated market should, from
2005 onwards, prepare and publish their consolidated financial statements in accordance
with adopted IFRSs. This proposal was then approved by the Council of Ministers of the
EU in June 2002. Individual standards have to be endorsed by the EU before they can
be adopted by listed companies. Similar government endorsement of standards is
required in other countries, e.g. Australia.
For more information on developments in this area, refer to the IS Alerts issued by the
International Standards Group. See
http://www.iasadvisory.kworld.kpmg.com/IFRS/resource/default.asp?getnode=1248
Note that in the ISGs IS Bulletins (available on the ISG Microweb) also information
about the status of various endorsement issues by the EU are included.
Other countries
and liaison
countries
Slide 16 Other countries and liaison countries
InAugust2007,theASBJandtheIASBagreedonaprocessforconvergingJapanese
GAAPwithIFRS.Theplanisthatallmajordifferencesbetweenthetwowillbe
eliminated by mid 2011. This target date excludes any major new IFRSs that are
issuedintheinterveningperiod.
Canada has adopted a plan to introduce IFRSs in full as Canadian Financial

ReportingStandards.Thesewillbeeffectivein2011andwillapplytoallpublicly
accountableprofitorientatedenterpriseswhichincludeallpubliccompaniesandother
profitorientated enterprises that are responsible to large or diverse groups of
shareholders.CompaniesmaystartusingIFRSasearlyas2008(onapprovalofthe
relevantprovincessecuritiesregulator.
Russia has been harmonizing its national accounting standards with IFRS since
1998,however,significantdifferencesstillremain.Since2004,allcommercialbanks
arerequiredtopreparetheiraccountsinbothIFRSandRussianGAAP.FullIFRS
transitionhasbeendelayeduntilatleast2011.
IndiahasannouncedaplantoadoptIFRSasIndianFinancialReportingStandards
in2011.
KoreahasalsoannouncedadoptionofIFRSin2011butwillpermitearlyadoption
from2009.
Seven national accounting standard setters have an IASB Member resident in their
jurisdiction (Australia and New Zealand have one). The IASB Constitution envisages a
partnership between IASB and these national bodies as they work together to achieve
the convergence of accounting standards worldwide.
SEC Position
Slide 17 SEC Position

details presented.
The SEC has been working on its approach to the adoption of IFRS for nearly 10 years.
The current position is that foreign registrants that are listed on the SEC may file
accounts prepared under IFRS without any reconciliation to US GAAP. Domestic filers
are required to file under US GAAP.
In March 2010 the SEC issued Commission Statement in Support of Convergence and
Global Accounting Standards which is an update outlining the responses it had received
to the road map, which was released in November 2008 and outlines the transition by
US domestic public companies to the use of IFRS. This states that a more comprehensive
work plan is necessary and as a result the SEC will develop a work plan.
Assuming the Commission determines in 2011 to incorporate IFRS into the U.S domestic
reporting system, they believe that the first time U.S issuers would report under such a
system would be approximately 2015 or 2016. This timeline will be further evaluated as
part of the work plan. This is based on responses received on the road map that U.S
issuers would need approximately four to five years to successfully implement a change
to their financial reporting systems.
The SEC will take a decision in 2011 on whether to implement the road map. It has set
out 7 milestones that will influence this decision:
Improvements in Accounting standards
Accountability and funding of the IASC Foundation
Improvement in the Ability to Use Interactive Data for IFRS Reporting
Education and training in the US re IFRS
Limited early adoption of IFRS (refer above)
Anticipated timing of future rulemaking by the SEC

Implementation of mandatory use of IFRS including whether this should be staggered
based on market capitalization.
SeparatelyfromtheplanannouncedbytheSECforSECfilerstoadoptIFRSby2014,
theU.S.FinancialAccountingStandardsBoard(FASB)andtheIASBhaveforsome
timebeenworkingonaconvergenceprogrammeofIFRSandU.S.GAAP.
ProgresshasbeenmadebybothBoardsinreducingkeydifferencesbetweenthetwo
setsofstandards.Toachievethisobjective:
aformalliaisonrelationshiphasbeenestablished;
bothBoardsmonitortherelationshipsbetweenmajorprojects;
shorttermconvergenceprojects areunderwayatbothBoards.Thescopeofthe
IASBs shortterm convergence project is limited to those differences in which
convergencearoundahighqualitysolutionwouldappeartobeachievableinthe
short term, usually by selecting between existing IFRSs and U.S. GAAP. The
objectiveoftheprojectistoanalyzeeachofthedifferenceswithinthescopeand
either (1) amend applicable U.S. GAAP literature to reduce or eliminate the
differenceor(2)communicatetotheIASBtheFASBsrationaleforelectingnotto
changeU.S.GAAP.Concurrently,theIASBwillreviewIFRSsandmakesimilar
determinationsofwhethertoamendapplicableIFRSsorcommunicateitsrationale
totheFASBforelectingnottochangeIFRSs.
For more information on the current status of the convergence project please refer to the
IASBs website at www.iasb.org or the FASBs website www.fasb.org.
USGAAP
IFRS
convergence
Slide 18 U.S. GAAP IFRS Convergence

SeparatelyfromtheplanannouncedbytheSECforSECfilerstoadoptIFRSby2014,
theU.S.FinancialAccountingStandardsBoard(FASB)andtheIASBhaveforsome
timebeenworkingonaconvergenceprogrammeofIFRSandU.S.GAAP.
ProgresshasbeenmadebybothBoardsinreducingkeydifferencesbetweenthetwo
setsofstandards.Toachievethisobjective:
aformalliaisonrelationshiphasbeenestablished;
bothBoardsmonitortherelationshipsbetweenmajorprojects;
shorttermconvergenceprojectsareunderwayatbothBoards.Thescopeofthe
IASBs shortterm convergence projectis limitedtothosedifferencesinwhich
convergencearoundahighqualitysolutionwouldappeartobeachievableinthe
short term, usually by selecting between existing IFRSs and U.S. GAAP. The
objectiveoftheprojectistoanalyzeeachofthedifferenceswithinthescopeand
either (1) amend applicable U.S. GAAP literature to reduce or eliminate the
differenceor(2)communicatetotheIASBtheFASBsrationaleforelectingnotto
changeU.S.GAAP.Concurrently,theIASBwillreviewIFRSsandmakesimilar
determinationsofwhethertoamendapplicableIFRSsorcommunicateitsrationale
totheFASBforelectingnottochangeIFRSs.
Memorandum of Understanding at a joint meetinginNovember 2009,the

InternationalAccountingStandardsBoard(IASB)andtheFinancialAccounting
Standards Board (FASB) reaffirmed their commitment toimprove International
Financial Reporting Standards (IFRS) and U.S. generally accepted accounting
principles(U.S.GAAP) andtobringabouttheirconvergence.TheBoards also
agreedtointensifytheireffortstocompletethemajorjointprojectsdescribedin
their2006MemorandumofUnderstanding(MoU),asupdatedin2008.
The IASB and FASB issued a joint statement describing their plans and
milestone targets for completing the major MoU projects in 2011. The
statement alsodescribesthevaluesand principlesunderpinningtheBoards
collaborationandsignificantsuccessesachievedthusfar.
For more information on the current status of the convergence project please refer to the
IASBs website at www.iasb.org or the FASBs website www.fasb.org.
IASB work
programme
until 2011
Slide 19 IASB work programme until 2011
Sourceofinformation:IASBwebsite
http://www.iasb.org/Current+Projects/IASB+Projects/IASB+Work+Plan.htmwith
monthlyupdateofIASBmeeting.
Dateoflastupdate:16March2010
Changeahead
forclients
(calendaryear
end)
Slide 20 Change ahead for clients (calendar year end)

