On 11 June 2009 The Accounting Standards Board (ASB) issued a Financial Reporting Exposure Draft (FRED) of Improvements to Financial Reporting Standards so as to maintain the existing levels of convergence between UK and International Financial Reporting Standards.

The ASB conducts an annual review of its standards. The proposals set out in the FRED arise as a consequence of the International Accounting Standards Board’s (IASB) annual improvements process. Proposals are also developed to respond to specific issues raised over the last number of months.

Particular standards of interest which have been addressed in the FRED include

·        FRS 11 Impairment of fixed assets and goodwill

·        FRS 20 (IFRS 2) Share-based payment

·        FRS 26 (IAS 39) Financial Instruments: Recognition and Measurement

·        UITF Abstract 42 (IFRIC 9) Reassessment of Embedded Derivatives

·        UITF Abstract 46 (IFRIC 16) Hedges of a Net Investment in a Foreign Operations

Amendment to FRS 11 Impairment of fixed assets and goodwill

The amendment to FRS 11 being proposed is that the key assumptions management make in determining either the value in use or the net realisable value should be disclosed in the financial statements, this is in conjunction with the requirement already in place that the discount rate being applied to cashflows should be disclosed.

This requirement should be applied in annual periods beginning on or after 1 January 2010. Earlier application is permitted

Amendment to FRS 20 (IFRS 2) Share-based payments

The key amendment proposed here is to change the scope of the standard to exclude application of this standard to common control transactions or the contribution of a business in the formation of a joint venture

This requirement should be applied in annual periods beginning on or after 1 January 2010. Earlier application is permitted

Amendment to FRS 26 (IAS 39) Financial Instruments: Recognition and Measurement