Accounting Policies and Accounting Estimates (Amend IAS 8)

Current Status Next Steps

IASB and AcSB are deliberating comments on their Exposure Drafts.

To be determined.

BACKGROUND

The Accounting Standards Board (AcSB) is participating in the International Accounting Standards Board’s (IASB) project to amend IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors.

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The objective of this project is to help entities distinguish accounting policies from accounting estimates. This distinction is important because changes in accounting estimates often affect an entity’s profit or loss, but changes in accounting policies generally do not.

The AcSB’s due process includes ensuring that Canadian entities’ financial reporting needs are considered by the IASB and issuing the AcSB’s own exposure draft on each IASB proposal. Subject to the responses to the AcSB’s exposure draft on whether the IASB’s proposals are appropriate for application in Canada, the AcSB expects that the amendments will be incorporated into Canadian GAAP in accordance with the AcSB’s strategy of adopting IFRS® Standards for publicly accountable enterprises.

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PROJECT NEWS & DECISION SUMMARIES

AcSB Response – Accounting Policies and Accounting Estimates (Proposed amendments to IAS 8)
On January 11, 2018, the AcSB submitted a comment letter responding to the IASB’s Exposure Draft issued in September 2017. The letter agrees with some parts of the proposals but expresses concerns with the way the relationship between accounting estimates and accounting policies is described. The AcSB suggests broadening the definition of accounting estimates, and defining that term independently from accounting policies to reduce unintended circularity. To improve application in practice, the AcSB strongly encourages the IASB to develop illustrative examples that cover a spectrum of complex situations. Read the AcSB letter posted by the IASB.

AcSB Decision Summary – December 14, 2017
The Board discussed and approved its response letter to the International Accounting Standards Board’s (IASB) Exposure Draft, “Accounting Policies and Accounting Estimates (Amendments to IAS 8),” subject to drafting changes.

AcSB Exposure Draft – Accounting Policies and Accounting Estimates (Proposed amendments to IAS 8)
October 3, 2017. The AcSB has issued its Exposure Draft that corresponds to the IASB’s Exposure Draft on this topic. Stakeholders are encouraged to submit their comments by January 15, 2018.

IASB® Exposure Draft – Accounting Policies and Accounting Estimates (Proposed amendments to IAS 8)
September 18, 2017. The IASB has issued an Exposure Draft proposing amendments to IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors. Canadian stakeholders are encouraged to submit their comments to the IASB by January 15, 2018.

 

Disclaimer: This project summary has been prepared for information purposes only. Decisions reported are tentative and reflect only the current status of discussions on this project, which may change after further Board deliberations. Decisions to publish Handbook material are final only after a formal ballot process.