AcSB Decision Summary – December 12, 2018

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.

IFRS® Standards

Financial Instruments with the Characteristics of Equity

The AcSB discussed the draft response letter to the International Accounting Standard Board’s (IASB) Discussion Paper “Financial Instruments with Characteristics of Equity.” The Board directed the staff to make amendments based on its comments and may reconsider the revised draft at its January 15 meeting. A potential delay in the Board’s response letter by the January 7 due date will be communicated to the IASB. (On December 13, an email was sent to the IASB about this.)

The Board encourages stakeholders to share their views on the IASB’s Discussion Paper by submitting a response to the IASB by January 7, 2019.

Insurance Contracts

The AcSB received an update on international developments of IFRS 17 Insurance Contracts, including the discussion during the November 14-15 IASB meeting and discussions at the December 6-7 Accounting Standards Advisory Forum meeting. The Board was also notified of the upcoming IFRS 17 discussion at the December 13 IASB meeting.

The Board will continue to monitor developments.

IFRS® Discussion Group

The AcSB discussed two issues the IFRS Discussion Group recommended:

  • the accounting for costs incurred related to biological transformation; and
  • the presentation of changes in fair value less costs to sell under IAS 41 Agriculture.

The Board considered the staff’s research on whether entities in other jurisdictions are encountering similar issues in applying the guidance in IAS 41.

The AcSB decided to submit one of the issues to the IFRS Interpretations Committee after considering the Committee’s agenda criteria. The submission will ask the Committee to clarify whether IAS 41 intends for costs incurred for the development of biological assets, measured at fair value less costs to sell, to be capitalized or expensed.

The AcSB decided not to submit the issue of presentation of changes in fair value less costs to sell. The Board felt that this issue did not meet the Committee’s agenda criteria because it is not sufficiently narrow in scope and cannot be resolved efficiently within the confines of IFRS® Standards. The IASB currently has a project that focuses on improving the structure and content of primary financial statements. The Board will monitor this project for an opportunity to bring forward this presentation issue.

Standards for Private Enterprises and Not-for-Profit Organizations


The AcSB continued discussing the proposal to address stakeholders’ issues about insufficient guidance in Section 3400, Revenue. The Board focused on multiple-element arrangements, upfront non-refundable fees/payments, and bill-and-hold arrangements. In addition, the Board discussed proposed illustrative examples and disclosure requirements specific to the percentage of completion method.

The AcSB will consider an updated draft of the proposed guidance, transition provisions, and the proposed effective date of the amendments at its January 2019 meeting.

The Board plans to issue the exposure draft no later than the second quarter of 2019.

Standards for Private Enterprises


The AcSB considered feedback on its Exposure Draft, “Agriculture,” in comment letters and during roundtable consultations with stakeholders. The Board directed staff to seek input from its Agricultural Advisory Group (the Group) about the feedback on the following proposals to:

  • require costs of disposal to be “relatively insignificant” to meet the conditions for measuring agricultural inventories at net realizable value;
  • require the accounting policy choice to determine cost using only input costs to be applied consistently to all agricultural inventories measured at cost; and
  • prohibit an agricultural producer from changing its accounting policy from determining cost using full cost to only input costs.

The AcSB also asked the Group to explore areas of the proposed guidance that stakeholders commented might require further clarification.

Finally, the AcSB directed staff to consult with and conduct further research into the forestry industry to better understand issues raised by industry stakeholders.

The Board will consider the input provided by the Group and the results of the further research at its March 2019 meeting.

Employee Future Benefits

The AcSB considered an issue that stakeholders raised about using the funding valuation in Section 3462, Employee Future Benefits, in the measurement of the defined benefit obligation. This issue has been highlighted by recent changes to pension legislation. The Board also considered feedback from its Private Enterprise Advisory Committee on this topic. The Board is concerned about potential diversity in practice that could arise. Therefore, it wants to communicate clearly its intention of allowing the use of the funding valuation.

The AcSB agreed that using the funding valuation was an accommodation that eliminated the additional costs of preparing a separate accounting valuation and is itself not management’s best estimate; an accounting valuation is management’s best estimate. The Board also agreed that the standard describes a funding valuation as being prepared in accordance with legislative, regulatory, or contractual requirements. It is the amount at which the legislation, regulation, or contract would require funding. The Board observed that when legislative, regulatory, or contractual requirements stipulate calculations of various components of the funding requirement separately, it is the aggregate of those components that make up the funding valuation to be reflected in the financial statements.

Accordingly, the Board directed staff to explore activities to communicate its intent with respect to using the funding valuation in the measurement of the defined benefit obligation.

Standards for Pension Plans

The AcSB received feedback on a recent meeting of a stakeholder group on issues arising from applying Part IV of the Handbook, and it discussed next steps. The Board directed staff to add research activities as part of the Board’s draft 2019-2020 annual plan to understand the nature and extent of issues arising from applying Part IV.

Due Process

AcSB 2019-2020 Annual Plan

The AcSB discussed an initial draft of its annual plan for the year beginning on April 1, 2019. The Board made preliminary decisions on the activities to undertake in 2019-2020 and, in some cases, asked for additional information.

The Board will continue discussions at its January meeting, and plans to approve the 2019-2020 annual plan in March 2019.

Board Advisory Committees

The AcSB received feedback on the discussions at recent meetings of its Not-for-Profit Advisory Committee and Private Enterprises Advisory Committee.