Responses to IASB Documents for Comment

Below are summaries of responses by the AcSB or AcSB staff to the IASB’s Documents for Comment. The IASB posts all letters received to their website. A link to the applicable IASB project page and a link to the letter submitted by the AcSB, as posted on the IASB’s website, is provided below.

Annual Improvements to IFRSs 2012 – 2014 Cycle

On March 13, 2014, the AcSB submitted a comment letter responding to the IASB’s Exposure Draft issued in December 2013. The letter supports most of the amendments. However, the letter questions if a fee earned from servicing a transferred financial asset constitutes continuing involvement and, thus, if the disclosure requirement is needed. Read the AcSB letter posted by the IASB.

Equity Method in Separate Financial Statements

On February 4, 2014, the AcSB submitted a comment letter responding to the IASB’s Exposure Draft issued in December 2013. The letter supports the proposal to permit the equity method as one of the options to account for an entity’s investment in subsidiaries, joint ventures and associates in the entity’s separate financial statements. However, the letter requests that the consequential amendment to IAS 28 be redrafted to reflect more clearly the accounting the IASB intended when an entity loses control of a subsidiary and the investment continues to be classified as either an associate or a joint venture. Read the AcSB letter posted by the IASB.

Conceptual Framework

On January 14, 2014, the AcSB submitted a comment letter to the IASB’s Discussion Paper issued in July 2013. The letter strongly supports a project to complete the IASB’s Conceptual Framework.  The letter emphasizes that the Conceptual Framework should be focused at the conceptual level and should include only concepts that have a sound theoretical basis in order to provide an integrated set of concepts that is useful.  The letter specifies which concepts should be part of the Conceptual Framework and the other material that, where relevant, should be dealt with outside of the Conceptual Framework. The letter recommends completing, in the proposed timeframe, the topics on asset and liability definitions, recognition and derecognition because they are well advanced and would be of significant benefit in moving forward some important standard-setting projects.  However, the topics on liabilities and equity, measurement, presentation and disclosure, and other comprehensive income, require significant further development.  The letter proposes that additional targeted research start as soon as possible. Read the AcSB letter posted by the IASB.

Insurance Contracts

On November 1, 2013, the AcSB submitted a comment letter responding to the IASB’s Exposure Draft issued in June 2013. The letter agrees with the fundamental principles in the proposed standard. The letter also sets out recommendations to amend some aspects of the proposed standard to result in financial reporting that would represent the economics of insurance contracts faithfully. In addition, the letter suggests ways of making the standard operational and enhancing the quality of its implementation on a global basis. The letter stresses the importance of the IASB and FASB renewing their efforts to work together in order to achieve a high-quality standard. Read the AcSB letter posted by the IASB.

Agriculture: Bearer Plants

On October 28, 2013, the AcSB submitted a comment letter responding to the IASB’s Exposure Draft issued in June 2013.  The letter supports the efforts to improve the accounting for bearer biological assets.  The letter recommends that the scope of the proposed amendments be expanded and provides some other input to enhance the quality of the amendments. Read the AcSB letter posted by the IASB.

Leases

On September 13, 2013, the AcSB submitted a comment letter to the IASB’s Exposure Draft issued in May 2013.  The letter supports the right‐of‐use model for leases and the recognition of assets and liabilities related to leases in financial statements.  The letter expresses several conceptual and practical concerns with the proposal for two categories of leases.  However, the letter recognizes that different stakeholders have different views about the economics of leases and, therefore, accepts that the IASB may need to proceed with a dual classification model in order to finalize an IFRS that recognizes assets and liabilities relating to leases. Read the AcSB letter posted by the FASB.

Regulatory Deferral Accounts

On September 4, 2013, the AcSB submitted a comment letter responding to the IASB's Exposure Draft issued in April 2013. The letter expresses the unanimous support of the AcSB for the proposed interim standard as a workable solution pending the completion of the IASB’s comprehensive Rate-regulated Activities project. Read the AcSB letter posted by the IASB.

Defined Benefit Plans: Employee Contributions (Proposed amendments to IAS 19)

On July 24, 2013, the AcSB submitted a comment letter responding to the IASB's Exposure Draft issued in March 2013.  The letter supports the narrow-scope amendments to IAS 19 Employee Benefits, which include providing a practical expedient to simplify the accounting for contributions for defined benefit plans from employees or third parties.  However, the letter requests some clarifications on the use of the practical expedient, and on how to incorporate negative benefits from these contributions. Read the AcSB letter posted by the IASB.

