April 2022

Accounting Standards in Canada – Enhancing Relevance – AcSB 2022-2027 Strategic Plan

Apr 14, 2022

The Accounting Standards Board (AcSB) issued its final 2022-2027 Strategic Plan. The Plan is focused on enhancing the relevance of financial information and supporting the improvement of non-financial information reported to stakeholders.

Review the Strategic Plan on the AcSB's website.

AcSB 2022-2027 Strategic Plan Feedback Statement

Apr 29, 2022

On April 29, 2022, the Accounting Standards Board (AcSB) released its 2022-2027 Strategic Plan, which includes conclusions reached on the significant comments received during our consultation process.

Review the press release on the AcSB's website.

IASB issues project summary on pension benefits that depend on asset returns project

Apr 26, 2022

On April 26, 2022, the International Accounting Standards Board (IASB) published its project summary "Pension Benefits that Depend on Asset Returns". The project summary provides an overview of research and deliberations on the project.

Following the 2015 Agenda Consultation, the Board has been considering whether to propose amendments to IAS 19 for pension benefits that depend on the return on a specified pool of assets (reference assets). The pension benefits to be paid to employees reflect the variability inherent in the reference assets, yet IAS 19 requires a discount rate that reflects high-quality corporate bonds. Applying the IAS 19 discount rate can overstate the pension liability, producing information that is not relevant to users of financial statements. At the IASB meeting in October 2021, the staff recommended the Board propose that an entity estimate the ultimate cost of providing pension benefits that vary with asset returns applying the IAS 19 discount rate, but only when the IAS 19 discount rate is lower than the expected rate of return on the reference assets. Only 5 IASB members voted to continue the project and therefore the project will be stopped. All Board members supported the staff recommendation to consider any further work as part of the Third Agenda Consultation.

Review the press release on the IFRS Foundation’s website.

Insurers face double hit from new accounting rules and new taxes

Apr 11, 2022

The federal government made a final decision on how it will implement IFRS 17 for insurance companies in the budget last week. IFRS 17 introduces a contract service margin (CSM) that defers revenue on new business value (NBV) gains related to insurance contract sales.

The government has decided to adopt IFRS 17 for income tax accounting purposes but to make an exemption for the CSM so that tax revenue is not deferred. Again, the total tax revenue does not change. Insurers simply cannot defer tax revenue by applying the CSM under IFRS 17.

Review the article on the Globe and Mail's website.

IOSCO to begin review of draft ISSB standards

Mar 31, 2022

On March 31, 2022, in a statement welcoming the publication of the two draft ISSB standards on general requirements of sustainability reporting and on climate-related disclosures, the International Organization of Securities Commissions (IOSCO) outlines its plans for reviewing the draft standards, with a view to informing its potential endorsement of the final standards.

The statement notes that IOSCO’s endorsement of the final standards once these are issued by the ISSB would be a landmark in sustainable finance as it would support IOSCO members as they consider how to adopt, apply or be informed by the ISSB standards as the baseline for their own sustainable reporting requirements. Next steps IOSCO will take will be reviewing the draft standards and follow subsequent developments at the ISSB so that the potential endorsement of the final standards can follow quickly. The statement points out:

IOSCO has set up the structures needed to review the draft standards proposed by the ISSB and will continue to engage closely and constructively with the standards board throughout its review process. IOSCO is seeking to finalise its endorsement process shortly after the ISSB finalizes the standards.

Review the full statement on the IOSCO's website.

ISSB forms working group to enhance compatibility between global baseline and jurisdictional initiatives

Apr 27, 2022

On April 27, 2022, the International Sustainability Standards Board (ISSB) formed a working group comprised of several jurisdictions to enhance the compatibility between the ISSB’s exposure drafts on sustainability disclosures and jurisdictional initiatives.

Specifically, the working group will “discuss compatibility of those initiatives to establish how the global baseline, fully responding to the needs of global market participants, can contribute to optimizing reporting efficiency for companies in those jurisdictions and how those jurisdictions can build upon the global baseline according to their needs.”

The working group consists of members from the Chinese Ministry of Finance, the European Commission, the European Financial Reporting Advisory Group, the Japanese Financial Services Authority, the Sustainability Standards Board of Japan Preparation Committee, the United Kingdom Financial Conduct Authority and the US Securities and Exchange Commission.

