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New and Proposed Changes to IFRS Sections for the Two Years Ended

December 31, 2018

New and Proposed Changes to IFRS Sections for the Two Years Ended December 31, 2018

This communication contains a general overview of the topic and is current as of December 31, 2018. This information is not a substitute for professional advice and we recommend that any decisions you take about the application or not of any of the information presented be made in consultation with a qualified professional. Contact your local MNP representative for customized assistance with the application of this material. MNP LLP accepts no responsibility or liability for any loss related to any person's use of or reliance upon this material. © MNP LLP 2018. All rights reserved.

NEW AND AMENDED STANDARDS

DATE ISSUED IASB AcSB

EFFECTIVE DATE

Framework for Reporting Performance Measures (New)

December

2018

Non-authoritative guidance.

Conceptual Framework for Financial Reporting (Amendment)

March 2018 October 2018 Effective for annual periods beginning on or after 1 January 2020. Earlier application is permitted.

Annual Improvements to IFRSs 2014 – 2016 Cycle (Amendment)

December 2016

March 2017 Effective for annual periods beginning on or after January 1, 2018, with the exception of amendments to IFRS 12, which are effective for annual periods beginning on or after January 1, 2017.

Annual Improvements to IFRSs 2015 – 2017 Cycle (Amendment)

December 2017

April 2018 Effective for annual periods beginning on or after January 1, 2019. Earlier application is permitted.

IFRS 2 Share-based Payment (Amendment)

June 2016 November 2016

Amendment, clarifying how to account for certain types of share-based payment transactions, is effective for annual periods beginning on or after January 1, 2018. Earlier application is permitted.

IFRS 3 Business Combinations (Amendment)

October 2018 December 2018

Effective for transactions for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after January 1, 2020. Earlier application is permitted.

IFRS 4 Insurance Contracts (Amendment)

September 2016

January 2017

Amendment to address concerns arising from the implementation of the new IFRS 9 Financial Instruments standard. Effective for annual periods beginning on or after January 1, 2018 or at the time IFRS 9 is implemented.

IFRS 9 Financial Instruments (New) July 2014

February 2015 Effective for annual periods beginning on or after January 1, 2018. Earlier application is permitted.

IFRS 9 Financial Instruments (Amendments)

October 2017

November 2017

Effective for annual periods beginning on or after January 1, 2019. Earlier application is permitted.

IFRS 10 Consolidated Financial Statements and IAS 28 (Revised) Investments in Associates and Joint Ventures (Amendment)

September 2014

November 2014

Effective date for these amendments is deferred indefinitely. Earlier application is still permitted.





EFFECTIVE DATE

IFRS 15 Revenue from Contracts with Customers (New)

May 2014

February 2015


IFRS 15 Revenue from Contracts with Customers (Amendment)

April 2016 August 2016 Amendment clarifying some requirements and providing additional transitional relief. Effective the same date as the Standard.

IFRS 16 Leases (New) January 2016

June 2016 Effective for annual periods beginning on or after January 1, 2019. Earlier application is permitted for entities that also apply IFRS 15.

IFRS 17 Insurance Contracts (New) May 2017

March 2018 Effective for annual periods beginning on or after January 1, 2021. Earlier application is permitted for entities that also apply IFRS 9 and IFRS 15.

IAS 1 Presentation of Financial Statements (Amendment)

October 2018 Effective for annual periods beginning on or after January 1, 2020. Earlier application is permitted.

IAS 7 Statement of Cash Flows (Amendment)

January 2016 April 2016


IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors

October 2018 Effective for annual periods beginning on or after January 1, 2020. Earlier application is permitted.

IAS 12 Income Taxes (Amendment)

January 2016 April 2016


IAS 19 Employee Benefits (Amendments)

February 2018 April 2018 Effective for annual periods beginning on or after January 1, 2019. Earlier application is permitted.

IAS 28 Investments in Associates and Joint Ventures (Amendments)

October 2017 November 2017


IAS 40 Investment Property (Amendment)

December 2016

March 2017 Effective for annual periods beginning on or after January 1, 2018. Earlier application is permitted.





EFFECTIVE DATE

IFRIC 22 Foreign Currency Transactions and Advance Consideration (New)

December

2016

March 2017


IFRIC 23 Uncertainty over Income Tax Treatments

June 2017 September 2017




EXPOSURE DRAFTS DATE ISSUED

IASB

EFFECTIVE DATE

Onerous Contracts – Cost of Fulfilling a Contract (Proposed Amendments to IAS 37)

December

2018

No date yet specified.

Non-GAAP and Other Financial Measures Disclosure (Proposed National Instrument 52-112)

September 2018


Accounting Policy Changes (Proposed Amendments to IAS 8)

March 2018 No date yet specified.

