AcSB Exposure Draft – Annual Improvements to IFRS® Accounting Standards – Volume 11

Highlights

The Accounting Standards Board (AcSB) proposes, subject to comments received following exposure, to incorporate into Part I of the CPA Canada Handbook – Accounting, amendments to IFRS 1 First-time Adoption of International Financial Reporting Standards, IFRS 7 Financial Instruments: Disclosures, IFRS 9 Financial Instruments, IFRS 10 Consolidated Financial Statements and IAS 7 Statement of Cash Flows.

This AcSB Exposure Draft reflects proposals made by the International Accounting Standards Board (IASB) that the AcSB intends to adopt, subject to deliberating comments received, as Canadian generally accepted accounting principles.

Comments are requested from individuals and organizations who agree with the Exposure Draft proposals as well as from those who do not. Comments are most helpful if they relate to a specific paragraph or group of paragraphs. Any comments that express disagreement with the proposals should clearly explain the problem and include a suggested alternative, supported by specific reasoning.

Comments received on the AcSB Exposure Draft will be available on the website shortly after the comment deadline unless confidentiality is requested. The request for confidentiality must be stated explicitly within the response.

IASB® Exposure Draft

The IASB recently issued the Exposure Draft, “Annual Improvements to IFRS Accounting Standards—Volume 11,” which is available on the IASB website at www.ifrs.org. The Introduction to this Exposure Draft explains how the IASB’s Annual Improvements project resulted in proposing the following amendments to IFRS Standards:

• Hedge Accounting by a First-time Adopter (Amendments to IFRS 1), adding cross-references in paragraphs B5-B6 to qualifying criteria for hedge accounting in paragraph 6.4.1 of IFRS 9, as well as aligning the wording in paragraph B6 with IFRS 9.
• Gain or Loss on Derecognition (Amendments to IFRS 7), replacing a reference to paragraph 27A (which has been deleted) in paragraph B38 with a reference to paragraphs 72-73 of IFRS 13 Fair Value Measurement.
• Introduction and Credit Risk Disclosures (Amendments to Guidance on implementing IFRS 7), clarifying in paragraph IG1 that the implementation guidance accompanying IFRS 7 does not illustrate all the requirements in IFRS 7 and simplifying the wording of paragraph IG20B.
• Disclosure of Deferred Difference between Fair Value and Transaction Price (Amendments to Guidance on implementing IFRS 7), amending paragraph IG14 to make it consistent with paragraph 28.
• Derecognition of Lease Liabilities (Amendments to IFRS 9), adding a cross-reference in paragraph 2.1(b)(ii) to paragraph 3.3.3 to clarify how to account for derecognition of a lessee’s lease liability.
• Transaction Price (Amendments to IFRS 9), revising the wording in paragraph 5.1.3 and deleting the reference to “transaction price” and the associated references to IFRS 15 Revenue from Contracts with Customers in Appendix A of IFRS 9 to remove the inconsistencies between the two standards.
• Determination of a “De Facto Agent” (Amendments to IFRS 10), amending the requirements of paragraph B74 to remove an inconsistency with paragraph B73 related to how an investor determines whether another party is acting on that investor’s behalf.
• Cost Method (Amendments to IAS 7), replacing the term “cost method” with “at cost” in paragraph 37 since the term “cost method” is no longer defined in IFRS Accounting Standards.

The IASB’s Exposure Draft includes a Basis for Conclusions. This material may provide useful information to interested and affected parties.

Comments Requested

The AcSB encourages interested and affected parties in Canada to respond to the IASB on its Exposure Draft. Specific questions on which the IASB would like input are provided in the Invitation to Comment in its Exposure Draft. The AcSB requests that comment letters be sent directly to the IASB with a copy to the AcSB.

The AcSB would like input from Canadian respondents on the following additional question regarding the proposed amendment:

The IASB has developed the proposed standard in accordance with its due process for application around the world. Assuming the Exposure Draft proposals are finalized and approved by the IASB in accordance with its due process, do you think that the proposals are appropriate for application in Canada? If not, please specify which aspects of the proposals, and what circumstances, make the accounting requirements proposed in the Exposure Draft inappropriate.

Send responses to these additional questions directly to the AcSB.

When to Reply

We value your input and look forward to your feedback. Comments to the IASB are due by December 11, 2023. Responses to the AcSB on the additional question set out above are due on the same date.

If you’d like the AcSB to consider your feedback prior to finalizing its comment letter to the IASB, please send your comments to the AcSB by November 27, 2023. Following the deadline, your feedback to the AcSB is considered as part of our IFRS Accounting Standards endorsement process. We also share Canadian feedback with the IASB through our involvement in international activities.