Chair Message
I often say that the most important aspect of our work at the Accounting Standards Board (AcSB) is outreach and consultation with our interested and affected parties. That is because the quality of our standards is directly related to the extent and quality of the input we receive. Our goal is never to impose our views on Canadians but to listen to them with the intent to understand their perspectives. With that in mind, throughout 2023-2024, the AcSB engaged in extensive outreach across various platforms and channels to gain a thorough understanding of the financial reporting challenges facing Canadians. We aimed to collaboratively work toward effective solutions.
This year we revamped our outreach strategy by prioritizing education to foster a deeper understanding of our proposals before soliciting feedback. We also provided respondents with the opportunity to offer feedback in an increasing number of ways, including in-person and virtual roundtables, panel discussions, comment letters, surveys, and one-on-one conversations. We also established the Small Practitioners Working Group to help us obtain feedback from a demographic we previously had difficulty engaging with. This broad approach to outreach resulted in an impressive response rate on many of our projects.
During our outreach on key projects such as Contributions – Revenue Recognition and Related Matters and Scaling the Standards, the feedback we received was not unanimous, and not everyone agreed with our ideas. However, this diversity of perspectives is invaluable. Every comment, whether in agreement or not, is considered by the AcSB and plays a vital role in shaping our standards. We focused on understanding the underlying reasoning behind the feedback, as this insight is what drives better decisions by the Board. We are now tasked with taking it all in, processing it, and determining next steps. This is evidence of our due process in action!
Emerging technologies, new business models, and evolving financial statement user information needs mean businesses are operating in an increasingly complex environment. This poses many challenges for our interested and affected parties. We acknowledge these challenges and seek to address them in various ways. For example, we are advancing work on our Scaling the Standards project to meet the financial reporting needs of entities of all sizes and types. Additionally, we developed a framework to assist the Board in determining when and how to address financial reporting issues submitted to us. Finally, we are leveraging the tools at our disposal, such as our IFRS® Accounting Standards Discussion Group, to address emerging issues for publicly accountable enterprises like accounting for carbon credits.
In closing, I extend my sincere gratitude to everyone who provided feedback this year. Your insights and perspectives are invaluable for developing high-quality accounting standards in Canada. As we navigate the evolving financial reporting landscape, we will remain committed to listening, understanding, and collaborating.
Armand Capisciolto, FCPA, FCA, CPA(MI)
Chair, AcSB
Taking It All In
Progressing on our commitment
This year we received a significant amount of feedback on Consultation Paper I, “Exploring Scalability in Canada.” We released this Consultation Paper as part of our commitment in our 2022-2027 Strategic Plan to explore scaling the existing accounting frameworks to better meet the needs of non-listed Canadian entities and their financial statement users. We proposed some possible scalability solutions and sought feedback on which ones Canadians would support to further advance our work in this area. Our outreach on this project included consultations with our newly formed Small Practitioners Working Group. In response to feedback received, in the coming year we will conduct a detailed review of Accounting Standards for Private Enterprises to determine how the standards can best meet the needs of interested and affected parties. We have also progressed our research on evaluating the Preface of the CPA Canada Handbook – Accounting, and developed a framework for issuing guidance on financial reporting issues submitted to us.
Advancing key domestic projects
This year we made significant progress on several of our domestic projects. Notably, in the not-for-profit sector, we conducted extensive outreach across the country on the Exposure Draft, “Contributions – Revenue Recognition and Related Matters.” After deliberating the diverse feedback we received, we decided to continue to allow an accounting policy choice for the recognition of contributions and to develop a new exposure draft that proposes improvements to the two existing methods for recognizing restricted contributions, while maintaining certain aspects of the Exposure Draft that received broad support. Milestones for private enterprises included completing the Related Party Combinations project, as well as launching research on the current challenges with the recognition of intangible assets acquired in a business combination and the subsequent measurement of goodwill. We also continued our research on improving the transparency of financial statements regarding the relationship entities have with controlled and related entities. For pension plans, we issued an amendment to provide relief from disclosure requirements for investments that are financial instruments not measured at fair value. We also continued our research on other issues in Section 4600, Pension Plans, in Part IV of the Handbook – Accounting Standards for Pension Plans relating to investment presentation and disclosures. Our advisory committees continue to be instrumental in advancing these initiatives.
Making global contributions
We continue to focus on ensuring that Canadians’ views on issues important to them are heard and considered at the international level. We exercised our international influence this year by responding to exposure drafts and requests for information issued by the International Accounting Standards Board (IASB). We ensured Canadians’ views were reflected in our response letters by hosting several outreach events, including virtual roundtables and panel discussions. We also responded to the International Sustainability Standards Board’s “Consultation on Agenda Priorities” by encouraging it to prioritize work that ensures connectivity between financial and sustainability reporting requirements. Finally, IFRS 17 Insurance Contracts was implemented in Canada successfully, which the AcSB dedicated significant time and effort over the past few years to ensure Canadians’ views were heard internationally.