February 2022

AcSB Response – Post-implementation Review – IFRS 9 Financial Instruments – Classification and Measurement

Feb 04, 2022

On February 4, 2022, the International Accounting Standards Board (IASB) published the Accounting Standards Board (AcSB) response to the IASB’s Request for Information issued in September 2021. The AcSB’s letter expressed that overall the classification and measurement requirements in IFRS 9 are working as intended. However, the AcSB questioned whether the principles of IFRS 9 are sufficiently flexible such that they may be applied to increasingly complex financial instruments and still provide relevant and meaningful information to users of financial statements.

Review the letter on the IASB's website.

AcSB Response – Subsidiaries without Public Accountability: Disclosures

Feb 08, 2022

On February 8, 2022, the International Accounting Standards Board (IASB) published the Accounting Standards Board (AcSB) response to the IASB’s Exposure Draft issued in July 2021. The AcSB’s letter focuses on the proposed scope of the draft Standard, with suggestions on widening the scope to benefit a broader group of stakeholders.

Review the letter on the IASB's website.

Consultation on potential cessation of Canadian Dollar Offered Rate

Feb 07, 2022

The administrator of the Canadian Dollar Offered Rate benchmark (“CDOR”), Refinitiv Benchmark Services (UK) Limited (RBSL), issued a consultation document regarding the potential permanent cessation of the CDOR. Comments are requested by February 28, 2022.

The CDOR is a daily benchmark reference rate for Bankers’ Acceptance ("BA”) borrowings. The Canadian BA market exists primarily within Canada and, at about 20% of the overall money market, constitutes the largest sector of the Canadian dollar money market after Government of Canada treasury bills. CDOR is currently the primary interest rate benchmark in Canada and is widely used in other Canadian dollar financial instruments including interest rate swaps, exchange-traded futures, loans and floating rate notes.

On December 16, 2021, the Canadian Alternative Reference Rate working group (“CARR”) issued a white paper (“White Paper”) recommending that “RBSL should cease the calculation and publication of CDOR after June 30, 2024”. The CARR recommendation has been unanimously endorsed by all members of both CARR and the Canadian Fixed-Income Forum (“CFIF”).

Any decision to cease CDOR remains with RBSL as the designated benchmark administrator of CDOR and CARR’s recommendation does not constitute a public statement or publication of information that CDOR has ceased or will cease permanently or indefinitely. On December 16, 2021, RBSL issued a response to the CARR recommendation4 noting that CARR:

  • Has concluded that certain aspects of CDOR’s architecture will pose risks to its future viability and robustness,
  • Has recommended that RBSL, as the CDOR benchmark administrator, cease publication of all of CDOR’s remaining tenors after June 30, 2024, and
  • Indicates that the decision to cease publication of CDOR ultimately lies solely with RBSL and CARR’s recommendation does not constitute a public statement or publication of information that CDOR has ceased or will cease permanently or indefinitely.

RBSL’s response further noted that RBSL as benchmark administrator for CDOR will conduct its own analysis, engage with market participants and consider what further steps might be necessary in order to reach a conclusion regarding the future of CDOR.

Review the consultation paper on Refinitiv's website.

Handbook Update – Section 3856, Financial Instruments

Feb 10, 2022

On February 1, 2022, the Accounting Standards Board (AcSB) amended Section 3856, "Financial Instruments", to provide relief to debt modification accounting and hedge accounting during the benchmark interest rate reform. These amendments are effective for fiscal years ending on or after February 1, 2022. Earlier application is permitted, including in financial statements not yet authorized for issue.

Review the amendments on the CPA Canada's website.

IASB updates IFRS Accounting Taxonomy 2021

Feb 15, 2022

On February 15, 2022, the International Accounting Standards Board (IASB) issued IFRS Accounting Taxonomy 2021 — Update 1 Disclosure of Accounting Policies and Definition of Accounting Estimates.

The taxonomy update includes changes to elements to reflect new and amended disclosure requirements in Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice Statement 2) and Definition of Accounting Estimates (Amendments to IAS 8).

Review the press release on the IASB’s Web site.

IFRS Foundation consolidates the CDSB from CDP

Jan 31, 2022

On January 31, 2022, the IFRS Foundation, CDP and the Climate Disclosure Standards Board (CDSB) have completed the consolidation of the CDSB into the IFRS Foundation. Resources from the CDSB will transfer to the IFRS Foundation and provide intellectual property and technical assets which will support the International Sustainability Standards Board (ISSB).

This marks the completion of the first of two organizations to consolidate into the IFRS Foundation with the other, Value Reporting Foundation, expected to consolidate by June 2022. Also noted was that the CDSB Framework, recent technical guidance on water, biodiversity and social disclosures, and other resources will remain applicable until the ISSB publishes its IFRS Sustainability Disclosure Standards.

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

ISSB Chair discusses role and ambitions for ISSB

Feb 03, 2022

On February 3, 2022, the IFRS Foundation released an interview of ISSB Chair Emmanuel Faber, where he discussed what appealed to him for the position and where he sees the ISSB going in the future.

