IFRS

The IASB issued narrow-scope amendments for income taxes (IAS 12) to clarify that companies are required to recognize deferred tax on transactions that would result in the recognition of equal deferred tax assets and liabilities (e.g.: leases and decommissioning obligations). These amendments align the reporting and accounting for recognizing deferred tax on temporary differences.

Effective for annual reporting periods beginning on or after January 1, 2023, with early application permitted.

Revised standard – insurance contracts

he IASB revised IFRS 17 to address an inconsistency between the requirements for providing comparative information on initial application between IFRS 17 and IFRS 9. Many insurance companies have not yet applied IFRS 9, which permits but does not require restatement of comparative periods. 

IFRS 17 requires restatement of comparative periods. The amendment to IFRS 17 allows companies who have not restated a financial asset, as per IFRS 9, to present comparative information as if the classification and measurement requirements of IFRS 9 had been applied to the financial asset before.

Effective for annual reporting periods beginning on or after January 1, 2023.

Revised standard – presentation of financial statements: disclosure of accounting policies

The IASB issued narrow-scope amendments to IAS 1 to require companies to disclose their material accounting policy information rather than their significant accounting policies. To support this amendment, IFRS Practice Statement 2, Making Materiality Judgements, was also amended to provide guidance on how to apply the concept of materiality to accounting policy disclosures. These amendments will help companies improve accounting policy disclosures to meet the needs of users of financial statements.

Effective for annual reporting periods beginning on or after January 1, 2023, with early application permitted.

Revised standard – accounting policies, changes in accounting estimates and errors: definition of accounting estimates

The IASB issued narrow-scope amendments to IAS 8 to clarify the distinction between a change in an accounting policy and a change in an accounting estimate. The amendments also introduced the definition of accounting estimates and clarified that the effects of a change in an input or a measurement technique used to develop an accounting estimate are changes in accounting estimates if they do not result from the correction of prior period errors.

Effective for annual reporting periods beginning on or after January 1, 2023, with early application permitted.

Exposure draft – non-current liabilities with covenants

The IASB issued an exposure draft proposing to amend IAS 1 to clarify that conditions a company must comply with within twelve months of the reporting period would not affect the classification of a liability with covenants as current or non-current at the reporting date. Instead, the company would present separately, and disclose information about non-current liabilities subject to such conditions. 

The exposure draft also proposes to defer the effective date of the January 2020 amendments to IAS 1 by one year to January 1, 2024 to align with the proposed amendment.

Comments are requested by March 21, 2022.

Exposure draft – subsidiaries without public accountability: disclosures

The IASB issued an exposure draft proposing a reduced disclosure IFRS standard that would apply on a voluntary basis to subsidiaries that:

  • do not have public accountability; and
  • have an ultimate or any intermediate parent that produces consolidated financial statements applying IFRS Standards. 

The intent is to reduce costs for eligible subsidiaries with reduced disclosure requirements while meeting the information needs of users of the financial statements.

Comments are requested by January 31, 2022.

Exposure draft – disclosure requirements in IFRS standards – a pilot approach

The IASB issued an exposure draft proposing guidance on developing and drafting disclosure requirements for IFRS Standards in the future. To test this draft guidance, the proposals also included amendments to IFRS 13, Fair Value Measurement, and IAS 19, Employee Benefits, that result from applying the proposed guidance to those standards.

    The intent is to help companies understand the type of information useful and material to investors and broader stakeholder groups.

    Comments are requested by January 12, 2022.

    Exposure draft – supplier finance arrangements

    The IASB issued an exposure draft proposing to amend IAS 7, Statement of Cash Flows and IFRS 7, Financial Instruments: Disclosures . The amendments would require qualitative and quantitative information to be provided about supplier finance arrangements. Typically, a supplier finance arrangement involves one or more finance providers offering to pay amounts that a company owes to its suppliers and the company agreeing to pay those finance providers with the same or different term than the original term with the suppliers.