Financial Instruments: Expected Credit Losses

On July 5, 2013, the AcSB submitted a comment letter responding to the IASB's Exposure Draft issued in March 2013. The letter supports the proposed standard but encourages convergence with the FASB. It expresses concern that the standard focusses very heavily on the financial services industry and notes that many entities and, in particular, smaller financial institutions and non-financial entities, will need to incur significant costs to implement the requirements. The letter also notes concerns with the lack of a conceptual basis for recognizing day one credit losses and with basing credit allowances on relative changes in credit risk as opposed to absolute changes. The letter requests the mandatory effective date of IFRS 9 be postponed to allow at least three complete years after the final standard is published. Read the AcSB letter posted by the IASB.

Acquisition of an Interest in a Joint Operation (Proposed amendment to IFRS 11)

On April 9, 2013, the AcSB submitted a comment letter to the IASB’s Exposure Draft issued in December 2012. The letter supports the proposal that a joint operator should account for the acquisition of an interest in a joint operation, in which the activity of the joint operation constitutes a business by applying IFRS 3 Business Combinations and other IFRSs, and disclose the relevant information specified in those IFRSs for business combinations. Read the AcSB letter posted by the IASB.

Sale or Contribution of Assets between an Investor and its Associate or Joint Venture (Proposed Amendments to IFRS 10 and IAS 28)

On April 9, 2013, the AcSB submitted a comment letter to the IASB’s Exposure Draft issued in December 2012. The letter supports the proposals, which address the inconsistency that exists between the requirements in IFRS 10 and IAS 28 in dealing with the sale or contribution of a subsidiary by an investor to an associate or joint venture. Read the AcSB letter posted by the IASB.

Classification and Measurement: Limited Amendments to IFRS 9

On March 28, 2013, the AcSB submitted a comment letter responding to the IASB's Exposure Draft issued in November 2012. The letter supports the proposed clarification that financial assets with the characteristics described as a "modified economic relationship" can be instruments with contractual cash flows that are solely payments of principal and interest. The letter also agrees with the proposed fair-value-through-other-comprehensive-income category and the proposed amendments to the transition provisions. The letter requests that the mandatory effective date of IFRS 9 be postponed to allow three complete years after the final standard is published. Read the AcSB letter posted by the IASB.

Novation of Derivatives and Continuation of Hedge Accounting

On March 26, 2013, the AcSB submitted a comment letter responding to the IASB's Exposure Draft issued in February 2013. The letter supports the proposal to amend the hedge accounting requirements in IAS 39 Financial Instruments: Recognition and Measurement and IFRS 9 Financial Instruments, when issued, to require that hedge accounting be continued when a derivative is novated to a central clearing party. However, the letter disagrees that the novation must be as a result of law or regulation. Read the AcSB letter posted by the IASB.

Equity Method: Share of Other Net Asset Changes (Proposed amendments to IAS 28)

On March 22, 2013, the AcSB submitted a comment letter responding to the IASB’s Exposure Draft issued in November 2012. The letter does not support developing a narrow scope amendment to IAS 28 and instead suggests that the IASB expedite its work on the equity method of accounting. The letter also does not agree that other net asset changes should be recorded in equity. If the IASB proceeds with a narrow scope amendment, the letter recommends including the effect of other net asset changes in profit or loss. Read the AcSB letter posted by the IASB.

Clarification of Acceptable Methods of Depreciation and Amortisation (Proposed amendments to IAS 16 and IAS 38)

On March 22, 2013, the AcSB submitted a comment letter responding to the IASB’s Exposure Draft issued in December 2012. The letter supports the proposed amendments and agrees that there is a limited circumstance in which the use of a revenue-based method that is based on units sold rather than total expected revenue may be appropriate. As well, guidance should not be provided in the Basis for Conclusions. The letter also expresses concern that a reason was not provided as to why an amendment regarding the relevance of information about technical or commercial obsolescence of the product or service output was added. In addition, it queries why this amendment is only applicable to the diminishing balance method. Read the AcSB letter posted by the IASB.

Recoverable Amount Disclosures for Non-Financial Assets

On March 19, 2013, the AcSB submitted a comment letter responding to the IASB’s Exposure Draft issued in January 2013. The letter supports the proposed amendments. Read the AcSB letter posted by the IASB.

Annual Improvements to IFRSs 2011 – 2013 Cycle

On February 15, 2013, the AcSB submitted a comment letter responding to the IASB’s Exposure Draft issued in November 2012. The letter supports most of the proposed amendments. However, the letter does not support the amendment to IFRS 1 First-time Adoption of International Financial Reporting Standards as the AcSB thinks that the current guidance is clear and provides sufficient direction. The letter also recommends that an entity should be allowed to apply the amendments to IAS 40 Investment Property retrospectively. As well, the letter expresses concern about providing guidance in the Basis for Conclusions and not revising the related authoritative material. Read the AcSB letter posted by the IASB.

