Friday, August 09, 2013

Applying IFRS - Online guidance and resource materials

The Chartered Professional Accountants of Canada (CPA Canada) maintain an IFRS web section to provide guidance and support for understanding and applying International Financial Reporting Standards (IFRS). Whether applying an existing standard, searching for information on new standards, preparing financial statements or communicating with clients or lenders about IFRS, check out these free online resources. The Reporting Alerts series summarizes new and revised standards.
In addition, the Viewpoint series discusses circumstances unique to the mining and the oil and gas sectors. CPA Canada and the Prospectors and Developers Association of Canada (PDAC) created the Mining Industry Task Force to share views on IFRS application issues of relevance to junior mining companies. CPA Canada, the Canadian Association of Petroleum Producers (CAPP) and the Explorers and Producers Association of Canada (EPAC) created the Oil and Gas Industry Task Force to share views on IFRS application issues of relevance to junior oil and gas companies. In addition, learn more about the importance of applying professional judgment when preparing or auditing IFRS-based financial reporting.

Thursday, March 22, 2012

IFRS – The Second Wave

Canadian companies have issued their first International Financial Reporting Standards (IFRS) financial statements and most still face numerous challenges in implementing the new accounting standards on a day-to-day basis. It appears, however, that the transition exercise is far from over because the International Accounting Standards Board (IASB) has more than 30 review projects on its agenda over the next few years. This, the second unavoidable wave of changes — consolidation, financial instruments, leases, financial statement presentation — is already dubbed the Big Bang II in Europe.

Canadian publicly accountable enterprises must be equipped to deal with this flood of new material. These extensive reforms will not only have accounting implications, they will also affect management information (including performance indicators), the company’s strategic decisions, operations, internal controls and information systems. Given this change in management process, companies need to identify their challenges and prepare the key players, such as internal and external auditors, in the process of managing the change.

For more information, read the article “The Big Bang, II” in the March 2012 issue of CAmagazine online.

Wednesday, February 22, 2012

Canada’s IFRS Discussion Group - January 2012

Canada’s IFRS Discussion Group assists the Accounting Standards Board (AcSB) regarding the application of International Financial Reporting Standards (IFRS). The Group comprises members with various backgrounds who participate as individuals in the discussion.

Views expressed in the public meeting do not necessarily represent the views of the organization to which a member belongs or the views of the AcSB. The discussions of the Group do not constitute official pronouncements or authoritative guidance. Only the International Accounting Standards Board (IASB) or the IFRS Interpretations Committee can make such a determination.

Listen to the audio recordings of the topics discussed by the Group in January 2012. For additional information, see the Group’s agenda and description of items.
  1. Opening Remarks and Updates;
  2. Preparing Annual IFRS Financial Statements;
  3. IFRS 1: Change in Date of Transition to IFRSs;
  4. IFRS 2 & IAS 32/39: Recognition of Share Purchase Warrants;
  5. IFRS 11: Classification of Limited Partnerships Subject to Joint Control;
  6. IFRS 11: Guarantees of Debt of a Joint Arrangement;
  7. IAS 8: Disclosure Requirements for Retrospective Application of New Standards;
  8. IAS 10: Reissuing Financial Statements in Connection with an Offering Document;
  9. IAS 23: Capitalization of Borrowing Costs on Major Renovations;
  10. IAS 28: Dilution in Ownership Interests;
  11. IAS 36: Impairment Test of Provisional Goodwill Acquired during the Current Period;
  12. Issues Submitted but Not Brought Forward.

Monday, February 06, 2012

IFRS Outlook Survey for the United States

Corporate financial reporting in the United States is in a period of change and uncertainty. In light of these changes, PricewaterhouseCoopers (PwC) published, in December 2011, a report called 2011 US IFRS outlook survey: Companies' thoughts on the best timing and methods for incorporating IFRS into the US financial reporting system. The report presents the views of finance executives and other stakeholders on approaches to incorporating International Financial Reporting Standards (IFRS) that would best serve the interests of investors, preparers and other users of financial statements.

The key findings are as follows: 1) Respondents had differing perspectives on the timetable for any SEC announcement as well as whether aspects of IFRS incorporation should be mandatory or voluntary. 2) Many companies have taken a “wait and see” attitude. Although a majority of executives still see the transition from US GAAP to IFRS as inevitable, most have not yet committed resources to the process. 3) Support for the US transition to IFRS remains strong, but has declined over the past year. This is attributed to uncertainty about the timing and specifics of the SEC’s plans. 4) The endorsement approach to transition, as outlined by the SEC staff in their May 2011 staff paper, is widely seen as a viable – though not necessarily the most preferred – means for the US to transition to IFRS. 5) There is still considerable debate and uncertainty in the cost-benefit analysis of moving to IFRS. Each company is different, so there is no easy way to generalize about the impacts of IFRS on US companies.

Monday, January 16, 2012

Canadian IFRS adoption - some inconclusive evidence

What, if any, are the potential economic consequences or benefits of the Canadian IFRS adoption?

As the activities of preparing and auditing the first set of complete annual reports using international financial reporting standards (IFRS) are in full swing, it is easy to identify some costs of transitioning from Canadian GAAP to IFRS. So it is an appropriate time to ask, why are we going through this transition? Are there benefits that my company, my clients or the country as a whole might expect to realize from IFRS adoption?

Recent academic literature has examined IFRS transitions, mainly the European Union (EU) transition, which occurred in 2005, and provides evidence that some benefits have accrued to some IFRS-adopting firms. Here, these benefits are summarized, cases where the evidence to date appears to be relatively inconclusive are highlighted and some cautions about generalizing from the EU transition experience to Canada are noted.

(For more information, read the article “Inconclusive evidence” by David Godsell and Michael Welker in the January/February 2012 edition of CAmagazine online.)