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AcSB Exposure Draft – Employee Future Benefits – Use of a Funding Valuation

Sep 16, 2019

On September 16, 2019, the Accounting Standards Board (AcSB) issued an Exposure Draft proposing amendments to Section 3462, Employee Future Benefits. Comments are requested by December 16, 2019.

The AcSB seeks feedback on its proposals to modify the guidance on using an actuarial valuation for funding purposes in the measurement of the defined benefit obligation. These proposals apply to private enterprises and not-for-profit organizations applying the standards in Parts II and III.

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

FASB (US Financial Accounting Standards Board) (lt blue) Image

FASB proposes amendments to classification of debt that would bring US GAAP and IFRSs closer together

Sep 12, 2019

On September 12, 2019, the US standard-setter FASB issued a revised version of its proposed Accounting Standards Update (ASU) "Simplifying the Classification of Debt in a Classified Balance Sheet (Current Versus Noncurrent)." Comments are requested by October 28, 2019.

The proposed amendments would make US GAAP more consistent with IFRSs, especially with IAS 1 Presentation of Financial Statements that includes guidance on the classification of liabilities. The exposure draft notes that FASB leveraged IAS 1 guidance when developing its proposals for the classification of debt. Furthermore, the FASB’s decision on applying the debt classification principle to post-balance-sheet refinancings of debt is consistent with the guidance in IAS 1. However, differences would still remain between US GAAP and IFRSs for classifying debt arrangements with covenant violations.

The IASB currently has a project on its agenda to amend IAS 1 that is specifically related to the classification of liabilities. Final amendments to IAS 1 are currently expected in the fourth quarter of 2019.

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

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Canadian securities regulators propose eight initiatives to reduce regulatory burden for investment funds

Sep 12, 2019

On September 12, 2019, the Canadian Securities Administrators (CSA) published for comment proposed rule amendments aimed at implementing eight initiatives that seek to eliminate duplicative requirements, streamline regulatory processes, codify frequently-granted exemptions from certain rules for investment funds, and eliminate the need for certain regulatory approvals. These proposed changes are part of the CSA’s ongoing work to reduce regulatory burden for investment funds. Comments are requested by December 11, 2019.

The proposals would reduce duplicative filing requirements by consolidating the Simplified Prospectus (SP) and Annual Information Form (AIF) for conventional mutual funds, as these contain overlapping disclosure in many places. The proposed rule amendments would also streamline regulatory processes by eliminating the filing of Personal Information Forms (PIFs) in connection with investment fund prospectus filings for individuals that are registered with securities regulators.

The proposals would eliminate the need for investment funds to apply for frequently granted exemptive relief to use the notice-and-access system, and from certain conflict of interest rules. The proposed amendments also introduce exemptions from the requirement to deliver a fund facts document for model portfolio products, portfolio rebalancing services and automatic switch programs, and would allow the use of a consolidated fund facts document under certain conditions. The proposals would repeal the need for regulatory approval for a change of manager or change of control of manager, given similar requirements in the registration system for investment fund managers. Furthermore, the proposed changes would broaden the pre-approval criteria for investment fund mergers.

In addition, the proposed rule amendments would formalize a common industry practice by mandating that investment funds have a designated website for posting regulatory disclosure. This change will allow the CSA to consider alternative methods for providing and delivering disclosure to investors.

Staff anticipate that these changes can be implemented in the near-term. Longer-term, the CSA will look for burden reduction opportunities in other areas, including, continuous disclosure obligations, securityholder meetings and information circular requirements, prescribed notices and reporting requirements and prospectus regime provisions.

Review the press release and notice and proposed rule amendments on the CSA's website.


IASB publishes project update on goodwill and impairment related to business combinations

Sep 10, 2019

On September 10, 2019, the International Accounting Standards Board (the Board) published an article by IASB member Tom Scott on the status of the Board's goodwill and impairment project following its post-implementation review of IFRS 3, "Business Combinations".

Within its goodwill and impairment project, the Board is investigating how companies can provide users of financial statements with better information about mergers and acquisitions (business combinations) at a reasonable cost. This investigation includes the challenging question of how companies should account for goodwill after the business combination.

The six-page article discusses the Board's preliminary views that:

  • "we should enhance disclosure objectives and requirements to improve the information provided to users about an acquired business and its subsequent performance, even if that information must be on a combined basis where the acquired business has been integrated into an existing business;
  • it is not feasible to make the impairment test significantly more effective at recognizing impairment losses of goodwill;
  • reintroducing amortization of goodwill would not provide significantly better information to users;
  • we should reduce the cost and complexity of the impairment test by providing relief from the mandatory annual quantitative impairment test for goodwill;
  • we should also reduce the cost and complexity of the impairment test by simplifying some of the requirements for estimating value in use;
  • we should not allow more intangible assets to be included in goodwill; and
  • we should enhance transparency by requiring companies to present total equity before goodwill in their balance sheets."

