News

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Glossy Annual Report Submission

Jan 11, 2023

On January 11, 2023, the Securities and Exchange Commission's (SEC) Division of Corporation Finance withdrew the guidance that the Staff would not object if a company posts an electronic version of its glossy annual report to its corporate website by the due date in lieu of mailing paper copies or submitting it on EDGAR.

The Staff’s action was prompted by the SEC’s adoption of a new electronic filing requirement for the glossy annual report that is required under Exchange Act Rules 14a-3 and 14c-3. As of Wednesday, January 11, 2023, it is now mandatory for glossy annual reports to be submitted to the SEC via EDGAR. Foreign private issuers that furnish their glossy annual report in response to the requirements of Form 6-K also have to submit those reports via EDGAR.

The annual report is filed under the EDGAR header submission type “ARS,” and, unlike your other EDGAR filings which must be filed in HTML format, the glossy annual report is submitted as a PDF file.

Review the following information:

 

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On-Demand Workshop: Introduction to International Public Sector Accounting Standards

Jan 11, 2023

On January 11, 2023, the Public Sector Accounting Board (PSAB) released videos to learn about the International Public Sector Accounting Standards Board (IPSASB) and its accounting standards for public sector entities, related to routine transactions of assets, liabilities, revenues and expenses.

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SEC Appoints Chief Accountant

Jan 11, 2023

On January 11, 2023, the Securities and Exchange Commission (SEC) announced the appointment of Paul Munter as chief accountant in the agency’s Office of the Chief Accountant (OCA). Mr. Munter has served as the OCA’s acting chief accountant since January 2021.

As Chief Accountant, Mr. Munter will continue to lead the Office of the Chief Accountant (OCA) and serve as the principal advisor to the Commission on accounting and auditing matters. He also will be responsible for assisting the Commission in discharging its oversight of both the Financial Accounting Standards Board (FASB) and the Public Company Accounting Oversight Board (PCAOB).

Review the press release on the SEC’s website.

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IASB publishes proposed amendments to IAS 12 to provide a temporary exception to the requirements regarding deferred tax assets and liabilities related to pillar two income taxes

Jan 09, 2023

On January 9, 2023, the International Accounting Standards Board (IASB) published an exposure draft "International Tax Reform — Pillar Two Model Rules (Proposed amendments to IAS 12)" to respond to stakeholders’ concerns about the potential implications of the imminent implementation of the OECD pillar two model rules on the accounting for income taxes. Comments are requested by March 10, 2023.

 

Background

In March 2022, the OECD released technical guidance on its 15% global minimum tax agreed as the second ‘pillar’ of a project to address the tax challenges arising from digitalisation of the economy. This guidance elaborates on the application and operation of the Global Anti-Base Erosion (GloBE) Rules agreed and released in December 2021 which lay out a co-ordinated system to ensure that multinational enterprises with revenues above €750 million pay tax of at least 15% on the income arising in each of the jurisdictions in which they operate.

The IASB decided to respond to stakeholders’ concerns about the potential implications of the imminent implementation of these rules on the accounting for income taxes by jurisdictions. In particular, the IASB noted that the situation is very complicated as:

  • jurisdictions may change statutory tax rates to avoid being considered a low-tax environment;
  • companies might decide to move their business to jurisdictions with higher statutory tax rates; and
  • companies might engage in business that comes with tax incentives that might bring down their statutory tax rate to below 15% although the jurisdiction they are doing business in is not generally considered a low-tax environment.

All of these and further considerations would entail most complicated calculations of deferred tax in a situation that is highly volatile due to the fact that jurisdictions implement the OECD rules at different speed and different points of time. Due to the many unknown variables involved, the IASB has decided to propose an exemption until the global tax system has settled and reestablished itself and the IASB can thoroughly assess the situation and provide a reliable solution.

 

Suggested changes

The proposed amendments in exposure draft IASB/ED/2023/1 International Tax Reform — Pillar Two Model Rules (Proposed amendments to IAS 12) are:

  • The IASB proposes to provide an exception to the requirements in IAS 12 that an entity does not recognise and does not disclose information about deferred tax assets and liabilities related to the OECD pillar two income taxes. An entity would disclose that it has applied the exception.
  • The IASB proposes that, in periods in which pillar two legislation is enacted or substantively enacted, but not yet in effect, an entity would disclose:
    • information about such legislation enacted or substantively enacted where the entity operates;
    • the jurisdictions in which the entity’s average effective tax rate is below 15%; and
    • whether there are jurisdictions where the entity expects either to pay pillar two income taxes although the 15% threshold does not apply or not to pay pillar two income taxes although the 15% threshold does apply.
  • The IASB proposes that an entity applies the exception immediately upon issuance of the amendments and retrospectively in accordance with IAS 8 and the disclosure requirements for annual reporting periods beginning on or after January 1, 2023.

Comments on the proposed changes are requested by March 10, 2023 (the DPOC agreed to a shortened comment period in view of the urgency of the matter).

