Reporting Alerts on IFRS and related resources

Information on new and revised IFRS, together with CICA's Reporting Alerts are now made available on the CICA Canadian Standards in Transition website. Related resources that are targeted towards the needs of smaller public companies are also available.

Reporting Alerts provide an orientation to the standard by highlighting the significance, content and timing of the standard or regulation; summarizing key changes from any predecessor; and suggesting an action plan to follow.

Resources that provide application guidance will vary depending on the nature of the particular standard. They may include checklists, decision trees, questions and answers, and comparisons to former requirements.

Canadian GAAP at a crossroads: Which path should private companies choose: ASPE or IFRS?

In 2011, private companies will start issuing financial reports based on either Accounting Standards for Private Enterprises (ASPE), or International Financial Reporting Standards (IFRS). Although both sets of standards are derived from the existing Canadian GAAP-based CICA Handbook – which will be phased out that same year – there are distinct differences between the two financial reporting systems. Much discussion has revolved around the more demanding disclosure requirements of IFRS; however, that’s just one of many factors private companies need to consider.


The first step in making an informed decision is analysing the business, accounting and stakeholder considerations, and the impact of choosing ASPE versus IFRS. While both sets of standards enable credible financial reporting, allowing capital providers and other stakeholders to monitor the performance of the enterprise, the choice ultimately comes down to weighing the differences between the two sets of standards against the information needs of stakeholders and intermediaries. The answer will not be the same for everyone.

(For more information, visit the Deloitte website and read Canadian GAAP at a crossroads, updated in April 2011.)

CICA seminar on integrated reporting features Robert Herz

Robert Herz, the recently retired chair of the US Financial Accounting Standards Board (FASB), will be in Toronto, Canada on November 23, 2011, for a breakfast seminar organized by the Canadian Institute of Chartered Accountants (CICA). Mr. Herz will review the proposals outlined in a Discussion Paper, Towards Integrated Reporting – Communicating Value in the 21st Century, published by the International Integrated Reporting Committee (IIRC).

The IIRC was established in August 2010 by the Prince of Wales Accounting for Sustainability Project, the Global Reporting Initiative, and the International Federation of Accountants.  The IIRC brings together a cross section of representatives from the corporate, investor, accounting, securities, regulatory and standard-setting communities.

The Discussion Paper features proposals for the development of an International Integrated Reporting Framework and outlines the next steps toward its creation and adoption. The goal of integrated reporting is to provide more comprehensive and meaningful information about how an organization creates and sustains value.

(For more information, see the CICA media release on November 18, 2011.)

International Financial Reporting Standards - IASB Future Work Plan

In July 2011, the International Accounting Standards Board (IASB) issued a Request for Views, “Agenda Consultation 2011.” This paper seeks input on the IASB’s future work plan and the areas of financial reporting it proposes to give priority to over the next three years. The comment deadline is November 30, 2011.

An important part of balancing the future work plan is to understand the financial reporting needs and challenges of stakeholders. As such, Canada’s Accounting Standards Board (AcSB) encourages all Canadian stakeholders to review the Request for Views and submit comments directly to the IASB. Your views will help shape the IASB’s future agenda.

The AcSB will be responding to the IASB, as well, and is seeking the views of Canadian stakeholders to develop an informed response. The AcSB has organized a program of public consultations between mid-October and early November 2011 to help form its response, including conference calls and roundtables in Vancouver, Calgary, Toronto and Montreal. More information on the IASB Agenda Consultation, and the related roundtables and conference calls, is available online.

(For an update on recent activities of Canada's Accounting Standards Board, see the FYI Newsletter October 2011.)

Canadian Standards in Transition - ASPE Resources Available

The Canadian Institute of Chartered Accountants (CICA) has recently issued three new resources to help private companies make a smooth transition to the new accounting standards for private enterprises (ASPE).

A Guide to Understanding Transitional Options and Accounting Policy Choices
This CICA guide helps practitioners understand the choices and decisions available under the new accounting standards for private enterprises (ASPE) and provides practical examples and worksheets.

