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.
The AcSB will respond to change and reprioritize when necessary, ensuring we can address implementation challenges and provide the information users may need in these unique circumstances.
The AcSB values input and feedback from stakeholders and can be reached anytime through our online form.
IFRS® Standards
Business Combinations under Common Control
The AcSB discussed the key issues to include in its response letter to the International Accounting Standards Board’s (IASB) Discussion Paper, “Business Combinations under Common Control.” The Board considered stakeholder feedback obtained to date through its outreach on this topic, including through its community platform. The Board will discuss its draft response letter at its July 2021 meeting.
The AcSB encourages stakeholders to share their views on the Discussion Paper by submitting their response letters to the IASB by September 1, 2021, with a copy to the AcSB. If respondents would like the AcSB to consider their comments when drafting its letter to the IASB, they should submit their response letters to the AcSB or share their feedback on the Discussion Paper through the community platform by July 31, 2021.
Management Commentary
The AcSB received an education session on the IASB’s Exposure Draft, “Management Commentary.” The Board will decide on its plan to respond to this Exposure Draft and will finalize its plan at a future meeting. Responses to this Exposure Draft are due to the IASB by November 23, 2021.
Rate-Regulated Activities
The AcSB discussed an initial draft of its response letter to the IASB’s Exposure Draft, “Regulatory Assets and Regulatory Liabilities.” The Board provided staff with comments to incorporate in the next draft of its response letter, which will be discussed at its July 2021 meeting.
The AcSB encourages stakeholders to share their views on the Exposure Draft by submitting their response letter to the IASB by July 30, 2021, with a copy to the AcSB. If respondents would like the Board to consider their comments when drafting its letter to the IASB, they should submit their response letters to the AcSB by July 15, 2021.
Sustainability: Changes to the Constitution
The AcSB received an overview of the IFRS® Foundation Trustees’ “Proposed Targeted Amendments to the IFRS Foundation Constitution to Accommodate an International Sustainability Standards Board to Set IFRS Sustainability Standards,” and discussed key points to include in its response letter. The Board provided staff with comments to incorporate in the next draft of its response letter, which will be discussed at its July 2021 meeting.
The AcSB encourages stakeholders to share their views with the IFRS Foundation by July 29, 2021. If respondents would like the Board to consider their comments when drafting its letter to the IFRS Foundation, they should submit their response letters to the AcSB by July 15, 2021.
Standards for Private Enterprises and Not-for-Profit Organizations
Cloud Computing
The AcSB continued discussing the identified accounting issues relating to the customer’s accounting for fees paid in a cloud computing arrangement and the accounting for the related implementation costs. The Board discussed factors that could be considered in assessing whether a cloud computing arrangement provides an entity with a software that it can control. The Board considered the guidance in U.S. Generally Accepted Accounting Principles as well as other factors that an entity might consider when assessing control of the software in the context of Section 3064, Goodwill and Intangible Assets.
The AcSB directed staff to explore a simplification approach that would allow entities the option to expense the costs related to a cloud computing arrangement without having to perform an analysis to identify and evaluate the elements in the arrangement.
The AcSB will continue to deliberate the draft Accounting Guideline at its September 2021 meeting.
COVID-19-Related Rent Concessions
The AcSB discussed the proposals to include in an exposure draft to amend Section 3065, Leases, extending the optional relief for COVID-19-related rent concessions as a result of the pandemic’s continuing impact. The Board decided to extend the relief by one year for those lease payments originally due on or before December 31, 2022.
The AcSB expects to issue the exposure draft in June 2021, with a 30-day comment period ending July 30, 2021. The Board plans to incorporate the amendments into Part II of the CPA Canada Handbook – Accounting in December 2021.
Interest Rate Benchmark (IBOR) Reform
The AcSB discussed the proposals to include in an exposure draft to amend Section 3856, Financial Instruments, to address issues related to debt modification and hedge accounting resulting from IBOR reform. The Board decided that the amendments will:
- provide optional relief for debt modifications directly related to IBOR reform, allowing entities to account for these modifications as a continuation of the existing contract rather than an extinguishment; and
- allow entities to update their hedge documentation to reflect changes resulting from IBOR reform without discontinuing hedge accounting.
The AcSB expects to issue the exposure draft in September 2021. The Board plans to incorporate the amendments into Part II of the Handbook in the first quarter of 2022 to make the relief available when entities prepare their 2021 year-end financial statements.
Standards for Pension Plans
The AcSB continued discussing the Pension Plan Working Group’s recommendations for addressing pension accounting issues in Part IV of the Handbook.
In developing proposed solutions, the AcSB decided to seek additional input from the Pension Plan Working Group. The Board reaffirmed it would prioritize the issues that could be addressed in the short term and would consider the remaining issues for its next Strategic Plan to be issued in 2022.
The AcSB will consider the Pension Plan Working Group’s advice at the Board meeting in September 2021.
Due Process
AcSB’s Advisory Committees
The AcSB received feedback on the discussions at recent meetings of its Academic Advisory Committee, IFRS® Discussion Group, and Private Enterprise Advisory Committee.
Academic Advisory Committee
Topics discussed at the June 9, 2021 meeting included:
IFRS Discussion Group
Topics discussed at the May 20, 2021 meeting included:
- accounting for configuration and customization costs in a cloud computing arrangement;
- equity method accounting on an investment of common and preferred shares;
- accounting for standby costs and penalties incurred under a force majeure clause; and
- issuer’s accounting for subscription receipts.
Private Enterprise Advisory Committee
Topics discussed at the May 26, 2021 meeting included:
- COVID-19 reporting issues;
- IBOR Reform; and
- results of the AcSB’s survey of Committee volunteers.
Due Process Manual
The AcSB discussed areas in its Due Process Manual that may require updating due to changes in its operating environment. The Board agreed changes are needed to clearly set out the due process for Accounting Guidelines. The Board also agreed to clarify the process when a Board member dissents on issuing a consultation paper, exposure draft, new standard, or amendment. The Board will review the proposed revisions to the Due Process Manual at its October 2021 meeting.
The AcSB also discussed whether changes to its process and its Due Process Manual are needed related to Agenda Decisions issued by the IFRS Interpretations Committee. The Board recognizes this topic is important to its IFRS stakeholders and is considering the timing for further action in the context of its overall priorities.