Decision Summary September 20-21, 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

Accounting Standards Advisory Forum

Board members advised the Chair on points to raise at the September 2017 meeting of the Accounting Standards Advisory Forum on the topics primary financial statements and rate-regulated activities (see the Forum’s Agenda Papers 1, 6, 6A and 6B at Select a Meeting – 28 September).

Principles of Disclosure

The Board reviewed and approved its response letter to the IASB® Discussion Paper, “Disclosure Initiative – Principles of Disclosure,” subject to drafting changes.

Insurance Contracts

An education session was held on the new standard, IFRS 17 Insurance Contracts. No decisions were made.

Standards for Private Enterprises

Financial Instruments – Narrow-scope Amendments

The Board considered the proposed drafting of the amendments. The Board decided that:

  • the scope of the standards should clarify when an enterprise applies Section 3856, Financial Instruments or Section 3840, Related Party Transactions for related party transactions;
  • enterprises should not be permitted to initially measure related party financial instruments at fair value; and
  • enterprises should only be permitted to subsequently measure related party financial instruments at fair value when the instrument is an investment in equity instruments that are quoted in an active market.

The Board members considered a communication plan for the forthcoming exposure draft and decided on its outreach activities with stakeholders.

The Board directed staff to begin the balloting process for the proposals and plans to issue the exposure draft no later than October 31, 2017.


The Board deliberated the remaining issues related to the project scope, recognition and measurement, and made the following decisions:


The Board affirmed its preliminary view that timber producers should be included within the scope of the project, and directed staff to seek feedback on its proposals from stakeholders with knowledge of that industry.


With regards to the remaining issues related to measurement, the Board decided:

  • to clarify that cost is the most relevant measurement basis for agricultural inventories, and that net realizable value would be only permitted as a practical expedient under certain conditions.
  • to obtain advice from its Agricultural Advisory Group on how possible conditions to determine when agricultural inventories would be measured at net realizable value could be modified to better meet Canadian stakeholders’ needs.
  • not to provide further guidance on how unrealized gains and losses recognized in income would be presented on the face of the income statement as similar guidance is not provided for other industries in the existing standards. The Board will consider the need for disclosure about these unrealized gains and losses in November 2017.
  • not to provide guidance on how to determine the unit of account for groups of productive biological assets or agricultural inventories as similar guidance is not provided for other industries in the existing standards.
  • that the elements of cost for agricultural inventories and productive biological assets should be consistent with the current guidance in accounting standards for private enterprises. However, Board members asked for advice from its Agricultural Advisory Group on how to reduce the complexity for stakeholders when determining cost:
    • through the use of techniques and formulas; as well as
    • providing a practical expedient to exclude costs of conversion that cannot be allocated without undue cost or effort.
  • to direct staff to begin drafting proposals to address the classification and measurement of productive biological assets when they undergo a change in use.
  • that the current proposals are sufficient to capture challenges that stakeholders have raised in relation to products such as plant clippings, cannabis and perennial plants.

Next steps

The Board also decided that guidance on Agriculture should be issued in the form of a separate standard rather than as amendments to existing standards in Part II of the Handbook. Board members agreed that Section 3041 should be reserved for this guidance.

The Board considered a revised project timeline and decided to postpone issuing the exposure draft to no later than the third quarter of 2018. The additional time is to consider how the proposed new standard will respond to the sector’s needs.

Consultation on Priorities for Part II

The Board discussed the results of the survey that sought input on what topics respondents think should be addressed in future projects. The Board was pleased with the number of responses and the broad range of backgrounds represented by survey respondents. The Board also acknowledged the time and effort taken by stakeholders in providing detailed commentary and found the insights helpful in its deliberation process.

After considering feedback from the survey and other consultations, the Board decided that three topics should be prioritized for further research in addition to its research activities on Section 3400, Revenue. The Board directed staff to seek input from its Private Enterprise Advisory Committee on these topics before it makes a final decision.

The Board also discussed the interaction of its research activities with Section 1000, Financial Statement Concepts. The Board decided that a review of financial statement concepts in Part II and Part III is warranted in context of its other research activities.

Standards for Not-for-Profit Organizations

Accounting Standards Improvements

The Board considered responses from stakeholders to its Exposure Draft, “Accounting Standards Improvements for Not-for-Profit Organizations,” and the recommendations from its Not-for-Profit Advisory Committee on how to proceed with the proposals based on that feedback.

The Board approved the issuance of the following new standards, subject to final drafting and a written ballot:

  • Section 4433, to replace Section 4431, Tangible Capital Assets Held by Not-for-Profit Organizations;
  • Section 4434, to replace Section 4432, Intangible Assets Held by Not-for-Profit Organizations; and
  • Section 4441, to replace Section 4440, Collections Held by Not-for-Profit Organizations.

The Board decided to:

  • clarify the guidance on identifying and measuring impairment in Sections 4433 and 4434;
  • modify Section 4441 to allow an NFPO that has multiple collections and elects to measure collections at cost to measure some collections at a nominal amount when cost cannot be reasonably determined for such collections; and
  • clarify that when an NFPO has integrated assets, it may assess impairment of those assets under Sections 4433 and 4434 on the combined group of integrated assets and not at the individual asset level.

The Board considered all of the feedback received and agreed that, other than drafting improvements, no other changes to the Exposure Draft proposals are required.

The Board expects to issue the final standards in the second quarter of 2018. The amendments will be effective for fiscal years beginning on or after January 1, 2019, with earlier application permitted.

Due Process and Governance

AcSB 2016-2021 Strategic Plan

The Board continued its discussion on strategic priorities in preparation of a strategy session in November 2017 as well as considering how to update these priorities in response to the current operating environment. This discussion focused on identifying the key actions to undertake over the next three years to achieve the objectives in its 2016-2021 Strategic Plan. The Board also considered how to allocate its resources to its strategic priorities.

AcSB 2017-2018 Annual Plan

The Board discussed a progress report on activities underway on its annual plan. The Board noted that taking additional time to develop an exposure draft on Agriculture would result in it not achieving its planned outcome on this project. The Board expects to achieve the other objectives and outcomes in its annual plan based on expected activities.


Read about Board recommendations made to influence the development of IFRS® Standards and enhance the global comparability of financial reporting outcomes, including U.S. GAAP, in the Board’s Responses to IASB Documents for Comment and Responses to Other Documents for Comment.