Proposal to Establish an Accounting Standards Advisory Forum

On December 17, 2012, the AcSB submitted a comment letter to the IFRS Foundation’s Invitation to Comment issued in November 2012. The letter commends the Foundation for reconsidering the role of national and regional accounting standard-setting bodies in supporting the IASB. The response agrees with the analysis in the Invitation to Comment and expresses strong support for the proposals. Read the AcSB letter posted by the IASB.

Post-implementation Review of IFRS 8 Operating Segments

On November 20, 2012, the AcSB submitted a comment letter to the IASB’s Request for Information issued in July 2012. The letter strongly supports post-implementation reviews. It agrees that the management approach in IFRS 8 provides useful information to enable users of financial statements to evaluate the nature and financial effects of the business activities in which it engages and the economic environments in which it operates. However, the letter recognizes that users are concerned that the disclosures do not always provide as much detail as they would like. Read the AcSB letter posted by the IASB.

IFRS Foundation Constitution

On October 22, 2012, the AcSB submitted a comment letter to the Trustees of the IFRS Foundation on its “Drafting Review: separating the role of the IASB Chair and the Executive Director” issued in July 2012. The Accounting Standard Oversight Council and the AcSB had advocated separating these roles previously. Therefore, the letter supports appointing an Executive Director and amending the Constitution to further enhance the independence of the IASB Chair to carry out standard-setting activities, both in fact and in appearance. These changes were required in order for the Foundation and the IASB Chair to be transparent and accountable. From that perspective, the response recommends further drafting amendments to the Constitution to distinguish more clearly the separate roles of the IASB Chair and the Executive Director. Read the AcSB letter posted by the IASB.

Put Options Written on Non-controlling Interests

On October 1, 2012 the AcSB submitted a comment letter responding to the IFRS Draft Interpretations Committee's Draft Interpretation issued in May 2012. The letter agrees that the proposed Interpretation correctly reflects existing IFRSs. However, it expresses concern that the relevant guidance does not result in fair representation of transactions involving non-controlling interests. The letter suggests that the IASB should undertake a project to comprehensively revisit the treatment of transactions between shareholders. Read the AcSB letter posted by the IASB.

IFRS Foundation Due Process Handbook

On August 30, 2012, the AcSB submitted a comment letter responding to the Due Process Oversight Committee of the IFRS Foundation Trustees on the Committee’s Invitation to Comment issued in May 2012. The letter commends the Trustees, the IASB and the IFRS Interpretations Committee for their efforts to develop the Due Process Handbook further, given the high quality of their existing due process. The quality of the IASB’s due process is an important factor in the AcSB’s endorsement of new IFRSs. The response emphasizes that the IASB and the Committee should be as accountable and transparent as possible in carrying out their due process. In that spirit, the letter proposes enhancing:

  • the re-exposure criteria to include considering the significance and extent of changes made to exposure draft proposals and the benefits of identifying unintended consequences;
  • the process for responding to issues referred by the Monitoring Board so that the IASB remains able to decide freely what issues it will address; and
  • the new section on implementation and maintenance to capture more fully some of the recommendations from the “Report on the Trustee’s Efficiency and Effectiveness of the IFRS Interpretations Committee.”

Read the AcSB letter posted by the IASB.

Annual Improvements to IFRSs 2010—2012 Cycle

On August 29, 2012, the AcSB submitted a comment letter responding to the IASB’s Exposure Draft issued in May 2012. The letter supports the proposed amendments. However, it expresses disagreement with presenting any portion of the change in fair value of contingent consideration classified as a liability in other comprehensive income. The letter also expresses concern about providing guidance in the Basis for Conclusions to IFRS 13 Fair Value Measurement and recommends that IFRS 9 Financial Instruments and IAS 39 Financial Instruments: Recognition and Measurement should be clarified with respect to the measurement of short-term receivables and payables. Read the AcSB letter posted by the IASB.

Levies Charged by Public Authorities on Entities that Operate in a Specific Market

On August 29, 2012 the AcSB submitted a comment letter responding to the IFRS Interpretations Committee's Draft Interpretation issued in May 2012. The letter supports the proposed Interpretation. However, it expresses concern that levies that are due only if a minimum revenue threshold is achieved are not included in the scope of the draft Interpretation, given that levies that rely on a minimum threshold other than revenue are included in the scope. The letter suggests that a ‘levy’ be more precisely defined because it is unclear whether the broader scope of the draft Interpretation was intended. It also expresses concern that the requirement that any liability to pay a levy within the scope of the draft Interpretation gives rise to an expense, conflicts with current cost capitalization guidance. Read the AcSB letter posted by the IASB.

