Responses to IASB® Documents for Comment
IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors
Exposure Draft – Accounting Policy Changes (Proposed amendments to IAS 8) – March 2018
On July 26, 2018, the AcSB submitted a comment letter responding to the IASB's Exposure Draft issued in March 2018. The letter disagrees with the proposals to amend IAS 8 to lower the impracticability threshold for retrospective application of voluntary changes in accounting policy resulting from agenda decisions published by the IFRS® Interpretations Committee (agenda decisions). The AcSB expresses concerns that amending IAS 8 as proposed would essentially elevate the authority of agenda decisions without the extent of due process expected for such an outcome. The AcSB also notes that the proposals could lead to unintended consequences in jurisdictions, including Canada, where entities are expected to apply accounting policies in line with explanatory material in agenda decisions and, therefore, such changes in accounting policy are not voluntary in practice. The AcSB strongly encourages the IASB to consider another mechanism, such as a change in the process around agenda decisions, to achieve its objectives for this project. Read the AcSB letter posted by the IASB.
Exposure Draft - Definition of Material (Proposed amendments to IAS 1 and IAS 8) – September 2017
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 concern with including terms such as “obscuring”, “omitting” and “misstating” in the definition of material. The AcSB suggests removing these terms from the proposed definition because the AcSB thinks that such subjective terms may make the definition difficult to operationalize or apply and may lead to increased litigation risk. Furthermore, the AcSB encourages the IASB to work with the International Auditing and Assurance Board to ensure that the IFRS definition of material aligns with the assurance definition. Read the AcSB letter posted by the IASB.
Exposure Draft – Accounting Policies and Accounting Estimates (Proposed amendments to IAS 8) – September 2017
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.