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Ernst & Young Monthly News June 2010

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IFRS outlook – May 2010

(PDF, English, 454 kB)

Convergence of accounting standards — can the different perspectives ever be reconciled? / Derecognition of financial instruments: the way forward / Financial reporting developments / Resources

Employee benefits: significant changes proposed by the IASB – May 2010 (Issue 70, Supplement to IFRS outlook)

(PDF, English, 107 kB)

The IASB published a new ED Employee Benefits on 29 April which proposes major changes to the accounting for long-term employee benefits. Chief among the new proposals is the removal of the 'corridor mechanism' that many companies use for accounting for pension obligations to defer actuarial gains and losses. This change would lead to greater volatility in the value of net assets, in turn requiring companies to consider the potential implications for debt covenant ratios and other ratios.

Improvements to IFRSs 2010 – May 2010 (Issue 71, Supplement to IFRS outlook)

(PDF, English, 218 kB)

The IASB's Improvements Project is an annual project that provides a mechanism for making necessary, but non-urgent, amendments to standards and the related Basis for Conclusions. This supplement summarizes 11 amendments to six standards and one interpretation, including transitional provisions, that were in the 2009 exposure draft of Improvements to IFRSs. Unless otherwise noted, the proposed effective date for the amendments is for annual periods beginning on or after 1 January 2011.

Classification and measurement of financial liabilities – new IASB proposals – May 2010 (Issue 72, Supplement to IFRS outlook)

(PDF, English, 596 kB)

As part of the ongoing project to replace IAS 39 Financial instruments: Recognition and Measurement, the IASB has published an exposure draft containing proposals for the classification and measurement of financial liabilities. The Board’s proposal is to retain the existing classification and measurement requirements in IAS 39 for financial liabilities.

Legal News – May 2010

(HTML, English)

The Cassis-de-Dijon principle: Application under Swiss law

Insurance Accounting Alert – April 2010

(PDF, English, 431 kB)

IASB and FASB continue to discuss significant issues to complete deliberations on insurance contract accounting

Financial power in healthcare

(PDF, French, 471 kB)
Source: L'Agéfi, 27 May 2010
Authors: Florian Magnollay, Jean-Luc Pache, Ernst & Young

What are the real factors influencing the development of health costs? And how can their growth be controlled?

Group tax planning in light of the capital contribution principle

(PDF, German, 185 kB)
Source: SteuerRevue, No. 5/2010
Authors: Rainer Hausmann, Corinne Bernegger, Ernst & Young

Swiss voters accepted the Corporate Tax Reform Act II on February 24, 2008. As a result of the Corporate Tax Reform II the capital contribution principle will go into effect as of January 1, 2011, and will replace the previously valid par value principle. This will enable capital contributions to be repatriated to the shareholders (income) tax-free.

Mastering business risks better

(PDF, German, 733 kB)
Source: Swiss Employee Benefit Plans, May 20, 2010
Authors: Patrik Schaller, Mathias Sager, Ernst & Young

Internal Control System (ICS) in the IT environment for pension funds

SMEs of a substantial size in particular benefit from recovery

(PDF, French, 2.85 MB)
Source: L'Agéfi, 10 May 2010
Authors: Pierre-Alain Cardinaux, Viktor Bucher, Ernst & Young

The situation of medium-sized enterprises in Switzerland is nearing that at the start of 2009. An encouraging sign.

Hidden tax in the banking sector – Is there a way out?

(PDF, German, 288 kB)
Source: Der Schweizer Treuhänder, 5|2010
Authors: Elisa Antonini-Schenkel, Thomas Patt, Ernst & Young

Proposed topics for discussion in the context of part B of the VAT revision.

Impacts of the new procedural law for tax-paying individuals

(PDF, German, 192 kB)
Source: Der Schweizer Treuhänder, 5|2010
Author: Béatrice Blum, Ernst & Young

Presented on the basis of the right to information and the assessment notification.

Successful conclusion of the first stage

(PDF, German, 131 kB)
Source: Der Schweizer Treuhänder, 5|2010
Author: Dominik Bürgy, Ernst & Young

With the Value Added Tax Act (VAT Act) that entered into force on January 1, 2010, part A of the VAT reform that started in June 2008 with the communication on the simplification of VAT has been concluded.

Complex VAT accounting– Supporting use of technology

(PDF, German, 271 kB)
Source: Der Schweizer Treuhänder, 5|2010
Authors: Barbara Henzen, Marc Schlaeger, Ernst & Young

Questions arise from complex VAT accounting. The article points out areas in which the use of technology can help to correctly display, post and ultimately also declare input and output.

Swiss VAT in the global context

(PDF, German, 295 kB)
Source: Der Schweizer Treuhänder, 5|2010
Author: Philip Robinson, Ernst & Young

Appraisal of the new Swiss VAT from the perspective of internationally active enterprises

Complexity under the magnifying glass

(PDF, German, 373 kB)
Source: stocks, 14 May 2010
Authors: Alessandro Lana, Marc Ryser, Ernst & Young

Simpler products after the crisis? A new classification model delivers the answer.

Bankruptcy law in five countries with a high-quality application of law

(PDF, German, 129 kB)
Source: Die Volkswirtschaft, 5-2010
Authors: Olivier Dunant, Sylvia Iynedjian, Ernst & Young

The State Secretariat for Economic Affairs (Seco) and the Federal Agency for Justice (BJ) commissioned Ernst & Young with an international comparison of bankruptcy law, which is to ensure that within the context of the planned revision of the Federal Statute on Debt Enforcement and Bankruptcy (SchKG) best-practice procedures will be taken into account that are used in the countries that due to the quality of their application of law in the area of bankruptcy and the restructuring of companies were selected for the comparison. In this article a few of the published elements that can contribute to the discussion will be elaborated on.

Swiss bankruptcy law from an economic perspective

(PDF, German, 150 kB)
Source: Die Volkswirtschaft, 5-2010
Authors: Christian Sauter, Petra Beck, Ernst & Young

Delayed bankruptcy proceedings, a lack of performance incentives in the Debt Enforcement and Bankruptcy Statute (SchKG) as well as insufficient latitude and a lack of transparency in the realization of assets contribute to third-class creditors in Switzerland losing out in a majority of bankruptcy proceedings. At the same time, today's system leads to there being unnecessary bankruptcy cases or even the prevention of possible relief cases. These are the conclusions of a study that analyzed Swiss bankruptcy law from an economic perspective.

"BoD is no longer a purely honorary position"

(PDF, German, 548 kB)
Source: Swiss Equity magazin, 16 May 2010
Interview with Thomas Stenz, Ernst & Young

How much financial know-how does the Board of Directors need? Thomas Stenz, Head of Auditing and himself Chairman of the Board of Directors at Ernst & Young, provides information.

The urgent need to improve data protection

(PDF, French, 849 kB)
Source: L'Agéfi, 17 May 2010
Author: Ferdinand Kobelt, Ernst & Young

The spectacular cases of data theft that have affected several banks (LGT Vaduz and HSBC Geneva) show that much remains to be done in the area of data security.