Climate change and digitalization represent the known unknowns in OSFI’s risk environment. So how will OSFI respond to the opportunities and changes presented by this risk environment?

There are two basic ways an institution leader can answer this question:

1. OSFI will adapt incrementally to the challenges and opportunities in their risk environment, or
2. their risk environment demands that they transform their approach and organization to meet the extraordinary opportunities and challenges before them

Review the speech on the OSFI's website.

What's New in This Edition

This edition includes updates to reflect rule changes which came into effect in 2017 (principally regarding annual disclosure requirements, including burn rate), expand guidance on the treatment of full value awards and provide FAQs addressing questions commonly received by TSX listings managers.

Key Highlights

1. Disclosure requirements – annually and upon adoption or amendment of a plan
2. Examples of acceptable disclosure and reporting
3. FAQ's

Review the press release and guide on the TSX's website and a summary on Miller Thomson LLP's website.

The network defines value accounting as: "The col­lec­tion, cal­i­bra­tion, and use of in­for­ma­tion about the relative value that an or­ga­ni­za­tion creates, preserves, or erodes for its stake­hold­ers, using common units. This in­for­ma­tion is used when making decisions for a variety of purposes."

The group has published agreed state­ments of com­mon­al­ity:

1. We firmly believe it is vital for busi­nesses, finance, and gov­ern­ments to base decisions on value accounting.
2. We aim to modernize accounting to transform gov­er­nance practices, decision making, and reporting.
3. We believe that we need generally accepted prin­ci­ples to account for value.
4. We believe that in­te­grated thinking, and a holistic sys­tems-based approach is essential.
5. We embrace and support the concept of ‘capital’ re­flect­ing stocks that can change over time and that underpin in­creas­ing or de­creas­ing flows of benefits to people, com­mu­ni­ties, the en­vi­ron­ment, and the economy.
6. We recognize the im­por­tance of accounting for holistic value creation, the value of impacts and de­pen­den­cies on different capitals.
7. We recognize that the value to society (in­side-out) and value to the entity (out­side-in) are both essential to assess and report value.
8. We believe that the trade-offs between capitals and between stake­hold­ers must be specified and addressed in decision making.
9. We recognize the im­por­tance of existing efforts, and we are building on the standards, frame­works and de­f­i­n­i­tions that have already been agreed.

The Value Balancing Alliance, one of the founding members of the Value Accounting Network, makes the following in­for­ma­tion available on its website:

• Joint Statement on Ad­vance­ments in Value Accounting
• Back­ground in­for­ma­tion on the Value Accounting Network