The Accounting Standards Oversight Council (AcSOC) met on November 14-15, 2023. The meeting spanned two days and was hosted in person at the Chartered Professional Accountants of Canada Toronto offices and virtually on the Zoom platform. The second day was reserved for in-camera discussions.
The following notes relate to the first day, November 14.
Call to Order
AcSOC Chair Lorraine Moore called the meeting to order at 10:00 a.m. (EST).
Approval of Meeting Minutes from June 1-2, 2023
AcSOC approved the June meeting minutes as written.
Chair’s Remarks
Ms. Moore shared a land acknowledgment and welcomed Ken Leung, as it was his first in-person meeting as an AcSOC member.
PSAB Update
PSAB Chair Clyde MacLellan shared the Board’s activities. The Board continues to discuss accounting for Employee Future Benefits. Staff is currently working on revising a draft to present to the Board in December. This draft includes all the modifications made in response to the comments received. The objective is to evaluate whether the changes result in a substantially different document from the original one that was issued. The Board will decide whether to re-expose the document or if the standard can proceed. AcSOC asked Mr. MacLellan if he anticipates deviation between similar standards for public companies regulated by the same governments providing feedback in the process. The Exposure Draft was largely supportive of retaining a multiple discount rate approach.
PSAB has initiated a project, Government Not-For-Profit: Capital Assets, integrating some stand-alone standards within the CPA Canada Public Sector Accounting Handbook and integrating them into the broader Handbook.
Another new project, Intangible Assets, was launched in September and will include cloud computing guidance. An existing international standard on intangibles will be the basis for PSAB’s assessment of whether it contravenes the Conceptual Framework for Financial Reporting in the Public Sector and if unique Canadian public interest issues need to be addressed.
AcSOC asked about the status of carbon credits. Mr. MacLellan replied that the subject was recently discussed at some Public Sector Accounting Discussion Group meetings and he anticipates it will be brought up during the Intangible Assets project.
AcSOC asked whether there is a requirement for individuals on the Indigenous Advisory Committee to be Indigenous. Mr. MacLellan stated that 50 per cent of members will have Indigenous heritage. Indigenous communities emphasized the importance of membership, including all voices with roles in accounting for Indigenous governments and communities. The possibility of leveraging expert groups to work across the standards Board was discussed.
AcSOC asked for an update on the International Public Sector Standards Board’s (IPSASB) work on sustainability. IPSASB will issue a project on climate-related disclosures – an adaptation of Scope 2 in September. PSAB is monitoring other projects related to accounting for natural resources and a statement for recommended practices. PSAB is consulting with the Canadian Sustainability Standards Board (CSSB). PSAB plans to support socializing international documents with interested and affected parties in Canada.
AcSOC asked how PSAB determines the return on investment pertaining to engagement with interested and affected parties. Attendance, questions, and surveys help measure the success of engagement and serve as a critical information pathway.
Performance Review Committee Update
The Performance Review Committee provided a report summarizing its meeting held on October 24. The Committee received information and discussed how the Boards are managing the risks associated with the 2023-2024 Annual Plans. Overall, the Committee was satisfied that the Boards executed their respective Annual Plans and believed risks were being managed effectively.
AcSB Chair Report
AcSB Chair Armand Capisciolto presented the Board’s key risks with mitigation plans and international and domestic activities. On the international side, the Board anticipates finalizing the Rate-regulated Activities project in 2025. The Canadian Securities Administrators will need to contemplate the relief it has provided to entities, which expires in 2027. The United Kingdom has not yet endorsed the standard, resulting in a project slowdown.
An exposure draft for the Financial Instruments with Characteristics of Equity project is anticipated in November 2023 and the AcSB is planning extensive outreach. This project has implications for the banking sector. The AcSB will ensure the Canadian perspective is understood by the International Accounting Standards Board.
AcSB continues to focus on the connectivity between financial reporting and sustainability. A newly hired staff position is shared by the CSSB and AcSB to understand how overlapping projects interact.
On the domestic side, the Exposure Draft, “Contributions – Revenue Recognition and Related Matters,” was issued in March 2023. Extensive outreach and communications activities have been completed, with the AcSB deliberating preliminary feedback in September. Respondents raised concerns about the recognition proposals from fundraising organizations and small not-for-profit organizations. Therefore, the timeline and next steps could be impacted, including the projected effort on the project required in the 2024-2025 Annual Plan. AcSOC asked whether it was possible that the Board will revisit the decision to change the standard. While the Board will consider various options, Mr. Capisciolto doesn’t believe the project will be terminated.
The projects for Evaluating the Preface and Scaling the Standards continue to progress, with the AcSB beginning deliberations on feedback in September. Due to the feedback, the Board decided not to pursue an intermediary framework between IFRS Accounting Standards and Accounting Standards for Private Enterprises.
Mr. Capisciolto updated AcSOC on research and the increased profile the AcSB has at the international level. The Board’s research plans for topics like carbon pricing, cashflow reporting, and intangible assets have generated significant interest from other standard-setters at international meetings, and opportunities for collaboration are being considered.
AcSOC noted the number of large projects on the Annual Plan for the AcSB. Mr. Capisciolto noted that some projects, like Scaling the Standards, are aligned with the five-year Strategic Plan while others, like Contributions, are identified as projects in the Annual Plan.
Closing Remarks
Ms. Moore thanked all the presenters and observers for attending.
Adjournment
Having no other business, the public portion of the meeting was adjourned at 1:20 p.m.