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AcSB Decision Summary – December 16, 2020

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 Board. Decisions to publish Handbook material are final only after a formal ballot process.

The AcSB will respond to change and reprioritize when necessary, ensuring we can address implementation challenges and provide the information users may need in these unique circumstances.

The AcSB values input and feedback from stakeholders and can be reached anytime through our online form.

IFRS® Standards

IFRS® Discussion Group

The AcSB discussed an issue raised by the IFRS Discussion Group (the Group) at its September 23, 2020 meeting. The issue relates to the application of the requirement in paragraph 72A of IAS 1 Presentation of Financial Statements to classify a term loan as current or non-current. The Board also received an update on the IFRS Interpretations Committee’s (IFRIC) discussion at its December meeting on a similar issue relating to the classification of debt with covenants as current or non-current. Given the potential impact this issue may have on Canadian stakeholders, the Board decided to formally respond to the IFRIC’s  tentative agenda decision on the issue rather than the usual practice of submitting a staff response. The deadline for commenting on this tentative agenda decision is February 15, 2021.   

The AcSB also considered a status update on the activities undertaken on past issues raised by the Group. The topics included IAS 41 Agriculture: Cannabis Accounting- Costs incurred Related to Biological Transformation, IFRS 16 Leases: Lease Incentive and IAS 16 Property, Plant and Equipment:  Capitalization of Costs.  The Board decided, based on international discussions and standard setting activity on these issues, that no further action is required at this time. 

Standards for Private Enterprises and Not-for-Profit Organizations 

Cloud Computing

The AcSB discussed the feedback from its Private Enterprise Advisory Committee and Not-for-Profit Advisory Committee on the accounting treatment under existing guidance for a fact pattern that outlines various expenditures an entity might incur to implement a cloud computing arrangement. The Board also discussed the Committees’ feedback on whether the accounting treatment reflects the economic substance of the expenditures. 

The AcSB directed staff to perform additional analysis on the accounting for cloud computing arrangements to help inform whether standard-setting activity relating to these arrangements is needed. The Board will continue its discussions at the February 2021 meeting.

For information purposes, the AcSB also received an update on the IFRS Interpretations Committee’s discussion on the accounting for configuration or customization costs in a cloud computing arrangement in the context of IFRS Standards.

Relevance of Financial Reporting 

Sustainability Reporting

The AcSB discussed and approved its response to the IFRS Foundation’s Consultation Paper on Sustainability Reporting, subject to final edits. 

The AcSB encourages interested stakeholders to submit their response to the IFRS Foundation by December 31, 2020.  

Due Process 

AcSB 2021-2022 Annual Plan

The AcSB discussed an initial draft of its annual operating plan for the year beginning April 1, 2021. 

The AcSB made preliminary decisions on the activities to undertake in 2021-2022, taking into consideration that the COVID-19 pandemic is still an evolving situation. The decisions included considering new topics to add to its work plan related to Accounting Standards for Private Enterprises and Accounting Standards for Not-for-Profit Organizations. The Board will continue to evaluate its activities in the coming months to consider the developing needs of our stakeholders during this exceptional time, including stakeholder’s capacity to respond.

The AcSB will continue discussions at its January 2021 meeting, and plans to approve the 2021-2022 annual plan in March 2021.