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Accounting Standards Board
Decision Summaries
These summaries of Accounting Standards Board (AcSB) decisions have 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.
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January 25, 2007 Meeting
Employee Future Benefits
The AcSB approved, subject to written ballot, an exposure draft of proposed revisions to Section 3461, Employee Future Benefits. Under the proposed revisions, an entity would recognize
the funded status (difference between plan assets and obligations) of its defined benefit plans on the
balance sheet. It would also measure the plan assets and obligations at the balance sheet date, and recognize
changes in the funded status in comprehensive income in the year in which the changes occur. The proposals
will converge Canadian GAAP with FASB Statement of Financial Accounting Standards No. 158, Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans.
They will also converge Canadian GAAP with International Financial Reporting Standards (IFRSs) in some
important respects and will not create differences with IFRSs that would require significant systems or
procedural changes when publicly accountable enterprises adopt IFRSs.
The AcSB decided that recognizing the funded status on the balance sheet should apply to all defined
benefit plans, rather than restricting it to pension and other post-retirement plans.
The AcSB noted that the recognition of the funded status of a defined benefit plan may affect the carrying
amount of a balance sheet asset, and decided that Section 3461 should continue to provide for a limit on the
carrying amount. A change in the valuation allowance arising from this limit would be charged (credited) to
other comprehensive income, with an adjustment to benefit cost in net income to maintain the same reported
net income as under current Section 3461.
The AcSB expects to publish an exposure draft for public comment in the first quarter of 2007. The
recognition and related disclosure provisions would be effective for financial statements of publicly
accountable enterprises covering fiscal years ending on or after December 31, 2007, and December 31, 2008 for
non-publicly accountable enterprises. The measurement date provisions would be effective for fiscal years
ending on or after December 31, 2008.
February 7, 2007 Meeting
International Activities
- The AcSB received reports on recent meetings and other activities 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 noted that:
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- the IASB has issued an exposure draft proposing an amendment to International Financial Reporting
Standard IFRS 1, First-time Adoption of International Financial Reporting Standards,
Cost of an Investment in a Subsidiary.
- the International Accounting Standards Committee (IASC) Foundation is requesting nominations for one
full-time and one part-time member on the IASB, and for four new members for the International Financial
Reporting Interpretations Committee (IFRIC). The applications are due on March 16, 2007 for the IASB
positions and March 9, 2007 for the IFRIC positions.
International Standard-Setting Appointments
Paul Tellier, former President and CEO of Bombardier and Canadian National Railway, and former Clerk of the
Privy Council and Secretary of the Cabinet, Canada, has been appointed a Trustee of the IASC Foundation,
effective January 1, 2007.
Tricia O’Malley has been appointed to the role of IFRIC Co-ordinator, following the completion of her term as
a member of the IASB on June 30, 2007. Ms. O’Malley, a former Chair of the AcSB and member of the EIC, will
continue to be the liaison with the AcSB in the event a Canadian is not appointed to the IASB.
Robert Morgan, a member of the AcSB, has been appointed a member of the IASB Standards Advisory Council,
effective February 2007.
Iain Robertson, Manager, Accounting Policy and Special Projects, Canadian Pacific Railway, has been appointed
to the joint IASB/FASB International Working Group on Lease Accounting. |
Non-Publicly Accountable Enterprises – Strategy
The AcSB continued its discussion on various possible approaches for setting accounting standards for
non-publicly accountable enterprises. These approaches are to be included in an Invitation to Comment
expected to be issued early in the second quarter of 2007.
Publicly Accountable Enterprises – Strategy
The AcSB discussed the implications of including pension plans in the definition of “publicly accountable
enterprises” (PAEs). The AcSB agreed that pension plans are PAEs, but that the staff should consult
knowledgeable parties about the anticipated effect of the application of International Financial Reporting
Standard IAS 26, Accounting and Reporting by Retirement Benefit Plans, on
Canadian pension plan reporting. The AcSB also recommended that the staff discuss with other national
accounting standard setters their experiences with IAS 26.
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