Decision Summary March 21-22, 2017

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

International Financial Reporting Standards

Annual Improvements 2015-2017

The AcSB discussed and approved its response letter to the IASB’s Exposure Draft, “Annual Improvements to IFRS Standards 2015-2017 Cycle,” subject to drafting changes.

IFRS Financial Statement Users

The AcSB discussed the views expressed by users of financial statements at a recent panel discussion on "Audited Financial Information: Is it losing its Relevance?" arranged by the Chartered Financial Analyst Institute, and sponsored by the Auditing and Assurance Standards Board and Canadian Public Accountability Board. The AcSB plans to monitor the next steps following this panel discussion and discuss further the role of the accounting standard setter and others in seeing that users have quality financial information to make investment decisions at future meetings.

Prepayment Features with Negative Compensation (Previously Called Symmetric Prepayment Options)

The AcSB decided on a 30-day comment period for the AcSB’s exposure draft corresponding to the forthcoming IASB’s exposure draft on the same topic. The AcSB expects to issue its wraparound exposure draft when the IASB issues its exposure draft in late April 2017.

Principles of Disclosure

The AcSB discussed a plan to respond to the IASB’s forthcoming discussion paper.

Rate-regulated Activities

The AcSB discussed an updated version of its research paper on the decision-usefulness of financial information that reflects the economics of rate-regulated activities. The paper has been expanded to make it more globally inclusive, using new data obtained in part by surveying other national standard setters to learn about the regulatory frameworks in their jurisdictions. The AcSB directed the staff to revise the paper to:

  • incorporate additional data from completed surveys returned after this AcSB discussion; and
  • provide further context for the data presented in some areas and improve the clarity around the overall research findings.

No decisions were made. The AcSB will consider a final draft of this research paper at a later date. 

Standards for Private Enterprises

2017 Annual Improvements

The AcSB considered responses from stakeholders to its Exposure Draft, “2017 Annual Improvements to Accounting Standards for Private Enterprises,” and the recommendations from its Private Enterprise Advisory Committee on how to proceed with the proposals based on that feedback. The AcSB approved proposed amendments, subject to drafting changes and a written ballot.

Amendments to accounting standards for private enterprises resulting from the 2017 annual improvements process will be effective for years beginning on or after January 1, 2018, with earlier application permitted. The amendments are expected to be issued in July 2017.

The responses to the Exposure Draft also included suggestions for additional improvements to accounting standards for private enterprises that did not relate to the specific proposals in the Exposure Draft. The AcSB will decide whether, and how, to address the suggestions at a future meeting.


The AcSB considered feedback from additional consultations held with users of financial statements on its Discussion Paper, “Agriculture,” and continued its deliberations on the key issues raised by stakeholders.

Measurement – Underlying Principle

AcSB members decided that specifying an underlying measurement principle would be useful to stakeholders and that this principle should be based on an agricultural producer measuring its transactions rather than the biological transformation of its assets. In addition, the feedback received assisted the AcSB in determining that:

  • the overall measurement principle should be applied to two broad categories encompassing items that had been previously been broken down into five categories specified in the AcSB’s Discussion Paper; and
  • the corresponding measurement basis of the categories should be cost and current value.

Project Scope – Purchased Agricultural Produce

The AcSB further considered the approach taken by the IASB and the U.S. Financial Accounting Standards Board. The AcSB observed that IFRSs excludes both grown and purchased agriculture produce from the scope of IAS 41 Agriculture whereas U.S. GAAP includes both within the scope of Accounting Standards Codification, Topic 905, Agriculture. The AcSB decided to include purchased agricultural produce within the scope of its project as long as purchases by enterprises that are not producers, such as a flour mill or a pet shop, remain out of scope.

Measurement – Unharvested Crops and Bearer Animals at Cost

The AcSB observed that many financial statement users have indicated that a cost-based measure for unharvested crops and bearer animals provides the information they need to make lending decisions. However, those users and other stakeholders have raised practical concerns about recognizing and measuring these assets at cost. The AcSB decided to explore developing a cost-based measure that requires only direct costs to be reflected and uses other practical expedients to respond to the concerns raised by stakeholders.

Next Steps

The AcSB is forming a new Agriculture Advisory Group, comprised of agricultural experts, to help develop proposals that will meet the sector’s needs. The AcSB directed staff to obtain advice from the Group on these decisions as well as the other complex issues raised by stakeholders. The AcSB plans to issue an exposure draft for public comment no later than the first quarter of 2018.