 

Additional information

 

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Julie Corden Image

IAASB re-appoints Deloitte Canada partner as member

Jan 09, 2023

On January 9, 2023, the International Auditing and Assurance Standards Board (IAASB) announced the re-appointment of Julie Corden for a term that begins on January 1, 2023.

Ms. Corden is a partner with Deloitte Canada who is responsible for leading audit methodology, policies and guidance, including the firm's ISQM 1 implementation.

Review the press release on the IAASB's website.

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Accounting Standards Board of Canada and the Accounting Standards Board of Japan Hold Bilateral Meeting in Toronto

Jan 09, 2023

On January 9, 2023, the Accounting Standards Board (AcSB) of Canada and Accounting Standards Board of Japan (ASBJ) held their fourth bilateral meeting in Toronto. The Boards provided updates on their activities and discussed topics of mutual interest, such as crypto assets.

Representatives from Financial Reporting & Assurance Standards Canada’s sustainability standards team and the Sustainability Standards Board of Japan (SSBJ) also attended the meeting. They shared updates on their activities and discussed the connectivity between sustainability and financial reporting.

Review the press release on the AcSB's website.

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IESBA Meeting Highlights: November/December 2022 Meetings

Jan 06, 2023

In January 2023, the In­ter­na­tional Ethics Stan­dards Board for Ac­coun­tants (IESBA) released the high­lights sum­mary of its meet­ings held on No­vem­ber 29 – De­cem­ber 2, 2022 and December 15, 2022.

The Agenda items in­cluded:

  • En­gage­ment Team – Group Au­dits In­de­pen­dence
  • Sustainability
  • Tax Plan­ning & Re­lated Ser­vices
  • Technology Project
  • Strat­egy & Work Plan (2024 – 2027)
  • Technology Working Group
  • Rollout of Revised Public Interest Entity (PIE) Definition

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

ISSB Image

Memorandum of understanding signed to establish ISSB presence in Beijing

Dec 29, 2022

On December 29, 2022, the Trustees of the IFRS Foun­da­tion announced that they have signed a Mem­o­ran­dum of Un­der­stand­ing with the Ministry of Finance of China to establish an International Sus­tain­abil­ity Standards Board (ISSB) office of the IFRS Foun­da­tion in Beijing.

The Beijing office is expected to open in mid-2023. Staff of the office will focus on leading and executing the ISSB’s strategy for emerging and de­vel­op­ing economies and act as a hub for stake­holder en­gage­ment in Asia.

For ad­di­tional in­for­ma­tion see the press release on the IFRS Foun­da­tion’s website.

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IASB issues report concluding the post-implementation review of classification and measurement requirements relating to financial instruments

Dec 21, 2022

On December 21, 2022, the International Accounting Standards Board (IASB) issued its project report and feedback statement on the Post-implementation Review (PIR) of IFRS 9 "Financial Instruments — Classification and Measurement".

The project report and feedback statement provides the IASB’s conclusions on the PIR which included the following:

  • “stakeholders have no fundamental questions about the clarity or suitability of the objectives or principles in the new requirements.
  • “in general, the requirements can be applied consistently and provide useful information to the users of financial statements. However, clarification is needed in some areas to improve the understandability of the requirements.”
  • “stakeholders encounter no unexpected costs when applying or enforcing the classification and measurement requirements of IFRS 9, nor when using or auditing information the Accounting Standard requires a company to provide.”

In addition, the IASB has identified two issues that will need further research. These issues are:

  • “the assessment of the contractual cash flow characteristics of financial assets with ESG-linked features.”
  • “electronic cash transfers as settlement of a financial asset or liability.”

Review the press release and report on the IASB's website.

Leaf - sustainability (green) Image

Sustainability Standards Advisory Forum membership announced

Dec 21, 2022

On December 21, 2022, the Sustainability Standards Advisory Forum (SSAF) composition was announced and will include representatives from thirteen jurisdictions and regions, including Canada. The SSAF goal is to provide the ISSB with technical advice in the development of ISSB’s standard-setting.

Members include:

  • Africa:
    • Pan African Federation of Accountants (PAFA)
  • Americas:
    • Brazilian Committee of Sustainability Pronouncements (CBPS)
    • CPA Canada (as interim prior to the establishment of the Canadian Sustainability Standards Board (CSSB))
    • Group of Latin American Accounting Standard Setters (GLASS)
    • Mexican Financial Reporting Standards Board (CINIF)
  • Asia-Oceania:
    • Accounting Regulatory Department, Ministry of Finance of People's Republic of China (ARD)
    • Institute of Chartered Accountants India (ICAI)
    • Korea Accounting Institute (KAI) and the Financial Services Commission (FSC)
    • Saudi Organization for Chartered and Professional Accountants (SOCPA)
    • Sustainability Standards Board of Japan (SSBJ)
  • Europe:
    • European Financial Reporting Advisory Group (EFRAG)
    • Swiss State Secretariat for International Finance (SIF)
    • UK Financial Reporting Council

In addition, the SSAF will have three observers from European Commission, IOSCO and the United States Securities and Exchange Commission and selected meetings with the Global Reporting Initiative (GRI).

Review the press release on the IASB's website.

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