Accounting Standards Oversight Council — Report on Public Meeting – June 9-10, 2016
Accounting Standards Oversight Council discusses the activities of the AcSB and PSAB, and related matters. As reported by The Standard.
At its meeting in Ottawa on June 9-10, 2016, the Accounting Standards Oversight Council (AcSOC) received presentations on, and discussed, the following:
Accounting Standards Board Activities
The AcSB’s Academic Advisory Council
Update on International Accounting Matters
Public Sector Accounting Board Activities
Accounting and the Accountability of Indigenous Governments in Canada
Report-back on AcSOC Members’ Attendance at a PSAB Meeting
Linda Mezon, Accounting Standards Board (AcSB) Chair, introduced AcSB members Marc Joyal and Michel Magnan who were present as observers. She noted that Mr. Magnan is the Chair of the AcSB’s Academic Advisory Council.
Ms. Mezon said that she was intensifying the AcSB’s efforts to support new volunteers and enhance the effectiveness of its committees. The AcSB is also continuing to build its relationships with the U.S. Financial Accounting Standards Board and other national standard setters.
She commented on her key priorities and the changing risk patterns regarding the following projects:
- International Financial Reporting Standards (IFRSs) in Part I of the CPA Canada Handbook – Accounting
- Rate-regulated activities
- Insurance contracts
- Accounting standards for private enterprises in Part II of the CPA Canada Handbook – Accounting
- Redeemable preferred shares
- Accounting standards for not-for-profit organizations in Part III of the CPA Canada Handbook – Accounting
- Improvement projects
Ms. Mezon’s comments on the above included the following:
- There are diverse global views and pressure for progress on developing an IFRS for rate-regulated activities. The AcSB is compiling evidence of the economic value of rate-regulated activities to support developing a new standard and is increasing its efforts in this regard. She said the International Accounting Standards Board (IASB) Chair has expressed the view that a working model should be developed for exposure and that if this is not possible, the project should be suspended. An AcSOC member commented that this would be tantamount to shutting down the project. The project’s suspension might place pressure on the AcSB to come up with a solution for the rate-regulated industry in Canada. Members expressed support for the AcSB’s approach to demonstrate the economic value of rate-regulated accounting and involving Canadian stakeholders in that work.
- For insurance contracts, the AcSB will focus on participating, and working with relevant Canadian stakeholders, in a fatal flaw review on a final draft of the upcoming insurance contracts standard. In reply to a question from a member, Ms. Mezon commented on the magnitude of the AcSB’s efforts in working with the Canadian insurance industry.
- For redeemable preferred shares, the AcSB is assessing the viability of a classification exception based on retaining control over the enterprise.
- For agriculture, the AcSB is considering the written feedback on its Discussion Paper issued in December 2015. It is also planning to hold roundtables in 14 locations across Canada.
Commenting on the proliferation of non-GAAP measures, Ms. Mezon stated that there is a need to understand the roles of standard setters, preparers, regulators, auditors and others regarding these measures. Some assert that standard setters should be more involved in monitoring developments regarding non-GAAP measures. She noted that she is endeavouring to involve more stakeholders in the standard-setting process and that in time this might alleviate the concerns of some regarding the use of non-GAAP measures. Members were pleased to hear about the AcSB’s increased outreach activities.
Regarding accounting standards for not-for-profit organizations, the AcSB has continued work to improve these standards after considering the advice of its Not-for-Profit Advisory Committee. In addition, the AcSB is participating in a global working group regarding the development of standards for this sector.
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