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Accounting Standards Board
Decision Summary
July 24 and 26, 2007
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. |
The AcSB considered the comments received on its Exposure Draft, “Employee Future Benefits (Amendments to
Section 3461),” from a wide spectrum of stakeholders, and decided not to proceed with the proposed
amendments.
The AcSB continues to believe that these proposals would have enhanced Canadian financial reporting.
However, AcSB members agreed that now is not the right time to implement changes to accounting for employee
future benefits. Rather, the focus should be on the implications of adopting IAS 19, Employee Benefits, on the date of transition to IFRSs, as well as the International
Accounting Standards Board’s current project to amend that standard. The AcSB noted that, in general,
Exposure Draft respondents did not urge the AcSB to continue with its project. As a result of changed market
conditions, the urgency associated with the project has decreased since it was initiated. The AcSB also
acknowledged the many issues associated with measuring the balance sheet amount, and that entities already
disclose the funded status of their defined benefit plans.
- The AcSB noted the following, based on current International Financial Reporting
Standards (IFRSs):
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- At the date of transition to IFRSs, an entity must either:
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recalculate all actuarial gains and losses retrospectively from the
inception of each defined benefit plan, which could be very onerous; or |
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include the accumulated unamortized actuarial gains and losses as an
adjustment of opening retained earnings. |
- IAS 19 provides very limited ability to defer and amortize past service costs. Therefore, in many cases
an entity’s opening IFRS balance sheet will reflect the funded status of a defined benefit plan as an asset
or a liability, as the Exposure Draft had proposed.
- Entities may need to take appropriate steps well in advance of the changeover to IFRSs to avoid potential
problems with debt covenants and other agreements containing terms based on financial statement amounts.
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