2009-10-20 Closing the GAAP: New Canadian GAAP Pronouncements Affecting 2009 Financial Statements (updated to September 30, 2009)

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This newsletter presents a summary of new Canadian GAAP pronouncements relevant to financial statements prepared for 2009 (updated to September 30, 2009 and including CICA Release No. 55, August 2009).

The following summarizes Canadian GAAP pronouncements that must be applied, if applicable, for the first time in 2009 to a company with a calendar year-end that is preparing financial statements in accordance with Canadian GAAP.

The listing includes the following pronouncements:

CICA Accounting Handbook Sections ("CICA")
CICA Accounting Guidelines ("AcG")
Emerging Issues Committee Abstracts of Issues Discussed ("EIC")

This newsletter will be updated quarterly. Newsletter 2009-07-03 Closing the GAAP: New Canadian GAAP Pronouncements Affecting 2009 Financial Statements (updated to June 30, 2009) is superseded by this newsletter. Developments since the previous newsletter, if any, are highlighted in grey below.

Reference	Pronouncement and Effective Date
CICA 1100 CICA 3465 AcG 19	Rate regulated accounting Amendments have been made to certain sections of the Handbook related to rate regulated accounting. CICA 1100 has been amended to remove a temporary exemption pertaining to its application to the recognition and measurement of assets and liabilities arising from rate regulation. CICA 3465 has been amended to require rate-regulated enterprises to recognize future income tax liabilities and assets, as well as a regulatory asset or liability for the amount of future income taxes expected to be included in future rates and recovered from or returned to future customers, and to present these amounts on a gross basis in the financial statements. These requirements are effective for fiscal years beginning on/after January 1, 2009. The disclosures required by entities subject to rate regulation (AcG 19) were also amended.
CICA 1535	Capital disclosures Amended in July 2008 to reduce disclosure requirements for non-publicly accountable enterprises. Amendments apply to interim and annual financial statements relating to years beginning on/after August 1, 2008. Early adoption is permitted.

Reference	Pronouncement and Effective Date
CICA 3025	Impaired loans Amended to conform the definition of a loan to that in amended CICA 3855 (see below) and to include held-to-maturity investments within its scope. These amendments apply to annual financial statements relating to years beginning on/after November 1, 2008.
CICA 3064 CICA 1000 CICA 3450 EIC 27 AcG 11	Goodwill and intangible assets CICA 3064 replaces CICA 3062 and establishes standards for the recognition, measurement and disclosure of goodwill and intangible assets. The provisions relating to the definition and initial recognition of intangible assets are equivalent to the corresponding provisions of IAS 38, Intangible Assets. CICA 1000 is amended to clarify criteria for recognition of an asset. CICA 3450 is replaced by guidance in CICA 3064. EIC 27 is no longer applicable for entities that have adopted CICA 3064. A number of other EIC Abstracts have consequential amendments (refer to CICA Revision Release No. 50 for a complete list). AcG 11 is also amended to delete references to deferred costs and to provide guidance on development costs as intangible assets under CICA 3064. Effective for interim and annual financial statements for years beginning on/after October 1, 2008.
CICA 3855	Financial instruments Amended to (i) change the categories into which a debt instrument is required or permitted to be classified; (ii) change the impairment model for held-to-maturity financial assets to the incurred credit loss model of CICA 3025 (see above); and (iii) require reversal of previously recognized impairment losses on available-for-sale financial assets in specified circumstances. These amendments apply to annual financial statements for years beginning on/after November 1, 2008. Also amended to add guidance concerning the assessment of embedded derivatives upon reclassification of a financial asset out of the held-for-trading category. These amendments apply to reclassifications made on/after July 1, 2009. Also amended to clarify the application of the effective interest method after a debt instrument has been impaired. Amendments effective on issue in June 2009.
CICA 3855	Financial instruments, non-publicly accountable enterprises and not-for profit organizations CICA 3855 was amended in July 2008 to (i) provide certain accounting policy choices to non-publicly accountable enterprises and not-for-profit organizations for interim and annual financial statements for years beginning on/after August 1, 2008, and (ii) permit non-publicly accountable enterprises to elect the date of adoption of CICA 3855 as the transition date for recognizing embedded derivatives. Early adoption is permitted.
CICA 3861	Financial instruments - disclosure and presentation Amended to clarify application of this Section by non-publicly accountable enterprises.
CICA 3862	Financial instruments - disclosures Amended to include additional disclosure requirements about fair value measurements of financial instruments and to enhance liquidity risk disclosure requirements for publicly accountable enterprises and other entities that choose to apply this Section. Amendments apply to annual financial statements for years ending after September 30, 2009.

Reference	Pronouncement and Effective Date
CICA 3862 CICA 3863	CICA 3862 and 3863 were amended in July 2008 to exempt non-publicly accountable enterprises from quantitative market risk disclosures, applicable for interim and annual financial statements relating to years beginning on/after August 1, 2008. Early adoption is permitted.
NPOs	Amendments relevant to not-for-profit organizations A series of amendments to existing standards for not-for-profit organizations have been made to the CICA Handbook in September 2008. These amendments impact the following guidance: CICA 4400 CICA 1100 CICA 4430 CICA 1540 CICA 4460 CICA 1751 CICA 4470 These amendments are effective for years beginning on/after January 1, 2009.
EIC 173	Credit risk and the fair value of financial assets and financial liabilities Considers whether an entity’s own credit risk and the credit risk of the counterparty should be taken into account in determining the fair value of financial assets and financial liabilities, including derivative instruments, for presentation and disclosure purposes. Applies for interim and annual financial statements for periods ending on or after January 20, 2009, except for entities that do not apply Section 3855 who may defer application to interim and annual financial statements relating to years beginning on or after January 1, 2010.
EIC 174	Mining exploration costs Considers the issues of (i) when exploration costs related to mining properties may be capitalized, and (ii) if exploration costs are initially capitalized, when should impairment be assessed to determine whether a write-down is required, and what conditions indicate impairment. Applies to financial statements issued after March 27, 2009.

While we have attempted to make this Newsletter as complete as possible, it may not include all changes or modifications to existing authoritative literature that may affect a particular enterprise.

International Financial Reporting Standards (IFRS)The transition to IFRS can be complicated.

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