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AcSB Decision Summary – June 18, 2019

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

Insurance Contracts

An education session was held on the expected proposed amendments to IFRS 17 Insurance Contracts. No decisions were made.

The AcSB also discussed and approved a plan to respond to the International Accounting Standards Board’s (IASB) upcoming exposure draft on amendments to IFRS 17. The plan includes outreach activities in July 2019 with Darrel Scott, IASB member and advisor on the IASB’s insurance project.

The Board is sponsoring this activity as part of its ongoing work to ensure Canadians are supported during the implementation phase of new standards, and to ensure Canadian views are heard. 

The AcSB’s outreach activities on the IASB’s exposure draft include:

  • hosting a panel discussion on July 18, 2019 featuring Darrel Scott and other experts from the financial reporting community;
  • consulting with the Board’s Insurance Transition Resource Support Group;
  • undertaking targeted outreach with Canadian stakeholders; and
  • holding a virtual roundtable early September for Canadian stakeholders across Canada to provide input on the proposed amendments to IFRS 17.

Accounting Standards for Private Enterprises

Employee Future Benefits

The AcSB considered feedback received from its Private Enterprise Advisory Committee and through outreach with actuaries on a draft of the proposals relating to the use of a funding valuation to measure the defined benefit obligation for defined benefit plans with a funding valuation requirement. The Board agreed that the defined benefit obligation should be measured at the amount that is required to be funded in accordance with legislative, regulatory, or contractual requirements.

The AcSB also discussed a draft of the proposals relating to the use of a funding valuation to measure the defined benefit obligation for defined benefit plans for which there is no legislative, regulatory, or contractual requirement to prepare a funding valuation.

For these defined benefit plans, the Board reconsidered the accounting policy choice in paragraph 3462.029C to measure the defined benefit obligation using an accounting valuation or a funding valuation. The Board understands that this accommodation to allow the use of a funding valuation for these defined benefit plans is causing diversity in practice. As a result, the Board tentatively agreed to remove this accommodation and plans to expose this proposed removal in the forthcoming exposure draft.

The AcSB also considered the transitional provisions for the proposed amendments and confirmed that transitional relief should be provided.

The AcSB plans to issue the exposure draft no later than the third quarter of 2019.

Accounting Standards for Not-for-Profit Organizations


The AcSB continued its discussion on the initial measurement of a combination between organizations within the scope of Part III of the CPA Canada Handbook -- Accounting. The Board discussed the proposed exposure draft.

The AcSB tentatively agreed, subject to further deliberation that:

  • favourable lease arrangements meet the definition of an asset and should be recognized for combinations that are accounted for as an acquisition;
  • if prior to a transaction that will be accounted for as an acquisition, the acquiree or both the acquiror and acquiree used the size exemption for the recognition of capital assets and intangible assets, those assets should be remeasured at fair value using the acquisition method at the acquisition date;
  • guidance should be provided if combining not-for-profit organizations have differing year ends; and
  • not-for-profit organizations that report their controlled subsidiaries using the disclosure option in accordance with Section 4450, Reporting controlled and Related Entities need not apply the proposed recognition and measurement principles on the date of acquisition.

The AcSB also considered other drafting proposals and consequential amendments and provided feedback to staff.  The Board will continue its deliberations in July 2019 and plans to issue the exposure draft in January 2020. 

Contributions – Revenue Recognition and Related Matters

The AcSB continued its discussion on the consultation paper, including the nature of illustrative examples to be included related to the recognition of restricted contributions. The Board also discussed how financial statement concepts are used by not-for-profit organizations when accounting for contributions, including the input to be sought in the consultation paper regarding financial statement concepts.

The Board also discussed the feedback received from stakeholders on the timeline for this project, considering the timing of the Combinations exposure draft and the related outreach activities for both projects.  The Board plans to issue the consultation paper in March 2020.

Enhancing the Relevance of Financial Reporting

Research activities

Private Enterprises

The AcSB received an analysis of the research conducted to date. This includes:

  • data gathered on private enterprises in Canada, financial reporting requirements in other jurisdictions, current international accounting and assurance standard setting activities; and
  • input obtained from its Private Enterprise Advisory Committee.

This research is being carried out to support the Board in setting priorities and its next strategic plan.

The AcSB directed staff to gather additional data on the nature and size of private enterprises in Canada that apply a GAAP framework and to perform a comparison of reporting requirements in Canada to other jurisdictions similar to Canada. The Board plans to consider this additional research in November 2019.

Not-for-Profit Sector

The AcSB provided feedback on staff research work to gather data and perform analysis on not-for-profit organizations in the private and public sectors. The research is being coordinated to jointly support the Board and the Public Sector Accounting Board in better understanding the sector, making informed decisions and setting priorities.

The Board plans to consider the analysis in Q4 2019.

Due Process

Board Advisory Committees

The AcSB received feedback on the discussions at recent meetings of its Private Enterprises Advisory Committee and Academic Advisory Council.