The Office of the Superintendent of Financial Institutions says it will delay implementation of new accounting standards for employee future benefits as they affect capital adequacy and assets requirements.

Under a proposal from the Accounting Standards Board, entities will be required to recognize the funded status of defined benefit plans in the balance sheet for fiscal years ending on or after December 31, 2007, OSFI notes.

“OSFI is aware that this proposed accounting standard has the potential to impact the calculation and reporting of adequacy of capital and assets by federally regulated financial institutions,” OSFI said in a letter to financial institutions.

“As a result of their different fiscal year-ends, some, but not all, FRFIs will be required to reflect these accounting changes in their fiscal 2007 year-end financial statements,” it says. “In order to ensure consistent regulatory treatment among FRFIs and to allow OSFI time to assess the impact of the final accounting standards, OSFI will delay the impact of these standards to its adequacy of capital and assets requirements for fiscal 2007 and until further notice.”

“OSFI will assess these changes in consultation with FRFIs over the coming year and plans to issue a Capital Advisory once a decision is reached on how these accounting changes should be reflected for purposes of measuring the adequacy of capital and assets,” it concludes.