Highlights
The Accounting Standards Board (AcSB) proposes, subject to comments received following exposure, to incorporate amendments to IFRS 7 Financial Instruments: Disclosures and IFRS 9 Financial instruments in Part I of the CPA Canada Handbook –Accounting.
This AcSB Exposure Draft reflects proposals made by the International Accounting Standards Board (IASB) that the AcSB intends to adopt, subject to deliberating comments received, as Canadian generally accepted accounting principles.
Comments are requested from individuals and organizations in Canada who agree with the Exposure Draft proposals as well as from those who do not. Comments are most helpful if they relate to a specific paragraph or group of paragraphs. Any comments that express disagreement with the proposals should clearly explain the problem and include a suggested alternative, supported by specific reasoning.
Comments received on the AcSB Exposure Draft will be available on the website shortly after the comment deadline unless confidentiality is requested. The request for confidentiality must be stated explicitly within the response.
IASB® Exposure Draft
The IASB recently issued the Exposure Draft, “Risk Mitigation Accounting,” which is available on the IASB website at www.ifrs.org.
The IASB’s Exposure Draft proposes to amend IFRS 7 Financial Instruments: Disclosures and IFRS 9 Financial Instruments:
- to add a risk mitigation accounting model for companies managing repricing risk on a net basis; and
- to require a company to disclose its strategy for managing repricing risk and the effects of its risk management activities.
The proposed risk mitigation accounting model seeks:
- to better represent in the financial statements the effects of a company’s activities to mitigate repricing risk; and
- to provide useful information to investors about how a company manages repricing risk and the extent to which this risk is mitigated.
The IASB also seeks feedback on the proposed withdrawal of IAS 39, Financial Instruments: Recognition and Measurement.
The IASB’s Exposure Draft includes illustrative examples, implementation guidance, and a Basis for Conclusions document that may provide useful information to interested and affected parties.
Comments Requested
The AcSB encourages interested and affected parties in Canada to respond to the IASB on its Exposure Draft. Specific questions on which the IASB would like input are provided in the Invitation to Comment in its Exposure Draft. The AcSB requests that comment letters be sent directly to the IASB with a copy to the AcSB.
The AcSB would like input from Canadian respondents on the following additional question regarding the proposed amendment:
The IASB has developed the proposed amendments in accordance with its due process for application around the world. Assuming the Exposure Draft proposals are finalized and approved by the IASB in accordance with its due process, do you think that the proposals are appropriate for application in Canada? If not, please specify which aspects of the proposals, and what circumstances, make the accounting requirements proposed in the Exposure Draft inappropriate.
Send responses to this additional question directly to the AcSB.