FYI Article – 2014 Annual Improvements: Clarifying the Standards

December 2014

The Accounting Standards Board (AcSB) has a mechanism to address issues relevant to the accounting standards for private enterprises that are narrow and specific in nature – the annual improvements process. 

Annual improvements consist of limited amendments to accounting standards for private enterprises set out in Part II of the CPA Canada Handbook – Accounting to clarify guidance or wording, or correct relatively minor unintended consequences, conflicts or oversights. The focus of annual improve­ments is to help stakeholders apply the standards, rather than introduce significant changes.

About the 2014 Annual Improvements

Two amendments were included in the 2014 annual improvements, both related to Section 3856, Financial Instruments.


In some cases a hedged transaction occurs before a year end and the hedging item matures after the year end. This raises the question of how to account for the hedging item in the period between the date the hedged transaction occurs and the year end. The amendment clarifies that the hedging item is remeasured at year end and any gain or loss since the date of the hedged transaction is included in income.

Disclosure of impairments

Disclosure of the allowance for impairment of financial assets and of the carrying amount of impaired financial assets by type of asset was previously required by the standard. For certain financial assets, such as trade receivables, the allowance for impairment is often determined as a group, based on an age analysis or other methodology rather than on an individual receivable basis. As a result, the allowance for impairment may not relate to a specific item and the related carrying amount of the impaired receivable may not be determinable. The amendment clarifies that disclosure of the carrying amount of impaired financial assets is not required for current trade receivables.

The above amendments were issued in October 2014 and are effective for fiscal years beginning on or after January 1, 2015, with earlier application permitted.

We Are Always Open to Hearing Your Issues

Help us to help you. Do you have an issue that should be considered as an annual improvement? The AcSB relies on stakeholders to inform it of the issues that need attention, as stakeholders are the ones using the standards. So if you have an issue - here’s how you can let us know.



Nicky Lahner, CPA, CA
Principal, Accounting Standards Board
Phone: +1 (416) 204-3348