Related Discussions

• Post-implementation Review of Section 3856 – AcSB

• Apr 15, 2020

• At its meeting on April 15, 2020, as a result of the impact of the Covid 19 pandemic, the AcSB decided to defer the effective date of these amendments to Section 3865 by one year to fiscal years beginning on or after January 1, 2021. Earlier application continues to be permitted.

• Post-implementation Review of Section 3856 – AcSB

• Feb 18, 2020

• At its meeting on February 18, 2020, the AcSB discussed feedback from stakeholders that the transition guidance in FINANCIAL INSTRUMENTS, paragraph 3856.68(b), is inconsistent with the Basis for Conclusions. The Board decided to correct the guidance in paragraph 3856.68(b) to better reflect its intent as described in paragraphs 55-56 in the Basis for Conclusions. The AcSB plans to issue the correction no later than the second quarter of 2020.

• Post-implementation Review of Section 3856 – AcSB

• Jul 17, 2019

• At its meeting on July 17, 2019, the AcSB discussed implementation questions stakeholders raised on the amendments to Section 3856, Financial Instruments, issued in December 2018 for retractable or mandatorily redeemable shares issued in a tax planning arrangement. The Board deliberated: (i) how “Condition 1 – Control” should be interpreted in tax planning arrangements where control of an enterprise is not directly held; (ii) “Condition 2 – No consideration other than shares” and whether nominal consideration in a tax planning arrangement results in this condition not being met; and (iii) “Condition 3– Redemption schedule” and whether a redemption schedule for some of the retractable or mandatorily redeemable shares issued in a tax planning arrangement results in all the remaining shares being classified as a financial liability. The AcSB decided that it will issue additional implementation materials to assist stakeholders with applying the amendments. These materials will outline factors that enterprises might consider when applying professional judgment in determining the appropriate classification of the shares in these arrangements.

• Post-implementation Review of Section 3856 – AcSB

• Jul 17, 2018

• At its meeting on July 17, 2018, the Board approved the issuance of narrow-scope amendments to Section 3856, Financial Instruments, subject to final drafting and a written ballot. The Board also decided that: the subsequent measurement and impairment of financial instruments will consider how the instrument was initially measured; and differences created in a related party transaction on initial measurement will be recognized in net income or equity when specific conditions are met.

• Post-implementation Review of Section 3856 – AcSB

• Jun 19, 2018

• At its meeting on June 19, 2018, the AcSB continued discussing feedback from stakeholders and the recommendations from its Private Enterprise Advisory Committee on its Exposure Draft. The Board decided the following (i) Debt instruments quoted in an active market and with observable inputs, issued or exchanged in a related party transaction, should be initially measured at fair value. The Board also decided to provide an accounting policy choice to subsequently measure these instruments at fair value or amortized cost. (ii) Debt instruments not quoted in an active market and without observable inputs, issued or exchanged in a related party transaction, should be initially and subsequently measured at cost. (iii) Guidance on the initial and subsequent measurement of indexed related party financial liabilities should be issued. (iv) Not-for-profit organizations should recognize the forgiveness of related party financial assets in the statement of operations. The Board plans to issue the final amendments no later than the fourth quarter of 2018.

• Post-implementation Review of Section 3856 – AcSB

• May 15, 2018

• At its meeting on May 15, 2018, the AcSB continued discussing feedback from stakeholders and the recommendations from its PEAC on its Exposure Draft. The Board considered proposed drafting changes relating to: (i) the initial measurement of various elements in a related party transaction, including both financial and non-financial assets and liabilities; (ii) the accounting for differences in the amounts recorded for the consideration exchanged in a related party transaction involving financial instruments; and (iii) the impairment of related party financial instruments. The Board will continue deliberating the feedback received in its June 2018 meeting and plans to issue the final amendments no later than the fourth quarter of 2018.

• Post-implementation Review of Section 3856 – PEAC

• May 03, 2018

• At its meeting on May 3, 2018, the PEAC continued discussing feedback obtained from outreach activities and response letters on the Exposure Draft and, in particular, the following items: (i) initial measurement; (ii) classification of the difference; (iii) entity-specific information; and (iv) other.

• Post-implementation Review of Section 3856 – AcSB

• Mar 20, 2018

• At its meeting on March 20-21, 2018, the AcSB began deliberating stakeholders’ comments and the PEAC’s recommendations on how to proceed with the proposals given the feedback received on its initial measurement of related party financial instruments and significant risk disclosure proposals. The Board instructed the staff to draft wording clarifying various aspects of the Exposure Draft for discussion at its May 2018 meeting, including: (i) how an enterprise accounts for the various elements in a related party transaction that includes both financial and non-financial assets and liabilities; (ii) updating and adding illustrative examples to help stakeholders apply the proposals; (iii) accounting for the transfer of impaired related party financial assets between related parties; and (iv) the initial measurement of financial instruments with variable or contingent consideration. The Board will also consider stakeholders’ comments on the subsequent measurement of related party financial instruments, including indexed related party financial liabilities and will provide authoritative guidance on entity-specific disclosures. The Board will continue deliberating this topic in its May 2018 meeting and plans to issue the final amendments no later than the fourth quarter of 2018.