A Case Study: Financial Statement Comparison
This publication presents an example of non-consolidated and consolidated financial statements prepared in accordance with pre-changeover accounting standards - XFI Version, and financial statements restated in accordance with ASPE.

Transition Considerations for a Non-Complex Entity
This summary highlights significant changes in the new standards as well as items that require management consideration. The information, geared to non-complex entities, raises awareness for typical balances on a set of financial statements.

Reporting Implications of New Auditing and Accounting Standards, August 2011

There are a number of significant changes taking place to accounting and auditing standards in Canada. The Auditing and Assurance Standards Board (AASB) recognizes that these changes may have an impact on the form and content of practitioners’ reports. Therefore, the AASB formed a Task Force to develop guidance that will address complex reporting issues that may arise during this period of change with a view to promoting consistency in reporting.

This Guide presents a series of issues in Question and Answer format. It also presents a series of Illustrative Reports. These are designed to help practitioners understand and apply requirements and supporting guidance issued by the AASB relating to reporting. Practitioners are expected to use professional judgment in determining whether the material in this Guide is both appropriate and relevant to the circumstances of each audit engagement.

(Read the Guide, Reporting Implications of New Auditing and Accounting Standards, Issue No. 5 — August 2011.)

CICA conference explores post-transition issues

Now that IFRS is Canadian GAAP for most publicly-accountable enterprises, organizations with December 31 year-ends have already filed their first interim reports. There are experiences to learn from regarding the application of IFRS and the impact of new financial reporting frameworks on organizations.

IFRS and the new world of global accounting standards will be a continuous journey of learning. Issues such as how far to go with Canadian guidance, while still being true to the commitment to adopt IFRS without country- specific interpretations, will be a constant challenge. And, there will always be the need to keep up –to-date technically on new and proposed standards as they emerge.

Many of these important issues will be the subject of discussion and debate at CICA’s first post-transition Financial Reporting and Accounting Conference (FRAC), which runs September 26 to 28, 2011, at the Metro Toronto Convention Centre in Toronto. The robust agenda of this year’s conference includes a CFO panel discussion on lessons learned from their organizations’ transition, another panel discussion entitled IFRS — Walking the Tightrope between Canadian Guidance and Interpretation — How Far Can We Go? and a third on the application and implications of the New World of Fair Value Measurement. The conference also includes several technical IFRS updates, including revenue recognition, leases, joint arrangements and consolidations, and post-employment benefits.

Canadian FYI Newsletter August 2011

The Canadian Accounting Standards Board (AcSB) FYI Newsletter August 2011 includes the message from the Chair and articles on other topics of interest to stakeholders. It notes that high-quality standards take time to develop. Setting a June 30, 2011 deadline did motivate the International Accounting Standards Board (IASB) and the US Financial Account­ing Standards Board (FASB) to meet more frequently to redeliberate important issues in light of the many comments and suggestions received on their exposure drafts.

However, in April 2011, the Boards conceded that more time is needed to complete their joint projects on revenue, leases and financial instruments, and also the IASB’s standard on insurance contracts. The fourth “Progress Report on IASB-FASB Convergence Work” extended the completion targets for these projects to the second half of 2011. The extension is consistent with the objectives of the G20 leaders. It will also permit the Boards to consult with those affected about the proposed changes and work through concerns and issues raised by stakeholders.

IFRS: the first quarter

The first IFRS Canadian corporate report filings are now in. How did the implementation go? What went right? What went wrong? What can we expect in the future? With a number of major IFRS projects underway at the International Accounting Standards Board — such as leases and financial instruments — the reporting landscape is still a live environment. But, the transition to a new era is now formally in play on the balance sheets of Canada’s publicly listed companies. With more than 4,100 IFRS-infused first quarter reports being filed with regulators in 2011, these organizations have only the briefest of respites to look back at what was for many an unexpectedly daunting task. (Read the article "IFRS: the first quarter" in the August 2011 issue of CAmagazine online.)

