OSC Perspectives
Canadian Securities Regulators Update IFRS Transition Timeline for Investment Funds
April 12, 2011 -
The Canadian Securities Administrators (CSA) have published an update on the adoption of International Financial Reporting Standards (IFRS) by investment funds in Canada.
CSA Staff Notice 81-320 (Revised) Update on International Financial Reporting Standards for Investment Funds published on March 23, 2011, is a revision of the original notice published last year under the same number. The original notice updated investment funds on the decision of the Canadian Accounting Standards Board (AcSB) to provide a one-year deferral of the transition to IFRS by investment companies. A revision of the original notice was required when the AcSB amended Canadian accounting standards to extend the deferral for another year, delaying the mandatory changeover date until January 1, 2013.
The AcSB’s decision to provide the extension was based on the same rationale that investment funds’ changeover date was initially deferred. In 2010, the International Accounting Standards Board (IASB) announced that it will propose that an investment company be exempt from consolidating entities that it controls. This proposed exemption has been delayed at the IASB and the exposure draft has not yet been published for comment. The deferral is intended to allow the IASB’s proposed exemption to be in place prior to the adoption of IFRS by investment companies in Canada. Given this deferral, investment funds in Canada now have until January 1, 2013 to transition to IFRS.
In light of these developments, CSA staff will review and revise previously proposed IFRS-related amendments to National Instrument 81-106 Investment Fund Continuous Disclosure, with the goal of having the necessary IFRS-related amendments in force by January 1, 2013.
Investment funds should continue to provide disclosure on the expected effect of the changeover to IFRS that is consistent with existing guidance provided in CSA Staff Notice 52-320 Disclosure of Expected Changes in Accounting Policies Relating to Changeover to International Financial Reporting Standards.
CSA Staff Notice 81-320 (Revised) Update on International Financial Reporting Standards for Investment Funds published on March 23, 2011, is a revision of the original notice published last year under the same number. The original notice updated investment funds on the decision of the Canadian Accounting Standards Board (AcSB) to provide a one-year deferral of the transition to IFRS by investment companies. A revision of the original notice was required when the AcSB amended Canadian accounting standards to extend the deferral for another year, delaying the mandatory changeover date until January 1, 2013.
The AcSB’s decision to provide the extension was based on the same rationale that investment funds’ changeover date was initially deferred. In 2010, the International Accounting Standards Board (IASB) announced that it will propose that an investment company be exempt from consolidating entities that it controls. This proposed exemption has been delayed at the IASB and the exposure draft has not yet been published for comment. The deferral is intended to allow the IASB’s proposed exemption to be in place prior to the adoption of IFRS by investment companies in Canada. Given this deferral, investment funds in Canada now have until January 1, 2013 to transition to IFRS.
In light of these developments, CSA staff will review and revise previously proposed IFRS-related amendments to National Instrument 81-106 Investment Fund Continuous Disclosure, with the goal of having the necessary IFRS-related amendments in force by January 1, 2013.
Investment funds should continue to provide disclosure on the expected effect of the changeover to IFRS that is consistent with existing guidance provided in CSA Staff Notice 52-320 Disclosure of Expected Changes in Accounting Policies Relating to Changeover to International Financial Reporting Standards.
