At its meeting on March 20-21, 2018, the AcSB began deliberating comments received from stakeholders and the recommendations from its PEAC on how to proceed with the proposals given the feedback received to the Exposure Draft. The Board decided to:

1. revise “Condition 2 – Redemption schedule” by replacing the reference to “explicit or implicit arrangements” in proposed paragraph 3856.23 (c) with “written or oral arrangements”, consistent with the language in the Exposure Draft, “Accounting for Related Party Financial Instruments and Significant Risk Disclosures (Proposed amendments to Financial Instruments, Section 3856”;
2. update “Condition 3 – No consideration other than shares exchanged” to clarify that this condition can apply to transactions that involve more than one class of shares;
3. include in Section 3856, Financial Instruments, the illustrative example relating to joint control that had been provided in the Exposure Draft’s Basis for Conclusions; and
4. provide an option to classify the shares as a financial liability even if all the conditions for the classification exception could be met. The Board also discussed whether: guidance was necessary to assess the related party unit of account; stock dividends should be within the scope of the classification exception; an option to present the effect of liability classification to retained earnings should be provided. The Board further considered the PEAC’s comments on whether transitional provisions were necessary in circumstances when information about a tax planning arrangement could not be obtained. The Board will continue deliberating this topic in its May 2018 meeting. It plans to issue the final amendments no later than the fourth quarter of 2018.

Review the Executive Summary on the AcSB's Web site.