1. ACCOUNTING
INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS)
Pronouncements Effective for Annual Periods Beginning On or After January 1, 2014
Investment Companies and Segregated Accounts of Life Insurance Enterprises
Mandatory date for first-time adoption of IFRS by investment companies and segregated accounts of life insurance enterprises - fiscal years beginning on or after January 1, 2014.
Investment Entities (Amendments to IFRS 10, IFRS 12 and IAS 27)
The amendment to IFRS 10 introduces an exception for investment entities to the principle that all subsidiaries are consolidated. Amendments define investment entities and require them to measure subsidiaries at fair value through profit or loss. In addition, IFRS 12 has been amended to include disclosure requirements for investment entities. IAS 27 has been amended to require investment entities to measure investments in subsidiaries at fair value through profit or loss when separate financial statements are presented.
IAS 32 Financial Instruments: Presentation
Offsetting Financial Assets and Financial Liabilities (Amendments to IAS 32): the amendment addresses inconsistencies identified in applying some of the offsetting criteria.
IAS 36 Impairment of Assets
The standard was amended to modify certain disclosure requirements about the recoverable amount of impaired assets, if that amount is based on fair value, less costs of disposal.
IAS 39 Financial Instruments
The standard was amended to allow hedge accounting to continue in a situation where a derivative, which has been designated as a hedging instrument, is novated to effect clearing with a central counterparty as a result of laws or regulation, if specific conditions are met (in this context, a novation indicates that parties to a contract agree to replace their original counterparty with a new one). Similar relief will be included in IFRS 9 Financial Instruments.
IFRIC 21 Levies
This new interpretation provides guidance on the accounting for levies imposed by governments. The Interpretation clarifies the obligating event that gives rise to a liability to pay a levy.
Pronouncements Effective for Annual Periods Beginning On or After July 1, 2014
IAS 19 Employee Benefits
The amendment to IAS 19 simplifies the accounting for contributions to defined benefit plans that are independent of the number of years of employee service.
Annual Improvements 2010-2012 Cycle
| IFRS 2 Share-based Payments | Clarification of the definition of 'vesting conditions' by separately defining a 'performance condition' and a 'service condition' |
| IFRS 3 Business Combinations | Clarification of the accounting for contingent consideration in a business combination |
| IFRS 8 Operating Segments | Addition of a disclosure requirement about the aggregation of operating segments, and clarification of the reconciliation of the total of the reportable segments' assets to the entity's assets |
| IFRS 13 Fair Value Measurement | Clarification on guidance related to the measurement of short-term receivables and payables |
| IAS 16 Property, Plant and Equipment and IAS 38 Intangible Assets | Clarification of the requirements for the revaluation model regarding the proportionate restatement of accumulated depreciation |
| IAS 24 Related Party Disclosures | Clarification of the identification and disclosure requirements for related party transactions when key management personnel services are provided by a management entity |
Annual Improvements 2011-2013 Cycle
| IFRS 1 First-time Adoption of International Financial Reporting Standards | Clarification that if a new IFRS is not yet mandatory but permits early application, that IFRS is permitted, but not required, to be applied in the entity's first IFRS financial statements |
| IFRS 3 Business Combinations | Modification to the scope exception for joint ventures to exclude the formation of all types of joint arrangements, and clarification that the scope exception applies only to the financial statements of the joint arrangement itself |
| IFRS 13 Fair Value Measurement | Clarification that the portfolio exception applies to all contracts within the scope of IAS 39 or IFRS 9, regardless of whether they meet the definitions of financial assets or financial liabilities as defined in IAS 32 |
| IAS 40 Investment Property | Clarifying the interrelationship between IFRS 3 and IAS 40 when classifying property as investment property or owner-occupied property |
Pronouncement Effective for Annual Periods Beginning On or After January 1, 2015
Entities with rate-regulated activities
Mandatory date for first-time adoption of IFRS by entities with rate-regulated activities - fiscal years beginning on or after January 1, 2015.
Pronouncement Effective for Annual Periods Beginning On or After January 1, 2016
IFRS 10 Consolidated Financial Statements and IAS 28 Investments in Associates and Joint Ventures
These standards were amended to eliminate an inconsistency between IFRS 10 and IAS 28 in dealing with the sale or contribution of assets between an investor and its associate or joint venture. Subsequent to the amendments, a full gain or loss is recognized when a transaction involves a business (whether it is housed in a subsidiary or not) and a partial gain or loss is recognized when a transaction involves assets that do not constitute a business, even if these assets are housed in a subsidiary.
