The Accounting Standards Board (AcSB) is participating in the International Accounting Standards Board’s (IASB) project to develop narrow scope amendments to IAS 32 Financial Instruments: Presentation (IAS 32).
The objective of this project is to address diversity in practice in applying IAS 32 for the classification of certain financial instruments with both financial liability and equity characteristics. That diversity reduces the comparability and understandability of financial statements, making it difficult for users of financial statements to assess the effects of financial instruments on the issuer’s financial position and performance.
The project seeks to address the diversity in practice by clarifying the underlying principles in IAS 32 and adding application guidance to facilitate the consistent application of those principles.
The AcSB’s due process includes ensuring that Canadian entities’ financial reporting needs are considered by the IASB and issuing the AcSB’s own exposure draft on each IASB proposal. Subject to the responses to the AcSB’s exposure draft on whether the IASB’s proposals are appropriate for application in Canada, the AcSB expects that the amendments will be incorporated into Canadian GAAP in accordance with the AcSB’s strategy of adopting IFRS® Accounting Standards for publicly accountable enterprises.