Review the press release on the IFRS Foundation’s website.

ISSB presence in Montreal announced

Apr 06, 2022

On April 6, 2022, the IFRS Foundation and Chartered Professional Accountants of Canada (CPA Canada) announced an agreement to establish the Montreal centre of the International Sustainability Standards Board (ISSB). While the main seat of the International Sustainability Standards Board (ISSB) will be in Frankfurt, the IFRS Foundation aims for a global footprint by establishing regional hubs in all regions. A memorandum of understanding has now been signed that establishes the Montreal presence of the ISSB.

The Montreal centre will host key functions on behalf of the ISSB, including the coordination of activity across the Americas. The five-year agreement states that Montreal will host significant standard-setting responsibilities and associated functions, including a share of board meetings, leadership and resources.

Review the press release on the IFRS Foundation's website.

Recordings of recent webinars on ISSB’s exposure drafts now available

Apr 29, 2022

On April 29, 2022, the IFRS Foundation posted the recording of its recent webinars on the ISSB’s proposed IFRS Sustainability Disclosure Standards.

The webinars lasted ap­prox­i­mately 60 minutes and discuss the following:

Review the press release on the IFRS Foundation's website.

SEC proposes rules to enhance disclosure and investor protection relating to special purpose acquisition companies, shell companies, and projections

Apr 08, 2022

The Securities and Exchange Commission proposed new rules and amendments to enhance disclosure and investor protection in initial public offerings by special purpose acquisition companies (SPACs) and in business combination transactions involving shell companies, such as SPACs, and private operating companies.

The proposed new rules and amendments would require, among other things, additional disclosures about SPAC sponsors, conflicts of interest, and sources of dilution. They also would require additional disclosures regarding business combination transactions between SPACs and private operating companies, including disclosures relating to the fairness of these transactions. Further, the new rules would address issues relating to projections made by SPACs and their target companies, including the Private Securities Litigation Reform Act safe harbor for forward-looking statements and the use of projections in Commission filings and in business combination transactions.

If adopted, the proposed rules would more closely align the required financial statements of private operating companies in transactions involving shell companies with those required in registration statements for an initial public offering.

The proposal also includes a new rule addressing the status of SPACs under the Investment Company Act of 1940, which is designed to increase attention among SPACs about this important assessment.  Under the proposed rule, SPACs that satisfy certain conditions that limit their duration, asset composition, business purpose, and activities would not be required to register under the Investment Company Act.

Review the press releaseproposed rule and fact sheet on the SEC's website.

Updated IASB and ISSB work plan — Analysis (April 2022)

Apr 29, 2022

On April 29, 2022, the International Accounting Standards Board (IASB) updated its work plan following its April 2022 meeting. The work plan now also lists the projects of the ISSB.

Below is an analysis of all changes made to the work plan since our last analysis on March 28, 2022.

Standard-setting projects

  • Climate-related disclosures An ISSB project newly added to the workplan; feedback on the exposure draft will be discussed in H2 2022
  • Disclosure initiative — Subsidiaries without public accountability: Disclosures — The IASB has now discussed the feedback to the exposure draft; the next project step will be a decision on the project direction expected in June 2022
  • General sustainability-related disclosures An ISSB project newly added to the workplan; feedback on the exposure draft will be discussed in H2 2022
  • Management commentary — The IASB has now discussed the feedback to the exposure draft; the next project step will be a decision on the project direction (no date given)
  • Second comprehensive review of the IFRS for SMEs An exposure draft is now expected in Q3 2022 (previously H2 2022)

Maintenance projects

Research projects

Other projects

  • no changes

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

Webinar on the ISSB EDs

Apr 12, 2022

On April 12, 2022, the International Sustainability Standards Board (ISSB) announced that it is offering a live webinar on April 28 on its proposed standards on general sustainability-related disclosures and climate-related disclosures.

The webinar, hosted by ISSB Vice-Chair Sue Lloyd, will offer an overview of ED/2022/S1 General Requirements for Disclosure of Sustainability-Related Financial Information and ED/2022/S2 Climate-related Disclosures and will provide the opportunity to ask questions.

For the convenience of stakeholders in different time zones, there will be two sessions of the webinar, one a t 9:00 BST and one at 17:00 BST.

Registration for the webinar is now open on the IFRS Foundation's website.

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