Accounting Policies and Accounting Estimates (Proposed Amendments to IAS 8)

September 2017


Property, Plant and Equipment – Proceeds before Intended Use (Proposed Amendments to IAS 16)

June 2017 No date yet specified.

Availability of a Refund from a Defined Benefit Plan (IFRIC 14)

June 2015 No date yet specified.

Classification of Liabilities (Proposed Amendments to IAS 1)

February 2015




New and Amended Standards

Framework for Reporting Performance Measures (New) In December 2018, the Accounting Standards Board (AcSB) issued the first edition of the Framework for Reporting Performance Measures (the “Framework”). The aim of this Framework is to assist entities in enhancing the transparency, consistency and comparability of financial and non-financial performance measures reported outside the financial statements. A public company, not-for-profit organization, private company or pension plan can apply this Framework to a financial, non-financial or operational performance measure. The key features of this Framework include: ▪ Identification of the characteristics of a high-quality performance measure.

▪ The application of materiality and cost benefit constraints when developing and reporting a performance

measure.

▪ A robust process for assessing what performance measure to report, and for developing and reporting

relevant performance measures, that includes:

(i) Selecting a relevant performance measure that can be faithfully depicted.

(ii) Applying materiality and cost benefit constraint considering the type and size of an entity and the

complexity of its activities.

(iii) Establishing policies, controls and procedures to ensure consistency, comparability, verifiability,

timeliness, and understandability.

(iv) Reinforcing with governance practices.

Application of this Framework is voluntary and it is non-authoritative guidance.

Conceptual Framework for Financial Reporting (Amendment) In March 2018, the International Accounting Standards Board (IASB) issued the revised Conceptual Framework for Financial Reporting, incorporated into Part I of the CPA Canada Handbook – Accounting by the Accounting Standards Board (AcSB) in October 2018. This revised Conceptual Framework replaces the previous version of the Conceptual Framework issued in 2010. The Conceptual Framework assists entities in developing accounting policies when no IFRS Standard applies to a particular transaction and helps stakeholders to more broadly and better understand the standards. The revised Conceptual Framework includes the following clarifications and updates:

▪ A new chapter on measurement; ▪ Guidance on reporting financial performance; ▪ Improved definitions and guidance, particularly for the definition of a liability; and, ▪ Clarifications in important areas such as the roles of stewardship, prudence and measurement uncertainty in

financial reporting.

The revised Conceptual Framework is effective for annual periods beginning on or after January 1, 2020. Earlier application is permitted.

Annual Improvements to IFRSs 2014-2016 Cycle (Amendment) In December 2016, the International Accounting Standards Board (IASB) issued a series of amendments to IFRSs, incorporated into Part I of the CPA Canada Handbook – Accounting by the Accounting Standards Board (AcSB) in March 2017, in response to issues addressed during the 2014-2016 cycle. The amendments are summarized below:



IFRS 1 First-time Adoption of International Financial Reporting Standards Amendments delete the short-term exemptions from the IFRSs contained in Appendix E, as the reliefs provided had been available to entities only for reporting periods that had passed. IFRS 12 Disclosure of Interests in Other Entities Amendments clarify the scope of the standard by specifying that the disclosure requirements in the standard, except for those in certain paragraphs, apply to an entity’s interests that are classified as held for sale, as held for distribution to owners or as discontinued operations in accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations. IAS 28 Investments in Associates and Joint Ventures Amendments clarify that the election to measure at fair value through profit or loss an investment in an associate or joint venture that is held by an entity that is a venture capital organization, or other qualifying entity, is available for each investment in an associate or joint venture on an investment-by-investment basis, upon initial recognition. The amendments above are effective for annual periods beginning on or after January 1, 2018, with the exception of amendments to IFRS 12, which are effective for annual periods beginning on or after January 1, 2017. Annual Improvements to IFRSs 2015 – 2017 Cycle (Amendment) In December 2017, the International Accounting Standards Board (IASB) issued a series of amendments to IFRSs, incorporated into Part I of the CPA Canada Handbook – Accounting by the Accounting Standards Board (AcSB) in April 2018, in response to issues addressed during the 2015-2017 cycle. The amendments are summarized below: IFRS 3 Business Combinations Amendments clarify that an entity remeasures its previously held interest in a joint operation when control of the business is obtained. IFRS 11 Joint Arrangements Amendments clarify that an entity does not remeasure its previously held interest in a joint operation when joint control of the business is obtained. IAS 12 Income Taxes Amendments clarify that an entity must recognise the income tax consequences of dividends when a dividend liability is recognised, and not only in circumstances where income taxes payable or refundable are measured at the tax rate applicable to undistributed profits. IAS 23 Borrowing Costs Amendments clarify that any outstanding borrowing made to obtain a qualifying asset should be treated as general borrowings when the qualifying asset is ready for its intended use or sale.

