May 2017

AcSB Response – Annual Improvements to IFRS Standards 2015-2017 Cycle

May 03, 2017

On May 3, 2017, the Accounting Standards Board (AcSB) submitted a comment letter responding to the IASB’s Exposure Draft.

Overall, the AcSB supports the proposed amendments, except as follows:

Exposure Draft – Annual Improvements to IFRS Standards 2015-2017 Cycle – January 2017

The letter expresses concern that the proposed amendments to IAS 28 Investments in Associates and Joint Ventures will not be effective at clarifying the interaction between IAS 28 and IFRS 9 Financial Instruments for long‐term interests. As well, the letter highlights concern over the timing of issuing these amendments because Canadian stakeholders need the amendments endorsed and incorporated into Canadian GAAP by November 1, 2017, when large Canadian banks will first apply IFRS 9. Furthermore, the letter recommends clarifications to the drafting of the amendments to IAS 12 Income Taxes and IAS 23 Borrowing Costs.

Read the AcSB letter posted by the IASB.

AICPA issues revenue working draft for the telecommunications industry

May 04, 2017

In May 2017, the American Institute of CPAs’ (AICPA) Revenue Recognition Task Force released for public comment a working draft on accounting issues associated with the implementation of the new revenue standard for the telecommunications industry.

The working draft addresses the effect of the time value of money. Comments on the working draft are due by July 3, 2017.

Review the working draft and the telecommunications Revenue Recognition Task Force page on the AICPA’s Web site.

FYI Article – AcSB Advisory Committees: A Glance at What’s Happening

May 10, 2017

On May 10, 2017, the Accounting Standards Board (AcSB) released an article that covers what the IFRS Discussion Group, Private Enterprise Advisory Committee and Not-for-Profit Advisory Committee have been up to recently.

Learn how they assist the Board in developing and maintaining accounting standards in Canada.

GLASS questionnaire on inflationary economies

May 12, 2017

On May 12, 2017, the Group of Latin American Accounting Standard Setters (GLASS) has taken up a research project on inflationary economies since the effects of inflation in financial statements have been a cause for concern in those regions of the world where inflation is moderate or high.

The GLASS research project is related to the recognition in the financial statements of high inflation effects before reaching hyperinflation, as IAS 29, Financial Reporting in Hyperinflationary Economies currently requires. As part of the research project, GLASS has prepared a questionnaire and would appreciate feedback.

Please be advised that the deadline for the completed questionnaire is May 31, 2017. It is available for download here. Completed questionnaires should be submitted to

IASB announces IFRS 17 release date

May 16, 2017

On May 16, 2017, the IFRS Foundation announced that it will deliver two live web sessions to introduce the new insurance contracts Standard, IFRS 17, which will be issued on May 18, 2017. In addition, the IASB expects to publish a proposed IFRS taxonomy update on insurance contracts.

The web presentations will provide an overview of the new requirements and will allow participants to ask questions. Registration is required (on the IASB's website) for the May 18 web presentations:

Review the press release on the IASB's website.

IASB issues new insurance contracts standard

May 18, 2017

On May 18, 2017, the International Accounting Standards Board (IASB) published a new standard, IFRS 17 "Insurance contracts". The new standard requires insurance liabilities to be measured at a current fulfillment value and provides a more uniform measurement and presentation approach for all insurance contracts. These requirements are designed to achieve the goal of a consistent, principle-based accounting for insurance contracts. IFRS 17 supersedes IFRS 4 "Insurance Contracts" and related interpretations and is effective for periods beginning on or after January 1, 2021, with earlier adoption permitted if both IFRS 15 "Revenue from Contracts with Customers" and IFRS 9 "Financial Instruments" have also been applied.



An entity shall apply IFRS 17, Insurance Contracts to:

  • Insurance and reinsurance contracts that it issues;
  • Reinsurance contracts it holds; and
  • Investment contracts with discretionary participation features (“DPF”) it issues, provided it also issues insurance contracts.

Scope changes from IFRS 4

  • The requirement, that in order to apply the insurance standard to investment contracts with DPF, an entity has to also issue insurance contracts.
  • An option to apply IFRS 15, Revenue from Contracts with Customers to fixed-fee contracts, provided certain criteria are met.


Level of aggregation

IFRS 17 requires entities to identify portfolios of insurance contracts, which comprises contracts that are subject to similar risks and are managed together. Each portfolio of insurance contracts issued shall be divided into a minimum of three groups:

  • A group of contracts that are onerous at initial recognition, if any;
  • A group of contracts that at initial recognition have no significant possibility of becoming onerous subsequently, if any; and
  • A group of the remaining contracts in the portfolio, if any.

An entity is not permitted to include contracts issued more than one year apart in the same group. Furthermore, if a portfolio would fall into different groups only because law or regulation constrains the entity's practical ability to set a different price or level of benefits for policyholders with different characteristics, the entity may include those contracts in the same group.


Overview of the new accounting model

The standard measures insurance contracts either under the general model or a simplified version of this called the Premium Allocation Approach. The general model is defined such that at initial recognition an entity shall measure a group of contracts at the total of (a) the amount of fulfillment cash flows (“FCF”), which comprise probability-weighted estimates of future cash flows, an adjustment to reflect the time value of money (“TVM”) and the financial risks associated with those future cash flows and a risk adjustment for non-financial risk; and (b) the contractual service margin (“CSM”).