The above slide shows, for a calendar year end entity, what standards/amendments are
mandatory for adoption in each year
Extractive activities, EPS and income taxes are not included in the slide.
Topic: IFRS Framework

Overview:
DiscusstheprefacetoIFRSsandIFRSFramework.
Discussconceptssuchasobjectiveoffinancialstatements,underlyingassumptions,andqualitative
characteristics of financial statements and definition of Asset, Liability, Equity and Income and
expense,recognitionandmeasurementcriteria.
WIIFM TelltheparticipantsthatwewilldiscusstheprefacetoIFRSsandIFRSFramework.
Agenda
Slide 21 - Agenda
Key points in
the preface to
IFRSs
Slide 22 Key points in the Preface to IFRSs
Explain that the Preface sets out the objectives and due process of the IASB and
Insights 1.1 explains the scope, authority and timing of application of IFRSs.
IFRSs are designed to apply to the general purpose financial statements of all profit-
oriented entities
Bold-type is used to indicate the main principles
Plain-type provides further explanation
Paragraphs in bold- and plain-types have equal authority in Standards approved by

the Board
IFRSs include
o IFRSs issued by the IASB,
o IASs issued by IASC, or revisions thereof issued by the IASB
o interpretations of IFRSs and IASs developed by the IFRIC and

approved by the IASB
o SIC interpretations developed by the SIC and approved for issue by the
IASB and the IASC
The IASB intends to issue IFRSs that do not contain alternative accounting
treatments
Consideration will be given to all comments received within the comment period on
discussion documents, draft IFRIC interpretations and exposure drafts
The requirements of an existing IFRS that would be affected by proposals in an
exposure draft remain in force until the effective date of a new IFRS.
Note that although IFRSs are designed to apply to profit-oriented entities, some non-
profit organizations also use IFRSs as well, for example the International Red Cross.
Framework
Framework F1-
F4
Slide 23 - 24 Framework
details presented.
Explain that the Framework for the Preparation and Presentation of Financial Statements
sets out the concepts upon which standards are formulated. The Framework was issued in
July 1989, after 26 standards had already been issued. Inform the participants that the
IASB has adopted the IASC Framework along with the IASs and the SIC interpretations.
The purpose of the Framework is to:
ensure the consistency of IFRSs

assist the IASB in the development of future IFRSs and its review of existing IASs
assist national standard setting bodies in developing their own national standards
assist preparers and users in preparing and interpreting IFRS financial statements and
with issues not covered by standards.
Mention that the Framework is not an IFRS and hence does not define standards for any
particular measurement or disclosure issue. Clarify that nothing in the Framework
overrides any specific IFRS.
If there are any conflicts between the Framework and an IFRS (the IASB recognizes that
there are such cases but few), the requirements of the IFRS prevail over those of the
IAS 8.10-11 Framework. However, the Board will be guided by the Framework in the development of
Insights 1.1.140 future standards and in its review of existing standards, the number of cases of conflict
between the Framework and IFRSs will diminish through time.
In case there is no standard or interpretation available to deal with a specific issue, IAS 8
includes a hierarchy approach to solve the absence of guidance. Management shall use
its judgment in developing and applying an accounting policy that is relevant to the
economic decision-making needs of users and reliable. When IFRSs do not cover a
particular issue, the entity should consider:
the guidance and requirements in standards and interpretations dealing with

similar and related issues; and
the Framework.
Theentitymayalsoconsiderthepronouncementsofotherstandardsettingbodiesand
acceptedindustrypracticetotheextentthattheydonotconflictwithotherpartsof
IFRSs.
Refer also to IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors
paragraph 7-11.
Say that the Framework deals with:

Framework F5-
F8 Objective and elements of financial statements
Insights 1.2.10 Characteristics that determine the usefulness of financial statements
Definition, recognition and measurement of assets and liabilities, income and expense
Concepts of capital and capital maintenance.
The Framework is concerned with general purpose financial statements including
consolidated financial statements (refer IAS 1 Presentation of Financial Statements
paragraphs1011forwhatisincludedinacompletesetoffinancialstatements).Inthe
case that entitieshave toapplyIFRSs, comment that theFramework appliestothe

financialstatementsofallentities,whetherinthepublicortheprivatesectors(although
notforprofitorganizationsalsocanapplyIFRSseeabove).
InApril2004theIASBandtheFASBagreedtoaddtotheiragendasajointprojectfor
the development of a common conceptual framework. The framework will be built
upontheIASBsandtheFASBsexistingconceptualframeworksandwillprovidea
basisfordevelopingfutureaccountingstandardsbytheBoards.
TheBoardshaveidentifiedthefollowingphasesofthisproject:
A. Objectivesandqualitativecharacteristics;
B. Elementsandrecognition;
C. Measurement;
D. Reportingentity;
E. Presentationanddisclosure;
F. Purposeandstatus;
G. Applicationtonotforprofitentities;and
H. Remainingissues,ifany.
TodatetheIASBandtheFASBhavepublished:
RegardingphaseA,ajointEDdealingwiththeobjectivesoffinancialreporting
andthequalitativecharacteristicsandconstraintsofdecisionusefulfinancial
reportinginformation.PhaseAisexpectedtobecompletein2010.
RegardingphaseD,ajointdiscussionpaper.
Otherphasesoftheprojectwillgenerateothertechnicalmaterialatalaterdate.
Just prior to delivering this presentation, we suggest you review the IASBs home page
(www.iasb.org) to update yourself on this project. You may also want to review the IFR
Groups Microweb:
(http://www.iasadvisory.kworld.kpmg.com/IFRS/resource/default.asp?getnode=4077) for
a KPMG comment letter related to the DP and
http://www.iasadvisory.kworld.kpmg.com/IFRS/resource/default.asp?getnode=1308 for a
KPMG comment letter on the ED. Also review Insights into IFRS chapter 1.2
Framework, section 1.2.120 Future Developments.
Objective of
Financial
Statements
Framework
F12-F21
Slide 25 - 26 Objective of Financial Statements

details presented.
Discuss the objective of financial statements, which is to provide information about:

1 the financial position,
2 performance, and
3 changes in financial position of an entity that is useful to a wide range of users in
making economic decisions.
Stress that IFRSs place emphasis on cash flows. For instance, the Framework states that
financial statements provide information on the ability of an entity to generate cash and
cash equivalents and of the timing and certainty of their generation. Users are better able
to evaluate this ability to generate cash and cash equivalents if they are provided with
information that focuses on the (1) financial position, (2) performance and (3) changes in
financial position of an entity.
Mention that (1) the financial position of an entity is affected by the economic resources
it controls, its financial structure, its liquidity and solvency, and its capacity to adapt to
changes in the environment in which it operates. Information about (2) the performance
of an entity, in particular its profitability, is required in order to assess potential changes
in the economic resources that it is likely to control in the future. Information concerning
(3) changes in the financial position of an entity is useful in order to assess its investing,
financing and operating activities during the reporting period.
Say that the financial statements do not necessarily provide non-financial information,
which would nevertheless be useful for many users of financial statements. You may
want to refer to IAS 1 Presentation of Financial Statements paragraphs 9-10 in which

entities are encouraged to present non-financial information outside the financial
statements.
Point out that financial statements are a means of assessing the results of stewardship of
management.
Framework F9
F11 You may want to involve the participants in a discussion around the fact that the
objective of IFRS financial statements is to provide information useful for economic
decision making as opposed to provide information for calculating taxable income (as in
some countries).
Users of financial statements

Comment on the users of financial statements and their different information needs.
Investors (present and potential).

