Accounting Standards Board
Decision Summaries

December 15, 2006 Meeting

Going Concern

The AcSB considered the responses to its Exposure Draft proposing the adoption of new requirements for assessing and disclosing an entity’s ability to continue as a going concern. The guidance is drawn from International Financial Reporting Standard IAS 1, Financial Statement Presentation, and was developed to assist the Auditing and Assurance Standards Board's (AASB) Going Concern Project. Exposure Draft respondents supported the development of consistent accounting and auditing guidance on this topic and, accordingly, the AcSB confirmed its proposals. The next steps in the project will be co-ordinated with the AASB’s work on its project.

January 4, 2007 Meeting

International Activities

The AcSB considered 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).

Public Company Strategy

The AcSB considered a report on the meeting of its IFRS Advisory Committee held on December 18, 2006. The AcSB also reviewed the status of activities to date in accordance with its “Implementation Plan for Incorporating International Financial Reporting Standards into Canadian GAAP,” noting that progress was largely on schedule. The AcSB also agreed to the activities proposed for the period to March 31, 2008.

Private Company Strategy

The AcSB discussed the views of ad hoc groups set up to review a draft of a proposed IASB standard for small and medium-sized enterprises. The groups had been asked to provide their views on whether the approach adopted by the IASB in that document might be given further consideration for Canadian private companies.

The AcSB also continued its discussion on various approaches that might be considered as a basis for financial reporting by private companies. Discussion on this issue will continue at its next meeting. The AcSB is proposing to issue an Invitation to Comment (ITC) on private company reporting that will ask for comments on those approaches that, in its opinion, merit serious consideration. Staff expects the ITC to be published by April 2007.

Deferral of Effective Dates for Non-publicly Accountable Enterprises

The AcSB considered whether, in light of its developing strategy for non-publicly accountable enterprises, any deferral of the effective dates of new pronouncements issued but not yet effective should be provided for such enterprises. The AcSB decided to consider this matter further in July 2007, in light of further progress with its strategy.

Income Trusts

The AcSB reviewed the responses to the Exposure Draft, Cash Distributions (Amendments to Section 1540). The amendments to Section 1540 proposed in the Exposure Draft were approved with minor wording changes.

Investment Companies

The AcSB agreed to modify AcG-15, Consolidation of Variable Interest Entities, and AcG-18, Investment Companies, such that investments accounted for at fair value in accordance with AcG-18 will not be subject to consolidation according to the requirements of AcG-15. The AcSB noted that, since both AcG-15 and AcG-18 are substantially harmonized with US GAAP, and there is currently no standard specific to investment companies or variable interest entities under International Financial Reporting Standards (IFRS), both Guidelines should continue to be harmonized with US GAAP until such time as IFRSs are adopted.

The AcSB agreed to develop an exposure draft outlining the proposed change, for a 30-day comment period. The resulting amendments will be applied retrospectively, with early adoption encouraged.

Liabilities and Equity

The AcSB discussed a difference between Canadian and IASB standards with respect to the classification as a liability or equity of derivatives that may be settled with the reporting entity’s equity shares. The AcSB concluded that an amendment to the Canadian standard is not warranted at this time. AcSB staff will continue to monitor the IASB/FASB joint project to develop improved and converged comprehensive standards on liability and equity classification and presentation.

AcSB Objectives and Work Plan – 2007-2008 Operating Year

The AcSB discussed a revised draft of its 2007-2008 objectives and work program for carrying out its Strategic Plan. A final draft will be submitted to the Accounting Standards Oversight Council (AcSOC) for review in AcSOC's February 1-2, 2007 meeting.

AcSB’s Role, Processes, Structure and Resources

The AcSB continued its ongoing discussions of these issues relative to its Strategic Plan by considering whether any changes to its current terms of reference should be recommended to AcSOC.