Interim Reporting Under IFRS — An Update

CPR Alert (Issue 14, July 2011) is a non-authoritative bulletin prepared by staff of the Canadian Performance Reporting Board (CPRB) at the Canadian Institute of Chartered Accountants (CICA). This issue, Interim Reporting Under IFRS — An Update, reviews: Filing deadlines – no extension for Q2 and Q3; Items to include in Q2 and Q3 2011 interim financial reports; Auditor review of interim financial reports; MD&A considerations for Q2 and Q3 2011; and Classification of bankers acceptances under IFRS. In addition, the Ontario Securities Commission published IFRS Release No. 3 – IFRS Interim Financial Reports –Tips For Q2 And Q3 on July 7, 2011. That release provides a useful filing tip sheet for Q2 and Q3.

Canada - IFRS Discussion Group

The Canadian Accounting Standards Board (AcSB) established the IFRS Discussion Group (IDG) in 2009 to implement and maintain a regular public forum on the application of IFRS in Canada. The purpose of the IDG is to assist the AcSB by considering issues relating to the application of IFRS in Canada and making recommendations on whether particular issues should be referred to the International Accounting Standards Board (IASB) or IFRS Interpretations Committee. The IDG normally meets four times a year. At the discretion of the IDG Chair, meetings are generally open to public observation. Members of the public are encouraged to submit issues for consideration by the IDG.

Listen to the audio recordings of the ten topics discussed by the Group in June 2011, including preliminary observations of some of the provincial securities regulators staff on the first quarter filings under IFRS and six issues arising from the application of IFRS in Canada.

Access to Unaccompanied International Financial Reporting Standards (IFRS)

The Canadian Accounting Standards Board (AcSB) provides free access to the consolidated unaccompanied IFRS, including the core standards without implementation guidance and the basis for conclusions. All rights to the content are owned or controlled by the IFRS Foundation. (IFRS as issued by the International Accounting Standards Board at January 1, 2010.)

Ernst & Young - IFRS: a strategic opportunity

The move to International Financial Reporting Standards (IFRS) is the single most important initiative in the financial reporting world (Ernst & Young). Its impact stretches far beyond accounting to affect every key business decision, not just how it is reported. Access to up-to-date knowledge, insights and timely advice is essential. As IFRS becomes the financial reporting language in many more countries, consistent interpretation and application becomes ever more vital. The starting point of the journey is to conduct an IFRS diagnostic to assess the impact conversion will have on your business.

Deloitte - Moving ahead in an IFRS world

Canada is an International Financial Reporting Standards (IFRS) jurisdiction for all publicly accountable enterprises, as of January 1, 2011. Many enterprises are now shifting their interest from preparing for IFRS implementation to keeping up with IFRS changes and understanding how to apply the principles of IFRS on a day-to-day basis.

IFRS requires an entity-wide approach to financial reporting. Companies must build IFRS into flexible financial reporting systems and processes. Management must also review the assumptions and judgments made and the systems and processes implemented throughout their IFRS journey. This includes developing their initial IFRS solutions, incorporating new developments in IFRS standards and interpretations, and preparing for changes to their business and the overall economic environment.

(Deloitte: Featured Insights - Moving ahead in an IFRS world, IFRS Resources, IFRS e-Learning)

IFRS - Academic Resources

The transition to International Financial Reporting Standards (IFRS) poses a unique challenge for accounting academics. The Canadian Institute of Chartered Accountants (CICA) is pleased to provide a range of materials to help academics develop teaching strategies to prepare their students for this significant change for our profession. Visit the Canadian Standards in Transition website.

Financial Reporting in Canada under IFRS 2011

Financial Reporting in Canada under IFRS 2011 is a concise, practical reference source that looks at the application of International Financial Reporting Standards (IFRS) from a Canadian perspective. It examines and explains IFRS requirements, illustrating their application using real-world extracts of financial statements from companies that have already adopted IFRS. It also includes: comparisons of the requirements under Canadian GAAP and IFRS; tables, charts and diagrams summarizing the requirements in easy-to-read point form; and examples of application presented in short case studies. The publication is available for purchase from the CAstore online. A free sample chapter (Chapter20 – First-time Adoption of IFRS) is also available online.