Revenue from Contracts with Customers

On March 27, 2012 the AcSB submitted a comment letter responding to the IASB's Exposure Draft issued in November 2011. The letter supports the proposed new standard. However, it suggests changes to emphasize that revenue should be recognized when an entity receives a right to payment for goods or services transferred to a customer. The letter expresses concern that the proposed disclosure requirements and, in particular, the proposed interim disclosures, will be excessive. It also expresses disagreement with the proposed requirements for onerous contracts, constraint on recognizing variable consideration and presentation of credit losses. Read the AcSB letter posted on the FASB’s website.

Transition Guidance (Proposed Amendments to IFRS 10)

On March 20, 2012 the AcSB submitted a comment letter responding to the IASB's Exposure Draft issued in December 2011. In principle, the letter supports the proposed amendments in the Exposure Draft. However, the letter states that the proposed revisions do not clarify when an entity has relief from restating comparative financial information when it has disposed of an interest in another entity. Additionally, the letter recommends that the IASB should evaluate the need to clarify the interaction of the transition provisions in IFRS 10 with the disclosures required by IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors. Read the AcSB letter posted by the IASB.

Investment Entities

On December 23, 2011, the AcSB submitted a comment letter responding to the IASB’s Exposure Draft issued in August 2011. The letter strongly supports the proposal that there is a class of entities (investment entities) that should report investments in controlled investees at fair value. The letter urges the IASB and the FASB to work together to develop high-quality accounting guidance for investment entities that can be applied globally. The letter recommends that some aspects of the IASB’s proposals be clarified to address practical concerns identified through consultations with Canadian stakeholders. The AcSB letter posted by the IASB is available here.

Government Loans (Proposed Amendments to IFRS 1)

On December 20, 2011 the AcSB submitted a comment letter responding to the IASB's Exposure Draft issued in October 2011. The letter supports the proposed amendment allowing first-time adopters to prospectively apply paragraph 10A of IAS 20 Accounting for Government Grants and Disclosure of Government Assistance. This will prevent the use of hindsight for loans where a fair value would need to be determined prior to the date of transition. The AcSB letter posted by the IASB is available here.

IASB Agenda Consultation 2011

On November 29, 2011, the AcSB submitted a comment letter responding to the IASB’s Request for Views issued in July 2011. The letter supports the view that the IASB should provide a period of calm and refrain from requiring any additional significant standards be adopted in the foreseeable future. The letter strongly recommends that the IASB give the highest priority to maintaining and improving the high quality of IFRSs. The IASB should dedicate a substantial portion of its resources to responding to implementation needs, as they arise, by providing interpretations and, when necessary, undertaking annual improvements and targeted, narrowly scoped projects to revise existing IFRSs. In order to provide a better tool for stakeholders to use when applying IFRSs, the letter recommends that the IASB should work on updating and improving its conceptual framework. The IASB can also use an updated framework to maintain and develop standards. The letter strongly encourages the IASB to work with the FASB and other standard setters on convergence in order to achieve the objective of one global set of high-quality accounting standards. The letter urges the IASB to address the diversity that is emerging in financial reporting by rate-regulated activities and proposes some specific recommendations on how the issue might be addressed. The AcSB letter posted by the IASB is available here.

Mandatory Effective Date of IFRS 9

On October 21, 2011, the AcSB submitted a comment letter responding to the IASB’s Exposure Draft issued in August 2011. The letter supports the proposal to delay the mandatory effective date of IFRS 9 Financial Instruments but only on completion of all components of IFRS 9 following full due process and publication of the final standard before December 31, 2012. If IFRS 9 cannot be completed by the end of 2012, the letter recommends further delaying the effective date by at least two full calendar years. The AcSB letter posted by the IASB is available here.

Improvements to IFRSs

On October 21, 2011, the AcSB submitted a comment letter responding to the IASB's Exposure Draft issued in June 2011. The letter supports the amendments proposed. However, the letter suggests some revisions be made to clarify the proposals and address the issues raised in the Exposure Draft. The AcSB letter posted by the IASB is available here.