Inform the participants that IFRSs are primarily directed to meeting the needs of
existing shareholders (i.e. investors).
Clarify that while all of the information needs of these users cannot be met by
financial statements, there are needs that are common to all users. As investors are
providers of risk capital to the entity, the provision of financial statements that meet
their needs also will meet most of the needs of other users.
Employees.
Lenders.
Suppliers and other trade creditors.
Customers.
Governments and their agencies.
Public.
Mention that management has the primary responsibility for the preparation and
presentation of the financial statements. The Framework does not deal with information
outside the financial statements that management needs to run the business.
You may want to involve the participants in a discussion on the difference between
stakeholders (the user groups listed above all of whom have an interest in the financial
health of the entity) and shareholders (investors).
You may want to ask the participants which user group takes priority in their own local
reporting standards.
Underlying assumptions
Inform the participants that the Framework sets out the underlying assumptions upon
which the standards are based. Go through the assumptions on the slide.
Framework
Explain that the financial statements are prepared on the accrual basis of accounting,
F22-23
i.e. the effects of transactions and other events are recognized when they occur (and not
as cash or its equivalent is received or paid) and they are recorded in the accounting
records and reported in the financial statements of the periods to which they relate.
Mention that the financial statements are normally prepared on the assumption that an
entity is a going concern and will continue in operation for the foreseeable future. The
going concern issue is also dealt with in IAS 1 Presentation of Financial Statements
paragraphs 25 - 26 and IAS 10 Events After the Reporting Period paragraphs 14-16.
Stress that prudence is not an underlying assumption. Under European accounting
acts, for example, companies tend to use the prudence principle. The Framework makes
it clear that prudence means exercising a degree of caution in making judgments under
conditions of uncertainty, but that it should not lead to the creation of hidden reserves or
excessive provisions.
Qualitative
characteristics
of financial
statements
Slide 27 Qualitative characteristics of financial statements
details presented.
Framework
Inform the participants that the qualitative characteristics are the attributes that make the
F24-42, 46
information provided in financial statements useful to users.
Insights 1.2.70
There are four principal qualitative characteristics (1) understandability, (2) relevance,
(3) reliability and (4) comparability, of which some are divided into sub-categories.
Clarify that an application of the principal qualitative characteristics and of appropriate

accounting standards normally results in financial statements that convey what is
generally understood as a true and fair view of, or as presenting fairly such information.
Comment on each item below; how briefly depends on the background knowledge of the
participants.
1. Understandability. Information should be presented in a manner that it is readily
understandable by users.
2. Relevance.Informationmustberelevanttothedecisionmakingneedsofusers.
Informationhasthequalityofrelevancewhenitinfluencestheeconomicdecisions
ofusersbyhelpingthemevaluatepast,presentorfutureeventsorconfirming,or
correcting,theirpastevaluations.Financialstatementsmusthavebothpredictive
valueandconfirmpastevents.
Materiality. The relevance of information is affected by its (a) nature and (b)
materiality. In some cases the nature of information alone is sufficient to determine
its relevance. In other cases both nature and materiality are important. Information
is material if its omission or misstatement could influence the economic decision of

users taken on the basis of the financial statements. As materiality depends on the
size and nature of the item or error judged in the surrounding circumstances,
materiality provides a threshold or cut-off point rather than being a primary
qualitative characteristic which information must have if it is to be useful.
n Either the size or the nature of the item, or a combination of both, could be the
determining factor. Consideration of materiality is relevant to judgments
regarding both the selection and application of accounting policies and to the
omission or disclosure of information in the financial statements.
IAS 1.7, 8.5 n Regarding disclosures, materiality impacts, for example when items may be
aggregated, the use of additional line items, headings and sub-totals.
Materiality also is relevant to the positioning of these disclosures (on the face
of the financial statements or in the notes).
Note that IFRSs are not intended to apply to immaterial items.

IAS 1.30, 31,
86 3. Reliability. Information has the quality of reliability when it is free from material
error and bias and can be depended upon by users to represent faithfully that which it
either purports to represent or could reasonably be expected to represent. Information
may be relevant but so unreliable in nature or representation that its recognition may
be potentially misleading. Reliability depends on:
Faithful representation. To be reliable, information must represent faithfully the

Insights 1.2.70 transactions and other events it either purports to represent or could reasonably be
expected to represent, e.g., a statement of financial position should represent
faithfully the transactions and other events that result in assets, liabilities and
equity at the reporting date which meet the recognition criteria.
Substance over form. Information must be accounted for and presented in

accordance with its substance and economic reality and not merely its legal form,
e.g., finance leases. Emphasize that this is a key point in this module.
Neutrality. Information must be free from bias. Financial statements are not
neutral if, by the selection or presentation of information, they influence the
making of a decision or judgment in order to achieve a predetermined result or
outcome.
Prudence. Prudence is the inclusion of a degree of caution in the exercise of the

judgments needed in making the estimates required under conditions of
uncertainty. However, the exercise of prudence does not allow, for example, the
creation of hidden reserves or excessive provisions, the deliberate understatement
of assets or income, or the deliberate overstatement of liabilities or expenses,
because the financial statements would not be neutral and, therefore, not have the
quality of reliability. Clarify that prudence is not an overriding principle.
Insights 1.2.90 Completeness. To be reliable, the information must be complete within the
bounds of materiality and cost. An omission can cause information to be false or
misleading and thus unreliable and deficient in terms of its relevance.
4. Comparability. Users must be able to compare the financial statements of an entity
(a) through time internal comparability and (b) with different entities external
comparability. The measurement and display of the financial effect of like
transactions and other events must be carried out in a consistent manner throughout
an entity and over time for that entity and in a consistent manner for different entities.
It is important that the accounting policies used and changes to these are disclosed. It
also is important that the financial statements show corresponding information for the
preceding periods.
Qualitative
characteristics
of financial
statements
(continued)
Slide 28 Qualitative characteristics of financial statements (continued).
Continue discussing qualitative characteristics with the constraints on relevant and

