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IFRS- coming soon!
Paul Cherry
Chair
Accounting Standards Board
2
The Decision Process
2 Invitations to Comment: 2004-05 Numerous roundtables across Canada Public meetings with Oversight Council
AcSB implementation plan: Jan/06 Posted on web; comments invited Transition date 2011
Transition date confirmed: March/08 Progress review Roundtables Public meeting with AcSOC
3
Why Change?
Improve access & reduce costs of capital Reflects globalization of capital markets
Canada < 3% of global market Make Canada more attractive to foreigners
Facilitate financial reporting External reporting Internal reporting
4
Who Is Affected
Mandatory: If publicly accountable and profit-oriented
Optional: Private profit-oriented Not-for-profit
Prohibited: Pension plans
5
Definition of “Publicly Accountable”
Securities currently outstanding & traded in a public market as defined in s. 1300;
or
Hold financial assets as fiduciary to a broad group of outsiders
Not incidental to your business
More precise than the definition in the Omnibus ED issued earlier in 2008
6
Crucial Dates
Date of transition: beginning of earliest period presented in first IFRS F/S Eg., 1/1/2010 for Dec 31 y/e Need a full IFRS opening B/S
Affects interim reports, too Ie, you must be fully IFRS compliant in Q1
7
IFRS-1, First-time Adoption
Some once-in-a lifetime choices ED of amendments to IFRS 1 [Sept 25/08]
Full cost method Rate – regulated operations
8
What You Need to Do
In-depth IFRS training; Individual implementation plans
MD&A disclosures Monitor active IASB projects
9
Early Adoption
In 2009, only with CSA approval: Must demonstrate you are ready A few companies have already got approval “IFRS per IASB” since not yet Cdn GAAP
In 2010: when all IFRSs have been incorporated into
Canadian HB
10
Will the US Adopt IFRS ?
SEC accepts IFRS for foreign companies No reconciliation to US GAAP [2007]
FASB/IASB MOU updated [2008] SEC proposal to require IFRS [Sept 08]
Optional for certain large filers 2010 Mandatory: phase-in 2014-16 “Roadmap” to be published later this month?
11
The Current Credit Crisis
Fair value measurement Major changes unlikely re when to use FV More implementation guidance is needed Enhanced disclosures- ED issued
FASB proposals Elimination of “Qs”: delayed 1 year Adding qualitative criteria to FIN-46R
IASB revising IAS 27/SIC 12
12
Status Report
“On track” for 2011 Current market conditions are an unexpected
challenge But no reason to alter our strategy
US is committed to convergence But timing may slow down
Our strategy makes sense whatever US does
13
Next Steps for the AcSB
Second “mini” omnibus ED Incorporates subsequent changes in IFRSs Preface with general explanatory material Revised definition of “publicly accountable”
14
Questions?