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.
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IFRS® Accounting Standards
Second Comprehensive Review of the IFRS for SMEs Accounting Standard
The AcSB discussed the proposals in the International Accounting Standards Board’s (IASB) Exposure Draft, “Third edition of the IFRS for SMEs Accounting Standard.” In particular, the AcSB considered how the proposal to amend the definition of public accountability in IFRS Accounting Standards for small to medium sized private enterprises (SMEs) could affect the scope of the IASB project Disclosure Initiative — Subsidiaries without Public Accountability: Disclosures.
The AcSB will consider a draft of the response letter at its meeting in January 2023.
Standards for Not-for-Profit Organizations
The AcSB continued discussing exposure draft proposals and considered feedback from the Not-for-Profit Advisory Committee related to:
- disclosure of contribution revenue;
- fund accounting presentation;
- presentation of net assets;
- disclosure of restricted cash; and
The AcSB tentatively decided that an organization should present each type of contribution revenue separately on the face of the financial statements. Contribution revenue should be disclosed by major source in the notes to the financial statements. The Board also decided to propose that an organization should disclose information about the extent to which a significant portion of its contribution revenue comes from one source for the period.
The AcSB tentatively decided that when fund accounting is used, the comparative information should be presented in the financial statements or in the notes or supporting schedules to the financial statements. The Board also tentatively decided that organizations can continue to choose to separately present net assets invested in capital assets in the statement of changes in net assets. When doing so, organizations should disclose:
- information about the availability of an organization’s financial assets to fund general operations in the following year;
- the amount of cash, cash equivalents, and other assets for which the use is externally restricted; and
- the nature of restrictions on capital assets.
The AcSB tentatively decided that the amendments to Section 4400, Financial Statement Presentation by Not-for-Profit Organizations, should be applied retrospectively and that the amendments should be applied at the same time as the new standard on contributions.
The AcSB also discussed a preliminary draft of the exposure draft, including the basis for conclusions.
The AcSB will continue discussing this project at its December meeting and consider a revised draft of the exposure draft. The Board will also discuss the results of field testing its draft proposals relating to the recognition of revenue from contributions. The Board plans to issue an exposure draft in March 2023.
Relevance of Financial Reporting
The AcSB continued discussing the extent and nature of consultations for its project on proposed strategies related to the Preface to the CPA Canada Handbook – Accounting and scalability of the standards, as set out in the 2022-2027 Strategic Plan. The Board reviewed the template of the consultation paper it plans to issue on this project and discussed the proposed communications and outreach plans.
The AcSB will review a preliminary draft of the consultation paper at its December 2022 meeting. The Board expects to issue the consultation paper in March 2023.
The AcSB received an update on global developments in sustainability reporting, including activities of the:
- International Sustainability Standards Board;
- Office of the Superintendent of Financial Institutions;
- Canadian Securities Administrators (CSA);
- U.S. Securities and Exchange Commission; and
- European Financial Reporting Advisory Group.
The AcSB also received an update on the establishment of the Canadian Sustainability Standards Board. The Board will continue to monitor developments at both the domestic and international levels.
Discussion with Representatives from the CSA
The AcSB held a discussion with the CSA on topics of mutual interest, including the Preface to the CPA Canada Handbook – Accounting, crypto-asset activities, application of IFRS Accounting Standards in Canada, sustainability, and digital reporting.
Public Sector Accounting Board (PSAB) Update
The AcSB received an update from the Chair of PSAB, which included discussions of PSAB’s 2022-2027 Strategic Plan, Government Not-for-Profit Strategy project, and Future Work Plan Consultation.
The AcSB discussed the next steps for its crypto-asset research activities, including:
- a proposal for the second topic in its thought-leadership series, (i.e., accounting for holdings of crypto assets);
- the potential third topic in its thought-leadership series, (i.e., accounting for crypto-asset lending arrangements);
- the formation of a working group to support the Board’s activities in this area; and
- the proposed timeline for completing these activities.
The AcSB decided to proceed with these proposals and to revisit prioritizing its research activities at a future meeting.
The AcSB discussed a research report done by the UK Endorsement Board on the Subsequent Measurement of Goodwill: A Hybrid Model. The Board did not make any decisions.
AcSB’s Advisory Committees and Working Groups
Small Practitioners Working Group
The AcSB discussed the need for a new working group focusing on small practitioners. The Board advised staff to consider the potential group’s mandate and present a proposal at a future AcSB meeting.
IFRS® Discussion Group
The AcSB received an update on the September 21, 2022, IFRS Discussion Group meeting.
At this meeting, the Group discussed:
- the impact of rising inflation and interest rates on financial reporting;
- financial reporting implications of the Organisation for Economic Co-operation and Development (OECD) Pillar Two GloBE Rules;
- deferred taxes related to assets and liabilities arising from a single transaction;
- a subsidiary’s accounting for a spin-off transaction; and
- cash received via electronic transfer as settlement of a financial asset.
The Group also discussed the member survey results and received a status update on the Group’s recommended issues still to be considered by the AcSB.
Not-for-Profit Advisory Committee
The AcSB received an update on the October 4, 2022, Not-for-Profit Advisory Committee meeting.
At this meeting, the Committee discussed PSAB’s:
- not-for-profit strategy;
- reporting controlled and related entities by not-for-profit organizations;
- insurance contracts with a cash surrender value;
- amendments to other frameworks;
- the Committee’s terms of reference and statement of operating procedures; and
- priorities for Part III of the Handbook.
Pension Plan Working Group
The AcSB received an update on the November 9, 2022, Pension Plan Working Group meeting.
At this meeting, the Group discussed issues in Part IV the Handbook, including investment disclosures and presentation of investment fees. The Group also discussed its terms of reference and statement of operating procedures.
Private Enterprise Advisory Committee
The AcSB received an update on the September 22, 2022, and the November 10, 2022, Private Enterprise Advisory Committee meetings.
At these meetings, the Committee discussed:
- member survey results;
- insurance contracts with a cash surrender value;
- amendments to other frameworks;
- the Committee’s terms of reference and statement of operating procedures;
- research findings from the UK Endorsement Board on the subsequent measurement of goodwill; and
- priorities for Part II of the Handbook.
User Advisory Committee
At its meeting on October 27, 2022, the User Advisory Committee discussed:
- the IASB’s Primary Financial Statements project;
- the upcoming post-implementation review of IFRS 15 Revenue from Contracts with Customers;
- the discount rates used in the measurement of provisions; and
- an update to the Committee’s terms of reference and statement of operating procedures.
The AcSB approved the framework to translate non-authoritative IFRS Accounting Standards materials, subject to final drafting changes.