IFRS 10 Consolidated Financial Statements, IFRS 12 Disclosure of Interests in Other Entities and IAS 28 Investments in Associates and Joint Ventures
These standards were amended to clarify the application of the requirement for investment entities to measure subsidiaries at fair value instead of consolidating them.
IFRS 11 Joint Arrangements
The amendments add new guidance on how to account for the acquisition of an interest in a joint operation that constitutes a business.
IFRS 14 - Regulatory Deferral Accounts
This interim standard permits first-time adopters to continue to recognize amounts related to rate regulation in accordance with previous GAAP requirements when they adopt IFRS. However, to enhance comparability with entities that already apply IFRS and do not recognize such amounts, the standard requires that the effect of rate regulation must be presented separately from other items. An entity that already presents IFRS financial statements is not eligible to apply the Standard. Earlier application is permitted.
IAS 1 Presentation of Financial Statements
Amendments are designed to further encourage companies to apply professional judgement in determining what information to disclose in their financial statements. For example, the amendments make clear that materiality applies to the whole of financial statements and that the inclusion of immaterial information can inhibit the usefulness of financial disclosures. Furthermore, the amendments clarify that companies should use professional judgement in determining where and in what order information is presented in the financial disclosures.
IAS 16 Property, Plant and Equipment and IAS 38 Intangible Assets
Amendments clarify that the use of revenue-based methods to calculate the depreciation of an asset is not appropriate, because revenue generated by an activity that includes the use of an asset generally reflects factors other than the consumption of the economic benefits embodied in the asset. The IASB also clarified that revenue is generally presumed to be an inappropriate basis for measuring the consumption of the economic benefits embodied in an intangible asset. This presumption, however, can be rebutted in certain limited circumstances.
IAS 16 Property, Plant and Equipment and IAS 41 Agriculture
These standards were amended to require bearer plants to be accounted for in the same way as property, plant and equipment in IAS 16 because their operation is similar to that of manufacturing. Bearer plants are used solely to grow produce over several periods. At the end of their productive lives they are usually scrapped. Once a bearer plant is mature, apart from bearing produce, its biological transformation is no longer significant in generating future economic benefits. The only significant future economic benefits it generates come from the agricultural produce that it creates. The amendments include bearer plants within the scope of IAS 16 instead of IAS 41. The produce growing on bearer plants will remain within the scope of IAS 41.
IAS 27 Separate Financial Statements
The standard was amended to allow entities to use the equity method to account for investments in subsidiaries, joint ventures and associates in their separate financial statements.
Annual Improvements 2012-2014 Cycle
| IFRS 5 Non-current Assets Held for Sale and Discontinued Operations | Amendment stating that the same classification, presentation and measurement requirements continue to apply if there is a reclassification (from being held for distribution to being held for sale or vice versa). |
| IFRS 7 Financial Instruments: Disclosures | Clarification regarding servicing
contracts and assessment of 'continuing involvement'. Clarification on applicability of disclosure requirements in amendments to IFRS7 regarding Offsetting Financial Assets and Financial Liabilities. |
| IAS 19 Employee Benefits | Clarification regarding the currency of bonds used in the estimate of the discount rate for post-employment benefit obligations. |
| IAS 34 Interim Financial Reporting | Additional requirement to cross-reference the information disclosed 'elsewhere in the interim financial report'. |
Pronouncement Effective for Annual Periods Beginning On or After January 1, 2017
IFRS 15 Revenue from Contracts with Customers
The core principle of the new standard is for companies to recognize revenue to depict the transfer of goods or services to customers, in amounts that reflect the consideration to which the company expects to be entitled in exchange for those goods or services. The new standard contains enhanced disclosures about revenue, provides guidance for transactions that were not previously addressed comprehensively (for example, service revenue and contract modifications) and improves guidance for multiple-element arrangements. IFRS 15 supersedes the following standards: IAS 11 Construction Contracts, IAS 18 Revenue, IFRIC 13 Customer Loyalty Programmes, IFRIC 15 Agreements for the Construction of Real Estate, IFRIC 18 Transfers of Assets from Customers, and SIC-31 Revenue—Barter Transactions Involving Advertising Services.
