Accounting Standards Board
September 21-22, 2016
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.
International Financial Reporting Standards
Definition of a Business and Accounting for Previously Held Interests (Amend IFRS 3 and IFRS 11)
The AcSB discussed the points to be included in its response letter to the IASB’s Exposure Draft, “Definition of a Business and Accounting for Previously Held Interests (Proposed amendments to IFRS 3 and IFRS 11),” after considering input received from the AcSB’s IFRS Discussion Group. The AcSB decided to encourage the IASB to amend the definition of a business in a manner that results in high-quality and common global reporting between IFRSs and U.S. GAAP. In addition, AcSB members advised the AcSB Chair on points to raise at the September 2016 meeting of the Accounting Standards Advisory Forum on the IASB’s proposals to amend the guidance on business combinations (see the Forum’s Agenda Papers 5 and 5B).
The AcSB encourages stakeholders to share their views on the Exposure Drafts issued by the IASB and AcSB by submitting comment letters by October 31, 2016.
IFRS Discussion Group
The AcSB considered potential changes to the IFRS Discussion Group’s mandate, including the feedback received from the Group members.
The AcSB decided to expand the Group’s mandate to include advising the Board on matters that influence the development of IFRSs, in addition to discussing issues arising from the application of IFRSs in Canada. The AcSB directed staff to draft a revised Terms of Reference and Statement of Operating Procedures.
The AcSB discussed a research paper, written by its staff, exploring the decision-usefulness of financial information that reflects the economics of rate-regulated activities. The paper will be discussed at the September 2016 meetings of the International Forum of Accounting Standard Setters and the Accounting Standards Advisory Forum. The AcSB will continue its discussions and determine next steps for the paper after considering this input.
Members also advised the AcSB Chair on points to be provided to the Korea Accounting Standards Board on its rate-regulated activities paper, to be discussed at the same international meetings (see the Forum’s Agenda Paper 3B).
No decisions were made.
FASB Invitation to Comment
The AcSB discussed points to be included in its response to the U.S. Financial Accounting Standards Board (FASB) on its Invitation to Comment, “Agenda Consultation.”
The AcSB encourages stakeholders to share their views on the Invitation to Comment with the FASB by submitting comment letters to the FASB by October 17, 2016.
Clarifying the Definition of a Business
AcSB members advised the AcSB Chair on points to raise at the September 2016 meeting of the Accounting Standards Advisory Forum on the FASB’s proposals to amend the guidance on business combinations (see the Forum’s Agenda Papers 5A). The AcSB decided to encourage the FASB to amend the definition of a business in a manner that results in high-quality and common global reporting between U.S. GAAP and IFRSs.
Standards for Private Enterprises
The AcSB approved the creation of an agriculture advisory committee to further assist the Board with this project. An invitation soliciting interest will be posted online shortly at www.frascanada.ca.
Consultation on Priorities for Part II of the Handbook
One of the AcSB’s expected activities described in its 2016-2017 Annual Plan is to consult with stakeholders about the relative priorities for future Part II projects. To carry out this activity, the AcSB discussed the scope of the consultation and decided that it should be targeted to specific topic areas at this time, as follows:
- Section 1000, Financial Statement Concepts;
- Section 3400, Revenue; and
- Section 3840, Related Party Transactions.
The AcSB further decided that the nature of the consultation should be tailored to each topic area to gain a better understanding of the issues, and may involve surveys as well as discussions with its advisory committees and other stakeholders.
Post-implementation Review – Financial Instruments
The AcSB discussed the merits of adding to its project plan:
- topics identified during the Section 3856 Post-implementation Review; and
- additional financial instrument issues raised by other stakeholders.
The AcSB directed staff to draft project proposals to address several of the issues raised but noted that the priority of these project proposals should be considered in the context of the AcSB’s broader agenda priorities.
Subsidiaries and Interests in Joint Arrangements
The AcSB approved the issuance of narrow-scope amendments to Section 1591, Subsidiaries, and Section 3056, Interests in Joint Arrangements, subject to final drafting and a written ballot.
In order to coincide with the effective date of amendments to be issued as a result of its Subsidiaries and Investments project, the AcSB decided that the amendments to clarify the accounting for a subsidiary controlled through a combination of contractual arrangements and voting interests will be effective for fiscal years beginning on or after January 1, 2018.
The amendments to clarify that the transition provisions may not be applied when an enterprise changes its accounting policy choice to consolidate its subsidiaries at any time in the future, and that an enterprise preparing non-consolidated financial statements is not required to assess whether contractual arrangements give rise to control, will be effective for fiscal years beginning on or after January 1, 2017, with earlier application permitted.
The AcSB also agreed that, other than drafting improvements, no other changes to the Exposure Draft proposals are required as a result of the feedback received from stakeholders. The AcSB expects to issue the amendments to Sections 1591 and 3056 in December 2016.
Standards for Not-for-Profit Organizations
Accounting Standards Improvements
The AcSB discussed the effective date of the new Sections proposed in the upcoming exposure draft and the timing of incorporating the proposed new Sections into Part III of the Handbook. The AcSB decided to propose an effective date of January 1, 2019 in the exposure draft. The AcSB also considered whether using an alternative effective date of April 1 for changes to Part III on an ongoing basis would be preferable and decided to seek input on that proposal in the exposure draft.
The AcSB also discussed concerns raised so far from the fatal flaw review of the exposure draft. The AcSB will continue to consider feedback received from the fatal flaw review and will discuss the need to revise the proposals at a future meeting, if necessary.
The AcSB continued its discussions on the Not-for-Profit Advisory Committee’s feedback on the scope and timing of projects subsequent to the Accounting Standards Improvements project. The AcSB directed the staff to:
- continue the research on contributions;
- begin research on reporting controlled and related entities by NFPOs, including gathering information on combinations between NFPOs; and
- continue to monitor issues and concerns on related party transactions of NFPOs.
AcSB Terms of Reference and Statement of Operating Procedures
The AcSB approved revised versions of its Terms of Reference and Statement of Operating Procedures, subject to minor amendments, and authorized their submission to the Accounting Standards Oversight Council for final approval in the case of the Terms of Reference, and ratification in the case of the Statement of Operating Procedures.
AcSB Committees’ Terms of Reference and Statements of Operating Procedures
The AcSB approved revised versions of the Terms of Reference and Statements of Operating Procedures of its standing committees, subject to minor amendments, and authorized their submission to the relevant committees for their input prior to the AcSB’s final approval in the case of the Terms of Reference, and ratification in the case of the Statements of Operating Procedures.
IFRS Discussion Group
The AcSB received feedback on discussions at the recent meeting of its IFRS Discussion Group.
Note: All of the AcSB’s responses to documents for comment issued by the IASB and the IFRS Interpretations Committee are available on the IASB’s website at www.ifrs.org.