The AcSB recently issued its Exposure Draft, “Amendments to Section 3856, Financial Instruments – Derecognition of Financial Liabilities,” and we want to hear your feedback!
Recent amendments made by the International Accounting Standards Board to IFRS 9 Financial Instruments clarified that a financial liability is generally extinguished on the settlement date rather than on the trade date, with a limited exception for certain electronic payment systems. Although these amendments do not apply to entities using Accounting Standards for Private Enterprises (ASPE), concerns have been raised that some entities may look to the amended IFRS® Accounting Standards for guidance. This is because the derecognition principles in Section 3856 align with those in IFRS 9.
Some entities applying ASPE may derecognize financial liabilities settled through common payment methods, such as cheques and electronic fund transfers, when the payment is initiated or issued, rather than upon settlement. The date used to extinguish financial liabilities paid in cash may have practical implications for Canadian entities.
To address this issue, the AcSB proposes an accounting policy choice in paragraph 3856.A49A that would allow an enterprise to derecognize a financial liability on either:
- the payment issuance date; or
- the settlement date.
Why should you attend?
- Learn more about the proposals and how they may impact financial reporting by private enterprises and not-for-profit organizations.
- Take advantage of this opportunity to share your views directly with AcSB representatives in an open forum discussion.
- Help inform the final amendments.
How to prepare