Pronouncement Effective for Annual Periods Beginning On or After January 1, 2018
IFRS 9 Financial Instruments
This new standard replaces the requirements in IAS 39 Financial Instruments: Recognition and Measurement for classification and measurement of financial assets. IFRS 9 is built on a logical, single classification and measurement approach for financial assets that reflects the business model in which they are managed and their cash flow characteristics. IFRS 9 also incorporates requirements for financial liabilities, most of which were carried forward unchanged from IAS 39. Certain changes were made to the fair value option for financial liabilities to address the issue of own credit risk. IFRS 9 removes the volatility in profit or loss that was caused by changes in the credit risk of liabilities, elected to be measured at fair value.
Requirements related to hedge accounting, representing a new hedge accounting model, have been added to IFRS 9. The new model represents a substantial overhaul of hedge accounting, which will allow entities to better reflect their risk management activities in the financial statements. The most significant improvements apply to those that hedge non-financial risk, so these improvements are expected to be of particular interest to non-financial institutions.
In addition, a single, forward-looking expected loss impairment model is introduced, which will require more timely recognition of expected credit losses.
Final Advisory by the Office of the Superintendent of Financial Institution Canada (OSFI)
The OSFI has issued the final version of the Advisory on the Early Adoption of IFRS 9 Financial Instruments for Domestic Systemically Important Banks (D-SIBs), requiring them to adopt IFRS 9 for their annual period beginning on November 1, 2017. All other Federally Regulated Entities, such as banks, cooperative credit associations, life insurance companies, using an October 31 year-end are permitted to adopt IFRS 9 on November 1, 2017, but are not expected to do so.
Recently Issued Document for Comment
Classification of Liabilities (Proposed amendments to IAS 1)
The proposed amendments, issued by the IASB in February 2015, are designed to improve presentation in financial statements by clarifying the criteria for the classification of a liability as either current or non-current. The proposed amendments do this by:
- clarifying that the classification of a liability as either current or non-current is based on the entity's rights at the end of the reporting period;
- and making clear the link between the settlement of the liability and the outflow of resources from the entity.
Comment period ends on June 10, 2015.
Current Status of Documents Previously Issued for Comment
| Insurance Contracts | Currently in deliberations. |
| Leases | Currently in deliberations. The IASB expects to issue the new standard in the second half of 2015. |
| Recognition of Deferred Tax Assets for Unrealised Losses (Proposed amendments to IAS 12) | The amendments, issued by the IASB in
August 2014, propose guidance that clarifies how to account for
deferred tax assets related to debt instruments measured at fair
value. The amendments will clarify that decreases in the carrying amount of a fixed-rate debt instrument for which the principal is paid on maturity give rise to a deductible temporary difference if this debt instrument is measured at fair value and if its tax base remains at cost. This applies irrespective of whether the debt instrument's holder expects to recover the carrying amount of the debt instrument by sale or by use, i.e., by holding it to maturity, or whether it is probable that the issuer will pay all the contractual cash flows. The amendments will also clarify that an entity's estimate of future taxable profit excludes tax deductions resulting from the reversal of deductible temporary differences. The comment period closed on December 18, 2014. Currently in deliberations. |
| Measuring Quoted Investments in Subsidiaries, Joint Ventures and Associates at Fair Value (Proposed amendments to IFRS 10, IFRS 12, IAS 27, IAS 28 and IAS 36 and Illustrative Examples for IFRS 13) | This Exposure Draft (ED) addresses
questions regarding the unit of account for investments in
subsidiaries, joint ventures and associates and on their fair value
measurement when those investments are quoted in an active market
(quoted investments) and regarding measurement of the recoverable
amount of cash-generating units (CGUs) on the basis of fair value
less costs of disposal when they correspond to entities that are
quoted in an active market (quoted CGUs). The proposed amendments clarify that an entity should measure the fair value of quoted investments and quoted CGUs, as the product of the quoted price for the individual financial instruments that make up the investments held by the entity, and the quantity of financial instruments. The comment period closed on January 16, 2015. Currently in deliberations. |
| Reporting the Financial Effects of Rate Regulation | This Discussion Paper (DP) considers
the common features of rate regulation and explores which of them,
if any, creates a combination of rights and obligations that is
distinguishable from the rights and obligations arising from
