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CAQ Image

Hyperinflationary economies - updated IPTF watch list available

Jan 10, 2022

IAS 29 "Financial Reporting in Hyperinflationary Economies" defines and provides general guidance for assessing whether a particular jurisdiction's economy is hyperinflationary. But the IASB does not identify specific jurisdictions. The International Practices Task Force (IPTF) of the Centre for Audit Quality (CAQ) monitors the status of "highly inflationary" countries. While it monitors the status of highly inflationary countries for the purposes of applying US GAAP, its criteria for identifying such countries are similar to those for identifying 'hyperinflationary economies' under IAS 29.

The IPTF's discussion document for the November 6, 2021 meeting is now available and states the following view of the Task Force:

Countries with three-year cumulative inflation rates exceeding 100%:

  • Argentina
  • Iran
  • Lebanon
  • South Sudan
  • Sudan
  • Venezuela
  • Zimbabwe

Countries with projected three-year cumulative inflation rates exceeding 100%:

  • Suriname
  • Yemen

Countries where the three-year cumulative inflation rates had exceeded 100% in recent years:

There are no countries in this category for this period.

Countries with recent three-year cumulative inflation rates exceeding 100% after a spike in inflation in a discrete period:

There are no countries in this category for this period.

Countries with projected three-year cumulative inflation rates between 70% and 100% or with a significant (25% or more) increase in inflation during the current period

  • Angola
  • Haiti

The IPTF also notes that there may be additional countries with three-year cumulative inflation rates exceeding 100% or that should be monitored which are not included in the analysis as the necessary data is not available. Examples cited are Afghanistan, Ethiopia, and Syria.

The full list, including exact numbers, detailed explanations of the calculation of the numbers, and observations of the Task Force is available on the CAQ website.

AASB Image

AASB issues FAQs on Extended External Reporting (EER)

Jan 07, 2022

On January 7, 2022, the Auditing and Assurance Standards Board (AASB) issued FAQs regarding assurance in respect of sustainability and environmental, social and governance. Check out these FAQs for all the information you need.

Re­view the FAQs on the AASB's web­site.

Securities - OSC Image

OSC issues Order to provide Exemption for Federal Financial Institutions from Non-GAAP Disclosure Requirements

Dec 31, 2021

On De­cem­ber 2, 2021, the Ontario Securities Commission (OSC) made an Order to exempt reporting issuers that fall under the definition of "federal financial institution" under the Bank Act from the application of National Instrument 52-112, “Non-GAAP and Other Financial Measures Disclosure” (NI 52-112) under certain circumstances. Securities regulators in British Columbia, Alberta, Manitoba, Saskatchewan, Nova Scotia, Newfoundland & Labrador, and Prince Edward Island have also made similar orders.

Under the OSC's Order, eligible issuers are exempt from NI 52-112 in respect of a disclosure of a specified financial measure pursuant to an OSFI Guideline where: (i) the OSFI Guideline specifies the composition of the measure and the measure was determined in compliance with that OSFI Guideline; and (ii) in proximity to the measure, the eligible issuer discloses the OSFI Guideline under which the measure is disclosed. "Eligible issuer" in the Order is defined to mean a reporting issuer that "is, or that has a subsidiary or an affiliate that is, a federal financial institution subject to OSFI Guidelines". A "federal financial institution" is defined in reference to the Bank Act (Canada), and generally includes banks, cooperative credit associations, trust companies and insurance companies.

The conditions for the exemption mirror the existing exception under section 4(1)(e) NI 52-112 in respect of disclosure of a specified financial measure that is required under law or by an SRO of which the issuer is a member. According to the OSC, the Order is intended to reduce the burden for eligible issuers subject to OSFI Guidelines "since sufficient disclosure exists surrounding these measures."

The Order came into effect on December 2, 2021 and expires on the earlier of June 2, 2023 and the effective date of rules that include an exception to the application of NI 52-112 based on disclosure of a specified financial measure pursuant to an OSFI Guideline.

Re­view the related article by Stikeman Elloitt on the Mondaq web­site.

IESBA (International Ethics Standards Board for Accountants) (lt gray) Image

IESBA Meeting Highlights: December 2021 Meetings

Dec 23, 2021

In December 2021, the In­ter­na­tional Ethics Stan­dards Board for Ac­coun­tants (IESBA) re-leased the high­lights sum­mary of its vir­tual meet­ings held on November 30 – December 16, 2021.

The Agenda items in­cluded:

  • Definitions of Listed Entity & PIE
  • Quality Management (QM)-related Conforming Amendments
  • En­gage­ment Team – Group Au­dits In­de­pen­dence
  • Technology Project
  • Technology Fact Finding and Thought Leadership
  • Tax Plan­ning & Re­lated Ser­vices
  • Benchmarking
  • Long Association Post-Implementation Review (LAPIR) (Phase 1)
  • Strategy & Work Plan (Update and Preliminary Considerations)
  • Next Meeting

Re­view the high­lights sum­mary and pod­cast on the IESBA's web­site.

