|
Emerging Issues Committee
Decision Summary
November 16, 2006
|
This summary of Emerging Issues Committee (EIC) decisions has been prepared for information purposes
only. Decisions reported reflect only the current status of discussion on projects, which may change
after further deliberations. Decisions to publish Abstracts, amendments thereto or Draft Abstracts are final
only after a formal ballot process. For more detailed information on EIC projects, please contact the EIC Secretary.
|
Amended Abstract Approved
EIC-103, Related Party Transactions — Meaning of Substantive Change and Measurement of Change in a
Transfer of Ownership Interests
Draft Abstract D61 titled “Measurement of an Item Transferred to a Related Party That Is a Variable Interest
Entity” was posted on the CICA website for public comment by October 16, 2006. The Committee approved the
issue and consensus proposed in D61 and added it to EIC-103 as a third issue.
The issue added to EIC-103 deals with the application of criterion (a) from the consensus on the first issue
in EIC-103 when an entity transfers an item to a related party that is a variable interest entity and for
which the transferor is the primary beneficiary. This issue applies to situations where the transferor does
not have voting control over the transferee before or after the transfer.
It is expected that amended EIC-103 will be posted on the CICA website in late-November.
Potential Abstracts
D59, Income Taxes Arising from Partnership Income
The Committee agreed to adopt an alternative approach to this topic that would affect the classification of
the future income tax liability. At the previous meeting the Committee had agreed to include additional
examples to illustrate the accounting for income taxes when the partnership interest is accounted for by the
equity method. D59 will be redrafted accordingly and approved for re-exposure at a future meeting.
Accounting by an Investor for Its Proportionate Share of Accumulated Other Comprehensive Income of an
Investee Accounted for Under the Equity Method Upon a Loss of Significant Influence
The Committee discussed a proposed Draft Abstract based on FSP APB 18-1 and agreed to discuss this further at
a future meeting.
Accounting Policy Choice for Transaction Costs on Initial Measurement — Paragraph 3855.57
The Committee had an initial discussion of this issue and will continue its discussion at a future
meeting.
Issues Considered and Added to the EIC Agenda
Accounting for a Future Income Tax Liability – Income Trusts
The Committee agreed to add an item to its agenda on the accounting issues arising from the recent government
announcement of proposed changes to the taxation of income trusts. These issues include when an income trust
should recognize a future income tax liability (as a result of these proposals), how this should be measured
and related disclosures.
Issue Removed from the EIC Agenda
Lessor’s Accounting for a Lease Valued at Above or Below Market Rates
The Committee was presented with further research on this issue and concluded that there is no significant
diversity in practice and removed the issue from its agenda.
|