The article notes that the Board plans to issue a discussion paper on these issues at the end of 2019.

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

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AcSB response – Annual Improvements to IFRS® Standards 2018-2020 Exposure Draft

Sep 09, 2019

On September 9, 2019, the Accounting Standards Board's (AcSB) response to the International Accounting Standards Board’s (IASB) Exposure Draft, Annual Improvements to IFRS® Standards 2018-2020, was published by the IASB.

The AcSB continues to strongly support the IASB in its efforts to identify and address standards implementation issues.

Overall, the letter agrees with most of the proposals but recommends that the IASB provide additional guidance to IFRS 16 Leases, to clarify when the reimbursement of leasehold improvements will be identified as a lease incentive.

Review the press release on the AcSB's website and the full letter on the IASB's website.

Securities - CSA Image

Canadian securities regulators seek comment on proposed amendments to business acquisition report requirements

Sep 05, 2019

On September 5, 2019, the Canadian Securities Administrators (CSA) published for comment proposed amendments to the business acquisition report (BAR) requirements for reporting issuers that are not venture issuers. Comments are requested by December 4, 2019.

The proposed amendments aim to reduce regulatory burden and address certain concerns expressed by stakeholders by narrowing the circumstances under which a BAR must be filed.

Currently, a reporting issuer that is not a venture issuer must file a BAR after completing a significant acquisition if any one of the three significance tests set out in National Instrument 51-102 Continuous Disclosure Obligations (NI 51-102) exceeds 20 per cent.

For reporting issuers that are not venture issuers, the proposed amendments will:

  • alter the determination of significance such that an acquisition of a business or related businesses is significant only if at least two of the three existing significance tests set out in NI 51-102 are triggered; and
  • increase the significance threshold from 20 per cent to 30 per cent.

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


IASB chair speaks in South Korea

Sep 04, 2019

On September 4, 2019, the International Accounting Standards Board (IASB) released a keynote speech given at an event organized to celebrate the 20th anniversary of the Korea Accounting Standards Board (KASB). In his speech, IASB chair Hans Hoogervorst discussed Korea’s contribution to international standard-setting through history and remaining relevant in the future.

Mr. Hoogervorst began by reflecting on the IASB's history with the KASB. He moved on to discuss the future of financial reporting and remaining relevant in a changing world. He noted, 'To remain relevant, we must adapt.' He reiterated his view that the IASB is unlikely to tackle sustainability reporting standards, but noted their importance. He also pointed to the work the KASB is doing to shrink the gap between book value and market value of companies — the KASB is researching the possibility of a separate 'Statement of Key Intangibles'. 

Review the transcript of Mr. Hoogervorst's speech on the IASB's website.


IASB publishes "Investor Perspectives" article on proposed amendments to IFRS 17

Sep 04, 2019

On September 4, 2019, the International Accounting Standards Board (the Board) issued the latest issue of "Investor Perspectives." In this edition, IASB board member Nick Anderson discusses the new disclosures in the targeted amendments to IFRS 17.

Specifically, this issue features insight into the proposed amendments related to commission paid on short-term insurance contracts with expected renewals and profit recognition on long-term insurance contracts with investment returns.

Review the press release and Investor Per­spec­tives article on the Board's website.


Updated IASB work plan — Analysis

Sep 03, 2019

On September 3, 2019, the International Accounting Standards Board (the Board) updated its work plan following its August 2019 meeting.

Below is an analysis of all changes that were made to the work plan since our last analysis on July 29, 2019.

Standard-setting projects

  • No changes

Maintenance projects

Research projects

  • SME Implementation Group draft Q&A — newly added o the work plan, discussion of the feedback on the draft Q&A is expected to begin in the fourth quarter of 2019

Other projects

  • Updated IFRS Foundation Due Process Handbook — Discussions on feedback received on the exposure draft is expected to occur in October 2019 (previously fourth quarter of 2019)

The revised IASB work plan is available on the Board's website.


Basis for Conclusion – 2018-2019 Annual Improvements to Public Sector Accounting Standards

Aug 30, 2019

On August 30, 2019, the Public Sector Accounting Board (PSAB) released the Basis for Conclusion, which sets out how the Board reached its conclusions on the 2018-2019 Annual Improvements.

It also includes a discussion of significant matters arising from comments received and issues raised in response to its Exposure Draft.

Review the Basis for Conclusion on the PSAB's website.

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