| This summary of recently issued Accounting Standards Board (AcSB) pronouncements
has been prepared for information purposes only. Reference should be made to official Handbook material for
the text of final AcSB pronouncements. |
Status: New Section 1506 issued.
The AcSB has replaced Section 1506, Accounting Changes, with a new Section based on International
Financial Reporting Standard IAS 8, Accounting Policies, Changes in Accounting Estimates and
Errors.
The main features of the new Section are as follows:
- Voluntary changes in accounting policy are made only if they result in the financial statements providing
reliable and more relevant information.
- Changes in accounting policy are applied retrospectively unless doing so is impracticable (as defined in
the Section).
- Prior period errors are corrected retrospectively.
- New disclosures are required in respect of changes in accounting policies, changes in accounting
estimates and correction of errors.
The final standard was released in July 2006 and is effective for fiscal years beginning on or after
January 1, 2007, with earlier adoption encouraged.
A Background Information and Basis for Conclusions document, which explains the AcSB’s rationale for the
new Section, is available.
Background
In September 2003, the AcSB issued an Exposure Draft of proposed amendments to Section 1506.
In the second quarter of 2004, the AcSB finalized a review of comments received and reached conclusions on
a final standard, pending completion of deliberations by the FASB.
In May 2005, the AcSB reviewed recent amendments to US GAAP resulting from FASB redeliberations and
finalization of its related standard. The AcSB decided to defer finalization of the project until the IASB had considered whether any changes to IFRSs were required
in light of the FASB’s decisions.
In December 2005, the AcSB was informed that the IASB had no immediate plans to modify IFRSs in light of
the FASB decisions.
In January 2006, the AcSB reviewed differences between the IASB and FASB positions and decided that the
final Canadian standard should adopt the converged portions of IFRSs and US GAAP. The AcSB also decided that
as a result of the AcSB’s strategy to transition to International Financial Reporting Standards, the final
standard should be based as closely as possible on IAS 8.
Contact Information
Questions or comments on this project should be directed to:
Greg Edwards, CA
Principal, Accounting Standards
Telephone: +1 (416) 204-3462
Fax: +1 (416) 204-3412
Canadian Accounting Standards Board
277 Wellington Street West
Toronto ON M5V 3H2 Canada
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