At its meeting on November 29, 2016, the IFRS Discussion Group (IDG) considered various transition issues related to the adoption and implementation of IFRS 16. Group members observed that the IASB provided practical expedients to reduce the cost and effort of adopting IFRS 16. While the practical expedients appear to simplify the requirements, for a larger organization with a number of leases there will potentially be a significant number of decision points in going through the transition. Accordingly, preparers could consider modelling the different possible combinations provided under the IFRS 16 transition provisions. The Group’s discussion raises awareness about this item. No further action was recommended to the AcSB.

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At its meeting on November 29, 2016, the IFRS Discussion Group (IDG) continued their discussion of whether preparers should consider the material from the Transition Resource Group (TRG) for Revenue Recognition. At this meeting, a CSA representative indicated that the views of the Group were discussed internally with the Chief Accountants of the CSA. Reiterating the comments previously expressed at the September 2016 meeting, the CSA representative noted that paragraph 10 in IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors states, in part, that “in the absence of an IFRS that specifically applies to a transaction, other event or condition, management shall use its judgment in developing and applying an accounting policy.” Paragraph 12 of IAS 8 further notes that management may consider “other accounting literature” in making its judgment. The CSA representative noted that the materials from the Joint IASB/FASB TRG meetings are useful resources that may help inform management’s views and strongly encourages their use.

Also, the CSA representative reiterated that there is nothing produced by the FASB that an issuer preparing financial statements in accordance with IFRSs is required to follow. However, the CSA representative noted that FASB TRG material could also be considered “other accounting literature” that may help to inform management’s view if IFRSs did not provide a clear answer on the accounting for a particular set of facts and circumstances. The CSA representative also noted that the OSC staff expects to see progressively more detailed disclosures as entities work through the implementation of the new standards, both in the financial statements and in the management commentary, in order to provide meaningful and relevant information to users in accordance with OSC Staff Notice 52-723, Office of the Chief Accountant Financial Reporting Bulletin (November 2016).

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