IFRS Foundation Strategy Review

On June 27, 2011, the Accounting Standards Oversight Council and the AcSB submitted a comment letter responding to the Foundation’s “Report on the Trustees’ Strategy Review: IFRSs as the Global Standard: Setting a Strategy for the Second Decade.” The letter strongly agrees with and commends the Trustees for articulating the principles and recommendations of the Foundation’s strategy for the next decade in a clear and effective manner that considers the perspectives of stakeholders. To build upon the main recommendations in the Report, the letter suggests additional actions that should be taken to enhance the consistent application of IFRSs and to strengthen the IASB’s due process and procedures. The letter posted by the IASB is available here.

Financial Instruments — Asset and Liability Offsetting

On April 28, 2011, the AcSB submitted a comment letter responding to the IASB’s Exposure Draft. The letter agrees with the proposed offsetting requirements because when the criteria are met, an entity has a right to, or obligation for, only the net amount that is equivalent to a single net financial asset or financial liability. However, the letter disagrees with the disclosure proposals because the required information is excessive, and may be too costly, or perhaps even impractical, for entities to provide. To balance the information needs of users and provide financial statements that are understandable, the letter recommends that the IASB explain how these additional disclosures will help users make more informed investing and lending decisions. The AcSB letter posted by the FASB is available here.

Financial Instruments: Impairment

On April 1, 2011, the AcSB submitted a comment letter responding to the IASB’s Supplementary Document to its 2009 Exposure Draft, “Financial Instruments: Amortised Cost and Impairment.” The letter acknowledges that the proposals address some of the concerns with the model proposed in the 2009 Exposure Draft. However, the letter expresses concern that the proposals are more complex than necessary to achieve the objectives of the project and will not provide better information for users. The letter recommends that the Boards adopt the FASB’s approach to recognizing and measuring impairment in financial assets measured at amortized cost. The AcSB letter posted by the FASB is available here.

Financial Instruments — Hedge Accounting

On March 9, 2011, the AcSB submitted a comment letter responding to the IASB’s Exposure Draft. The letter acknowledges that there are aspects of the proposals that would be helpful to preparers and provide meaningful information to users. However, the letter expresses concern that the proposals will not reduce complexity for preparers or provide better information for users. The AcSB urges the IASB to take the time necessary to achieve convergence with the FASB and to complete the proposals with a macro-hedging model. The AcSB also encourages the IASB to make revisions that would permit hedging of any risk provided it is separately identifiable and reliably measurable. The letter recommends that the IASB re-expose a simpler, more realistic and comprehensive model for hedge accounting. The AcSB letter posted by the IASB is available here.

IFRS Foundation Strategy Review

On February 17, 2011, the Accounting Standards Oversight Council and the AcSB submitted a comment letter responding to the Foundation’s Paper for Public Consultation. The letter provides views about the Foundation’s mission, governance, processes and financing and recommendations for improvement in each area. The letter does not support defining “the public interest” in the Foundation’s Constitution and instead proposes that the Constitution should be clarified to reflect that “the Foundation serves the public interest by developing” standards. The letter also recommends that the Foundation’s objectives should be made more congruent with The Conceptual Framework for Financial Reporting Standards. Although the letter supports the current governance structure, it provides recommendations on how the Monitoring Board and Trustees should balance accountability and independence to better apply this structure. In addition, the letter expresses concern that the application of the standard-setting processes has not always been sufficient to ensure high quality standards that are consistently applied. The letter posted by the IASB is available here.

Effective Dates and Transition Methods

On January 31, 2011, the AcSB submitted a comment letter responding to the IASB’s Request for Views. The letter strongly recommends that the IASB give the highest priority to taking the time to deliberate stakeholders’ comments on its exposure drafts fully, resolve differences in approach with FASB, and develop high-quality global standards. Given the significant number of new standards still under development and the uncertainty of when they will be issued, the letter recommends ten principles to guide the IASB in setting effective dates once the standards are finalized. The AcSB letter posted by the IASB is available here.

Leases

On December 22, 2010, the AcSB submitted a comment letter responding to the Exposure Draft issued jointly by the IASB and FASB. The letter supports recognizing all assets and liabilities arising from leases in the statement of financial position. However, the letter disagrees with many of the specific proposals on applying this approach to lease accounting. The letter recommends that the Boards undertake a thorough reconsideration of the proposals and not rush to finalize the proposals by June 30, 2011. The AcSB letter posted by the FASB is available here.