activities that are not rate-regulated. The DP explores several possible approaches that the IASB could consider when deciding how best to report the financial effects of a defined type of rate regulation. Currently in discussions. |
| Accounting for Dynamic Risk Management: a Portfolio Revaluation Approach to Macro Hedging | The IASB issued this DP in April 2014 with the goal of exploring a possible approach to better reflect dynamic risk management activities in entities' financial statements. The approach is the portfolio revaluation approach (PRA). When applying the PRA, exposures within open portfolios would be revalued with respect to the managed risk. This revaluation would offset the effect of measuring any risk management instruments (derivative instruments) that are used to manage those risks at fair value. Currently in deliberations. |
| Conceptual Framework | This DP was published by the IASB in July 2013, as a first step towards issuing a revised Conceptual Framework. An Exposure Draft for a revised Conceptual Framework is expected in Q2 of 2015. |
| IFRS 3 – Post-implementation Review | Comments period closed on May 30, 2014. Feedback Statement is expected in Q2 of 2015. |
| Disclosure Initiative (Proposed amendments to IAS 7) | The proposed amendments, issued by
the IASB in December 2014, will require companies to provide a
reconciliation between the opening and closing balances of
liabilities and assets related to their financing activities, which
will allow investors to clearly see movements in a reporting period
that result from cash flows from financing activities, the effects
of mergers and acquisitions (eg. obtaining or losing control of
subsidiaries or other businesses), and other non-cash changes (such
as the effects of foreign exchange and changes in fair
values). To improve transparency around a company's ability to use cash and cash equivalents, the IASB will also propose that a company disclose restrictions that affect management's decisions on how to use cash and cash equivalent balances. Comment period ends on April 17, 2015. |
| Classification and Measurement of Share-based Payment Transactions (Proposed amendments to IFRS 2) | The proposed amendments, issued by
the IASB in November 2014, address the following:
Comment period closed on March 25, 2015. Currently in deliberations. |
Recent AcSB Activity
IFRS 15: The New Revenue Standard – Are You Ready?
An FYI article from the AcSB highlights the need for entities to carry out an assessment of the extent to which changes will be required to processes, IT systems and internal controls as a result of the new standard. IFRS 15 is effective for annual periods beginning on or after January 1, 2017, and comparatives will be required for 2016.
Click here for the article.
Questions?
Here are some resources that will assist in the application of the standards.
CPA Reporting Alerts
CPA Canada issues Reporting Alerts aimed at assisting smaller public companies in determining the impact of new and revised standards on their business. Reporting Alerts provide a summary of the standard, highlight significant items, summarize key changes and address common questions.
The latest Reporting Alerts:
- IFRS 15 Revenue from Contracts with Customers – click here to access.
- IFRS Round Up 2014 - click here to access.
Viewpoints
This series discusses views of the Oil and Gas Task Force and the Mining Task Force on IFRS application issues relevant to junior oil and gas companies and junior mining companies, respectively.
The Guide to International Financial Reporting Standards in Canada
This guide, published by CPA Canada, examines and explains the application of IFRSs from a Canadian perspective.
Each publication includes an overview of key requirements and a detailed analysis of relevant issues, including practical application insights, as well as a discussion of accounting policy choices, significant judgments and estimates.
Additional application insights include:
- extracts from financial statements of Canadian entities;
- analysis of IFRS Discussion Group reports;
- items discussed but never incorporated into the IASB agenda;
- industry application viewpoints via the Viewpoint Series;
- illustrative examples; and
- statistics on particular IFRS application
IFRS Discussion Group Meeting Topics
Established by the AcSB, the IFRS Discussion Group implements and maintains a regular public forum to discuss issues that arise in Canada when applying IFRS.
The Financial Reporting & Assurance Standards Canada website allows for topics and issues discussed by the IFRS Discussion Group to be searched and sorted. Find out whether the Group has discussed an issue that you face in applying IFRSs and get the meeting report extract and audio webcast for each issue you find. Click here to access the database.
ACCOUNTING STANDARDS FOR PRIVATE ENTERPRISES (ASPE)
Pronouncements Effective for Annual Periods Beginning On or After January 1, 2014
Employee Future Benefits, Section 3462
The new standard replaces Section 3461 Employee Future Benefits. The new standard requires immediate recognition of all gains and losses arising from defined benefit plans as they are incurred, thus eliminating the deferral and amortization accounting. The new standard also requires for the plan obligations and plan assets to be measured at the balance sheet date. In addition, past service costs are now recognized in the current period for defined contribution plans.