Framework
reliable information.
F43-45
Timeliness. If there is undue delay in the reporting of information it may lose its
relevance. Management may need to balance the relative merits of timely reporting
and the provision of reliable information.
Benefit and cost. The benefits of information should be greater than the cost of
providing it. The evaluation of benefits and costs is, however, a judgmental process.
Balance between qualitative characteristics. In practice a balancing, or trade-off,

between qualitative characteristics is often necessary. The relative importance of the
characteristics in different cases is a matter of professional judgment.
Discuss that many accounting issues are trade-offs between relevance and reliability. Ask
the participants to give examples (e.g., fair value information is relevant but some argue
that fair value information is not reliable).
Assets,
liabilities and
equity:
definitions
Before showing Slide 29 Assets, liabilities and equity: definitions and commenting on
Framework
the elements of the statement of financial position, ask the participants to give the
F49, 53-68
definitions of assets, liabilities and equity.
Insights 1.2.20
Show thereafter slide 29 and comment on the definition of an asset (F49, 53-59) as given
in the Framework: An asset is a resource controlled by the entity as a result of past
events and from which future economic benefits are expected to flow to the entity.
Explain an assets relation to cash flows; the future economic benefit embodied in an
asset is the potential to contribute, directly or indirectly, to the flow of cash and cash
equivalents to the entity. For more details, refer F53-59.
Point out that physical form is not essential to the existence of an asset, e.g., patents and
copyrights. Note also that legal ownership is not of primary concern; economic
ownership is the essential characteristic (e.g., leased items). For other examples, see the
Framework (substance over form: F57).
You may want to ask the participants if the IFRS definition of an asset is different from
the one used for the balance sheets prepared under national law.
Go through the definition of a liability (F49, 60-64) in the Framework: A liability is a

present obligation of the entity arising from past events, the settlement of which is
expected to result in an outflow from the entity of resources embodying economic
benefits. Illustrate the importance of the term present obligation (as opposed to
future commitment), i.e., a decision by management to buy an asset in the future does
not give rise to a present obligation an obligation normally arises only when the asset is
delivered or when management enters into an irrevocable agreement to acquire the asset.
As for assets, substance over form is relevant.
Explain that equity is the residual interest in the assets of the entity after deducting all its
liabilities (refer F65-68).
Refer IAS 1 Presentation of Financial Statements (appendix) for the presentation of
different items in the statement of financial position.
Assets and
liabilities:
recognition
criteria
Slide 30 Assets and liabilities: recognition criteria

details presented.
Framework Emphasize that assets and liabilities must be recognized if the criteria for their
F82-91 recognition is satisfied. Note that they also have to meet the definition of an asset or
liability. The interrelationship between the elements means that an item that meets the
Insights 1.2.20
definition and recognition criteria for a particular element; for example, an asset
automatically requires the recognition of another element, for example income or a
liability.
Items are to be recognized as assets or liabilities (or as income and expenses refer slide
29) if:
1. it is probable that any future economic benefit associated with the item will flow to or
from the entity, and
2. the item has a cost or value that can be measured with reliability.
Discuss the fact that the probability of future economic benefits is to be assessed when
the financial statements are prepared. The concept of probability refers to the degree of
uncertainty that the future economic benefits associated with the item will flow to or
from the entity. Assessments of the degree of uncertainty attaching to the flow of future
economic benefits are made on the basis of the evidence available when the financial
statements are prepared.
Ask the participants what percentage they think is probable. Explain that probable is
not defined in the Framework but in IAS 37, in IFRS 3 and in IFRS 5 where probable is
defined as more likely than not.
Comment on reliability of measurement (refer discussion of reliability on slide 28, F31-
38). In many cases, cost or value must be estimated; the use of reasonable estimates is an
essential part of the preparation of financial statements and does not undermine their
reliability.
Mention that an item that, at a particular point in time, fails to meet the recognition
criteria may qualify for recognition at a later date as a result of subsequent
circumstances or events. Also, an item that possesses the essential characteristics of an
element but fails to meet the criteria for recognition may nonetheless warrant disclosure
in the notes, explanatory material or in supplementary schedules. Some standards require
disclosure.
With the above discussion of the general recognition criteria as a point of reference
(F83), briefly comment on the specific recognition criteria for an asset and for a liability
(F89-91).
Assets:
(1) Probable that future economic benefits will flow to the entity, and
(2) the cost or value can be reliably measured.
The future economic benefits may flow to the entity in a number of ways. For example:
Inventories, property, plant and equipment, and know-how may be used in the
production of goods or services to be sold by the entity;
Cash and cash equivalents, receivables or marketable securities may be exchanged for
other assets;
Cash and cash equivalents may be used to settle a liability; or
Cash and cash equivalents may be distributed to the owners of the entity.
Liabilities:
(1) Probable outflow of resources will result from settlement of a present obligation, and
(2) the amount can be measured reliably. The settlement of a present obligation usually
involves the entity giving up assets in order to satisfy the claim of the other party.
Settlement may occur in a number of ways, for example, by:
The payment of cash or cash equivalents as is the case with most payables;
The transfer of other assets, for example in a barter transaction or in some business
combination;
The rendering of services to the other party as is the case with a liability for warranty
repairs; or
The replacement of the obligation with another obligation.

Executory contracts: Explain that although the Framework does not refer explicitly to
executory contracts, they are an integral part of accounting under IFRSs. IAS 37
describes an executory contract as one in which neither party has performed any of its
Insights 1.2.60 obligations nor both parties have partially performed their obligations to an equal extent
(IAS 37.3).
IAS 37.3
For example, an entity enters into a contract to buy equipment in six months and agrees
to pay 100,000 at that time. Initially this is an executory contract because the entity has
the right to receive the equipment, but also has an obligation to pay the 100,000, and
neither party has performed its obligation.
Even though the rights and obligations under executory contracts generally meet the
definition and recognition criteria of assets and liabilities, current practice generally is
not to record them in the financial statements to the extent that the rights and obligations
have equal value, or the rights have a value greater than the obligations. When the value
of the obligation exceeds the value of the rights, a provision for an onerous contract is
recognized in accordance with IAS 37.
Income and
expense:
definitions
Slide 31 Income and expense: definitions

Review the definitions of income and expense (measurement of performance).
Framework
Income is increases in economic benefits during the accounting period, in the form of:
F69-80
Insights 1.2.20 direct inflow
enhancement of assets
decreases in liabilities
that result in increases in equity, other than those relating to contributions from equity
participants.
Expenses are decreases in economic benefits during the accounting period in the form of:
direct outflows
decreases in the value of assets

increases in liabilities
that result in decreases in equity, other than those relating to distributions from equity
participants.
The definition of income encompasses both revenue and gains. Revenue arises in the
course of the ordinary activities of an entity, including sales, fees, interest, dividends,
royalties and rent. Gains represent other items that meet the definition of income and
may, or may not, arise in the course of the ordinary activities of an entity (e.g., gains on
the disposal of non-current assets). Gains represent increases in economic benefits and as
such are no different in nature from revenue. Hence, they are not regarded as constituting
a separate element in the Framework. The definition of income also includes unrealized
gains (e.g., unrealized gains arising on the revaluation of marketable securities).
The definition of expenses encompasses losses as well as those expenses that arise in the
course of the ordinary activities of the entity. Losses represent other items that meet the
definition of expenses and may, or may not, arise in the course of the ordinary activities
of the entity.
Refer to IAS 1 Presentation of Financial Statements guidance on implementation,
regarding how different items of income and expenses should be presented in the
statement of comprehensive income.
Income and
expense:
recognition
criteria
Slide 32 Income and expense: recognition criteria

