The Accounting Standards Oversight Council (AcSOC) discussed the activities of the Accounting Standards Board (AcSB), the Public Sector Accounting Board (PSAB), and related matters. The meeting spanned two days and was held in-person with ZOOM availability. The second day was reserved for in-camera discussions.
The following notes relate to the first day, June 2.
Chair’s Opening Remarks
PSAB Chair Report
AcSB’s Chair Report
Chair’s Opening Remarks
AcSOC Chair Lorraine Moore opened the meeting by welcoming members and the external observers to the meeting. She also congratulated the AcSB Chair, Linda Mezon-Hutter, on her appointment as a member of the International Accounting Standards Board (IASB) starting in September 2022. She provided an overview of the agenda topics to be covered at the meeting.
Lisa French, Vice-President, Sustainability, provided an update on global developments in sustainability disclosure standards, noting three related consultations by:
- International Sustainability Standards Board (ISSB):
- Securities and Exchange Commission; and
- European Financial Reporting Advisory Group.
Since the launch of these consultations, the IFRS® Foundation has convened a working group to understand where the three consultations differ, why they differ, and how those differences could affect stakeholders. The working group met in mid-May and plans to meet again in July 2022.
Ms. French mentioned that the IFRS Foundation issued a call for candidates for membership of the Sustainability Standards Advisory Forum (SSAF). The SSAF will be established in 2022 and, with its members advice, will help the ISSB to develop IFRS® Sustainability Disclosure Standards. Canada is seeking a strong Canadian candidate for that role.
She explained that the ISSB has published two Exposure Drafts:
The comment deadline for both Exposure Drafts is July 29, 2022.
Ms. French described the response strategy to address the two Exposure Drafts, including:
- expanding the website;
- translating IFRS S1 and IFRS S2;
- creating an issue log; and
- forming an expert panel.
The strategy also includes targeted roundtables to collect feedback from focus groups, including the preparer community and other stakeholders such as academia, audit firms, and Indigenous groups.
PSAB Chair Report
PSAB Chair Clyde MacLellan gave an update on the Board’s activities and key strategies. He remarked that staff have done a lot of work analyzing the feedback to Exposure Drafts that closed in 2021.
Mr. MacLellan stated that the Employee Benefits project has changed its status in the from red to yellow. The Employee Benefits Board Subcommittee provided oversight, strategic direction, and decision-making at meetings in February, May, and June 2022. The Group of Experts met collectively in April and May 2022 to discuss key issues stakeholders raised in relation to the Exposure Draft. PSAB will review a summary of stakeholder feedback and proposed amendments when meets in June 2022. In response to a question from a Council member, the Mr. MacLellan summarized the different points of view stakeholders expressed, especially regarding the discount rate methodology.
At its June meeting, PSAB plans to approve the new Conceptual Framework, the related consequential amendments, and the accompanying Basis for Conclusions. The Task Force met in February, March, and May to consider the extensive feedback received on the reporting model Exposure Drafts and to work through the numerous issues respondents raised.
For the International Strategy, staff have been liaising with the International Public Sector Accounting Standards Board (IPSASB) on its Natural Resources Consultation Paper and on its Consultation Paper on Sustainability Reporting, both issued on May 9, 2022. On May 12, 2022, IPSASB representatives attended the Public Sector Accounting Discussion Group meeting to present the proposals. PSAB staff will be conducting roundtables with Canadian stakeholders on the IPSASB's Consultation Papers. Feedback from these roundtables will help inform PSAB's response letters to the IPSASB.
After reviewing the feedback from extensive consultations with stakeholders on the Government Not-for-Profit (GNFP) Strategy Consultation Papers I and II, and the feedback received from the Advisory Group, PSAB reviewed the GNFP Strategy Implementation Plan at its March 2022 meeting. The Board approved “Option 2,” which entails Public Sector Accounting Standards (PSAS) incorporating the PS 4200 series with potential customizations.
When it met in March 2022, PSAB discussed the initial approach regarding a Work Plan Consultation to obtain input from stakeholders on which new projects would best support its strategic objectives. The survey results and recommendations will be communicated to PSAB at its December 2022 meeting.
Mr. MacLellan addressed a few operational matters and mentioned that the risk profile related to staff has changed from a higher to lower residual risk. Since the last update, good progress has been made in terms of onboarding staff and PSAB has a full staff complement. Staff morale has improved with flexible work arrangements and pairing staff to work jointly on projects.
AcSOC members asked what actions are being taken around staff retention. The importance of offering employees flexible working arrangements and the monitoring of results to employee surveys were highlighted in response.
AcSOC members remarked that PSAB’s future presentations on project performance could compare previous versus current risks, pressures, and status. This information would help Council members understand the changes since the last update.
Mr. MacLellan concluded with an overall assessment, stating that there were no reportable departures from due process nor were there any unusual events in the application of due process.