Disposal of Long-lived Assets and Discontinued Operations, Section 3475
This standard was amended to modify the definition of a discontinued operation by creating a higher threshold for a disposal to be classified as a discontinued operation, thus resulting in fewer disposals qualifying as discontinued operations in practice.
2013 Annual Improvements
| Cash Flow Statement, Section 1540 | Reference to non-controlling interests removed |
| Business Combinations, Section 1582 | Clarification that contingent
consideration is remeasured when the contingency is resolved Amendment to require that certain of the existing disclosures are only applicable if the subsidiary is consolidated |
| Subsidiaries, Section 1590 | Clarification that the accounting for a change in ownership should be based on the accounting policy used to account for the subsidiary |
| Non-controlling Interests, Section 1602 | Clarification that an entity does not
deduct non-controlling interests in determining net income Clarification on allocation of exchange gains and losses arising from translation of a self-sustaining foreign operation that are attributable to the non-controlling interest |
| Financial Instruments, Section 3856 | Clarification that contingent
consideration is remeasured when the contingency is resolved Clarification that a financial instrument that would only be redeemed by economic compulsion, rather than any contractual requirement, would not be classified as a financial liability Clarification of the treatment of hedging relationships using foreign exchange forward contracts that mature, before the hedged item is recognized |
Pronouncement Effective for Annual Periods Beginning On or After January 1, 2015
2014 Annual Improvements
| Financial Instruments, Section 3856 | Clarification that, when a reporting
period ends between the date the hedged transaction occurs and the
date the hedging item matures, the hedging item is remeasured at
year end and any gain or loss since the date of the hedged
transaction is included in income Clarification that disclosure of the carrying amount of impaired financial assets is required for financial assets other than current trade receivables |
Pronouncements Effective for Annual Periods Beginning On or After January 1, 2016
Subsidiaries, Section 1591
This new Section, which replaces Section 1590, Subsidiaries and AcG-15, Consolidation of Variable Interest Entities, requires the use of judgment to determine when control is obtained through means other than equity interests. The guidance on accounting for subsidiaries controlled through equity interests has been brought forward from the previous standard unchanged.
Investments, Section 3051
This Section has been amended to clarify that investments subject to significant influence and certain other non-financial instrument investments are included in the scope of the standard, whereas other investments (such as subsidiaries and interests in joint arrangements) are excluded.
Interests in Joint Arrangements, Section 3056
This new standard, which replaces Section 3055, Interest in Joint Ventures, specifies the accounting by an investor for an interest in a joint arrangement according to whether it is an interest in jointly controlled operations or jointly controlled assets, or a jointly controlled enterprise. The option to account for all types of joint arrangements using the proportionate consolidation method, cost method or equity method is eliminated.
Recently Issued Document for Comment
2015 Annual Improvements
| Financial Instruments, Business Combinations, Section 1582 | Clarification that disclosure of the amounts recognized as of the acquisition date for each major class of assets acquired and liabilities assumed, which is required when the subsidiary is consolidated, should also be required when a business combination is achieved through the acquisition of an asset or group of assets. |
| Investments, Section 3051 and Leases, Section 3065 | Clarification that disclosure of the amount of any impairment loss or reversal of a previously recognized impairment loss is required. |
| Employee Future Benefits, Section 3462 | Clarification that the option to use a funding valuation can only be applied by entities that have at least one funded defined benefit plan. |
This ED was issued by the AcSB in February 2015, with comment period ending on May 26, 2015. The amendments are expected to be issued in Q4 of 2015 and be effective for years beginning on or after January 1, 2016.
Current Status of Documents Previously Issued for Comment
| Redeemable Preferred Shares Issued in a Tax Planning Arrangement | This ED, issued by the AcSB in
October 2014, proposes to amend Section 3856 Financial Instruments
to require redeemable preferred shares issued in a tax planning
arrangement to be presented as liabilities and, therefore, be
accounted for consistently with other financial liabilities. The
effect of recognizing the liability would be presented as a
separate component of equity, and there would be additional
disclosure on this separate component of equity. The proposed
effective date of the amendments would be for fiscal years
beginning on or after January 1, 2016, provided no significant
changes are required to the proposal after comments received are
deliberated. Comment period closed on January 15, 2015. Currently in deliberations. |
| Post-Implementation Review: Section 3856 Financial Instruments | This Request for Information has been
issued by AcSB in October 2014. The AcSB intends to assess the
following, with respect to Section 3856:
|
Questions?
