Accounting Standards Board
Decision Summary
January 5, 2005
This summary of Accounting Standards Board (AcSB) decisions has been prepared for information purposes only. Decisions reported are tentative and reflect only the current status of discussion on projects, which may change after further deliberations by the AcSB. Decisions to publish Handbook material are final only after a formal ballot process.
For more detailed information on AcSB projects, please refer to the project summaries under Projects, which will be updated approximately one week following the posting of this decision summary. |
Business Combinations
The AcSB discussed the tentative decisions of both the IASB and FASB to credit to income the excess of the fair value of net assets acquired over the consideration paid in a business combination. The AcSB expressed its concerns about this treatment and instructed staff to ensure that the rationale to support the proposed treatment is adequately explained in the forthcoming Exposure Draft to revise Section 1581, Business Combinations. The AcSB also plans to solicit public comment specifically on this issue. The AcSB proposes to harmonize with the FASB’s planned replacement of its Statement of Financial Accounting Standards No. 141, Business Combinations, which is expected to be exposed for comment in the first quarter of 2005.
Disclosure Framework
The AcSB continued its discussion of a framework for determining the type of information to be included in financial statement note disclosures. No decisions were made.
Fair Value Measurements
The AcSB decided that its forthcoming Exposure Draft on Business Combinations will not include detailed guidance on how to measure fair value. Rather, it will refer to the FASB’s project on Fair Value Measurements, indicating that the AcSB expects to develop guidance on that topic taking into account the conclusions of the FASB project. The AcSB expects to have its guidance in place before the effective date of the new Business Combinations standard. The AcSB will commence work on fair value measurements when the FASB’s current work on the topic has been completed (currently expected by the end of June 2005).
Financial Instruments
The AcSB has provided its written approval of Section 3855, Financial Instruments — Recognition and Measurement, and related amendments to other Handbook Sections resulting from the introduction of Section 3855, as well as Section 1530, Comprehensive Income, and Section 3865, Hedges. The AcSB expects to release typescript copies of the new Sections on January 27, 2005.
Inventories
The AcSB continued its discussion of key principles and issues in preparing an exposure draft.
Strategic Planning
The AcSB continued discussing the written and oral input received in response to the May 2004 Invitation to Comment, “Accounting Standards in Canada: Future Directions (PDF),” and formulating tentative conclusions on fundamental strategic issues. These tentative conclusions will be presented at the February 10-11, 2005 meeting of the AcSOC, with a view to finalizing a draft plan for public comment in March or April 2005.
International Activities
The AcSB received reports on recent activities of the International Accounting Standards Board (IASB) and US Financial Accounting Standards Board (FASB) (see www.iasb.org.uk and www.fasb.org, respectively). In particular, the AcSB noted that:
- the IASB has issued International Financial Reporting Standard 6, Exploration for and Evaluation of Mineral Resources, and amendments to International Accounting Standard 19, Employee Benefits; and
- the FASB has issued Statements of Financial Accounting Standards Nos. 123(R), Share-Based Payment, 152, Accounting for Real Estate Time-Sharing Transactions and 153, Exchanges of Nonmonetary Assets.
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