Let’s Play Ball!

April is a time for renewal and optimism. As a Toronto Blue Jays fan, April is my favorite month of the year, as no matter how the season starts it is still early and hope reigns supreme. ?This season has gotten off to a mediocre start (I am being kind), however, I am still optimistic that I will be watching the Jays well into October and hopefully November.?

For the Accounting Standards Board (AcSB) , April is also a time for renewal. New members join the Board, and we kick off our fiscal year with the goal of accomplishing everything we have set out in our annual plan. Achieving everything in our annual plan is akin to winning the World Series as an accounting standard setter!

IFRS 18

Continuing with the theme of renewal, this April the International Accounting Standards Board (IASB) has given us a new standard with the issuance of IFRS 18, Presentation and Disclosures in Financial Statements, which replaces IAS 1. ??

Although IFRS 18 carries forward a lot of the requirements of IAS 1, it will lead to a new look statement of comprehensive income by:

• introducing two new defined subtotals: operating profit and profit before financing and income taxes; and
• introduces categories for classifying income expenses – operating, investing, financing, income taxes and discontinued operations.

?The other major changes are:

• requiring disclosure in the financial statements of some management-defined performance measurements; and
• new guidance on how to aggregate and disaggregate information in the primary financial statements and notes.

IFRS 18 Implementation will require planning and communication?

Although IFRS 18 will not impact recognition and measurement, it is important that preparers do not underestimate the effort required to implement this new standard. The new subtotals and requirements related to grouping of financial statement items may require system changes. The disclosures related to management-defined performance measures that are required to be in the notes to financial statements, although not that different than regulatory requirements, will subject these items to the rigor of an audit. ?Most importantly, communication with investors ahead of the implementation will be critical, as IFRS 18 will have significant benefits to users of financial statements by:

• providing investors with additional useful information about financial performance;
• improving investors’ ability to compare performance between companies and between reporting periods for the same company; and
• improving transparency to help investors understand how management defines the company’s performance measures and how those performance measures compare with measures defined by IFRS ? Accounting Standards.

Communication with investors is critical so they are not surprised by the new information that will be available to them.

From an AcSB standpoint, we also want companies to start their implementation early, so that any implementation issues can be identified, and we can proactively use our ?IFRS Accounting Standards Discussion Group (IDG) meetings as a platform to discuss and socialize these issues.

Canadian Sustainability Standards Board’s public consultation – your input is key!

I would also like to highlight the important Consultation work underway by our sibling board, the Canadian Sustainability Standards Board (CSSB).?

In March, the CSSB issued three Exposure Drafts.? Committed to the global baseline the ISSB established, the CSSB’s proposed Canadian Sustainability Disclosure Standards (CSDS) 1 and 2 align with IFRS S1 and S2 – but with Canadian-specific modifications suggested. Also available for public comment is a paper discussing how the CSSB proposes to introduce changes, if required, to IFRS Sustainability Disclosure Standards for use in Canada. I encourage you to review the proposals and provide your input.

Your feedback to our proposals – be it accounting standards or sustainability – is critical to the issuance of quality standards!

I will end with some more baseball talk. I have not been able to fit in a game at the newly renovated Rogers Centre yet this year, however, I was able to fit in a ball game while in Japan for meetings with other accounting standard setters. Of course, I was wearing Blue Jays gear, including a Yusei Kikuchi t-shirt so I could represent both the Jays and Japan. A big thank you to Yasunobu Kawanishi and Nami Yamaguchi for getting us to a game between the Yokohama DeNA Bay Stars and Tokyo Yakult Swallows.