IFRS for SMEs has interesting implications for non-profits.  This from Grant Thornton UK IFRS for SMEs blog:

This raises an interesting consideration for the not-for-profit sector: not only does the ‘public accountability’ definition have a different interpretation than that we are perhaps used to in the sector, but the definition may result in a greater degree of incomparability.

Go to FitchRatings and download their deep dive into global accounting convergence. You'll have to register (free) and search for Accounting and Financial Reporting: 2010 Global Outlook Bumps on The Road to Convergence.  It's worth the trouble. This is a good, concise status report.

The key points on convergence: 

• Convergence probably won't meet the 2011 deadline.
• FASB and IASB are far from agreement on financial instruments.
• The SEC will move to adopt IFRS, but not on the previous roadmap timetable.

On other fronts:

• Off balance sheet items come back onto the balance sheet under GAAP.
• “Special purpose entities" cease to exist.
• Pension assets and liability changes may have to run through the income statement.
• Expect more disclosure in general, especially on GAAP statements.

Don't believe everything you read in the South China Morning Post.  A Big 4 auditor sent an article to us and said it's causing problems because the SCMP got the facts backward.  China is making dual-listed insurers use China standards.  We can't link to it because the SCMP is behind a paywall, but here's the dead-wrong headline and lede:

Dual-listed insurers to adopt HK accounting
New rule will eliminate differences in results
Daniel Ren in Shanghai
Dec 31, 2009

The mainland insurance regulator will require insurers trading on both the Hong Kong and
Shanghai stock exchanges to report their earnings this year using a single set of accounting standards.  Under the rule announced yesterday, mainland insurers including China Life (SEHK: 2628, announcements, news) Insurance, Ping An Insurance (Group) (SEHK: 2318) and China Pacific Insurance Group will report using Hong Kong accounting standards. The move is designed to bring the mainland's accounting standards in line with international practice.

In fact, China Accounting Standards (CAS) and IFRS are almost completely converged now, but a few differences remain.  One of them is the treatment of policy acquisition costs by insurers.  Hong Kong standards allow them to be capitalized and amortized.  CAS require them to be expensed when
incurred.

Chinese insurance companies dual-listed in China and in Hong Kong have been reporting one set of numbers in the statements for investors in China listed A shares and another in their statements for Hong Kong listed H shares. They capitalized the costs for A share reporting and expensed them for A share reporting. 

As a result, H share statements show more capital than A share statements -- never mind the income statement impact.  Chinese authorities are disallowing that as of the 2009 reporting year.

The capital impact will be huge for some insurers, with billions of dollars disappearing from the H share balance sheets.  Chinese regulators required the insurers to disclose the potential impact in their 2008 annual reports, so this should't come as a complete surprise.  The easiest way to get the annual reports is to use the search feature at  HKEXNews.  Sometimes the company websites are slow.  One thing the SCMP got right -- the names of the companies and their codes. 

[end]

A July survey of financial executives of US firms showed that more than half were unsure of how a switch to IFRS might impact their firms. Even so, no-one is asking questions--at least not according to the SEC which says that it has received questions and statements of concern over IFRS from "only about 1% of the companies in the United States that would be impacted by this change".

IFRS is not on the front burner for companies because the SEC isn't paying attention to it either.    SEC Chairman Mary Schapiro stated in her confirmation hearings that she wanted to take a deep breath to think about IFRS.  Last month in a letter to Robert Pozen, chairman of the Committee on Improvements to Financial Reporting she wrote:

"We have focused our efforts on matters directly related to the economic crisis, financial regulatory reform, and improvements to the agency's processes and programs, and we expect to continue to do so in the coming months."

Nonetheless, it's been a busy summer for IFRS on other fronts.

A few items of note:

• In mid-July the IASB released new rules dividing financial assets into two categories, as a change from the late 2008 relaxation of rules regarding financial assets.

• Charles Nemeier, erstwhile candidate for Chief Accountant of the SEC and IFRS critic has announced plans to leave the PCAOB.

• Canada is in the midst of making the switch to IFRS.

• Korea is prepping for a switch by 2011, but firms are worried about whether it will be possible to make the switch according to timeline. This may be in part because of claims that the switch to IFRS will "expose firms' hidden weaknesses".

• Accounting firms in India are raising questions over whether as part of the upcoming 2011 shift to IFRS they will have to "recast revenues and expenses of the previous years" as other countries have. There are also calls for senior managers to prepare a year-long detailed roadmap for the shift.

• The UK has released a roadmap with transition to IFRS set for January 1, 2012.

• South Africa is struggling to ensure consistent compliance with IFRS, while bracing for enforcement of a new wave of rule changes from the IASB.

Stay tuned to IFRSreporter.com for more on IFRS in the News.