Explain that the recognition criteria for income and expense are the same as for the
Framework recognition of assets and liabilities.
F82-84, 92-98
Income is recognized in the statement of comprehensive income when an increase in
Insights 1.2.30 future economic benefits related to an increase in an asset or a decrease of a liability has
arisen that can be measured reliably. This means, in effect, that recognition of income
occurs simultaneously with the recognition of increases in assets or decreases in
liabilities.
Expenses are recognized in the statement of comprehensive income when a decrease in
future economic benefits related to a decrease in an asset or an increase of a liability has
arisen that can be measured reliably. This means, in effect, that recognition of expenses
occurs simultaneously with the recognition of an increase in liabilities or a decrease in
assets.
Describe the matching concept, i.e., matching costs with revenues (expenses are
recognized in the statement of comprehensive income on the basis of a direct
associationbetweenthecostsincurredandtheearningofspecificitemsofincome).
Expensesmayneedtobeallocatedinasystematicandrationalwayiftheflowof
related benefits is unclear. Inform the participants that although historically the
matching principle had a significant influence on the preparation of financial
statements,ithasbeendeemphasizedinrecentstandardsettingasthepredominanceof
thebalancesheetapproachhas grown. Accordingly, expenses (or revenue) may be
deferredinthestatementoffinancialpositiononlyiftheymeetthedefinitionofan
asset(orliability).
Mentionbrieflytransactionswithshareholders:thedefinitionsofincomeandexpenses
excludecapitaltransactionswithequityparticipants(F.70).Discussdifferentexamples
(capitalcontributionsfromshareholdersandcasesinwhichthetransactionwiththe
shareholderequallycouldhavebeenathirdparty;refertoInsights1.2.110).
Measurement
of elements of
financial
statements
Slide 33 Measurement of elements of financial statements

Comment briefly on the different measurement bases mentioned in the Framework:
Historical cost
Current cost
Realizable (settlement) value
Present value
Ask the participants to give examples of items that are measured at historical, current
cost etc.
Also other measurement bases are referred to in the standards, e.g., recoverable amount
in IAS 36 Impairment of Assets and fair value in IAS 39 Financial Instruments:
Recognition and Measurement.
Mention that the trend is to fair value as seen in recent standards, e.g., IAS 39 and IAS
40 Investment Properties.
Conceptual
Framework
project
Slide 34 Conceptual Framework project

Below is a brief description of the current status of the project. See
http://www.iasb.org/Current+Projects/Conceptual+Framework/Conceptual+Framework
.htm.
The projects overall objective is to create a sound foundation for future accounting
standards that are principles-based, internally consistent and internationally converged.
This project is being undertaken jointly by the IASB and US FASB.
The boards are conducting the project in 8 phases. Phases A, B, C and D of the project
are currently active:
A Objective of Objectives and Qualitative Characteristics Phase
The aim of the Objectives and Qualitative Characteristics phase of Financial Reporting,
is to consider:
The objective of financial reporting
The qualitative characteristics of financial reporting information
The trade-offs among qualitative characteristics and how they relate to the
concepts of materiality and cost-benefit relationships.
Current status
The Boards issued an Exposure Draft, Conceptual Framework for Financial

Reporting:TheObjectiveofFinancialReportingandQualitativeCharacteristicsand
ConstraintsofDecisionUsefulFinancialReportingInformation, inMay2008.The
commentperiodendedinSeptember2008.
The Board redeliberated some of the issues arising from the Exposure Draft.
The Board decided to:
1. Continue to use the term faithful representation to refer to the characteristic that
had been labeled reliability in the existing framework.
2. Continue to classify relevance and faithful representation as fundamental

characteristics.
3. Clarify that the components of faithful representation (neutrality, completeness,

and freedom from error) are not absolutes. For example, the phrase freedom
from error is not intended to imply that financial statements must be 100
percent accurate must be 100 percent accurate.
4. Continue to classify verifiability, comparability, timeliness, and

understandability as enhancing characteristics.
5. Continue to describe materiality and cost as constraints on financial reporting.
B Objectives Elements and Recognition Phase
The objectives of the Elements and Recognition phase are to refine and converge the
Boards frameworks as follows:
Revise and clarify the definitions of asset and liability.
Resolve differences regarding other elements and their definitions.
Revise the recognition criteria concepts to eliminate differences and provide a

basis for resolving issues such as derecognition and unit of account.
Current status
The Boards have tentatively adopted the following working definition of an asset:
An asset of an entity is a present economic resource to which the entity has a

right or other access that others do not have.
The Boards have tentatively adopted the following working definition of a liability:
A liability of an entity is a present economic obligation for which the entity is

the obligor.
C Objective of Measurement Phase
The objective of the Measurement phase is to provide guidance for selecting

measurement bases that satisfy the objectives and qualitative characteristics of financial
reporting.
Current status
In June 2009 the Board discussed a draft measurement chapter for the conceptual
framework that is based on measurement factors the Board has discussed in earlier
meetings. Those factors are:
1. Method of value realization
2. Cost of preparing and using measures
3. Relative level of confidence in different measures
4. Use of consistent measures for similar items and items used together
5. Separability of changes in measures.
The Board decided that the measurement factors and the discussion of their relation to
the objective of financial reporting and the qualitative characteristics of decision-useful
information are an appropriate starting point for developing a Discussion Paper. The
Board provided suggestions for clarifying and improving the ideas discussed in the draft
chapter.
D Objective of Reporting Entity Phase
The objective of the Reporting Entity phase, is to determine what constitutes a reporting
entity for the purposes of financial reporting.
Current status
The Boards issued their Exposure Draft, Conceptual Framework for Financial
Reporting: The Reporting Entity, in March 2010. The comment period ends in July
2010
Topic: KPMG and IFRSs

Overview:
DiscussKPMGIFRSnetworkandrolesofISG,IFRSpanel,NationalDPPsandtopicteams.Discuss
theprocesstobefollowedforanIFRSQuery.
WIIFM TelltheparticipantsthatwewilldiscusstheKPMGIFRSnetworkandrolesofISG
globalIFRSTopicTeams,theIFRSpanel,NationalDPPsandtopicteams,followedby
theprocessforanIFRSquery.
Agenda
Slide 35 Agenda
Point out to the participants the high importance of a co-coordinated approach to IFRSs
within KPMG. The main reasons for co-coordinating our approach on IFRS matters are:
1 Risk management we need to be sure that we interpret and apply IFRS

consistentlythroughoutKPMGglobally.EspeciallysinceIFRSsoftenareusedby
companiesasameanstoattractforeigninvestorsandfrom2005hasbeenusedby
allEUlistedcompanies.Therefore, itisessentialthatasKPMGwemaintaina
consistently high quality level, regardless of where the financial statements are
prepared.
2 To seize business opportunities Many companies have a need for specialist

assistance. By creating sufficient resources and IFRS expertise nationally, regionally
and internationally, we seek to be and be seen as the leading firm in IFRSs.
The IFRS
Network
Slide 36 The IFRS Network
At the top of the IFRS structure are the Global Quality and Risk Management Steering
Group (GQRMSG) and the Global Audit Steering Group (GASG).
Below that level is the ISA Panel, the ISG Executive Committee and the IFRS Panel.
The responsibilities of the ISA Panel include monitoring the development of ISA
guidance by the ISG; and monitoring the development of response letters to the IAASB
and /or regulators by the ISG.
The responsibilities of the ISG Executive Committee include developing policies on

