The Office of the Superintendent of Financial Institutions is giving banks and trust and loan companies three fiscal reporting periods to ignore new accounting requirements in their regulatory filings.

OSFI says that for the first, second and third quarters of fiscal 2004 only, it will provide transitional relief to permit banks, and others, to continue to prepare regulatory returns without “regard for the new requirements”, which establish standards for financial reporting in accordance with GAAP and describes what constitutes Canadian GAAP and its sources.

The regulator notes that a number of the institutions under its authority have identified industry accounting practices that do not comply with the new GAAP requirements, which took effect for fiscal years starting after Oct. 1 last year, “and have pointed out that the final accounting treatment and materiality of some of the changes have not yet been determined.”

Compliance with these new requirements may impact on GAAP-based capital adequacy calculations.

“We understand that institutions may need additional time to determine the impact these changes will have on their GAAP financial statements,” OSFI says. “In the context of its ongoing review of other recent changes to GAAP in Canada, OSFI will review the impact of adopting [the new requirements] and determine whether longer-term exceptions to the GAAP basis for regulatory reporting are warranted.”

This short-term exception only applies to the firms’ regulatory reporting.