What’s new with accounting standards?
This bulletin will be of particular interest to those who prepare financial statements.
In 2016, the Public Sector Accounting Board (PSAB) started a project on employment benefits to examine Sections PS 3250 and PS 3255 and eventually publish a new section. After advancing in the analysis of the responses received during the three Invitations to Comment published since 2016, the PSAB announced, at the end of November 2019, that it had decided to review its project by re-examining its plan and its scope, which should be communicated again in 2020.
In September 2019, the Accounting Standards Board (AcSB) published an exposure draft that proposed amendments to Section 3462 (“Employee Future Benefits”). These amendments are aimed at organizations that use a funding valuation to prepare their accounting results. The proposed amendments are in response to an issue raised in 2018 surrounding the diversity in practices observed with regard to whether or not he stabilization provision or the provision for adverse deviations should be taken into consideration in accounting results. You can consult our bulletin from last September for a summary of the proposed amendments.
After analyzing the responses to its exposure draft, including diverging opinions on certain proposals, the AcSB will go forward with the proposed amendments but with some adjustments to the text published in the exposure draft for greater clarity. As a reminder, transitional provisions have been proposed. The AcSB will continue working to finalize the standards’ text and the basis for conclusions. However, on May 13, it made the decision to postpone the effective date to the fiscal years starting on or after January 1, 2022 (instead of January 1, 2021). Early enforcement will be permitted.
For several years, IASB has been working on a project to improve the usefulness of the information to be provided in financial statement disclosures. This project is in response to a consultation that allowed primary users to express their concerns regarding current disclosure requirements, which led to issues such as the lack of relevant information, surplus irrelevant information and ineffective communication of information.
As a result, IASB is developing guidelines for preparing and drafting more adequate disclosure requirements (for all its standards) in the future. IASB chose to use disclosure requirements for employee benefits (Section IAS 19) as well as those from another standard (Section IFRS 13 – Fair Value Measurement) to test and adjust the guidelines developed during the project. IASB expects to publish an exposure draft focusing on the guidelines and the amendments to disclosure requirements in Sections IAS 19 and IFRS 13 in winter 2021. Please note that it was recently announced that publication would be postponed to take into consideration the impact of the current situation on stakeholders.
For more information on this subject, please contact a Normandin Beaudry consultant.