This summary of Accounting Standards Board (AcSB) decisions has been prepared for information purposes only. Decisions reported are tentative and reflect only the current status of discussion on projects, which may change after further deliberations by the Board. Decisions to publish Handbook material are final only after a formal ballot process.
The AcSB will respond to change and reprioritize when necessary, ensuring we can address implementation challenges and provide the information users may need in these unique circumstances.
The AcSB values input and feedback from stakeholders and can be reached anytime through our online form.
IFRS® Accounting Standards
Business Combinations – Disclosures, Goodwill and Impairment
The AcSB discussed, in a special meeting on July 11, its draft response letter to the International Accounting Standards Board’s (IASB) Exposure Draft, “Business Combinations—Disclosures, Goodwill and Impairment.” The IASB issued its Exposure Draft in March 2024, with comments due to the IASB by July 15, 2024.
In developing its response letter, the AcSB considered feedback from 87 interested and affected parties, including users, preparers, practitioners, valuators, and regulators. The AcSB supported the project’s objectives but disagreed with the IASB's approach to addressing users’ information needs in the IFRS 3 Business Combinations disclosure proposals. The AcSB considered whether the general-purpose financial reports are the appropriate location for the information outlined in the IFRS 3 Business Combinations disclosure proposals. The AcSB also discussed an alternative solution recommending incremental disclosures within IAS 36 Impairment of Assets, which could more effectively address the delayed recognition of goodwill impairments. This approach would also enable users to independently assess the subsequent performance of business combinations.
The AcSB delegated final edits and approval of the response letter to the Chair, and submitted its response letter to the IASB on July 15, 2024.
Power Purchase Agreements (Contracts for Renewable Electricity)
The AcSB discussed its draft response to the IASB’s Exposure Draft, “Contracts for Renewable Electricity.” The IASB issued its Exposure Draft in May 2024, with comments due to the IASB by August 7, 2024. In developing its response letter, the AcSB considered feedback from 41 interested and affected parties, including users, practitioners, and preparers.
The AcSB decided to disagree with the proposal in the Exposure Draft to expand the own-use exemption for only certain types of physical power purchase agreements (PPAs). Instead, the Board thinks that all electricity contracts, which do not currently meet the own-use exemption, should continue to be recognized and measured at fair value through profit or loss. The Board also recognized that Canadian entities have a mix of physical and virtual PPAs; this could lead to less comparable financial statements if the agreements that result in similar economic outcomes are subject to different recognition and measurement requirements. The Board was supportive of the proposal in the Exposure Draft to expand hedge accounting for these contracts, as it is an effective approach to provide information to users about how an entity manages volume and price risk associated with these contracts.
The AcSB delegated final edits and approval of the response letter to the Chair.
Standards for Private Enterprises and Standards for Not-for-Profit Organizations
Subsequent Measurement of Goodwill and Acquired Intangible Assets
The AcSB considered feedback from extensive preliminary outreach activities on potential proposals for inclusion in a future exposure draft on its Subsequent Measurement of Goodwill and Acquired Intangible Assets project.
The AcSB discussed proposals to provide relief from recognizing intangible assets acquired in a business combination (relief) in Part II of the CPA Canada Handbook – Accounting (the Handbook). The Board discussed that a key objective of the project is to provide relief to entities when the cost of separately recognizing and measuring intangible assets at fair value exceeds the benefit to financial statement users. The Board tentatively decided to propose in an exposure draft that the relief would:
- be provided as an accounting policy choice, provided the entity amortizes its goodwill, which would include any subsumed intangible assets;
- apply to all intangible assets acquired in a business combination; and
- require an entity to provide qualitative disclosures for a subset of intangible assets included in goodwill.
The AcSB also discussed preliminary proposals to allow goodwill amortization in Part II of the Handbook. The Board tentatively decided to propose that entities not opting for the relief would have an accounting policy choice to amortize goodwill. The Board explored options for the amortization period and method for goodwill, but no decisions were made.
The AcSB will continue discussing the exposure draft proposals at its September 2024 meeting.
Due Process
AcSB’s Annual Plan
The AcSB received a quarterly update on activities relating to its 2024-25 Annual Plan, including identifying any potential project-related risks and mitigating factors. The Board discussed priorities for the remainder of the year, including the importance of remaining flexible in its work plan to respond to emerging financial reporting matters and to address application issues through the guidance framework.
The AcSB decided to continue with its activities as planned and will continue to monitor whether updates are required to its Annual Plan. The Board will consider the topic again at its October 2024 meeting.
AcSB’s Advisory Committees and Working Groups
Agriculture Advisory Group
The AcSB received an update on the July 16, 2024, Agriculture Advisory Group meeting. At this meeting, the Group discussed issues to be included in the post-implementation review of Section 3041, Agriculture, in Part II of the Handbook and the timing of the review. The Group discussed application issues related to Section 3041, including net realizable value model disclosures, productive biological assets managed on a collective basis, and impairment. The Group also provided feedback on the Subsequent Measurement of Goodwill and Acquired Intangible Assets project.
Insurance Transition Resource Group
The AcSB received an update on the June 26, 2024, Insurance Transition Resource Group meeting. At this meeting, the Group continued discussions on experiences with the implementation of IFRS 17 Insurance Contracts, which took effect on January 1, 2023. The Group also discussed initial feedback from analysts on the usefulness of IFRS 17 reporting. Finally, the Group considered ways to socialize this information, including at a future meeting with an IASB member, and in other global forums.
Small Practitioners Working Group
The AcSB received an update on the July 11, 2024, Small Practitioners Working Group meeting. At the meeting, the Group shared its views on Financial Statement Concepts, the Detailed Review of ASPE, and Evaluating the Preface.