CSA Staff Notice 52-328: Disclosure about Accounting Policies in the Year of Changeover to International Financial Reporting Standards (IFRS)

For many issuers, the adoption of IFRS will result in one or more significant changes in an issuer’s accounting policies. This notice responds to specific questions CSA staff have received on disclosure about accounting policies in an issuer’s interim and annual Management’s Discussion and Analysis (MD&A) in the year of changeover to International Financial Reporting Standards (IFRS). (See CSA Staff Notice 52-328: Disclosure about Accounting Policies in the Year of Changeover to International Financial Reporting Standards (IFRS).

Global - IFRS News by PricewaterhouseCoopers

IFRS News is a monthly global publication by PricewaterhouseCoopers (PwC) that provides Canadian-specific content in The Canadian Report, IASB technical updates and PwC insights into the impact of the adoption of International Financial Reporting Standards (IFRS). (Read the March 2011 issue of IFRS News online.)

Effective IFRS communications with stakeholders

Effective communication cannot happen without an understanding of the needs of the audience. In preparing the first IFRS interim reports, adopters should try to look at the information through the same lens as the people who are seeing it for the first time, most of whom are on a steep IFRS learning curve. Do the reports convey the intended message? Will the readers of those reports be able to discern whether changes in the statements are a reflection of business performance or the new standards? Watch for unintentionally raising red-flags by what is said – or not said. Adopters issuing their first quarter reports under IFRS have an important story to tell. How it is told will affect how it is interpreted. Helpful resources can be found on the CICA’s IFRS website including: (1) IFRS Financial Statements – Examples: A sampling of interim IFRS financial statements provided by first-time adopters. (2) Meeting Regulatory Requirements: A web page that provides OSC guidance on MD&A disclosure, including a publication called Ontario Securities Commission Issuer Guide: Top 10 Tips for Public Companies Filing Their First IFRS Interim Financial Reports. (3) A Review of 2010 Financial Statement Disclosures and What to Expect in 2011: An audio/slide presentation that discusses how financial analysis will be different in an IFRS world. The CICA is providing free access to this recording. Other useful IFRS audio presentations are available at the CICA Xtensions Learning Centre.

Role of audit committees in the transition to IFRS

Audit committees play an important role in the transition to International Financial Reporting Standards (IFRS).  National Instrument 52-110, Audit Committees, requires audit committees to review the issuer’s interim financial statements, related MD&A and interim earnings press releases before the information is made publicly available. For an issuer filing its first IFRS interim financial report, this report will contain the expanded disclosure required by IFRS 1 and securities law. In many organizations, the board looks to the audit committee for insight into the soundness of the entity’s transition strategy and to monitor and review its progress. In addition, the audit committee can be an important sounding board for management. The Board/Audit Committee webpage on the CICA’s IFRS website provides a number of helpful resources.

Financial Reporting in Canada under IFRS - First-time Adoption of IFRS

The move to International Financial Reporting Standards (IFRS) is a major challenge for everyone involved in financial reporting in Canada: preparers, users, practitioners, professors and students. The CICA Guidance and Support Group have prepared the 2011 edition of Financial Reporting in Canada under IFRS as a primer for understanding and applying IFRS. Chapter 20 of the publication provides guidance on the First-time Adoption of IFRS. Additional resources are available on the CICA’s Transition to IFRS website.

The IFRS deadline is finally here, and while there has been a great deal of preparation, it's not over yet.

The long-awaited dawn of International Financial Reporting Standards (IFRS) in Canada has finally arrived. IFRS became Canadian generally accepted accounting principles for most public companies on January 1, 2011. But experts advise adopters not to become complacent in the early days of this new era in financial reporting. Read the article "Finishing Touches" in the January-February 2011 edition of CAmagazine online.