    The intent is to complement the current requirements in the IFRS standards that apply to reverse factoring and similar arrangements and enhance transparency to assist users in understanding the effects of these arrangements on a company’s liabilities, cash flows, liquidity risk and risk management.

    Comments are requested by March 28, 2022.

    ASPE

    New standard – agriculture

    The AcSB issued a new standard (Section 3041) that sets out the principles for the recognition, measurement and disclosure of agricultural inventories and productive biological assets. The standard applies to transactions and events related to agricultural production, including the purchase of the harvested product of biological assets for use in agricultural production.

    Effective for annual reporting periods beginning on or after January 1, 2022, with early application permitted.

    Revised standard – revenue

    The AcSB issued amendments to the revenue standard (Section 3400) that provide additional guidance on:

    • percentage of completion method;
    • multiple element arrangements;
    • reporting revenue gross or net;
    • bill and hold arrangements; and
    • upfront non-refundable fees/payments.

    These amendments provide guidance that was previously not included in Section 3400 and eliminate the need to refer to guidance outside of ASPE for recognition of revenue.

    Effective for annual reporting periods beginning on or after January 1, 2022, with early application permitted.

    Revised standard – leases

    As a result of the ongoing Covid-19 pandemic, the AcSB revised Section 3065 to extend the practical relief period by one year to December 31, 2022 for both lessees and lessors in relation to accounting for rent concessions received or granted.

    Effective for annual periods ending on or after December 31, 2022, with early application permitted.

    Exposure draft – financial instruments

    The AcSB issued an exposure draft proposing to amend Section 3856, Financial Instruments. The amendments would apply to private enterprises and NFPOs that use Parts II and III of the Accounting Handbook, and would allow those entities to:

    • account for debt modifications directly related to Interbank Offered Rate Benchmark Reform (IBOR reform) as a continuation of the existing contract rather than an extinguishment; and
    • update their hedge documentation to reflect changes resulting from IBOR reform without discontinuing hedge accounting.

    These amendments would ease the financial reporting burdens for Canadian private enterprises and NFPO.

    The comment period is closed.

    PSAB

    New standard - public private partnerships

    The PSAB issued a new standard (PS 3160) that addresses the recognition, measurement, presentation and disclosure of infrastructure procured by public sector entities through certain types of public private partnership arrangements. This would include private partnership arrangements where the private sector partner is obligated to:

    • design, build, acquire or better new or existing infrastructure;
    • finance the transaction past the point where the infrastructure is ready for use; and
    • operate and/or maintain the infrastructure.

    Effective for fiscal years beginning on or after April 1, 2023, with early application permitted.

    Exposure draft – employee benefits, proposed section PS 3251

    The PSAB issued an exposure draft that outlines principles for the first of several phases of the revised employee benefits standards.

    Proposed Section PS 3251 would replace existing sections PS 3250, Retirement Benefits, and PS 3255, Post-employment Benefits, Compensated Absences and Termination Benefits. Key changes include:

    • the rate used to discount a post-employment benefit plan would depend on the plan’s funding status; and
    • a deferral and amortization approach for actuarial gains and losses would no longer be used.

    The comment period is closed.

    ASNPO

    New standard – combinations by not-for-profit organizations

    The AcSB issued a new standard (Section 4449) that:

    • provides accounting requirements for the recognition, initial measurement and disclosure of a combination;
    • applies to combinations involving two or more NFPOs that are unrelated or related parties;
    • outlines criteria to determine when a combination is accounted for as a merger or as an acquisition; and
    • provides guidance on how to account for a merger or an acquisition.
    Effective prospectively for fiscal years beginning on or after January 1, 2022, with early adoption permitted.

    COVID-19 resources

    The COVID-19 pandemic continues to significantly impact Canadian organizations. Find relevant information on financial reporting that accounts for the global pandemic and its impact on the profession.

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