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News

IFRS - IASB Image

IASB finalizes amendments to IAS 1 to clarify the classification of liabilities

Jan 23, 2020

On January 23, 2020, the International Accounting Standards Board (IASB) issued "Classification of Liabilities as Current or Non-Current (Amendments to IAS 1)" providing a more general approach to the classification of liabilities under IAS 1 based on the contractual arrangements in place at the reporting date.

 

Background

The issue was originally addressed as part of the annual improvements project 2010 -2012 cycle. Exposure Draft ED/2012/1 Annual Improvements to IFRSs (2010—2012 Cycle), published in May 2012, proposed amendments to IAS 1.73 to clarify that a liability is classified as non-current if an entity expects, and has the discretion, to refinance or roll over an obligation for at least twelve months after the reporting period under an existing loan facility with the same lender, on the same or similar terms. During 2013, however, the IASB decided not to finalise the amendment, but instead pursue a narrow-scope project to refine the existing guidance in IAS 1 on when liabilities should be classified as current.

In February 2015, the Board published its proposals in the Exposure Draft  ED/2015/1 Classification of Liabilities (Proposed amendments to IAS 1). The Board discussed feedback on the ED from December 2015 to September 2019, pausing the project between 2016 and 2018 while it finalised revisions to the definition of a liability in the Conceptual Framework. As a result of these discussions, the Board made no fundamental changes to the proposed amendments but decided to clarify some aspects of them.

 

Amendments

The amendments in Classification of Liabilities as Current or Non-Current (Amendments to IAS 1) affect only the presentation of liabilities in the statement of financial position — not the amount or timing of recognition of any asset, liability income or expenses, or the information that entities disclose about those items. They:

  • clarify that the classification of liabilities as current or non-current should be based on rights that are in existence at the end of the reporting period and align the wording in all affected paragraphs to refer to the "right" to defer settlement by at least twelve months and make explicit that only rights in place "at the end of the reporting period" should affect the classification of a liability;
  • clarify that classification is unaffected by expectations about whether an entity will exercise its right to defer settlement of a liability; and
  • make clear that settlement refers to the transfer to the counterparty of cash, equity instruments, other assets or services.

 

 

Effective date and transition

The amendments are effective for annual reporting periods beginning on or after January 1, 2022 and are to be applied retrospectively. Earlier application is permitted.

 

Additional information

Review the press release on the IASB's website.

 

Securities - CSA Image

Canadian securities regulators release detailed data from review of women on boards and in executive officer positions

Jan 23, 2020

On January 23, 2020, the securities regulatory authorities in Manitoba, New Brunswick, Nova Scotia, Ontario, Québec and Saskatchewan (the participating jurisdictions) published the underlying data used to prepare CSA Multilateral Staff Notice 58-311 Report on "Fifth Staff Review of Disclosure regarding Women on Boards and in Executive Officer Positions", published on October 2, 2019.

This was the fifth consecutive annual review of disclosure related to women on boards and in executive officer positions conducted by the participating jurisdictions. 

The data was compiled from public documents filed on SEDAR and includes the name, industry and year-end of the 641 non-venture issuers who were included in the review sample. These issuers had year-ends between December 31, 2018 and March 31, 2019, and filed information circulars or annual information forms by July 31, 2019.

Review the press release on the CSA's website and the data on the the OSC's website.

United States Image

The importance of board director relationship management

Jan 22, 2020

On January 14, 2020, the BoardEffect released an article on how board directors interact with groups and individuals that stem from many different facets of their board service. Board directors need to have good relationships with their peers, customers, vendors, executives, staff members, and other professionals and stakeholders.

To manage all relationships well, board directors need the ability to inspire and influence others. They often need to be good problem-solvers, which can be challenging when it’s difficult to predict how people will respond or be able to work together.

Review the article on the BoardEffect's website.

IESBA (International Ethics Standards Board for Accountants) (lt gray) Image

Global Ethics Board proposes significant revisions to international independence standards

Jan 21, 2020

On January 21, 2020, the International Ethics Standards Board for Accountants (IESBA) released two Exposure Drafts (EDs): "Proposed Revisions to the Non-Assurance Services Provisions of the Code" and "Proposed Revisions to the Fee-Related Provisions of the Code".

The EDs are aimed at strengthening the non-assurance services (NAS) and the fee-related independence provisions of the International Code of Ethics for Professional Accountants (including International Independence Standards) (the Code). The EDs represent a key milestone in two major strategic commitments of the IESBA in its current strategy and workplan.

Among the key changes proposed to the NAS provisions are:

  • A prohibition on providing NAS to an audit client that is a public interest entity (PIE) if a self-review threat to independence will be created;
  • Further tightening of the circumstances in which materiality may be considered in determining the permissibility of a NAS;
  • Strengthened provisions regarding auditor communication with those charged with governance (TCWG), including, for PIEs, a requirement for NAS pre-approval by TCWG; and
  • Stricter requirements regarding the provision of some NAS, including certain tax and corporate finance advice.

