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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Standards for Private Enterprises and Not-for-Profit Organizations
Insurance Contracts with Cash Surrender Value
The AcSB approved a project to provide guidance on accounting for insurance contracts with cash surrender value in Part II and Part III of the CPA Canada Handbook – Accounting.
The project will focus on:
- recognition and measurement of the cash surrender amount as an asset;
- presentation of a cash surrender asset on the balance sheet;
- presentation of the policy premiums and change in cash surrender amount in the income statement;
- disclosures that would provide decision-useful information to users; and
- recognition of contributed insurance policies with cash surrender value received by not-for-profit organizations.
The AcSB discussed feedback received from the Private Enterprise Advisory Committee and the Not-for-Profit Advisory Committee on recognition, measurement, presentation, and disclosure of the cash surrender value in an insurance contract.
In addition, the AcSB discussed recognition of contributions of insurance contracts with cash surrender value received by not-for-profit organizations. The Board tentatively decided that a not-for-profit organization should recognize contribution income equal to the cash surrender value on the date that a contributor transfers ownership of an insurance policy to the not-for-profit organization.
The Board directed staff to request more feedback from its advisory committees on the proposals, including on where guidance could be located in the Handbook.
Standards for Pension Plans
Pension Plans
The AcSB discussed feedback from its Pension Plan Working Group on disclosures for buy-in annuity contracts under Section 4600, Pension Plans. In December 2022, Section 4600 was amended to introduce new guidance specific to buy-in annuity contracts. Those amendments require buy-in annuity contracts to be measured at a value equal to the related benefit obligation instead of at fair value.
However, the fair value disclosure requirements from IFRS 7 Financial Instruments: Disclosures and the Appendix to Section 4600 were still required. The AcSB considered feedback from its Pension Plan Working Group that these disclosures may become less useful for buy-in annuity contracts once the December 2022 amendments take effect. The Board agreed with this feedback.
Therefore, as part of its 2023 annual improvements process, the AcSB plans to issue an exposure draft to scope out buy-in annuity contracts from the fair value disclosure requirements. The Board tentatively decided to propose an effective date of January 1, 2024, to align with the effective date of the December 2022 amendments. Earlier application would be permitted. The Board reviewed a draft of the exposure draft at the meeting and gave permission to begin the balloting process. It expects to issue the exposure draft in early May 2023 with a 30-day comment period.
Due Process
AcSB’s Advisory Committees and Working Groups
Academic Advisory Committee
The AcSB received an update on the April 14, 2023, meeting of the Academic Advisory Committee. At this meeting, the Committee discussed CPA Canada’s research agenda, sustainability reporting, additional reporting on fraud and going concern in the auditor’s report, and improvements to cash flow reporting.
Crypto-asset Working Group
The AcSB received an update on the March 22, 2023, inaugural meeting of the Crypto-asset Working Group. At this meeting, the Group discussed its Terms of Reference and Statements of Operating Procedures, as well as the accounting for payment tokens.
Pension Plan Working Group
The AcSB received an update on the April 13, 2023, meeting of the Pension Plan Working Group. At this meeting, the Group continued discussing investment presentation and disclosures issues in Part IV of the CPA Canada Handbook – Accounting. These issues include disclosures for buy-in annuity contracts, presentation and disclosure of investment management expenses, and disclosures for interests in investment funds. The Group also discussed the results of a self-assessment by its members.
AcSB’s Performance Report and Annual Report
The AcSB approved its performance report for the operating year ended on March 31, 2023 for presentation to AcSOC’s Performance Review Committee. The Committee will receive this report in May 2023 to assess the Board’s performance for the 2022-2023 operating year.
The AcSB also approved its 2022-2023 Annual Report and plans to issue it before the end of May 2023.
AcSB Member and Volunteer Surveys
The AcSB discussed the results of a self-assessment of its members and surveys of other volunteers on the performance of the Board and its related committees and groups in 2022-2023. The Board was satisfied with the results and the high response rate.