Insurance Contracts

On November 30, 2010, the AcSB submitted a comment letter responding to the IASB’s Exposure Draft. The letter strongly recommends that the IASB and FASB give the highest priority to taking the time to deliberate constituents’ comments fully, resolving the differences between their approaches, and developing a common and high-quality standard. The letter fundamentally agrees with the IASB’s proposal to use the building block approach for determining a current measurement of insurance contracts, except for one aspect of the “time value of money” building block. To assist the IASB in developing a revised discount rate requirement, the letter includes the following alternative proposal for a two-step approach for reporting the interest cost on insurance liabilities. In profit or loss, an insurer would report the effect of discounting insurance liabilities using the long-term rate the insurer expects to earn on its investments. In other comprehensive income, an insurer would report the change in the difference between discounting the liability using the current market observable rate (i.e., a high-quality corporate rate) and the long-term expected rate of return on investments. The AcSB letter posted by the IASB is available here.

Annual Improvements Process

On November 30, 2010, the AcSB submitted a comment letter responding to the IFRS Foundation’s Consultation Document. Overall, the letter supports the Foundation’s efforts to amend the Due Process Handbook and supports the proposed enhanced criteria for determining whether a matter should be addressed through the IASB’s Annual Improvements Process. However, the letter does not support the proposed third criterion that requires an assessment of the likelihood that the IASB will reach a conclusion on an issue during the planning stage. The AcSB letter posted by the IASB is available here.

Stripping Costs in the Production Phase of a Surface Mine

On November 29, 2010, the AcSB submitted a comment letter responding to the IFRS Interpretations Committee’s Draft Interpretation. The letter supports the proposals but suggests changes in the criteria for capitalizing stripping costs. The AcSB letter posted by the IASB is available here. 

Severe Hyperinflation (Proposed amendment to IFRS 1)

On November 29, 2010, the AcSB submitted a comment letter responding to the IASB’s Exposure Draft. The letter supports the IASB’s proposal, except that the letter raises concerns regarding the clarity of the language in the proposed amendment. The AcSB letter posted by the IASB is available here.

Deferred Tax: Recovery of Underlying Assets (Proposed amendments to IAS 12)

On November 9, 2010, the AcSB submitted a comment letter responding to the IASB’s Exposure Draft. The letter supports the IASB’s proposal that the deferred tax measurement for an investment property that is measured at fair value should reflect a rebuttable presumption that the asset will be recovered through sale. The letter also recommends extending this presumption to owner-occupied properties that are held for both use and capital appreciation and are measured using the revaluation model under IAS 16 Property, Plant and Equipment. However, the letter does not support extending this presumption to other property, plant and equipment or intangible assets. The AcSB letter posted by the IASB is available here.

Removal of Fixed Dates for First-time Adopters (Proposed amendments to IFRS 1)

On October 27, 2010, the AcSB submitted a comment letter responding to the IASB’s Exposure Draft. The letter supports the IASB’s proposal and encourages the IASB to finalize the proposed amendments promptly. The AcSB letter posted by the IASB is available here.

Revenue from Contracts with Customers

On October 22, 2010, the AcSB submitted a comment letter responding to the Exposure Draft issued jointly by the IASB and FASB. The letter commends the Boards on their efforts to produce a common, single standard for revenue recognition. However, the letter expresses concern about the main principle and proposes that revenue should be recognized when the entity has an unconditional right to consideration for the provision of goods or services in accordance with a contract with a customer. The AcSB letter posted by the FASB is available here.

Presentation of Items of Other Comprehensive Income

On September 30, 2010, the AcSB submitted a comment letter responding to the IASB’s Exposure Draft. Overall, the letter supports the IASB’s proposals. However, the letter emphasizes that the proposals have limited effectiveness without a conceptual basis for determining which items should be included in other comprehensive income rather than profit or loss, and which items of other comprehensive income should be recycled. The AcSB letter posted by the IASB is available here.

Measurement Uncertainty Analysis Disclosure for Fair Value Measurements

On September 7, 2010, AcSB staff submitted a comment letter responding to the IASB’s Exposure Draft. The letter supports the IASB’s proposal that an entity should take into account and disclose the effect of interdependent relationships between unobservable inputs if such interdependencies are relevant when estimating the effect on a fair value measurement of a change in more than one unobservable input. The letter recommends that an entity should be required to consider interdependent relationships commonly used by market participants. The AcSB staff letter posted by the IASB is available here.