Performance Review Committee Chair Clare Isman provided an update on the Committee’s meeting held on May 4, 2022. She stated the Committee focused on the AcSB’s and PSAB’s 2021-2022 Annual Plan updates and final draft performance reports, internal and external. The volunteer and self-assessment questionnaires were also reviewed.
Ms. Isman noted that as the new Committee Chair, she wants to explore ways to streamline the material AcSOC reviews. For example, ensuring that the Committee and the Council receive reports on a timely basis and that required versus optional reading material is clearly indicated. Providing marked-up documents versions of could also make it easier to focus on changes. She added that she will work with staff to prepare a summary page included with the agenda papers that will highlight and explain changes. The Council Chair indicated her support to streamline reporting made to the Council.
Ms. Isman summarized the Performance Review Committee discussion related to PSAB. At the Committee meeting, Mr. MacLellan stated that the Board had met its goals in a responsive and adaptive manner. Ms. Isman added that the Committee evaluated the internal documents and found nothing inconsistent or substantially different from the external reports that had already been made public.
Mr. MacLellan confirmed that the Performance Review Committee’s and AcSOC’s comments and editorial changes have been incorporated in the documents.
Ms. Isman concluded that the Performance Review Committee recommended that AcSOC approve the public PSAB 2022-2023 Annual Plan, the final 12-month version of the Board’s 2021-2022 Performance Report, and the 2022-2023 Risk Assessment. She added that the Board met its 2021-2022 objectives. The Committee supported the reports and congratulated the Board Chair and staff for their work.
AcSB Chair Report
AcSB Chair Linda Mezon-Hutter provided an update of the Board’s activities and stated her confidence in the Board’s and staff’s ability to continue giving a solid performance after she steps down as Chair. She added that the Board, its Advisory Committees, and the staff will gradually return to some in-person meetings.
Ms. Mezon-Hutter stated that AcSB has been very busy on the domestic front. The Board issued the Exposure Draft, “Customer’s Accounting for Cloud Computing Arrangements,” in March 2022, with a 90-day comment period. She noted that two Board members dissented on the publication of the Exposure Draft, and she explained the reasons. She also mentioned the Board is discussing an application issue related to Section 3400, Revenue, and an exposure draft proposing to defer the effective date of amendments specific to up-front non-refundable fees is expected to be approved in June 2022.
On the Contributions project, AcSB continues to work toward issuing an exposure draft by March 2023.
The Cloud Computing Arrangements and the Contributions projects are causing capacity constraints, and resuming in-person meetings will help alleviate those constraints.
Ms. Mezon-Hutter noted that the IASB has issued fewer documents for comment, but the AcSB has recently responded to three IFRS® Interpretation Committee tentative agenda decisions for which concerns had been identified.
She explained that the Interpretation Committee recently discussed an implementation matter the UK Endorsement Board raised regarding IFRS 17 Insurance Contracts. Ms. Mezon-Hutter shared concerns about new guidance coming at such a late stage of implementation. She indicated that the AcSB continues to maintain dialogue with stakeholders in Canada as they are adopting IFRS 17 and focus on supporting implementation and raising awareness of implementation issues, if warranted.
As of July 2022, the Accounting Standards Advisory Forum is reverting to full or partial in-person meetings. Ms. Mezon-Hutter also mentioned that the IFRS Foundation Trustees are meeting in Montreal at the end of June 2022 and that the meeting will be focused on sustainability.
Ms. Mezon-Hutter provided an update on the IASB’s work plan. She shared information about the projects added to the IASB’s work plan in April 2022, highlighting that no project related to crypto currencies or going concern disclosures were added. The IASB is also deciding on the direction of key projects in May-July 2022.
She concluded by saying that there were no reportable departures from due process nor were there any unusual events in the application of due process that arose in from January 1, 2022, to April 30, 2022.
Ms. Isman stated that based on the Performance Review Committee meeting held on May 4, 2022, the AcSB met its objectives. She stated that the Committee evaluated the internal documents and found nothing inconsistent or substantially different from the external reports that had already been made public.
She concluded that the Performance Review Committee recommended that AcSOC approve the public AcSB 2022-2023 Annual Plan, the final 12-month version of the Board’s 2021-2022 Performance Report and the 2022-2023 Risk Assessment. The Committee supported the reports and congratulated the Board Chair and staff for their work.
Ms. Mezon-Hutter noted the challenges related to the length of performance reports, and the need to develop a model where performance is monitored in more detail for AcSB purposes and where reporting to the Council is streamlined to focus on key matters and risks.
Director, Accounting Standards, Katharine Christopoulos added that staff is looking at a new project management tool that could facilitate preparing performance reports. She also noted that decision summaries and committee notes will focus more on transparency to help stakeholders more fully understand the work of the AcSB and its committees.
AcSOC members commented that in the future the AcSB and PSAB should prepare smaller packages and include more details regarding stakeholder engagement in Council material.
Ms. Moore closed the meeting, stating that PSAB and AcSB had very strong performance over the last year. She thanked the Board Chairs, Directors, and staff for their effort and work. She also thanked the new AcSOC members for their participation.