• Post-implementation Review of Section 3856 – PEAC

• Feb 07, 2018

• At its meeting on February 7, 2018, the PEAC discussed a summary of the feedback obtained from outreach activities on the Exposure Draft, “Accounting for Related Party Financial Instruments and Significant Risk Disclosures.” Committee members advised that the Board clarify the initial measurement proposals for related party financial instruments. Members thought adding a flow chart in Section 3856, Financial Instruments, and Section 3840, Related Party Transactions, would direct stakeholders on which standard to apply to the various elements of a related party transaction. Committee members also advised the Board to consider providing guidance on what “entity-specific information” means. However, members think illustrative examples should not be provided in the guidance because these may be applied as template disclosures.

• Post-implementation Review of Section 3856 – AcSB

• Sep 20, 2017

• At its meeting on September 20-21, 2017, the AcSB considered the proposed drafting of the amendments. The Board decided that: (i) the scope of the standards should clarify when an enterprise applies Section 3856, Financial Instruments or Section 3840, Related Party Transactions for related party transactions; (ii) enterprises should not be permitted to initially measure related party financial instruments at fair value; and (iii) enterprises should only be permitted to subsequently measure related party financial instruments at fair value when the instrument is an investment in equity instruments that are quoted in an active market. The Board members considered a communication plan for the forthcoming exposure draft and decided on its outreach activities with stakeholders. The Board directed staff to begin the balloting process for the proposals and plans to issue the exposure draft no later than October 31, 2017.

• Post-implementation Review of Section 3856 – AcSB

• Jul 13, 2017

• At its meeting on July 13, 2017, the AcSB considered feedback received from its Not-For-Profit Advisory Committee on current practice of not-for-profit organizations on the topics in this project. The Board decided: (i) that the modification of all related party financial instruments will be accounted for as an extinguishment and that the modified instrument will be measured using the initial measurement concepts for related party financial instruments; (ii) to amend the Section to clarify that an entity needs to disclose significant risks arising from derivatives although it need not be done separately; (iii) that the amendments will be applicable to for-profit enterprises and not-for-profit organizations; and (iv) on the transition requirements and the proposed effective date. The Board directed the staff to conduct testing of the initial measurement proposals. The Board expects to issue an exposure draft no later than the fourth quarter of 2017.

• Post-implementation Review of Section 3856 – AcSB

• Jun 22, 2017

• At its meeting on June 22, 2017, the AcSB received an update on additional stakeholder feedback received and confirmed that the initial measurement of related party financial instruments will continue to be included in the scope of the project. In that regard, the Board discussed possible initial measurement concepts for related party financial instruments, and directed the staff to explore further how those concepts can be described. The Board also decided on the approach to the accounting for impairment and forgiveness of related party financial instruments. The Board will consider the remaining issues and next steps, as well as the project timeline to issue an exposure draft by no later than the fourth quarter of 2017, at its next meeting.

• Post-implementation Review of Section 3856 - AcSB

• May 16, 2017

• At its meeting on May 16, 2017, the AcSB considered feedback received from the “Post-implementation Review of Section 3856, Financial Instruments” and additional targeted advice from members of its Private Enterprise Advisory Committee on alternatives to resolve the following narrow-scope issues: (i) Initial measurement of related party financial instruments; (ii) Measurement of related party compound financial instruments; (iii) Classification of impairment and forgiveness of related party loans; (iv) Scope of accounting for modifications and extinguishments of related party loans; (v) Usefulness of financial instrument risk disclosures; and (vi) Application by not-for-profit organizations. The Board will issue an exposure draft on these narrow-scope issues no later than the fourth quarter of 2017.

• Post-implementation Review of Section 3856 - AcSB

• Jan 12, 2017

• At its meeting on January 12, 2017, the AcSB approved a project to address several narrow-scope issues identified during the Post-implementation Review of Section 3856, Financial Instruments, associated with the scope of related party transactions and measurement of related party compound financial instruments and disclosure. The AcSB discussed whether several other topics, including fair value measurement, hedge accounting, derecognition and classification of equity and financial liabilities, have merit in being added to its work plan. The AcSB agreed that if these topics are added to its work plan, they would need to be addressed through major projects. Therefore, the AcSB will consider these topics in the context of its consultation with stakeholders about the relative priorities for Part II projects.