Here are some resources that will assist in the application of the standards.
CPA Canada Reporting Alerts for ASPE
CPA Canada issues Reporting Alerts aimed at assisting companies in determining the impact of new and revised standards on their business. Reporting Alerts provide a summary of the standard, highlight significant items, summarize key changes and address common questions.
The following alerts have recently been issued:
- 2014 Annual Improvements to
ASPE
Click here to access this alert. - Section 3051, Investments
Click here to access this alert.
Private Enterprise Advisory Committee
Established by the AcSB in 2010, the Committee assists the AcSB in maintaining and improving accounting standards for private enterprises and advises on the need for non-authoritative guidance about the standards. At the request of the AcSB, the Committee may also undertake research into the financial reporting needs of private enterprises.
Click here to access recent meeting notes.
ACCOUNTING STANDARDS FOR NOT-FOR-PROFIT ORGANIZATIONS (ASNPO)
Pronouncement Effective for Annual Periods Beginning On or After January 1, 2014
Reporting Employee Future Benefits by Not-for-Profit Organizations, Section 3463
This new Section provides guidance for defined benefit plans on the recognition and presentation of remeasurements and other items that differ from the guidance in Employee Future Benefits, Section 3462 in Part II of the Handbook. The requirements in Section 3462 apply in all other respects.
The main features of Section 3463 are as follows:
- Remeasurements and other items are recognized directly in net assets in the statement of financial position, rather than in the statement of operations, and presented as a separately identified line item in the statement of changes in net assets.
- Remeasurements and other items are not reclassified to the statement of operations in a subsequent period.
Current Status of Document Previously Issued for Comment
| Improvements to Not-for-Profit Standards (Statement of Principles) | Statement of Principles issued by the
AcSB and PSAB in April 2013 and presents key principles that each
Board expects to include in future exposure drafts, aimed at
revising ASNPO and PSA Handbook including the PS 4200 series of
Sections in order to improve the existing standards for financial
reporting by not-for-profit organizations (NFPOs). Comment period closed on December 15, 2013. The AcSB and PSAB are assessing the comments received. |
PUBLIC SECTOR ACCOUNTING (PSA)
Introduction to Public Sector Accounting Standards
In December 2014, Introduction to Public Sector Accounting Standards was amended to:
- introduce the term public sector entity;
- define a government component;
- amend the definition of a government organization;
- include specific definitions of all types of government organizations and partnerships; and
- provide guidance as to the basis of accounting to be used by government components, organizations and partnerships, where the partnerships have two or more public sector entity partners.
Pronouncement Effective for Fiscal Years Beginning On or After April 1, 2014
PS 3260 Liability for Contaminated Sites
The new standard establishes recognition, measurement and disclosure standards for liabilities relating to contaminated sites.
Pronouncements Effective for Fiscal Years Beginning On or After April 1, 2016
(Except for government organizations that applied CICA Handbook – Accounting prior to adoption of the CICA Public Sector Accounting Handbook, for which these pronouncements apply to fiscal years beginning on or after April 1, 2012)
Financial Statement Presentation, Section PS 1201
This section revises and replaces Financial Statement Presentation, Section PS 1200. The new standard introduces a new statement for reporting of remeasurement gains and losses.
Foreign Currency Translation, Section PS 2601
This section revises and replaces Foreign Currency Translations, Section PS 2600. Definition of currency risk is aligned with the new Financial Instruments Section, PS 3450. The new standard also removes certain previously available exceptions to measurement of items on initial recognition. The deferral and amortization of foreign exchange gains and losses relating to long-term foreign currency denominated monetary items, hedge accounting and presentation of items as synthetic instruments are removed. In addition, the new statement of remeasurement gains and losses introduced in Section PS 1201 is used to reflect exchange gains and losses until the period of settlement, rather than reflecting them in the statement of operations.