Consultation on Priorities for Part II of the Handbook

The AcSB is currently conducting research and targeted outreach with stakeholders to gain a better understanding of the issues relating to the following topics:

  • Section 3840, Related Party Transactions;
  • Section 1000, Financial Statement Concepts;
  • Section 3400, Revenue; and
  • the benefit of amortizing goodwill and providing relief from the recognition of intangible assets on business combinations.

The AcSB is also considering the following topics in its priorities for Part II:

  • clarifying the definition of a business;
  • including guidance on determining functional currency; and
  • Section 3856, Financial Instruments: fair value measurement, hedge accounting, derecognition and classification of equity and financial liabilities.

The AcSB discussed different approaches to consulting stakeholders and decided to issue a survey to seek views on:

  • the prioritization of topics it is considering; and
  • if, and when, to conduct post-implementation reviews of Section 1582, Business Combinations and Section 3462, Employee Future Benefits

The AcSB expects to issue the survey in the second quarter of 2017. The AcSB will consider the results of the survey and the research and targeted outreach performed on the topics identified by no later than the fourth quarter of 2017. 

Redeemable Preferred Shares

The AcSB considered the feedback obtained from additional outreach with financial statement users and the most recent advice from its Private Enterprise Advisory Committee relating to its discussions of the field test results. The AcSB reaffirmed its view that the basis for the exception should be on the condition of retention of control of the enterprise and decided that the control of the enterprise must be retained by the party receiving the redeemable preferred shares. The AcSB further decided on the additional conditions necessary to qualify for equity classification which determine that control of the future cash outflows of the enterprise has not changed.

The AcSB also decided that additional guidance relating to substantive rights should be added in Section 1591, Subsidiaries, to provide sufficiently robust guidance to address the characteristics of the redeemable preferred shares issued in a tax planning arrangement.

The AcSB further discussed the feedback received from field test participants about whether additional guidance was necessary when assessing control of an enterprise held by a group of related parties. The AcSB decided not to provide additional guidance on related parties because it was concerned about the potential implications on a broader range of transactions. The AcSB will explain its rationale in the basis for conclusions.

The AcSB discussed when redeemable preferred shares that initially qualify for equity classification may need to be reclassified as liabilities. The AcSB directed staff to explore when an enterprise would need to reassess its classification of redeemable preferred shares.

The AcSB considered the advice from its Private Enterprise Advisory Committee on the effect of the proposals on current practice and discussed different transitional approaches that could be provided.  The AcSB will continue its discussion on transitional provisions and begin its discussion on disclosure requirements at its May 2017 meeting. Accordingly, the AcSB is expecting to issue a re-exposure draft during the third quarter of 2017.

Standards for Not-for-Profit Organizations

Advisory Committee

The AcSB received feedback on the discussions at a recent meeting of its Not-for-Profit Advisory Committee.

Due Process and Governance

AcSB Annual Plan

The AcSB approved its 2017-2018 Annual Plan for the operating year commencing April 1, 2017 after considering input from AcSOC on a preliminary draft. The AcSB has posted the annual plan online at

AcSB Annual Report

The AcSB approved a revised approach to drafting its 2016-2017 Annual Report to communicate better with stakeholders. The AcSB plans to post its Annual Report online at in June 2017.

AcSB Member and Volunteer Self-Assessment Surveys

The AcSB discussed the results of a self-assessment of its members and surveys of other volunteers on the performance of the AcSB and its related committees in 2016-2017. The AcSB discussed ways of improving the efficiency and effectiveness of its internal operations.

AcSB Research Program

The AcSB continued to discuss the overall objectives of its research program, and decided on:

  • the activities that constitute research in a Canadian standard-setting context; and
  • the research-related goals to be included in its 2017-2018 Annual Plan.

AcSB 2016-2021 Strategic Plan

The AcSB considered actions to refine the implementation of the AcSB’s 2016-2021 Strategic Plan
that would enable the AcSB to:

  • improve the timeliness of standard-setting projects;
  • better anticipate the future needs of stakeholders; and
  • further enhance the quality of the accounting standards it sets and the resulting financial statements that are produced.

The AcSB discussed how to prioritize actions and develop next steps to implement these actions. Discussions will be continued at future AcSB meetings.

Note: All of the AcSB’s responses to documents for comment issued by the IASB and the IFRS Interpretations Committee are available on the IASB’s website at