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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, including the decisions summarized below, please refer to the project summaries under Projects, which will be updated within the month following an AcSB meeting. |
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). The AcSB received an update on IASB and FASB activities in response to the current credit environment. (See “Credit Environment” below.) The AcSB also noted that the IASB has issued an Exposure Draft to amend IFRS 5, Non-current Assets Held for Sale and Discontinued Operations, that proposes to revise the definition of a discontinued operation and require additional disclosures. As part of its joint project with the IASB on this topic, the FASB has issued proposed FASB Staff Position (FSP) FAS 144-d. The comment deadline is January 23, 2009. The AcSB intends to expose the IASB’s proposals for public comment in Canada shortly. The AcSB was informed that AcSB staff has submitted a comment letter to the IASB on its Discussion Paper on, “Preliminary Views on Amendments to IAS 19 Employee Benefits.” The letter supports the proposals to recognize all changes in the value of plan assets and in the defined obligations in the financial statements in the period they occur. However, the letter does not support the proposal to create a category of contribution-based promises. Also, AcSB staff has submitted comment letters regarding the IASB’s Conceptual Framework project. The letter on the Exposure Draft on “An improved Conceptual Framework for Financial Reporting: Chapter 1: The Objective of Financial Reporting, and Chapter 2: Qualitative Characteristics and Constraints of Decision-useful Financial Reporting Information,” supports the improved statement of the objective for business enterprises in the private sector and the modifications to the description of qualitative characteristics. The letter on the Discussion Paper on “Preliminary Views on An Improved Conceptual Framework for Financial Reporting: The Reporting Entity,” supports the development and application of a broad description of a reporting entity, but disagrees with some of the specific proposals. Credit Environment The AcSB reviewed recent developments in response to the current credit environment. The AcSB decided on the following actions: Reclassification of Financial Instruments The AcSB approved, subject to written ballot, amendments to Sections 3855, Financial Instruments — Recognition and Measurement, and 3862, Financial Instruments — Disclosures. The amendments are based closely on those that the IASB recently made to corresponding provisions in IAS 39, Financial Instruments: Recognition and Measurement, and IFRS 7, Financial Instruments: Disclosures. The intention is to incorporate into Sections 3855 and 3862 the same amendments that the IASB made to IAS 39 on October 13, 2008, modified only to reflect pre-existing differences between Canadian standards and IFRSs. These amendments are effective for reclassifications made on or after July 1, 2008, but only for periods for which annual or interim financial statements have not been issued previously. Recognizing the urgent need for these amendments to ensure consistency of Canadian GAAP with International Financial Reporting Standards (IFRSs) and US GAAP on this matter, the AcSB agreed to waive formal exposure. Instead, a draft will be published on the AcSB website for a “fatal flaw” review. A typescript version of the final amendments is expected to be published on the AcSB website by October 24, 2008. Ongoing Monitoring The AcSB will continue to closely monitor international developments to avoid any unnecessary inconsistencies in accounting treatments between the requirements of the Handbook and IFRSs or US GAAP. AcSB staff has issued three staff commentaries to help companies apply fair value accounting requirements when dealing with this country’s own liquidity environment. These commentaries provided companies with guidance on how to report to investors on their holdings of asset-backed commercial paper (ABCP). These commentaries are available from the AcSB website at www.acsbcanada.org. AcSB staff is presently preparing a fourth commentary on ABCP, dealing with accounting for the restructuring of that paper. In addition, AcSB staff is considering expanding the commentary guidance to cover a wider range of investments. Disclosures about Fair Value Measurements and Liquidity Risk The AcSB deferred, until its next meeting, consideration of possible actions relating to disclosures about liquidity risk and fair value measurement, being developed by the IASB. Financial Instruments In light of enquiries received regarding the AcSB’s September 2008 decision that a private enterprise will not be required to apply the current financial instruments standards, the AcSB decided that: - Co-operative business enterprises and rate-regulated enterprises that are not public enterprises as defined in Section 1300, Differential Reporting, will not be required to apply Sections 3862, Financial Instruments — Disclosures, and 3863, Financial Instruments — Presentation. They would continue to apply Section 3861, Financial Instruments — Disclosure and Presentation. This decision recognizes that many co-operative business enterprises and rate-regulated enterprises may qualify to adopt the proposed set of standards for private enterprises that the AcSB is currently developing, which are expected to require significantly reduced disclosures about financial instruments.
- Not-for-profit organizations may defer adoption of Sections 3862 and 3863, until interim and annual financial statements relating to fiscal years beginning on or after October 1, 2008. In the meantime, they would continue to apply Section 3861. This decision recognizes that many not-for-profit organizations might not yet have adopted Sections 3862 and 3863 and, subject to the outcome of the AcSB’s forthcoming consultations on future directions in setting standards for this sector, may be in a position to apply the proposed set of standards for private enterprises.
Publicly Accountable Enterprises Strategy The AcSB deferred continued consideration of the comments received from the public on the omnibus Exposure Draft issued in April 2008 until its next meeting. |