The NAS ED also includes enhanced guidance to assist firms in evaluating the level of threats to independence when providing NAS to audit clients. 

Among the key proposed changes to the fee-related provisions are:

  •  A prohibition on firms allowing the audit fee to be influenced by the provision of services other than audit to the audit client;
  • In the case of PIEs, a requirement to cease to act as auditor if fee dependency on the audit client continues beyond a specified period; and
  • Communication of fee-related information to TCWG and to the public to assist their judgments about auditor independence.

The Fees ED also includes enhanced guidance on identifying, evaluating and addressing threats to independence in relation to other fee-related matters, including the proportion of fees for services other than audit to the audit fee.

Review the press release and exposure drafts on the IESBA's website.

ASPE_AcSB Image

Withdrawal of Part V from the CPA Canada Handbook – Accounting

Jan 21, 2020

On January 21, 2020, the Accounting Standards Board (AcSB) announced that as of March 1, 2020, Part V, also known as pre-changeover accounting standards, will be removed from the Handbook.

Review the press release for additional information and to find out what this means for stakeholders and preparers on the AcSB's website.

AASB Image

AASB Exposure Draft – Conforming amendments to Canadian standards resulting from IAASB conforming amendments to IAASB International Standards as a result of the revised IESBA Code

Jan 17, 2020

On January 17, 2020, the Auditing and Assurance Standards Board (AASB) issued an Exposure Draft proposing to adopt, with appropriate amendments, proposed revisions to International standards issued by the International Auditing and Assurance Standards Board (IAASB). Comments are requested by March 27, 2020.

Review the press release and the Exposure Draft on the AASB's website.

Securities - CSA Image

Canadian securities regulators publish additional guidance for entities facilitating the trading of crypto assets

Jan 16, 2020

On January 16, 2020, the Canadian Securities Administrators (CSA) published Staff Notice 21-327 "Guidance on the Application of Securities Legislation to Entities Facilitating the Trading of Crypto Assets", to help these entities to determine situations where securities legislation may or may not apply.

The notice describes situations where securities legislation will and will not apply. For example, securities legislation may apply to platforms that facilitate the buying and selling of crypto assets that are commodities, because the user’s contractual right to the crypto asset may itself constitute a derivative, a security or both.

The relevant determination will depend on the facts and circumstances, including the obligations and intention to provide immediate delivery of the crypto asset. The notice provides guidance on what constitutes immediate delivery, together with a detailed example of a situation where securities legislation does not apply.

Review the press release on the CSA's website and the Staff Notice on the OSC's website.

IFRS - AcSB Image

AcSB Exposure Draft – General Presentation and Disclosures

Jan 15, 2020

On January 15, 2020, the Accounting Standards Board (AcSB) released an exposure draft that corresponds to the International Accounting Standards Board's (IASB) exposure draft of a new standard "General Presentation and Disclosures" that is intended to replace IAS 1, "Presentation of Financial Statements". Comments are requested by June 30, 2020.

The AcSB would like input from Canadian respondents on the following additional question regarding the proposed amendments:

  • The IASB has developed the proposed amendments in accordance with its due process for application around the world. Assuming the Exposure Draft proposals are finalized and approved by the IASB in accordance with its due process, do you think that the proposals are appropriate for application in Canada? If not, please specify which aspects of the proposals, and what circumstances, make the accounting requirements proposed in the Exposure Draft inappropriate.

Review the press release and exposure draft on the AcSB's website.

ASNPO_AcSB Image

AcSB Exposure Draft – Combinations – Initial Measurement and Related Disclosures

Jan 15, 2020

On January 15, 2020, the Accounting Standards Board (AcSB) released an Exposure Draft seeking feedback on its proposals to introduce new guidance on the accounting for a combination of not-for-profit organizations. These proposals apply to not-for-profit organizations applying the standards in Parts III of the CPA Canada Handbook – Accounting. Comments are requested by April 14, 2020.

The proposals in this Exposure Draft are as follows:

  • The scope of Section 4449 would include a combination involving two or more NFPOs that are unrelated parties or related parties.
  • The Section would include a set of criteria to determine when a combination is accounted for as a merger or as an acquisition.
  • The Section would include initial and subsequent measurement, presentation and disclosure guidance on how to account for a merger or acquisition.
  • The Section would apply on a prospective basis for combinations occurring on or after January 1, 2022 with early application permitted.

Review the press release and Exposure Draft on the ACSB's website.

IFRS - IASB Image

Summary of the December 2019 MCCG meeting

Jan 13, 2020

On January 13, 2020, the International Accounting Standards Board (the Board) published a summary of the Management Commentary Consultative Group (MCCG) meeting held on December 13, 2019.

The meeting focused on topics for further input, an overview of the staff’s current proposals, and supporting the adoption of the Practice Statement.

The topics for further input were:

  • information on intangibles and ESG matters in management commentary;
  • the meaning of ‘management’s view’;
  • the entity’s purpose; and
  • guidance on narrative coherence.

Review the press release and summary on the Board's website.

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