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 - Consolidation — Investment Company Exemption
The AcSB reviewed a draft of its exposure draft proposing to defer the changeover date to International Financial Reporting Standards (IFRSs) for entities that may be affected by the proposal of the International Accounting Standards Board (IASB) to exempt investment companies from consolidation requirements. The AcSB reviewed the scope of its proposed deferral of the IFRS changeover date in light of further analysis and input received on the tentative decision it reached in its May 5 meeting. The AcSB also considered the subsequent decisions of the IASB: - not to provide an exemption in IFRS 1 First-time Adoption of International Financial Reporting Standards from the current requirements of IAS 27 Consolidated and Separate Financial Statements pending completion of its project on consolidations; and
- not to extend the proposed exemption from the requirement to consolidate controlled investees to parents of investment companies that are not themselves investment companies.
The AcSB decided to propose for public comment a one-year deferral of the IFRS changeover date for investment companies applying Accounting Guideline AcG-18, Investment Companies. IFRSs would apply to such entities for their interim and annual financial statements relating to annual periods beginning on or after January 1, 2012. The AcSB concluded that the deferral of the IFRS changeover date should be limited to those entities expected to qualify for the IASB’s proposed exemption from consolidation. Accordingly, parents of investment companies applying the AcG-18 exemption from consolidation would not qualify for the deferral of the IFRS changeover date unless they are themselves investment companies. Investment companies qualifying for the deferral of the IFRS changeover date would still be permitted to adopt IFRSs early (i.e., in 2011 as originally planned). The AcSB plans to issue the exposure draft for comment shortly. Extractive Activities
The AcSB received a report from the staff on consultations with Canadian stakeholders on the IASB's Discussion Paper, “Extractive Activities.” The AcSB decided that its comment letter to the IASB should support the need to deal with the issues facing entities that carry out extractive activities. These include practice issues related to existing IFRSs for entities with mining and oil and gas activities, which will not be resolved by the completion of the IASB’s existing project and on which guidance is needed quickly. The AcSB's comment letter will also include a number of more detailed comments based on stakeholders’ input. Financial Instruments
The AcSB approved a comment letter to the IASB on its Exposure Draft, “Financial Instruments: Amortised Cost and Impairment.” The AcSB recommends that the IASB not proceed with its proposal and that the IASB and the US Financial Accounting Standards Board (FASB) work to develop a single, globally converged standard that is less complex for preparers and more easily understood by, and useful to, financial statement readers. - The AcSB directed the staff to develop a response to the IASB Exposure Draft, “Fair Value Option for Financial Liabilities.” The AcSB agrees that most financial liabilities should be measured at amortized cost. It is concerned with the following aspects of the proposal:
- The possible diversity of approaches to measuring the component of the change in fair value of a financial liability that would be recognized in other comprehensive income.
- The inconsistency in use of other comprehensive income that would result from not requiring recycling of a gain or loss on early settlement of a financial liability.
The AcSB also decided to respond to the FASB’s Invitation to Comment in its May 26, 2010 Exposure Draft, “Accounting for Financial Instruments and Revisions to the Accounting for Derivative Instruments and Hedging Activities.” IFRS Discussion Group
The AcSB discussed a report on the meeting of the IFRS Discussion Group held on June 1, 2010. Several matters have been referred to the IASB staff as a result of discussions at this and prior meetings. For further information, including a recording of the June 1 meeting, click here. Pension Plans — Scope Amendment The AcSB discussed the comments received on its April 2010 Exposure Draft, “Pension Plans (Proposed amendment to the Scope of Section 4600).” The AcSB noted that entities that would be included in the proposed scope expansion would qualify for the deferral noted above (see International Activities, Consolidation — Investment Company Exemption). Accordingly, the AcSB decided not to proceed with an amendment to the scope of Section 4600 at this time and to reconsider the need for such an amendment once the IASB finalizes its consolidation project. The AcSB continues to believe that entities described in the Exposure Draft should measure their investments at fair value, consistent with the accounting standards for pension plans. The AcSB decided to amend Section 4600 to permit a pension plan to present the details of investment income by type of investment either on the face of the statement of changes in net assets available for benefits or in the notes to the financial statements. This choice is consistent with the alternatives permitted in Section 4600 for the presentation of the details of investment assets and investment liabilities. The amendment will be effective at the same time as Section 4600. Not-for-Profit Organizations — Accounting for Intangible Assets The AcSB reiterated its position that there should be no differences in accounting between profit-oriented enterprises and not-for-profit organizations when the circumstances and transactions are the same, other than for matters included in the 4400 series of Handbook Sections. Consequently, because development costs incurred by not-for-profit organizations are not covered by Section 4430, Capital Assets Held by Not-for-Profit Organizations, the AcSB is of the view that the provisions of Section 3064, Goodwill and Intangible Assets, apply. Such costs include those related to a series of plays or concerts, gallery exhibitions, and fundraising events and campaigns. The guidance on other types of costs addressed by that Section, such as selling, administrative and other general overhead expenditures, would also apply. The AcSB intends to clarify this matter further in adopting Part III of the CICA Handbook – Accounting. |
