Canada adopts financial instruments standards
26 Jan 2005
The Canadian Accounting Standards Board (AcSB) has adopted a new standard on financial instruments that is a hybrid of IAS 39 and US GAAP.
The new standard – Financial Instruments: Recognition and Measurement, Hedges, and Comprehensive Income:
- does not adopt either of the 'carve outs' from IAS 39 that were adopted by the European Commission (thus Canadian companies can use the full fair value option and cannot apply hedge accounting to bank core deposits),
- does not include the macro hedging provisions of IAS 39,
- takes the US position (SFAS 115) for available-for-sale financial assets that non-quoted equities are at cost, rather than the IAS 39 position that only those for which fair value cannot be determined are at cost,
- does not address derecognition because the AcSB has previously adopted a derecognition standard that is in line with the US model (SFAS 140),
- is effective for annual and interim periods beginning on or after 1 October 2006 (for most companies this means initial application in calendar years beginning on 1 January 2007), with early adoption permitted.