AcSB Decision Summary – May 15, 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

The AcSB received an update on international developments of IFRS 17 Insurance Contracts, including summaries of the March 26 AcSB Insurance Transition Resource Group meeting and the May 14-16 discussion at the International Accounting Standards Board (IASB) meeting.

The IASB is expected to issue an exposure draft of proposed amendments to IFRS 17 by the end of June 2019. The AcSB briefly discussed outreach activities it intends to conduct to obtain feedback from stakeholders in mid-July for a forthcoming exposure draft. The Board will be sponsoring a visit from Darrel Scott, an IASB member and IASB advisor on insurance, to participate in the AcSB’s outreach activities. The AcSB Chair, along with representatives from Europe, will be participating on an insurance panel in Hong Kong discussing the implementation and endorsement process. The Board will consider a formal plan to respond to the IASB’s exposure draft at its next meeting.

Standards for Private Enterprises


The AcSB considered two outstanding issues with the Exposure Draft proposals and decided to clarify:

  • that agricultural producers must apply judgment to determine whether purchased agricultural produce is within the scope of the Section 3041, Agriculture, if it is not used in agricultural production; and
  • the unit of account for the amortization of productive biological assets.

The AcSB also reviewed draft revisions to the guidance reflecting its decisions to date and directed staff to begin the fatal-flaw-review process.

The AcSB plans to review a draft of the final standard in July 2019 and issue the final standard no later than the fourth quarter of 2019.

Employee Future Benefits

The AcSB continued its discussion regarding changes to pension legislation in Ontario and Quebec and the effects on the measurement of the defined benefit obligation for registered defined benefit plans when an enterprise elects to use a funding valuation in accordance with Section 3462, Employee Future Benefits.

The AcSB plans to issue an exposure draft to clarify that all components of a going concern funding valuation required for legislative or regulatory purposes be included in the measurement of the defined benefit obligation when the funding valuation is chosen. The Board agreed that it would not refer to specific legislation so that the amended guidance would address current and future legislation.

The AcSB also considered the use of the funding valuation for defined benefit plans for which there is no legislative, regulatory, or contractual requirement to prepare a funding valuation. Specifically, the Board discussed the meaning of “on a basis consistent with” in paragraph 3462.029C. The Board reviewed the work done when Section 3462 was developed and determined that the intent was that “on a basis consistent with” is equivalent to “the same”. The Board decided to clarify the guidance relating to this issue in the exposure draft.

The AcSB directed staff to consult with actuaries on a preliminary draft of the proposed amendments relating to these issues.

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

The AcSB plans to discuss this topic further at its June 2019 meeting, including considering the feedback received from consultations with its Private Enterprise Advisory Committee as well as actuaries.

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

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 criteria to determine whether a transaction would be considered an acquisition or a merger and provided feedback to the staff.

The AcSB tentatively proposed, subject to further deliberation:

  • that not-for-profit organizations (NFPOs) should refer to Section 1582, Business Combinations, in Part II of the Handbook to account for the acquisition of a for-profit enterprise;
  • what to include in the scope of the proposals including to not scope out combinations between entities under common control;
  • to provide guidance for mergers and acquisitions relating to the size exemption for the recognition of capital assets and intangible assets; and
  • to remove aspects of the acquisition guidance in Section 1582 that are not relevant to NFPOs.

The AcSB considered the proposed project timeline and will continue its discussions at its June 2019 meeting.

Contributions – Revenue Recognition and Related Matters

The AcSB continued discussing the topics that will be included in a consultation paper. The Board considered its Not-for-Profit Advisory Committee’s feedback and other research conducted to date. It discussed the questions it will ask stakeholders in the consultation paper for the following topics:

  • contributed materials and services;
  • size exemption from the recognition of capital assets;
  • restricted contributions;
  • presentation of net assets and restricted cash; and
  • other presentation issues.

The AcSB also discussed the proposed content for the following topics in a consultation paper:

  • the reason for the project;
  • capital contributions;
  • endowments;
  • pledges; and
  • bequests.

The AcSB considered the proposed project timeline and will continue its discussions at its June 2019 meeting.

Pre-changeover Accounting Standards

The AcSB discussed the Private Enterprises Advisory Committee’s input on withdrawing Part V of the Handbook and staff’s analysis of the Bases for Conclusions in Part V and of using Section 4250, Future-Oriented Financial Information. The Board directed staff to consider the implications of retaining Section 4250 as non-authoritative guidance available through in its online Handbook.

The AcSB also discussed communication activities, including ensuring that after Part V is withdrawn, stakeholders are aware that the materials will still be accessible from CPA Canada’s library services. The Board tentatively plans to remove Part V no later than Q1 2020.

Enhancing the Relevance of Financial Reporting

Framework for Reporting Performance Measures

The AcSB considered an updated outreach plan to raise awareness of and encourage use of the Framework for Reporting Performance Measures. There has been strong interest in the plain-language resources developed, including a video, a one-page summary, and an on-demand webinar. Accordingly, the Board plans to develop tailored communications identifying the need to improve the quality of performance measures reported and the actions management, directors, and users can take by applying the Framework’s guidance. The Board is leveraging its stakeholder network and working with associations and groups so many can benefit from the guidance.

Due Process

Due Process Compliance

The AcSB approved a report to the Accounting Standards Oversight Council on its compliance with due process.

Location of Non-authoritative Guidance

The AcSB discussed whether to make available other non-authoritative guidance. The Board decided that it would, in addition to the Basis for Conclusions for IFRS standards, also make available certain non-authoritative guidance, including IFRS® Practice Statements, in its online Handbook.