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PSAB - Amendments to the Transition Provisions of Section PS 2601, Foreign Currency Translation, and Section PS 3450, Financial Instruments [Completed]

Effective date:

Same effective dates as Sections PS 2601 and PS 3450.

Transitional provisions:

The amendments have the same effective date as Sections PS 2601 and PS 3450, being fiscal years beginning on or after April 1, 2012 for government organizations, and April 1, 2016 for governments.  Early adoption is permitted.

Last updated:

December 2013

Overview

In addition to approving the proposed amendments of the ED, which were supported by commentators, an additional amendment was made by the PSAB to clarify that the measurement provisions of the new Sections are to be applied prospectively.  The main features of the ED were as follows:

Section PS 2601, Foreign Currency Translation

The proposals: (a) amend paragraph PS 2601.25(a) to address the accounting for accumulated gains or losses yet to be recognized in net income or operations associated with a hedging item designated to a cash flow hedge or to hedge a net investment in a self-sustaining foreign operation; and (b) add paragraph PS 2601.25(d) to account for accumulated other comprehensive income or, in the case of a not-for-profit organization, the equivalent accumulated gain or loss recognized in the statement of changes in net assets, attributable to the translation of the financial statements of a self-sustaining foreign operation.

The proposed amendments would require recognition, at the date of transition, in opening accumulated remeasurement gains and losses, of gains or losses attributable to the circumstances as described above in (a) or (b).

Section PS 3450, Financial Instruments

Amendments are proposed to clarify the application of paragraph PS 3450.099 by government organizations. As well, the proposed changes address the accounting for accumulated other comprehensive income, or in the case of a not-for-profit organization the equivalent accumulated gain or loss recognized in the statement of changes in net assets, associated with items classified as available for sale. These amounts are recognized at the date of transition in opening accumulated remeasurement gains and losses.

Other developments

December 2013

In December 2013 meeting, the PSAB, in response to a request for additional time by governments to implement PS 2601 and PS 3450, approved an amendment to the transitional provisions of these standards to extend their effective date by one year to April 1, 2016 from April 1, 2015.

October 2012

On October 3, 2012, the PSAB issued a Basis for Conclusions document with respect to these amendments.

March 2012

In March 2012, the PSAB approved clarifying amendments to the transition provisions of Section PS 2601, Foreign Currency Translation, and Section PS 3450, Financial Instruments.

Correction list for hyphenation

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