Post-employment Benefits

On September 2, 2010, AcSB staff submitted a comment letter responding to the IASB's Exposure Draft, "Defined Benefit Plans (Proposed amendments to IAS 19)." The letter supports the IASB’s proposal for the recognition of all changes in the value of plan assets and in the defined benefit obligation in the period in which they occur. The letter also supports the proposed improvements to the presentation of the changes in plan assets and the defined benefit obligation, but notes concerns with some aspects of presentation such as the net interest approach in determining the finance cost component. Although the letter agrees with the disclosure objectives, it expresses concern that literal compliance of the disclosure requirements will continue to result in voluminous disclosures that do not highlight the risks of these plans. The letter raises concern that significant practice issues with IFRIC 14, IAS 19 — The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction, have not been addressed and urges the IASB to resolve them as part of finalizing the amendments. The AcSB staff letter posted by the IASB is available here.

Extractive Activities

On July 30, 2010, the AcSB submitted a comment letter responding to the IASB’s Discussion Paper. The letter supports the IASB adding the project to its active agenda. The letter also notes that there is a need for guidance on significant existing application issues. The letter includes an Appendix prepared by AcSB staff that provides detailed comments on the proposals in the Discussion Paper. The AcSB’s letter posted by the IASB is available here.

Fair Value Option for Financial Liabilities

On July 16, 2010, AcSB staff submitted a comment letter responding to the IASB’s Exposure Draft. The letter does not support the IASB’s proposal because the IASB and FASB proposals in this area are not converged. As well, the proposal requires the increased use of other comprehensive income without articulating a principle that distinguishes between items to be recognized in net income and those to be recognized in other comprehensive income. The AcSB staff letter posted by the IASB is available here.

Conceptual Framework — The Reporting Entity

On July 14, 2010, AcSB staff submitted a comment letter responding to the IASB’s Exposure Draft. The letter supports the IASB’s proposed definition of a reporting entity. The letter recommends that the concept of control be explicitly incorporated within the definition to identify the boundaries that define a reporting entity. Also, the letter recommends that the nature of the entity’s business activities demonstrate the unit-of-account to be used to account for entities the reporting entity controls. The AcSB staff letter posted by the IASB is available here.

Financial Instruments: Amortised Cost and Impairment

On June 29, 2010, the AcSB submitted a comment letter responding to the IASB’s Exposure Draft. The letter does not support the IASB’s proposal to require that an entity’s expectations about future credit losses on a financial asset measured at amortized cost should be incorporated into the asset’s effective interest rate with subsequent changes in expectations recognized in profit and loss immediately. The AcSB thinks that the proposal does not meet the IASB’s and the FASB’s objective of developing a single global standard for financial instruments that reduces the complexity in current standards and produces financial statements that are more easily understood. The AcSB letter posted by the IASB is available here.

Liabilities — Improving IAS 37

On May 19, 2010, the AcSB submitted a comment letter responding to the IASB’s Working Draft of a new “Liabilities” standard, including the proposals in its “Measurement of Liabilities in IAS 37” Exposure Draft. The letter supports the IASB’s project to improve IAS 37, but recommends that practical changes be made before the proposals are finalized. The letter recommends adding a “more likely than not” threshold to assist an entity to determine if a present obligation exists. It also recommends requiring obligations that will be fulfilled by performing a service to be measured at the expected present value of the resources the entity expects to expend. If the project cannot be completed expeditiously, the letter recommends that the IASB defer the project and focus on developing and issuing high-quality standards in its joint projects with the FASB. The AcSB’s letter posted by the IASB is available here.

Comparative IFRS 7 Disclosures for First-time Adopters

On December 15, 2009, AcSB staff submitted a comment letter responding to the IASB’s Exposure Draft. The letter agrees with the proposed amendment. The letter does recommend that the IASB revise the proposed effective date so that an entity wanting to apply the amendment would not have to early adopt the amendment. The AcSB staff letter posted by the IASB is available here.

IASCF Constitution Review, Part 2

On November 24, 2009, the AcSOC and the AcSB submitted a joint response to the IASC Foundation (IASCF) Discussion Document, “Part 2 of the Constitution Review: Proposals for Enhanced Accountability.” While the response agrees with many of the proposals, the AcSOC and the AcSB strongly disagree with the proposal to establish an accelerated due process in exceptional circumstances. In addition, they disagree with a) changing the name of the IASB to the IFRS Board, b) emphasizing that governance of the IASC Foundation rests “primarily” with the Trustees, and c) reducing the length of a possible second term of IASB members. The letter posted by the IASCF is available here.