On subsequent measurement, the carrying amount of a group of insurance contracts at the end of each reporting period shall be the sum of the liability for remaining coverage and the liability for incurred claims. The liability for remaining coverage comprises the FCF related to future services and the CSM of the group at that date. The liability for incurred claims is measured as the FCF related to past services allocated to the group at that date.

An entity may simplify the measurement of the liability for remaining coverage of a group of insurance contracts using the premium allocation approach on the condition that, at initial recognition, the entity reasonably expects that doing so would produce a reasonable approximation of the general model, or the coverage period of each contract in the group is one year or less.


Presentation in the statement of financial performance

An entity shall disaggregate the amounts recognized in the statement(s) of financial performance into an insurance service result, comprising insurance revenue and insurance service expenses, and insurance finance income or expenses. Income or expenses from reinsurance contracts held shall be presented separately from the expenses or income from insurance contracts issued.

An entity shall present in profit or loss revenue arising from the groups of insurance contracts issued, and insurance service expenses arising from a group of insurance contracts it issues, comprising incurred claims and other incurred insurance service expenses. Revenue and insurance service expenses shall exclude any investment components.


Effective date

IFRS 17 is effective for annual reporting periods beginning on or after January 1, 2021. Earlier application is permitted if both IFRS 15, Revenue from Contracts with Customers and IFRS 9, Financial Instruments have also been applied.



An entity shall apply the standard retrospectively unless impracticable, in which case entities have the option of using either the modified retrospective approach or the fair value approach.

At the date of initial application of the standard, those entities already applying IFRS 9 may retrospectively re-designate and reclassify financial assets held in respect of activities connected with contracts within the scope of the standard.


Additional information

IASB website

Global IAS Plus website

Other updated information

IASB launches IFRS 17 implementation support page

May 23, 2017

On May 23, 2017, after the issuance of IFRS 17 "Insurance Contracts" on May 18, the International Accounting Standards Board (IASB) has set up an implementation support page for IFRS 17.

In addition to material issued alongside IFRS 17, the page also offers contact details and submission information for technical inquiries and implementation issues.

The IASB will keep the implementation support page available through the whole implementation process for IFRS 17 and will continue to add additional information that becomes available.

Review the new page on the IASB's website.

IASB posts webcast on IFRS 9

May 16, 2017

On May 16, 2017, the International Accounting Standards Board (IASB) staff made available a webcast discussing IFRS 9 and the application of the impairment requirements for revolving facilities.

In the webcast, IASB Vice-Chair Sue Lloyd and Technical Director Kumar Dasgupta talk through key requirements of IFRS 9, Financial Instruments that are relevant when an entity determines the expected life of revolving facilities, such as credit cards and overdrafts, by considering its normal credit risk management actions.

View the webcast on the IASB’s website.

IASB posts webcast on principles of disclosure

May 04, 2017

On May 4, 2017, the International Accounting Standards Board (IASB) staff made available a webcast discussing the Board's recent discussion paper (DP) on the disclosure initiative.

The IASB issued its DP, Disclosure Initiative—Principles of Disclosure in March 2017. This webcast, hosted by IASB member Gary Kabureck, discusses:

  • The background and objective of the Principles of Disclosure project;
  • Disclosure issues identified by the Board;
  • Possible approaches to remedy these disclosure issues, including the Board's preliminary views; and
  • The questions on which the Board is seeking feedback.

View the webcast on the IASB’s website.

IASB publishes Request for Information on the post-implementation review of IFRS 13

May 25, 2017

On May 25, 2017, the International Accounting Standards Board (IASB) issued a Request for Information (RFI) seeking comments from stakeholders to identify whether IFRS 13 "Fair Value Measurement" provides information that is useful to users of financial statements; whether there are areas of IFRS 13 that are difficult to implement and may prevent the consistent implementation of the standard; and whether unexpected costs have arisen in connection with applying or enforcing the standard.

So far, four broad areas have been identified where IFRS 13 might benefit from improvements. These four areas are the backbone of the RFI:

  • Disclosures about fair value measurements. Some of the disclosure requirements for Level 3 fair value measurements are perceived as onerous while at the same time their usefulness is questioned.
  • Prioritising Level 1 inputs or the unit of account. IFRS 13 is perceived as not clear on whether entities should prioritise Level 1 inputs or the unit of account when determining the fair value of investments in joint ventures and associates.
  • Application of the concept of the highest and best use. Concerns in this area regard the implications of applying the concept of highest and best use in the measurement of groups of operating assets.
  • Application of judgement in specific areas. Challenges around this have been mentioned to the IASB and the question is whether further support could be helpful.

Also, the RFI asks respondents whether the IASB should strive to maintain convergence with US GAAP Topic 820 Fair Value Measurement in any changes that might be the result of the PIR.

Comment deadline is September 22, 2017.

Review the press release and request for information on the IASB's website.

Correction list for hyphenation

These words serve as exceptions. Once entered, they are only hyphenated at the specified hyphenation points. Each word should be on a separate line.