The Accounting Standards Board (AcSB) is participating in the International Accounting Standards Board’s (IASB) project to consider the financial reporting implications of interest rate benchmark reform.
In September 2019, the IASB completed the Phase 1 of the project to address the pre-replacement issues of the reform.
The IBOR Reform and its Effects on Financial Reporting—Phase 2 project focuses on issues that might affect financial reporting when an existing interest rate benchmark is replaced with an alternative benchmark (replacement issues). Specifically, the proposed amendments address replacement issues associated with modification of financial assets and financial liabilities, including lease liabilities, hedge accounting and reform-related disclosures.
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 Standards for publicly accountable enterprises.