Portfolio Investments, Section PS 3041
This section replaces Section PS 3040, Portfolio Investments. In addition, Section PS 3030 is withdrawn as the distinction between temporary and portfolio investments is removed with the issue of Section PS 3041. The scope in the new standard is expanded to include interests in pooled investment funds and requirement for application of cost method is removed. The new standard is also aligned with the new Financial Instrument Section, PS 3450.
Financial Instruments, Section PS 3450
This new Section establishes standards for recognizing and measuring financial assets, financial liabilities and non-financial derivatives. The standard introduces two measurement categories: fair value and cost or amortized cost. The statement of remeasurement gains and losses will reflect gains and losses arising on fair value remeasurement until an item is derecognized. The standard also introduces new disclosure requirements of items reported and the nature and extent of risks arising from financial instruments.
Pronouncements Effective for Fiscal Years Beginning on or After April 1, 2017
Related Party Disclosures, Section PS 2200
This new Section defines a related party and establishes disclosures required for related party transactions. Disclosure of information about related party transactions and the relationship underlying them is required when they have occurred at a value different from that which would have been arrived at if the parties were unrelated, and they have, or could have, a material financial effect on the financial statements.
Inter-entity Transactions, Section PS 3420
This new Section establishes standards on how to account for and report transactions between public sector entities that comprise a government's reporting entity, from both a provider and recipient perspective.
Recently Issued Document for Comment
Conceptual Framework Fundamentals and the Reporting Model
This Consultation Paper 3, issued by the PSAB in March 2015, proposes a new reporting model and draft principles on public sector characteristics, financial statement objectives, qualitative characteristics, elements, recognition, measurement and presentation.
Comment period ends August 31, 2015. Click here to access this consultation paper.
Current Status of Documents Previously Issued for Comment
| Assets, Contingent Assets and Contractual Rights | This Exposure Draft, issued by the
PSAB in August 2014, proposes to issue three new Handbook sections:
assets, contingent assets and contractual rights. Additional
guidance on the definition of assets will be provided and
disclosure of types of assets that are not recognized will be
required. Contingent assets and contractual rights will be defined.
Disclosure of contingent assets will be required when the
occurrence of the confirming future event is likely. Disclosure of
contractual rights will be required. Comment period closed on November 3, 2014. Currently in deliberations. |
| Restructuring Transactions | This Exposure Draft, issued by PSAB
in August 2014, proposes guidance on accounting for and reporting
assets and liabilities transferred in restructuring transactions by
both transferors and recipients. Comment period closed on November 28, 2014. Currently in deliberations. |
| Retirement Obligations | This Statement of Principles was issued by PSAB in August 2014. Subject to comments received, the PSAB proposes to expose a proposed new section on retirement obligations associated with tangible capital assets controlled by a public sector entity. Comment period closed on November 21, 2014. Currently in deliberations. |
| Revenue | Comment period for this Statement of Principles closed on February 3, 2014. Currently in deliberations. |
| Improvements to Not-for-Profit Standards (Statement of Principles) | Statement of Principles issued by the
AcSB and PSAB in April 2013 and presents key principles that each
Board expects to include in future exposure drafts, aimed at
revising ASNPO and PSA Handbook including the PS 4200 series of
Sections in order to improve the existing standards for financial
reporting by not-for-profit organizations (NFPOs). Comment period closed on December 15, 2013. The AcSB and PSAB are assessing the comments received. |
| Financial Instruments: Transition | This ED, issued by the PSAB in October 2014, proposes to clarify aspects of the Section's scope of application, specifically, the receivables and payables that the Section does not apply to, and add transitional provisions and new guidance relating to certain specialized forms of agreements. Comment period closed on January 15, 2015. Currently in deliberations. |
| Post-Implementation Review: Section PS 3410, Government Transfers | This Request for Information was
issued by PSAB in November 2014. Now that stakeholders have had an
opportunity to work through the issues related to Section PS 3410,
PSAB is looking for comments on how those issues were dealt.
Undertaking this post-implementation review will help PSAB assess
any implementation challenges encountered by stakeholders, and the
nature, extent and cause of any ongoing issues. Comment period ends on May 15, 2015. |
PSA Discussion Group Meeting Topics
Established by the PSAB, the PSA Discussion Group provides a public forum for discussion of issues arising on the application of the PSA Handbook.
Summaries of topics and discussions from past meetings are available on the Financial Reporting & Assurance Standards Canada website by clicking here.
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