IFRS- and ISA-related matters for approval by the Global Audit Steering Group or, for
risk and compliance matters, the Global Risk and Compliance Steering Group; and
recommendations relating to risk and quality control procedures with the aim of ensuring
the consistent application of IFRS and ISA across the KPMG network of member firms.
The responsibilities of the IFRS Panel include monitoring the development of IFRS
guidance by the ISG and the Topic Teams; and monitoring the development of response
letters to the IASB and /or regulators by the ISG and the Topic Teams.
Inform the participants that a contact list of all the members of the above networks can
be found at the ISGs Microweb www.iasadvisory.kworld.kpmg.com. The ISGs
Microweb can be found at: http://www.iasadvisory.kworld.kpmg.com/IFRS/default.asp
International
Standards
Group: Key
objectives
Slide 37 International Standards Group: Key objectives
KPMGs International Standards Group exists to promote global consistency, realize

efficiencies and empower national practices in the area of international
standards. Operating in large part through geographically dispersed topic teams and
other working groups, its key objectives are:
promote and facilitate global and regional networks addressing international

standards issues;
issue a wide range of publications, including many that are available to clients, on
technical and sector specific issues;
develop training material and other guidance on international standards;
provide technical support to member firms as they resolve specific client queries; and
monitor standard setting and regulatory developments and comment on them on

behalf of the international network of member firms
International
Standards
Group: Role
Slide 38- 39 International Standards Group: Role
details presented.
Explain that the ISG has two departments as shown in slide 36: the ISG and the ISA.
TheISGsmainobjectivesare:
Promoting global consistency in the application of IFRSs. The group sponsors

networks that formulate KPMG guidance on the application of IFRSs. They
coordinate DPPs in identifying and resolving IFRS application issues throughout
KPMG worldwide. They promote an inclusive approach to formulating KPMG views
and guidance on IFRS application issues. Further, they assist individual DPPs in
resolving widespread national issues, including issues raised by regulators reviewing
IFRS financial statements. Also, they update and distribute guidance via member
firms. They develop and distribute publications to enhance marketplace visibility and
distribution to clients.
Traditional DPP role in respect of IFRSs. The group monitors and reports IASB
developments and leads and supports KPMG participation in the IFRS standard-
setting and interpretive processes, including responses to IASB proposals. They
monitor international and regional regulatory initiatives on IFRSs.
Enabling member firms to achieve efficiencies offered by IFRSs. The ISG

develops resources once centrally and shares across practices. They develop
overview, training and client communication materials. They develop and maintain
detailed basic, advanced and specialist IFRS training modules. Furthermore, they
support and maintain shared DPP resources.
Empowering national practice of IFRSs. The ISG embeds IFRSs in member firm
structures and distribute knowledge and resources. They use networks established for
issue identification and resolution to share conclusions. The group maintains
distribution networks for IFRS news and technical resources. They support resources
available directly to engagement teams.
Mention that the main activities to support the abovementioned objectives are:
Formulating the firms IFRS policies in co-operation with the IFRS Panel and topic
teams (See slides 43 and 44).
Technical inquiries and advice, i.e., answering IFRS related questions. Thousands of
questions have been dealt with so far, ranging from the relatively easy to the very
complex. Some areas on which questions arise are business combinations, group
restructurings, impairment of assets, consolidation issues, deferred tax, financial
instruments, pensions, and share-based payments.
TheISGreferstotheIFRSPanelandtopicteamswherenecessary(seeslides43
and44).
Coordinating international responses to the IASB. The ISG drafts KPMG

internationals responses to IFRS exposure drafts and discussion papers for approval
by the Panel.
Monitor and report on the IASB (the Board and the IFRIC) activities via the ISGs
Web site (see slide 40) and IS Alerts.
Development and distribution of IFRS knowledge through IS Alerts, publications (see

slide 41), Web site (see slide 40) and training.
An IS Alert is issued as soon as there is something to report regarding IFRS and

IFRIC issues, or when the ISG has formed an opinion in cases where the existing
guidance is not clear or needs to be supplemented.
Global Audit Learning & Development (Global ALD) is responsible for

coordinating the preparation of Global IFRS training material that is available
throughout KPMG. Global ALD updates the Global IFRS Baseline Training modules
and prepare a Global IFRS Partner / Manager course in co-ordination with ISG. ISG
reviews all IFRS related training material. Subsequently, local KPMG offices are
responsible for providing local staff and partners with sufficient IFRS training.
ISG also prepares an annual training and holds an annual train-the-trainer conference
at which that training is rolled out via DPPs course for IFRS Reviewing Partners.
Quality control: KPMG aims at having a consistent IFRS application throughout the
firm globally, which is possible with help of everyone involved in IFRS audits. The
global IFRS network, including IFRS reviewing partners also help to achieve this
objective.
International
Standards
Group:
Information
Sources
Slide 40 International Standards Group: Information Sources
Introduce to the participants the range of IFRS information resources::
IFRS network
IFRS reference material
IFRS tools and publications
IFRS training.
Explain that this information can be found at the ISG homepage (Microweb), the GALD
homepage (Microweb) and Accounting Research On-line (ARO) or ALex.
To receive e-mail alerts regarding the new material posted to the ISGs internal
Microweb, go to the IFRS Network page and click on the icon e-mail alert to
activate this service (should be set on on).
Advise the participants to use these sources especially ARO and the search engine ALex
when seeking information about IFRSs. The instructor should, if he/she is not already,
get familiar with these Web sites before presenting this module.
Mentionthatonitsexternalhomepage,theISGspublicationscanbeorderedoroften
downloaded.TheyalsoareavailableonasubscriptionbasistoexternalusersonARO.
TheISGs comments onIFRS Exposure drafts and other discussion papers are also
includedonthehomepageandARO(ALex).Moreover,theISGpublishesnewsletters
andotherusefulIFRSsrelatedinformationregularly.Inaddition,theparticipantswillbe
abletodownloadalltheeffectivestandardsandinterpretationsaswellasnewsletters
fromtheIASBandtheIFRIC.
You may also want to point out that IASB has a good Web site: http://www.iasb.org
International
Standards
Group:
External
Publications
Slide 41 International Standards Group: External Publications
Introduce to participants the range of the publications issued by the International

Standards Group. They include:
Annual publications (such as Insights into IFRS, IFRS Illustrative Financial

Statements and Disclosure Checklist, IFRS compared to US GAAP)
First Impressions issued for certain standards and interpretations that introduce a
major change in accounting practice
Other publications, including regular IFRS In Brief and Briefing Sheets.
It is advisable that the instructor brings and shows at least the annual publications to
participants (if possible).
The participants should all be familiar with at least Insights into IFRS, The Application
of IFRS: Disclosures in Practice, the Illustrative Financial Statements and Disclosure
Checklist after this course. Advise the participants to use the publications as the views
expressed in these publications represent KPMGs current positions on these topics.
When applying IFRSs, consideration should be given to particular facts and
circumstances. If an engagement team believes that the application of the guidance
contained in these publications is not appropriate in a particular set of circumstances or
that the application of the guidance is unclear, the ISG should be contacted (after
consultation with the engagement teams national DPP, where available).
Refer the participants to Handout 3: Alert 2009/60 regarding Insights 6th Edition
2009/10.
Mention that orders of publications can be made via the ISGs Web site. It is also
possible to download softcopies (only for internal purposes in many cases) from the Web
site and Accounting Research Online (ARO) or ALex. The Insights into IFRS version on
ARO or ALex is updated semi-annually for the latest developments. Emphasize that this
is where you should start researching when the standards are not clear. The continuously
updated version can be found at: http://www.aro.kworld.kpmg.com/NXT/gateway.dll/?
f=templates$fn=default.htm$VID=assursrc:pcaobvw$bpvid=yes (Financial Reporting
Handout 3: KPMG guidance opinions and publications Accounting Guidance).
Alert 2009/60
Dont forget to update yourself in terms of new publications in the ISGs Microweb at
http://www.iasadvisory.kworld.kpmg.com/IFRS/resource/default.asp?getnode=91 or at
ARO and ALex on Kworld.
ISG Executive
Committee
Slide 42 ISG Executive Committee

