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Improving Disclosures about Financial Instruments
| 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: Final amendments to Section 3862 issued.
The International Accounting Standards Board (IASB) issued amendments to IFRS 7, Financial Instruments: Disclosures in March 2009. The AcSB issued the corresponding amendments to Section 3862 in June 2009.
Background
Activities to Date
Related Information
Contact Information
The IASB’s project to amend IFRS 7, Financial Instruments: Disclosures, is in response to calls by users of financial statements and others for enhanced disclosures, especially in light of the current market conditions, and concerns that the nature and extent of liquidity risk disclosure requirements were unclear and difficult to apply.
The AcSB’s strategy is to adopt International Financial Reporting Standards (IFRSs) for publicly accountable enterprises. In order to help companies focus their efforts on adopting IFRSs, the AcSB generally does not intend to require amendments to standards in Canada prior to full adoption of IFRSs in 2011. However, in light of the present market concerns and to provide users with additional information and insight into those areas of concern, the AcSB adopted the amendments to the final IASB standard into Canadian GAAP, and incorporated them into Canadian GAAP prior to the complete changeover to IFRSs.
The IASB issued an Exposure Draft, “Improving Disclosures about Financial Instruments,” proposing amendments to the disclosure requirements in IFRS 7. These proposals are to enhance disclosures about fair value measurements, including the relative reliability of the inputs used in those measurements, and about the liquidity risk, of financial instruments. Comments were requested by December 15, 2008.
The AcSB also issued an Exposure Draft to amend Section 3862, Financial Instruments — Disclosures, by adopting the corresponding enhancements being proposed by the IASB. The Canadian Exposure Draft proposes that the amendments be effective for interim and annual financial statements relating to fiscal years beginning on or after July 1, 2009, the same effective date as proposed by the IASB. The amendments proposed would apply to publicly accountable enterprises, and those private enterprises, co-operative business enterprises, rate-regulated enterprises and NFPOs that choose to apply Section 3862.
In March 2009, the AcSB reviewed the comments submitted to it in response to the IASB and AcSB’s Exposure Drafts, “Improving Disclosures about Financial Instruments.” The AcSB agreed to adopt the final version of the amendments to IFRS 7, Financial Instruments: Disclosures, issued in March 2009. The amendments were made to Section 3862, Financial Instruments — Disclosures (and also the version of IFRS 7 to be incorporated into the Handbook later this year as part of the AcSB’s IFRS transition strategy).
The amendments are applicable to publicly accountable enterprises and those private enterprises, co-operative business enterprises, rate-regulated enterprises and not-for-profit organizations that choose to apply Section 3862.
The amendments are effective for annual financial statements for fiscal years ending after September 30, 2009. Earlier adoption is permitted. To provide relief for preparers, and consistent with IFRSs, the AcSB decided that an entity need not provide comparative information for the disclosures required by the amendments in the first year of application.
- Responses to the AcSB's Exposure Draft are available here
- IASB Exposure Draft: “Improving Disclosures about Financial Instruments”
- Additional information on the IASB’s project to amend IFRS 7.
- AcSB Exposure Draft: “Improving disclosures about Financial Instruments”
Questions or comments on this project should be directed to:
Rebecca Villmann, CA
Principal, Accounting Standards
Telephone: +1 (416) 204-3464
Fax: +1 (416) 204-3412
Canadian Accounting Standards Board
277 Wellington Street West
Toronto ON M5V 3H2 Canada