ifrs update ian p.n. hague, ca principal, accounting standards own views – not those of acsb or...
TRANSCRIPT
IFRS Update
Ian P.N. Hague, CAPrincipal, Accounting Standards
Own views – not those of AcSB or other staff
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Agenda
•AcSB IFRS Strategy
•IFRSs – Tackling the transition
•Helpful resources
•Private Cos & NFPOs
•Closing & questions
3
All systems go for 2011 adoption
•Balance of factors:
•Five years lead-time
•Date certain
•Relatively stable platform of IFRSs
•Limited period of C-GAAP falling behind
•Desire to drop IFRS-US reconciliation
•Desire for common global reporting
•EU Equivalence
•Many enterprises in advanced stages of preparation
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When is adoption required?
Jan. 1,2010
Dec. 31,2011
IFRSReporting
date
Openingbalancesheet
Preparatory period
Jan. 1,2011
Jan. 1,2008
8 months
Cdn. GAAP & IFRS
InterimF/S
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Who does this apply to?
•Publicly Accountable Enterprise:• Issued, or is in the process of issuing, debt
or equity instruments that are or will be outstanding and traded in a public market (i.e. all public companies are PAE’s); or
• Holds assets in a fiduciary capacity for a broad group of outsiders as one of its primary businesses, (i.e. others with large or diverse groups of users, such as a bank, insurance entity, securities broker/dealer, credit union, mutual fund or investment banking entity).
•Also, Public Sector: GBE/GBTO (see ITC)
•NOT required for NFPOs•Others may choose to adopt IFRSs
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International developments
• Global acceptance of IFRSs (100+
countries)
• IASB and FASB working closely together
• Elimination of IFRS/US GAAP reconciliation
• Single set of high quality standards –
“Memorandum of Understanding”
•Agreed upon standards by June 2011
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SEC Roadmap
•US Filers to adopt IFRSs in 2014-16?•Decision for roadmap – 2009?•Decision for 2014-16 - 2011•Largest international issuers choose to adopt
as early as 2009•20 largest in industry globally•IFRSs used most often in that industry
•Will consider•MoU•Accountability & funding of IASCF•XBRL•Education & training•Application experience
Comments were due by
April 20, 2009
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Canadian Securities Administrators
•Preparing investors for the transition
– disclosures
•“Grooming Disclosures” CSA Staff
Notice – 52 - 320
•2008 – Annual (interim if available)
•2009 & 2010 – Annual and Interim
•Guidance also available from CICA
•Early adoption - Staff Notice 52 - 321
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What does it mean to adopt IFRSs?
•PAEs adopt IFRSs without
modification as Canadian GAAP – all
Canadian GAAP falls away (for PAEs)
•Interpretations by IFRIC only
•Focus of attention becomes on IASB
in London
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Benefits to Canada
•Access to foreign markets
•Lower cost of capital – familiar standards
•Continued principles-based standards –
less complexity
•Efficiencies for international companies
•BUT: It will take work to get there
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Agenda
•AcSB IFRS Strategy
•IFRSs – Tackling the Transition
•Helpful resources
•Private Cos & NFPOs
•Closing & questions
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Implications for educators
•A changing world
•Opportunity to refresh course content
•Teach fundamental concepts
•Introduce international perspectives into curricula
•Broaden students minds beyond standards compliance
•Research opportunities
•Demand for comprehensive training
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Planning – Changing Standards
•Today’s IASB project is tomorrow’s
Canadian GAAP for Publicly Accountable
Enterprises
•Therefore students need to focus on what
will be in place in the future, not solely on
what is in place today
•So, what is changing and what is stable?
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Majority of IFRSs remain unchanged through 2011•Inventories
•Accounting Policies & Accounting Changes
•Events after the Balance Sheet Date
•Property Plant & Equipment
•Government Grants
•Foreign Currency
•Borrowing Costs
•Associates
•Hyperinflation
•Interim Reporting
•Impairment?
