The Accounting Standards Board (AcSB) is participating in the International Accounting Standards Board’s (IASB) project to develop an accounting model that will enable investors to understand the effect of a company’s dynamic risk management of repricing risk due to changes in interest rate (which is predominately used in the banking industry), and to evaluate the effectiveness of that risk management.
The IASB developed and refined the “core areas” central to the model (core model) that will enable investors to understand the effect of a company’s dynamic risk management. The core model’s development reflects information the IASB gathered at meetings with banks that use dynamic risk management for repricing risk due to changes in interest rate.
The AcSB’s due process includes ensuring that Canadian entities’ financial reporting needs are considered by the IASB and issuing the AcSB’s own exposure draft on each IASB proposal. Subject to the responses to the AcSB’s exposure draft on whether the IASB’s proposals are appropriate for application in Canada, the AcSB expects that the amendments will be incorporated into Canadian GAAP in accordance with the AcSB’s strategy of adopting IFRS Accounting Standards for publicly accountable enterprises.