US_SEC Image

SEC proposes new share repurchase disclosure rules

Dec 20, 2021

The Securities and Exchange Commission (SEC) proposed amendments to its rules regarding disclosure about an issuer’s repurchases of its equity securities, often referred to as buybacks.

The proposed rules would require an issuer to provide a new Form SR before the end of the first business day following the day the issuer executes a share repurchase. Form SR would require disclosure identifying the class of securities purchased, the total amount purchased, the average price paid, as well as the aggregate total amount purchased on the open market in reliance on the safe harbor in Exchange Act Rule 10b-18 or pursuant to a plan that is intended to satisfy the affirmative defense conditions of Exchange Act Rule 10b5-1(c).

Review the press release on the SEC's website.

Securities - OSC Image

OSC announces temporary changes to service commitments

Dec 20, 2021

The Ontario Securities Commission (OSC) announced temporary changes to its service commitments in response to a significant and persistent increase in the volume and complexity of certain applications and filings. The changes extend timelines related to reviews of certain offering documents, compliance reviews, applications and other registration materials for which the OSC is principal regulator. The extended timelines will remain in effect from December 7, 2021 to June 30, 2022.

While the temporary changes to its service commitments are in place, OSC staff will not review pre-files for draft preliminary base shelf prospectuses or non-offering prospectuses under its confidential pre-file program. The temporary changes do not impact urgent and time-sensitive prospectus pre-filings, such as those involving bought deals and overnight marketed offerings.

As part of its annual review, the OSC will conduct a comprehensive evaluation of all its service commitments, including the applications and filings included in the temporary changes. The OSC will publish any further changes to its service commitments as a result of this evaluation at the end of Q1 2022 (June 30, 2022). All preliminary prospectuses and exemptive relief applications filed after December 7, 2021 will be processed under the temporary service commitments.

Review the press release and temporary changes on the OSC's website.

IFRS - AcSB Image

AcSB Exposure Draft – Subsidiaries without Public Accountability: Disclosures

Dec 17, 2021

On December 17, 2021, the Accounting Standards Board (AcSB) issued its Exposure Draft that corresponds to the IASB’s Exposure Draft on this topic. Canadian stakeholders who would like their feedback considered prior to the AcSB finalizing its comment letter are encouraged to submit comments to the AcSB by January 17, 2022.

The AcSB would like input from Canadian respondents on the following additional questions regarding the proposed amendment:

  1. The IASB has developed the proposed standard in accordance with its due process for application around the world. Assuming the Exposure Draft proposals are finalized and approved by the IASB in accordance with its due process, do you think that the proposals are appropriate for application in Canada? If not, please specify which aspects of the proposals, and what circumstances, make the accounting requirements proposed in the Exposure Draft inappropriate.
  2. Assuming the Exposure Draft proposals are finalized, a new standard is issued by the IASB, and endorsed by the AcSB and incorporated into Part I of the Handbook, would you apply it if the entity met the eligibility requirements?
  3. Do you agree with the IASB’s proposed eligibility requirements? If not, do you think the scope of the standard should be widened to include entities other than subsidiaries that are small or medium-sized entities? If so, please specify which types of entities.

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


Updated IASB work plan — Analysis (December 2021)

Dec 17, 2021

On December 17, 2021, the International Accounting Standards Board (IASB) updated its work plan following its December 2021 meeting.

Below is an analysis of all changes made to the work plan since our last analysis on November 23, 2021.

Stan­dard-set­ting projects

Main­te­nance projects

Research projects

Other projects

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

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

FASB Releases 2022 Taxonomies for U.S. GAAP, SEC Financial Reporting, and XBRL DQC Rules

Dec 17, 2021

On December 17, 2021, the Fi­nan­cial Ac­count­ing Stan­dards Board (FASB) announced the availability of the 2022 GAAP Financial Reporting Taxonomy (GRT) and the 2022 SEC Reporting Taxonomy (SRT) (collectively referred to as the “GAAP Taxonomy”). The FASB also is making available the 2022 DQC Rules Taxonomy (DQCRT), which together with the GAAP Taxonomy, are collectively referred to as the “FASB Taxonomies.”

The 2022 U.S. GAAP taxonomy reflects updates as a result of accounting standards and other improvements. The 2022 SEC taxonomy “contains improvements for removing references for superseded guidance, adding references to improve selection of the appropriate element for the disclosure requirement, and adding new abstract elements.” The 2022 XBRL DQC taxonomy includes 10 new DQCRs.

The taxonomies are subject to final SEC approval, which is expected to be granted in early 2022. For more information, see the press release on the FASB’s Web site.


IASB issues "Investor Update" newsletter

Dec 16, 2021

On December 16, 2021, the International Accounting Standards Board (IASB) issued the latest edition of its newsletter "Investor Update", which profiles recently introduced IFRS Standards and other changes that are in the pipeline as well as how those changes may affect companies and performance.

This issue features:

  • In profile — Anthony Scilipoti, President & CEO, Veritas Investment Research Corporation and member of the Capital Markets Advisory Committee
  • Spotlight — 2021 Greatest Hits: An update on IASB consultations
  • We need your views
  • Stay up to date
  • Resources for investors

Review the Investor Update newslet­ter on the IASB’s website.

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