•Intangible Assets
•Investment Property
•Agriculture
•Business Combinations
•Extractive Activities
•Segments
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IFRS Adoption at changeover
•Many similarities between IFRSs &
Cdn GAAP
•BUT: Also some major differences
•Revaluations
•Impairment
•Securitization
•Devil is in the details!
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How do we get there?
C-GAAP changes before changeover
• Business combinations [IFRS 3/IAS
27] – 2011 - complete
• Earnings per share [IAS 33] – 2010??
• Joint ventures [IAS 31] – 2011
• Economic Environment? – 2010/11?
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Business combinations
•IASB/FASB standards finalized
•IASB and FASB not fully converged
•AcSB converged with IASB
•Effective January 1, 2011 with prospective
application – early adoption permitted
•Will significantly change some aspects of
accounting for business combinations
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Earnings per share
•IASB Exposure Draft issued – Comment
Deadline December 5, 2008
•Simplify and converge IASB and FASB EPS
•Principle - which instruments to be included
in basic EPS
•Diluted EPS –
•FV through P&L – no adjustment
•FV not through P&L – mkt price at the end of
the period
•Effective 2010?
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Joint ventures / arrangementsIASB Exposure Draft - comment deadline
January 11, 2008 – final expected H2 2009
•Eliminates proportionate consolidation
for jointly controlled enterprises•Maintains proportionate consolidation for jointly controlled assets and jointly controlled operations
•Key is how the structure qualifies within the definition –
•Direct interest in underlying asset – p.c.•Indirect interest in net outcome- equity
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Economic environment
•Issued guidance on ABCP
•Issued guidance on FV in Inactive Markets
•Issued amendments to reclassfcn of fin’cl
assets
•Amended 3862 re FV & Liquidity disclosures
•Considering Consolidations and Derecognition
•Comprehensive Financial Instruments project
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IASB changes expected
Other IASB changes before 2011
•Liabilities – 2009
•Management commentary – 2010
•Fair value measurement (how not when) – 2010
•Income taxes – 2010
•Emissions trading – 20102009 probably effective 2011
2010 probably effective 2012
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IASB isolated changes
Isolated changes
•Related Party Disclosures
•Discontinued Operations
•Group Cash-settled Shared-based
Payment
•First-time Adoption
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IFRS 1 choices
New Canadian proposals
•Full cost oil and gas
•Rate-regulation
•Assessments when prior accounting
same as IFRSs - Leases
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Changes expected in 2011
•Financial statement presentation
•Insurance contracts
•Liabilities & equity
•Leases
•Employee benefits
•Revenue recognition
Likely to be effective in 2013. Might not be available for early adoption?
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IASB Projects in longer term
•Reducing complexity in financial
instruments
•Extractive activities
•Common control transactions
•Government grants
•Intangible assets
•Conceptual framework
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Agenda
•AcSB IFRS Strategy
•IFRSs – Tackling the Transition
•Helpful resources
•Private Co’s and NFPO’s
•Closing & questions
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IFRS resources
•IASB web site – www.iasb.org
•IFRSs: Knotia, Omnibus ED, CAAA, IASB web site
•AcSB web site – www.acsbcanada.org
•What’s changing when?
•Canada/IFRS GAAP Comparisons – two levels
•AcSB’s IAC Meeting Notes, Bulletins, etc.
•CICA – 20 Qns for Audit Committees
- MD&A Guidance
•Major firms – Newsletters, webcasts, publications, illustrative F/S, syllabi, case studies, training materials, etc. etc.
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Agenda
•AcSB IFRS Strategy
•IFRSs – Tackling the Transition
•Helpful resources
•Private Co’s and NFPO’s
•Closing & questions
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What about private companies?
•Some might elect to use IFRSs
•For others:
•Starting from existing GAAP
•But aspects evolving towards IFRSs
•ED – April/May 2009
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Not-for-profit Organizations
•IFRS does not explicitly deal with
NFPOs
•Possible strategy:
•Allow NFPOs to use either:
•IFRS, or
•Private enterprise GAAP, with
addition of NFPO guidance?
•ITC – December 2008