Key takeaways from the interview include:

  • Mr. Faber places sustainability at the core of business strategy and believes the development of ‘high-quality global standards for disclosing sustainability information will significantly reduce greenwashing ‘noise’ and help companies and investors have meaningful conversations about what really matters to them and the concrete steps taken to implement sustainability commitments’.
  • He commented that way of viewing the linear economic system is coming to an end and focus needs to be put in addressing volatilities associated with climate change in order to manage and mitigate its effect.
  • Previous role as Chair of Danone provided him with experience in leadership and working with stakeholders from all over the world.
  • Mr. Faber looks forward to getting to know his new colleagues, working out the details of the prototypes developed by the Technical Readiness Working Group, and engaging with stakeholders.
  • Some challenges he noted were getting the ISSB up and running which includes the appointment of a diverse group of ISSB members. In addition, the creation of a timeline that meets the need to quickly produce these standards while making sure stakeholders have enough time to provide feedback. Success in the first year will be measured by accomplishing the goals set out by the IFRS Foundation Trustees and overcoming the challenges noted.
  • ISSB will learn for the standard-setting process already established by the IASB. The two organizations will collaborate as much as needed during the process.
  • A public consultation on the future work plan is being developed. The work plan will assist the ISSB on which topics it should focus on first.
  • Sustainability disclosures will play an important role to reach the objectives set in the Paris Agreement. He commented that ‘helping build a globally accepted language about these emissions that will be a foundation for effective dialogue and decision making among all the stakeholder groups of the Paris Agreement’.

Review the full interview on the IFRS Foundation’s website.

Staged approach to filling up ISSB membership

Feb 16, 2022

On February 16, 2022, the IFRS Foundation announced that it will follow a staged approach regarding the appointment of members of the International Sustainability Standards Board (ISSB).

While the IFRS Foundation Constitution affords the ISSB the option to publish exposure drafts for public comment when approved by its Chair and Vice-Chair, and subject to oversight by the Trustees’ Due Process Oversight Committee, a quorum of eight members is required for the ISSB to deliberate on feedback received on the exposure drafts and for final requirements to be published. With the Chair and Vice-Chair already appointed, the Trustees will now focus on appointing a first set of six ISSB members from among the applications received so far. The press release notes that further applications are still welcome, which would then be considered in the next round of appointments.

The Trustees note that this approach will (a) enable the ISSB to begin its work and move at the pace required by stakeholders and (b) allow them, at each step, to build further the diversity and breadth of profiles and expertise of the ISSB.

The press release states that a similar approach is being taken to determining the membership of two key advisory bodies to the ISSB: the Sustainability Consultative Committee and the Sustainability Standards Advisory Forum.

Review the press release on the IFRS Foundation website.

Two webcasts on supplier finance arrangements

Feb 04, 2022

On February 4, 2022, the International Accounting Standards Board (IASB) released two webcasts featuring IASB member Zach Gast introducing the exposure draft "Supplier Finance Arrangements" published by the IASB in November 2021.

The first webcast (approx. 2 minutes) provides background information about reverse factoring and other supplier finance arrangements. The second webcast (approx. 9 minutes) illustrates how the IASB’s proposals aim to enhance the transparency of supplier finance arrangements.

Listen to both webcasts on the IFRS Foundation's website.

Updated IASB work plan — Analysis (February 2022)

Feb 28, 2022

Following the IASB's February 2022 meeting, we have analyzed the IASB work plan to see what changes have resulted from the meetings and other de­vel­op­ments since the work plan was last revised in January 2022.

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

Stan­dard-set­ting projects

  • Dis­clo­sure Ini­tia­tive — Sub­sidiaries without Public Ac­count­abil­ity: Dis­clo­sures — The dis­cus­sion of the exposure draft feedback is now expected in April 2022 (pre­vi­ously Q2 2022).
  • Dis­clo­sure Ini­tia­tive — Targeted Stan­dards-level Review of Dis­clo­sures — The dis­cus­sion of the exposure draft feedback is now expected in May 2022 (pre­vi­ously Q2 2022).
  • Second Com­pre­hen­sive Review of the IFRS for SMEs Standard — Exposure draft is expected in H2 2022.

Main­te­nance projects

Research projects

Other projects

The above is a faithful com­par­i­son of the IASB work plan at January 28, 2022 and February 28, 2022.

For access to the current IASB work plan at any time, please click here.

Webinar – Domestic Accounting Standards Update (Winter 2022)

Feb 28, 2022

Are you a Canadian private enterprise, not-for-profit organization, pension plan or an advisor to one? Watch this webinar to learn about amendments in Part II, III and IV of the CPA Canada Handbook, including topics such as accounting for retractable or mandatorily redeemable shares, not-for-profit combinations, and amendments to pension plan accounting.

Watch the recording on the AcSB's website.

 

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