2012-11-29 AcSB staff releases guidance on newly issued IFRSs

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This newsletter highlights aspects of the AcSB Staff recent Financial Reporting Commentary regarding the newly issued IFRSs and the early adoption and advance disclosure related issues.

On October 24, 2012 the AcSB Staff released a Financial Reporting Commentary on newly issued IFRSs and related issues Canadian public companies may encounter with respect to early adoption and advance disclosure of changes to IFRSs. The following is a brief summary of the contents.

1. IFRSs effective in Canada
   
   
   • Canada is an 'endorser' jurisdiction, that means it goes through an established due process to adopt each change to IFRSs that results in a time lag following the issuance of the new or amended IFRS by the IASB.
   • Newly issued IFRSs are part of Canadian GAAP only when they are incorporated into the CICA Handbook, and not at any earlier point in the process, such as the publication of online decision summaries whose announcements are tentative and unofficial.
   
   
2. Issues
   
   
   • Early adoption - When a company decides to early adopt a new IFRS and issues financial statements incorporating the effect of its early adoption but the new IFRS has been incorporated into the Handbook, it would not be in compliance with paragraph 3.2(1)(a) of National Instrument 52-107, Acceptable Accounting Principles and Auditing Standards that requires financial statements to be prepared in accordance with Canadian GAAP.
   
   
3. Managing the issues

The staff proposed clarification to the Preface to the CICA Handbook - Accounting and the introduction to Part I of the Handbook for consideration by the AcSB.

The Accounting Standards Board is aware of this issue and is looking at ways to ensure the endorsement process is completed as soon as possible.

In some cases it may be necessary for companies to seek exemptive relief to adopt an IFRS that has been issued by the IASB but not yet included in the CICA Handbook.

The full text of the staff notice can be found here http://www.osc.gov.on.ca/en/SecuritiesLaw_csa_20120302_41-307_cf-prospectus-guidance.htm.