November 6, 2013
AcSB Decision Summary – November 6-7, 2013
The AcSB discussed recent international developments including the IASB’s tentative decision to proceed with the publication of an interim standard for first-time adopters of IFRSs that provides guidance on the accounting for rate-regulated activities until its comprehensive project is completed. Subject to the expected interim standard being issued early in 2014, the AcSB decided against further extending its deferral of the mandatory date for first-time adoption of IFRSs by rate-regulated entities. The deferral expires at the end of 2014.
January 16, 2013
AcSB Decision Summary – January 16, 2013
The AcSB discussed recent international developments including the IASB’s decision, subject to written ballot, to develop an exposure draft for an interim standard to provide guidance on the accounting for rate-regulated activities until its comprehensive project is completed.
The AcSB agreed to monitor the progress of this project at the IASB and will discuss at a later date whether there is any action that the AcSB should take.
November 7, 2012
AcSB Decision Summary – November 7-8, 2012
The AcSB discussed recent international developments, including:
- the IASB’s decision to restart its previous Rate-regulated Activities project with the development of a discussion paper (see Update – Rate-regulated Activities); and
- IASB and IFRS Advisory Council discussions on whether the IASB should develop an interim IFRS in the shorter term, and what the different options are for such an interim IFRS, should the IASB decide to develop one.
No decisions were taken.
September 5, 2012
AcSB Decision Summary – September 5-6, 2012
The AcSB decided to extend the existing deferral of the mandatory IFRS changeover date for entities with qualifying rate-regulated activities by an additional year to January 1, 2014. In an update relating to its earlier extension (to January 1, 2013) of the mandatory changeover date for this sector, the AcSB said it would monitor future developments and consider the need for a further deferral should an interim solution not occur within a year, but remain a possibility. This is the case, given recent statements the IASB has made publicly about the priority it intends to give rate-regulated activities when setting its future agenda. The AcSB decided it was better to end stakeholder uncertainty about a further extension now, than to wait until closer to the end of 2012 to do so.
The AcSB expects to issue the amendment to the Introduction to Part I of the Handbook in October 2012.
March 20, 2012
AcSB Decision Summary – March 20-21, 2012
The AcSB decided to extend the deferral of the mandatory IFRS changeover date for entities with qualifying rate-regulated activities by one year to January 1, 2013, in light of recent discussions of the IASB’s future agenda. Those discussions suggest an increased possibility that the IASB may:
- address rate-regulated activities as part of its future agenda; and
- develop interim guidance in the meantime that, in effect, would allow the continuation of accounting practices in accordance with pre-changeover standards in Part V of the Handbook.
The deferral of the mandatory changeover date for an additional year will permit the AcSB to consider the actions it might take should the IASB add to its agenda a project on the effects of rate regulation.
The AcSB expects to issue the amendment to the Introduction to Part I of the Handbook in May 2012.
October 13, 2010
AcSB Decision Summary – October 13, 2010
The AcSB considered a request from an industry association:
- to extend, by an additional year, the recently approved optional one-year deferral of the mandatory date for first-time adoption of IFRSs by entities with rate-regulated activities;
- to continue to work with and attempt to influence the IASB in support of the recognition of regulatory assets and regulatory liabilities; and
- during the requested two-year deferral period, to develop an interim solution that would remain in place until issues relating to rate-regulated activities have been appropriately resolved.
The AcSB also considered suggestions received from other stakeholders to replace the deferral with new Handbook guidance requiring entities with rate-regulated activities to adopt IFRSs as originally planned except for the treatment of rate regulation.
The AcSB decided against amending or replacing the one-year deferral incorporated recently into Part I of the CICA Handbook — Accounting. The AcSB observed that the IASB’s decision to consult constituents in 2011 on whether issues relating to rate-regulated activities should be considered in a project in its post-2011 agenda means that those issues will remain unresolved for some time. The AcSB concluded that it would not be appropriate to:
- prolong the continued use of Part V of the Handbook by entities in this sector beyond the additional year it has already approved; or
- create a “Part VI” to the Handbook for use in the interim. Developing such guidance would be very difficult and time-consuming. Adopting this approach would also introduce complications for entities in terms of applying IFRS 1 First-time Adoption of International Financial Reporting Standards, an inability to claim compliance with IFRSs, and, for SEC registrants, the continued need to provide a reconciliation to US GAAP.
The AcSB noted that either alternative would put Canadian reporting issuers with rate-regulated activities in contravention of recently amended Canadian Securities Administrators’ regulations that incorporate the AcSB’s one-year deferral.
The AcSB encourages current efforts on the part of entities with rate-regulated activities and their auditors to work together to determine the extent to which the actions of rate regulators result in assets and liabilities that can be recognized in accordance with existing IFRSs.
September 1, 2010
IASB Update – Rate-regulated Activities
The AcSB redeliberated the proposals in its July 2010 Exposure Draft, “Adoption of IFRSs by Entities with Rate-regulated Activities” based on comments received. The AcSB decided to amend the Introduction to Part I of the CICA Handbook – Accounting to require:
||qualifying entities with rate-regulated activities, investment companies and segregated accounts of life insurance enterprises to adopt IFRSs for the first time no later than interim and annual financial statements relating to annual periods beginning on or after January 1, 2012; and
||entities electing to defer the first-time adoption of IFRSs to disclose that fact.
The AcSB plans on publishing the amendment no later than October 1, 2010.
The AcSB noted that, on September 16, 2010, the IASB will consider whether to amend existing IFRSs to make clear that they do not permit the recognition of regulatory assets and regulatory liabilities, and incorporate issues relating to rate regulation into a future comprehensive project on intangible assets. The AcSB decided that, in view of this and other recent standard-setting activities in this area, entities with rate-regulated activities may need additional time to prepare themselves and users of their financial statements for IFRSs. The AcSB decided that an optional deferral of the mandatory IFRS changeover date for this sector was warranted and that the deferral should last for one year only, regardless of the disposition of the IASB’s Rate-regulated Activities project.
The AcSB reaffirmed its decision that the deferral should be limited to entities that have activities subject to cost-based regulation and that recognize regulatory assets and regulatory liabilities. Accordingly, the deferral applies to the consolidated financial statements of parents of qualifying entities with rate-regulated activities, but does not extend to the financial statements of any subsidiaries that do not, themselves, qualify to use the deferral.
July 14, 2010
AcSB Decision Summary – July 14. 2010
The AcSB discussed the status and expected timing of the IASB’s Rate-regulated Activities project based on the agenda papers prepared for the IASB’s meeting of July 20, 2010. No decisions were taken.