Rate-regulated Activities

On November 20, 2009, the AcSB submitted a comment letter responding to the IASB’s Exposure Draft. The letter broadly agrees with the proposals. However, the letter recommends two exceptions to the proposed requirement to discount the estimated cash flows associated with regulatory assets and regulatory liabilities — one for regulatory items relating to deferred income taxes and the other for items relating to employee future benefit costs. Also, the letter recommends expanding the application guidance to clarify the scope of the proposed standard. The AcSB letter posted by the IASB is available here

Improvements to International Financial Reporting Standards

On November 12, 2009. AcSB staff submitted a comment letter responding to the IASB’s Exposure Draft. The letter supports the amendments proposed, except that the letter requests clarification on when a first-time adopter is required to explain any changes or update required reconciliations if the entity changes its accounting policies or its use of the exemptions in IFRS 1 First-time Adoption of International Financial Reporting Standards after it has published an interim financial report. The AcSB staff letter posted by the IASB is available here.

Extinguishing Financial Liabilities with Equity Instruments

On October 5, 2009, the AcSB staff submitted a comment letter responding to the IFRIC’s Draft Interpretation 25. The letter agrees with the consensus proposed in the Draft Interpretation, except that the letter raises concerns regarding the practicality of the measurement requirement. The AcSB staff letter posted by the IASB is available here.

Fair Value Measurement

On September 29, 2009, AcSB staff submitted a comment letter responding to the IASB’s Exposure Draft. The letter agrees that the proposed standard on how to determine a fair value measurement is a significant improvement compared to existing guidance in IFRSs. Compared to US SFAS No. 157 Fair Value Measurements, as amended (or ASC Topic 820-10), the letter identifies several significant concerns that could result in significant GAAP differences between the standards that must be addressed before finalizing the proposed IFRS. During the transition to the new fair value measurement standard, the letter also recommends that IFRS 1 First-time Adoption of International Financial Reporting Standards be amended to allow IFRS adopters to prospectively apply the new IFRS. The AcSB staff letter posted by the IASB is available here.

Discount Rate for Employee Benefits

On September 28, 2009, AcSB staff submitted a comment letter responding to the IASB's Exposure Draft. The letter fully supports the proposals. The AcSB staff letter posted by the IASB is available here.

Financial Instruments: Classification and Measurement

On September 14, 2009, the AcSB submitted a comment letter responding to the IASB’s Exposure Draft. The letter expresses concern that the speed with which the project is progressing and the apparent lack of co-ordination with the FASB will not result in the best possible standards for financial instruments. The letter also recommends that the IASB combine the three phases of the IAS 39 replacement project (classification and measurement, impairment and hedge accounting) and develop a comprehensive exposure document. The AcSB letter posted by the IASB is available here.

Credit Risk in Liability Measurement

On September 4, 2009, AcSB staff submitted a comment letter responding to the IASB’s Discussion Paper. The letter supports that fair value measurement of liabilities should include the market’s best estimate of credit risk at a particular point in time. However, the letter expresses concern that there are varied views among financial statement users, academics and staff as to whether there are circumstances in which liabilities should be measured at current measures that exclude the effects of the entity’s credit standing. The AcSB staff letter posted by the IASB is available here.

Expected Loss (Impairment) Model

On September 2, 2009, AcSB staff submitted a comment letter responding to the IASB’s Request for Information on an expected loss model for recognizing impairment of financial assets. The letter notes that the proposals would not be consistent with the measures used in current credit management and monitoring processes. In addition, the letter comments that the proposed model would blur the distinction between net interest income and credit losses as it effectively includes allowances for future credit losses in the net interest income line. The AcSB staff letter posted by the IASB is available here.

Classification of Rights Issues

On September 1, 2009, AcSB staff submitted a comment letter responding to the IASB’s Exposure Draft. The letter agrees with the proposals and rationale provided in the Basis for Conclusions. The letter proposes that the IASB include an explanation of why the pro rata treatment is essential to demonstrating that the transaction is conducted with owners in their capacity as owners and an explanation of why no amendments to IFRS 1 are proposed. 

Derecognition (proposed amendments to IAS 39 and IFRS 7)

On July 31, 2009, AcSB staff submitted a comment letter responding to the IASB’s Exposure Draft. The letter does not support the proposals because they are not considered an improvement over the existing provisions in IAS 39. The letter does support the “alternative view” summarized in the accompanying Basis for Conclusions, with some concerns to be resolved. The AcSB staff letter posted by the IASB is available here.

Income Taxes

On July 31, 2009, the AcSB submitted a comment letter responding to the IASB’s Exposure Draft. The letter does not support the project proceeding in its current form. Instead it suggests the project be re-scoped to consider a more fundamental review of accounting for income taxes, or defer to allow constituents and the IASB to focus on projects currently of higher priority. The letter included an appendix prepared by AcSB staff providing detailed comments on a number of the proposals. The AcSB letter posted by the IASB is available here.