Following a special meeting, the Accounting Standards Board (AcSB) confirmed Thursday that “the recent U.S. guidance on determining the fair value of financial instruments is consistent with Canadian standards.”
The guidance deals with determining whether a market is inactive and whether a transaction is a distressed sale.
Also, the AcSB decided to revise its standards on impairment of debt instruments to converge with international standards. These decisions are consistent with the AcSB’s strategy of adopting IFRSs for publicly accountable enterprises in 2011, the AcSB says.
“For financial assets classified as ‘held-to-maturity’ or ‘loans and receivables’ (which could include debt instruments not quoted in an active market), impairment would be based on the credit loss that has been incurred as at the balance sheet date,” the AcSB says.
These proposed revisions will be exposed for public comment. The changes will also narrow the differences with new U.S. requirements.
The AcSB says it strongly supports the work of the International Accounting Standards Board (IASB) and the U.S. Financial Accounting Standards Board (FASB) to develop a new international standard on measurement and recognition of financial instruments.
In the lead up to the changeover to IFRSs, the AcSB says one of the its guiding principles is to avoid changes that conflict with IFRSs and that are not aligned with emerging global accounting standards. “The AcSB is committed to working with the IASB and the FASB to develop new, high-quality standards,” it says.
“We endorse a level playing field and believe that a robust global accounting standard on financial instruments is the best way to achieve it. The proposed changes in the accounting for impairment respond to concerns that Canadian companies should not be disadvantaged as we make the transition to IFRSs,” said Paul Cherry, chairman of the AcSB.
“Canadian standards historically have been of a high quality, and maintaining transparency and trust in financial statements is vital,” Cherry adds.
IE
Accounting Standards Board levels playing field on determining value of financial instruments
Proposed changes respond to concerns that Canadian banks should not be disadvantaged
- By: IE Staff
- May 1, 2009 May 1, 2009
- 07:27