The ISG Executive Committee is chaired by the head of ISG and comprises senior ISG
members and senior professional practice partners from KPMG regions.
The responsibilities of the ISG Executive Committee include developing policies on
IFRS- and ISA-related matters for approval by the Global Audit Steering Group
(GASG) or, for risk and quality control procedures, the Global Quality and Risk
Management Steering Group (GQRMSG); and recommendations relating to risk and
quality control procedures with the aim of ensuring the consistent application of IFRS
and ISA across the KPMG network of member firms.
IFRS Panel
Slide 43 IFRS Panel
Inform the participants about the KPMG IFRS Panel, which comprises 16 senior
technicalpartnersfromdifferentcountriesandregions.
ThePanelwascreatedwiththeaimofprovidingaplatformatinternationallevelto
formulateKPMGspoliciesonIFRSissues,bothatastrategicandatatechnicallevel.
ThePanelhasoverallresponsibilityforensuringconsistencyofKPMGguidanceand
positions and in that role reviews new guidance and drafts of KPMG responses to
IASBexposuredraftsanddiscussionpapers,whicharepreparedbyGlobalIFRSTopic
Teams.ForthosewhowanttoreadmoreaboutthePanel,pleaserefertothelatest
versionofthePanelCompositionandOperatingproceduresontheISGPortal.
Topic Teams
Slides 44 - 45 Topic Teams

Inform the participants that the areas in which Topic Teams will help the ISG are
business combinations and consolidation, employee benefits, financial instruments,
income taxes, insurance contracts, leases, presentation, revenue recognition and
provisions and valuation and impairment.,
The IFRS Topic Teams are responsible for quality and market presence in their topic
area, their specific responsibilities are:
formulating KPMG International guidance on IFRS accounting and reporting
practice;
providing IFRS input as required to KPMG International audit tools;
formulating proposed responses to IASB proposals such as discussion papers,

exposure drafts and draft interpretations;
approving publications or parts thereof containing new guidance on IFRS;
deciding the outcome of consultations referred to the Topic Team by Topic Team
members;
understanding current practice in the relevant topic in their regions / home

practices;
acting as a central contact point for their regions/ home practices in identifying
and addressing issues related to the relevant topic;
TR 1: DPP taking an active role in disseminating information and implementing guidance

Topic Teams formulated by the Topic Team, and providing feedback and input on issues
Charter related to the consistent application of IFRS in their regions / home practices;
and
pro-active identification, review and resolution of emerging practice issues.

As a part of preparation for presenting this module, the instructor should make
him/herself familiar with the contents of the Technical Resource: DPP Topic Teams -
Charter for more detail on background of the topic teams.
Refer participants to Handout 4: ISG Announcement: Appointment of Global IFRS

Technical Topic Team Leaders for more information, and inform participants that this
document can also be found at:
https://portal.ema.kworld.kpmg.com/grm/depts/isg/isgnsltts/ISG_Announcement_09-
09.html
Handout 4:
ISG
Announcement
National DPP
Network
Slide46:NationalDPPNetwork
One of the objectives of the ISG is to enhance the global network for IFRSs. Part of this
effort is to support a network of national DPP dealing with IFRS issues, resulting in a
global consistency of views and greater efficiency through exchange of output.
The ISG has set regular DPP network conference calls with DPPs. The objectives for
the calls are:
to update DPPs on the latest developments at the ISG regarding training, publications,
shared database, etc.;
to receive feedback from the users of ISG products;
to share between DPPs and the ISG activities and developments of the national
DPPs in order to share ideas and products;
to improve efficiency by avoiding re-inventing the wheel;
not to resolve accounting issues (for that there is the before mentioned query process,
see slide 47).
Query process
Slide47Queryprocess
Explain that audit teams generally have two different kinds of questions/problems. They
are either accounting or auditing related.
Emphasize that if client teams have questions relating to ISA (International Standards
on Auditing), those teams should refer to the ISA Group. Make sure that the
participants become aware of this opportunity with respect of international auditing
issues. Contact persons are presented in the ISA Groups web page. There is also more
information available on the ISA Desk on the web page.
The accounting part will be explained in more detail on the following slides. Emphasize
to the participants that National DPPs/liaison partners should be contacted and
consulted first and that they should be aware of all queries submitted to the ISG (e.g.,.
cc e-mail).
Inform the participants that the ISG has published a query procedure.
Handout 5: Refer the participants to Handout 4: IS Alert 2007/12 New template for queries
Alert 2007/12 addressed to the ISG. The template must be used for queries addressed to the ISG. The
quick reference card addressing the use of the template can be found at:
The query template should be sent to the email-in-box
(UK-FM IFRG Query Submission - IFRGQuerySubmission@kpmgifrg.com)
All official answers from the ISG will be received from the email-out-box
(UK-FM IFRG Query Clearance IFRGQueryClearance@kpmgifrg.com)
IFRS
Reviewing
Partners
Slide48IFRSReviewingPartners
Inform the participants that KAM requires a mandatory review of IFRS financial
statements, if these are prepared by listed clients or if the engagement is classified as
higher risk by local risk management. These reviews need to be performed by
designated IFRS Reviewing Partners (or local equivalents). IFRS reviewing partners
for certain countries combined with the Engagement Quality Control Reviewer role
are approved by country/regional risk management.
The IFRS review requirements generally apply to consolidated financial statements and
not to subsidiaries. Hence, reporting for consolidation purposes does not normally require
an IFRS review unless that engagement is considered higher risk or, for example, the
group auditors requires such a review.
Information on policies as they relate to IFRS Reviewing Partners is available on the
ISGs Microweb.
Emphasize that the procedure of becoming a designated IFRS Reviewing Partner differs
depending on whether the candidate is coming from the country where IFRS as an
applicable accounting framework or not. Remind the participants that the list of
countries where IFRS is an applicable accounting framework was discussed with them
during the Introduction module.
Note that to become a designated IFRS Reviewing Partner, for countries where IFRS is
the applicable accounting framework, local guidelines regarding registration needs to be
followed.
For countries where IFRS is not an applicable accounting framework, the registration
form on the ISGs Microweb should be used. In order to become a designated IFRS
reviewing partner, a partner should have at least three years experience as an
engagement partner on listed or public interest IFRS clients or they should have
obtained appropriate knowledge and experience in IFRS. An ongoing training
requirement is applicable too.
A list of the IFRS Reviewing Partners in countries where IFRS is not the applicable
accounting framework can be found in the following address:
Developments
Slide 49 Developments
The information below is provided in detail. The instructor should assess the level
of details presented.
IS Alert 2010/10
On 15 February 2010 the IASC Foundation announced amendments to its Constitution

ISAlert as part of the second phase of its Constitution Review. The objectives of the
amendments include enhancing the public accountability of the IASC Foundation,
2010/10 stakeholder engagement and operational effectiveness. In addition to the amendments to
the Constitution, the Trustees of the IASC Foundation (the Trustees) announced their
intention to undertake several reviews starting in 2010.
See IS alert 2010/10 Completion of IASC Foundation Constitution Review for more
details.
IS Alert 2010/11
IS Alert 2010/11 serves as a reminder of newly effective standards and standards issued
but not yet effective which will be relevant to audit clients.
The standards, interpretations and amendments to standards and interpretations

