Accounting Standards Board
Decision Summary
October 9, 2007

International Activities

The AcSB received reports on recent meetings 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 recently issued two new exposure drafts:

• “Joint Arrangements,” which proposes to eliminate the proportionate consolidation method of accounting for the arrangements currently described as jointly controlled entities but not to alter the treatment of jointly controlled operations and jointly controlled assets,
• Amendments to IAS 39 Financial Instruments: Recognition and Measurement,” which proposes clarifications to what can be designated as a hedged item in a hedge accounting relationship.

In each case, the IASB is requesting comments by January 11, 2008.

The AcSB staff has responded favourably to the US Securities and Exchange Commission’s proposal to accept financial statements issued by foreign private issuers without reconciliation to US GAAP, when prepared in accordance with IFRSs as promulgated by the IASB.

The AcSB noted that the FASB, as part of its project on the fair value option, is contemplating converging with IAS 40, Investment Property. The FASB plans to issue an exposure draft in the first quarter of 2008. The AcSB decided not to initiate a project to make corresponding changes to Canadian GAAP at the same time as the FASB. Rather, the AcSB decided that it would be preferable to wait until the changeover date to IFRSs before adopting IAS 40 in Canada.

Publicly Accountable Enterprises Strategy

The AcSB considered a report on the September 13, 2007 meeting of its IFRS Advisory Committee. In particular, the AcSB noted that some people are asking questions about the application of IFRS 1, First-time Adoption of IFRSs. It was suggested that the AcSB gather together such issues and consult with other national standard setters to identify any common issues that are arising with regard to the application of IFRS 1 in those countries adopting IFRSs in 2010 or 2011. These issues might then be brought to the attention of the IASB.

The AcSB considered a draft report to the Accounting Standards Oversight Council (AcSOC) on its progress review to assess new information or issues that would affect the implementation of the strategy for publicly accountable enterprises. This report is a preliminary report on matters arising to date. A final report is expected to be submitted to the AcSOC in February 2008, prior to confirming (or varying) the expected adoption of IFRSs by Canadian publicly accountable enterprises for years beginning on or after January 1, 2011. The preliminary report to the AcSOC is expected to be made available on the AcSB website, at www.acsbcanada.org, in late October.

The AcSB noted that, as part of its progress review, roundtable discussions are being planned in Calgary, Montreal, Toronto and Vancouver in late November or early December 2007. Details will be made available on the AcSB web site as soon as possible.

The AcSB discussed whether pension plans should be required to adopt IFRSs at the changeover date. The AcSB was advised that few pension plans internationally seem to apply IAS 26, Accounting and Reporting by Retirement Benefit Plans. No decisions were made, pending further consultation with Canadian pension plans. The AcSB expects to make a decision on the applicability of IFRSs to pension plans at its next meeting, in November 2007.

Asset-Backed Commercial Paper

The AcSB Chair noted that he has been involved in recent discussions with constituents as to whether there are any accounting issues arising from the lack of liquidity of the non-bank-issued asset-backed commercial paper market. The AcSB will continue to closely monitor developments, but at this time does not expect to issue any accounting pronouncements on this topic.