AcSB Decision Summary – November 12-13, 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 AcSB. 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 key points to include in its response letter to the International Accounting Standard Board’s (IASB) Discussion Paper, “Financial Instruments with Characteristics of Equity.” The Board considered the feedback from its IFRS® Discussion Group, Academic Advisory Council, and User Advisory Council. The Board’s views will also be informed by feedback from roundtable discussions held in various cities across Canada with IASB member Tom Scott.

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 recent discussions during the October IASB meeting. The Board was also notified of the upcoming discussion of IFRS 17 at the November 14 IASB meeting1.

The Board will continue to monitor developments.

IFRS Discussion Group

The Board discussed the Group’s recommendation from its October 2018 meeting to consider whether to refer the issue, “IFRS 16 and IAS 16 Accounting for Asset Retirement Obligation,” to the IASB or the IFRS® Interpretations Committee. The Board agreed with the Group that the standards are unclear on whether the costs to remove an immovable equipment from the leased land should be part of the right-of-use asset under IFRS 16 Leases or the item of property, plant and equipment under IAS 16 Property, Plant and Equipment. Although the Board debated whether the issue is expected to have a material effect on entities, it recognizes that this is not only an IFRS 16 transition issue. Therefore, the Board will explore options with the IASB to clarify the issue for stakeholders.

Canadian Security Administrators (CSA) Proposed National Instrument 52-112

The Board discussed key points to include in its response letter to the CSA’s Proposed National Instrument and Companion Policy 52-112 “Non-GAAP and Other Financial Measures Disclosure.” The Board considered the feedback from its Academic Advisory Council and User Advisory Council.

The Board encourages stakeholders to share their views on the Notice and Request for Comments by submitting comment letters to the CSA by December 5, 2018.

Standards for Private Enterprises and Not-for-Profit Organizations


The Board continued its discussion on the scope of transactions subject to the proposed guidance. The Board analyzed various transactions and assessed whether the transactions would meet the proposed criteria for accounting for the combination as a merger. Although the Board agreed with the outcome of some transactions under the proposed guidance, it questioned the outcome of other transactions.

The Board directed staff to conduct further research to determine whether additional information, such as the purpose of the entity, should be considered to determine the scope of the proposals.

Financial Statement Concepts

The Board considered the scope and approach of a future project on the financial statement concepts. The Board discussed the following concepts for inclusion in the project:

  • elements
  • recognition;
  • measurement;
  • disclosure; and
  • unit of account.

The Board agreed that a project on the financial statement concepts be approached in phases. The Board will consider a project proposal in the first quarter of 2019.


The Board discussed the approach in developing the proposals to address stakeholders’ concerns over insufficient guidance on accounting for revenue in Section 3400, Revenue. The Board decided that while the proposed guidance will retain the principles-based approach, it will provide explanatory guidance, accompanied by illustrative examples when useful.

The Board discussed the proposed guidance for percentage of completion and reporting revenue gross or net. The Board will continue its discussions on the remaining topics at its December 2018 meeting:

  • multiple-element arrangements;
  • upfront non-refundable fees/payments; and
  • bill-and-hold arrangements.

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

Standards for Private Enterprises

Financial Instruments – Hedging

The Board discussed the application and usefulness of the hedge accounting guidance in Section 3856, Financial Instruments for private enterprises. The Board considered feedback from its Private Enterprise Advisory Committee and Not for Profit Advisory Committee.

The Board directed staff to seek further input from the Agriculture Advisory Group on how to enhance the usefulness of the hedge accounting guidance for private enterprises in commodity-based sectors, such as agriculture, that routinely manage risk using derivatives.

The Board will further consider input and a project proposal in the first quarter of 2019.

Related Party Transactions

The Board considered an approach to addressing concerns stakeholders have raised relating to Section 3840, Related Party Transactions. The Board considered the feedback from its Private Enterprise Advisory Committee. The Board discussed the merits of addressing these concerns through a phased project. It discussed whether a principles-based approach or additional examples would improve the existing definition of a related party.

The Board will continue deliberating this topic at its January 2019 meeting and plans to approve a project proposal in the first quarter of 2019.

Pre-changeover Accounting Standards (Part V of the CPA Canada Handbook – Accounting)

The Board considered specific steps to withdraw Part V from the CPA Canada Handbook – Accounting. The Board directed staff to draft communication for its consideration, and to research the implications of withdrawing Part V on Section 4250, Future-oriented Financial Information.

The Board also reviewed an inventory of the Background Information and Basis for Conclusions documents for the pre-changeover accounting standards in Part V that are relevant to understanding Part II standards. The Board directed staff to seek further input from its Private Enterprise Advisory Committee on the relevance of these materials to private enterprises.

The Board will consider this input and an assessment of the steps to remove Part V in the first quarter of 2019.

Enhancing the Relevance of Financial Reporting

Framework for Reporting Performance Measures

The Board continued deliberating the feedback on the Draft Framework for Reporting Performance Measures from consultations, written responses, and a survey. The feedback showed that:

  • over 70 per cent of survey respondents indicated that guidance contained in the Framework is valuable; and
  • over 75 per cent said they would likely apply the guidance as part of enhancing the reporting of financial and operational performance measures. 

The Board is finalizing the revised Framework to issue in December 2018. This will make the voluntary guidance available for entities when developing and reporting year-end performance measures.

Due Process

Board Advisory Committees

The Board received feedback on the discussions at recent meetings of its Academic Advisory Council, IFRS Discussion Group, and User Advisory Council.


1 At this meeting, the IASB tentatively agreed to a one-year deferral of IFRS 17 and the extension of the deferral of IFRS 9 in alignment with IFRS 17.