ISAlert (collectively referred to as standards or requirements) are grouped into four parts:
2010/11
Part I Standards effective for periods beginning on or after 1 April 2009 or later and
that are required to be applied in annual and interim periods ending 31 March 2010.
Part II Standards effective for periods beginning on or after 1 July 2009. These
standards are required to be applied in interim periods, but not for annual periods,
ending 31 March 2010. These standards can be early adopted unless otherwise
indicated. Additional disclosures are required when such a standard is early adopted.
Part III Standards effective for periods beginning on or after 1 January 2010. These
standards are not required to be applied in interim periods relating to annual periods
beginning before 1 January 2010, but can be early adopted unless otherwise indicated.
Additional disclosures are required when such a standard is early adopted.
Part IV Standards which are not required yet to be applied in either interim or annual
periods, but which can be early adopted. Additional disclosures are required when such
a standard is early adopted.
See IS Alert 2010/11 Reminders: Effective dates of IFRSs for more details.
ISAlert IS Alert 2010/15

2010/15 On11March2010theInternationalAccountingStandardsBoard(IASB)published
Exposure Draft Conceptual Framework for Financial Reporting: The Reporting
Entity(ED).
The ED is the result of the IASBs and the U.S. Financial Accounting Standards
Boards (FASB) common conceptual framework project, which is being conducted as a
joint project.
The objective of general purpose financial reporting is to provide financial information

about the reporting entity that is useful in making decisions about providing resources
to the entity and in assessing whether the management and the governing board of that
entity have made efficient and effective use of the resources provided. The objective of
the ED is to develop a reporting entity concept consistent with this object. The ED
proposes to define the reporting entity concept, provide a high-level definition of control
of an entity and clarify who should present consolidated financial statements and other
types of financial statements.
InApril2004theIASBandtheFASBagreedtoaddtotheiragendasajointproject
forthedevelopmentofacommonconceptualframework.Theframeworkwillbebuilt
upontheIASBsandtheFASBsexistingconceptualframeworksandwillprovidea
basisfordevelopingfutureaccountingstandardsbytheBoards.
TheBoardshaveidentifiedthefollowingphasesofthisproject:
A. Objectivesandqualitativecharacteristics;
B.Elementsandrecognition;
C. Measurement;
D. Reportingentity;
E. Presentationanddisclosure;
F. Purposeandstatus;
G.Applicationtonotforprofitentities;and
H. Remainingissues,ifany.
TodatetheIASBandtheFASBhavepublished:
ISAlert Regarding phase A, a joint ED dealing with the objectives of financial reporting and
2010/15 the qualitative characteristics and constraints of decision useful financial reporting
(contd) information
RegardingphaseD,ajointdiscussionpaper.
See IS Alert 2010/15 Exposure Draft: Conceptual Framework for Financial

Reporting:TheReportingEntityformoredetails.
Prior to delivering this presentation, we suggest you review IASBs home page
(www.iasb.org) to update yourself on this project. You may also want to review the
ISGs Microweb:
(http://www.iasadvisory.kworld.kpmg.com/IFRS/resource/default.asp?getnode=4077)
for a KPMG comment letter related to the DP and
for a KPMG comment letter on the ED. Also review Insights into IFRS chapter 1.2
Framework, section 1.2.120 Future Developments.
2010 IFRS Baseline
Resources
Reference Description
TechnicalResource
TR1 NotetoInstructors
ParticipantMaterials
PM1 IFRSBaselineTrainingFeedbackForm
Exercises
None
Solutions
None
Handouts
HO1 KAMAlert200904IFRSAssignments
HO2 ListOfCountriesForIFRS
HO3 IS Alert 2009-60
HO4 ISGAnnouncement
HO5 ISAlert200712
2010 IFRS Baseline
TR/01: Note to Instructors
This lecture guide is to assist the instructor in presenting the topic. Instructors are encouraged to make
their presentations as interactive as possible by, for example, asking the participants questions about
their own experiences and the different issues covered in the lecture guide.
The lecture guide does not repeat the content of the standards or basis for conclusions and instructors
should read those documents carefully in addition to this lecture guide. Instructors may wish to discuss
examples that they have come across in addition to those included in the lecture guide.
Please note that participants from different countries may not always have the same level of
background knowledge with regard to IFRSs. It may be appropriate therefore not to comment on all the
issues that are discussed under each slide, or even not to use a slide at all.
TheapproximatetimesgivenintheOutlineandtheLectureguideareonlyestimatesofhowlong
timeitwilltaketopresentthismodule.Thetimeofthemodulecaneasilybeshortenedorlengthened
depending on how much time is spent on each slide and whether slides are excluded from the
presentation.
ReferencestotheKPMGseriesofIFRSIllustrativeFinancialStatements(IFS)2009mayalsobe
made.

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2010IFRSBaseline

Module Name: Introduction

Learning 1. Introduce and Describe IFRS Accreditation requirements as per KAM

Total time 85 minutes

Instructor Preparation and Reference Materials

Instructor You will need to:

Topic: Introduction, IFRS Accreditation

Slide 3 Participant Introductions

Office they are coming from

Level of involvement in the audits of IFRS clients

Expectations (objectives) from the course.

Write down participants objectives/expectations on the flipchart to refer to them later

Slide 4 Baseline Policy

Refer the participants to Handout 1: KAM Alert 2009/04: Revisions to the

necessary experience and training.

Refer the participants to Handout 2: List of Countries to indicate those jurisdictions,

(b) a KPMG member firm (level B).

Other independent auditors.

Slide 5 Engagement Levels

Slide 6 Minimum Requirements

Introduce the table summarizing minimum requirements to the participants. Emphasize

- the required training is completed no more than 12 months prior to the

Those professionals who are promoted to manager or admitted to the partnership

Briefly mention that in limited circumstances exceptions in experience requirements are

Slides 7-9 Course Outline

Tailorable Modules: 6 days (including certain optional components of 1 day)

Optional Modules: 1.5 day (includes Optional Industry Specific modules)

All attendees should receive the tailorable modules.

Go throughtheparticipantsmaterials,explainingwhathas beenincluded in them.

Starting and finishing times

Lunch and coffee breaks

Messages and e-mail

Turn off cell phones

Topic: IASB and IFRSs

IASB and its

The International Accounting Standards Committee Foundation comprises 21

The IFRIC was constituted in December 2001, as a result of the Standing

Comment period: Exposure drafts of standards and discussion documents have, in

interpret the application of IFRSs and provide timely guidance on financial

In case the IFRIC Agenda Committee decides not to draft an interpretation on a

Slide 14 IFRSs around the world

International Organization of Securities Commissions (IOSCO)

United States Securities and Exchange Commission (U.S. SEC)

Slide 15 IFRS and global standard setting

Slide 16 Other countries and liaison countries

Canada has adopted a plan to introduce IFRSs in full as Canadian Financial

Slide 17 SEC Position

Improvements in Accounting standards

Accountability and funding of the IASC Foundation

Improvement in the Ability to Use Interactive Data for IFRS Reporting

Education and training in the US re IFRS

Limited early adoption of IFRS (refer above)

Anticipated timing of future rulemaking by the SEC

Slide 18 U.S. GAAP IFRS Convergence

Memorandum of Understanding at a joint meetinginNovember 2009,the

Slide 19 IASB work programme until 2011

Slide 20 Change ahead for clients (calendar year end)

Topic: IFRS Framework

Slide 22 Key points in the Preface to IFRSs

Bold-type is used to indicate the main principles

Plain-type provides further explanation

Paragraphs in bold- and plain-types have equal authority in Standards approved by

o IASs issued by IASC, or revisions thereof issued by the IASB