The amendments above are effective for annual periods beginning on or after January 1, 2019. Earlier application is permitted. IFRS 2 Share-based Payment (Amendment) In June 2016, the International Accounting Standards Board (IASB) issued amendments to IFRS 2, incorporated into Part I of the CPA Canada Handbook – Accounting by the Accounting Standards Board (AcSB) in November 2016, to clarify how to account for certain types of share-based payment transactions. The amendments provide requirements on the accounting for:

▪ The effects of vesting and non-vesting conditions on measurement of cash-settled share-based payments;

▪ Share-based payment transactions with a net settlement feature for withholding tax obligations; and

▪ A modification to the terms and conditions of a share-based payment that changes the classification of the

transaction from cash-settled to equity-settled.

The amendments are effective for annual periods beginning on or after January 1, 2018. Earlier application is permitted.



IFRS 3 Business Combinations (Amendment) In October 2018, the International Accounting Standards Board (IASB) issued amendments to IFRS 3, incorporated into Part I of the CPA Canada Handbook – Accounting by the Accounting Standards Board (AcSB) in December 2018. The amendments clarify the definition of a business, permitting a simplified assessment to determine whether a transaction should be accounted for as a business combination or as an asset acquisition.

The amendments are effective for transactions for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after January 1, 2020. Earlier application is permitted. IFRS 4 Insurance Contracts (Amendment) In September 2016, the International Accounting Standards Board (IASB) issued amendments to IFRS 4, incorporated into Part I of the CPA Canada Handbook – Accounting by the Accounting Standards Board (AcSB) in January 2017. The amendments address the concerns created by the implementation of IFRS 9 Financial Instruments before an entity has implemented the replacement Standard being developed for IFRS 4. The amendment provides two voluntary approaches to deal with the transition to IFRS 9:

▪ Overlay approach – provides all entities that issue insurance contracts the choice to recognize, in comprehensive income instead of profit and loss, the volatility that may arise from implementing IFRS 9 before the new insurance contract standard is available.

▪ Deferral approach – provides entities that have activities predominantly connected with insurance the option to temporarily apply an exemption from IFRS 9 (until 2021). Entities applying this exemption will continue to apply IAS 39 Financial Instruments.

The amendments to IFRS 4 for entities applying the deferral approach are effective for annual periods beginning on or after January 1, 2018. The amendments for entities applying the overlay approach are effective at the time IFRS 9 is implemented. IFRS 9 Financial Instruments (New) In July 2014, the International Accounting Standards Board (IASB) issued the complete and final version of IFRS 9 (2014), which was incorporated into Part I of the CPA Canada Handbook – Accounting by the Accounting Standards Board (AcSB) in February 2015. IFRS 9 (2014) supersedes all previous versions including IFRS 9 (2009), IFRS 9 (2010) and IFRS 9 (2013). This new standard will replace IAS 39 Financial Instruments: Recognition and Measurement, effective for reporting periods beginning on or after January 1, 2018. Earlier application is permitted. The key features of IFRS 9 (2014) are as follows: Classification and measurement

▪ Financial assets are initially measured at fair value plus, in the case of those not subsequently measured at fair value through profit or loss, transaction costs.

▪ Financial assets are classified based on both a “business model” test and a “cash flow characteristics” test into one of three subsequent measurement categories: amortized cost, fair value through other comprehensive income, or fair value through profit or loss.

▪ Investments in equity instruments, including those without a reliably determinable fair value, are classified as at fair value through profit or loss. ▪ However, investments in equity instruments not held for trading may be irrevocably designated as fair

value through other comprehensive income with only dividends recognized in profit or loss. ▪ When designating a financial liability at fair value, changes in fair value resulting from changes in the liability’s

credit risk are presented in other comprehensive income unless doing so would create or enlarge an accounting mismatch in profit or loss.

▪ Embedded derivatives within host contracts that are financial assets within the scope of IFRS 9 are not separated (or bifurcated) from the host contract, but rather, the entire hybrid contract is assessed for classification into a measurement category.



▪ Reclassification of financial assets is permitted only when an entity changes its business model for managing financial assets, and is prohibited for financial liabilities.

Impairment

▪ A single model is applied for recognizing impairment losses on financial assets, including trade receivables, contract assets, and certain financial guarantee contracts and loan commitments, that will result in an earlier, more timely recognition of expected credit losses.

▪ Equity investments and other financial assets classified as subsequently measured at fair value through profit or loss, or equity investments elected to be measured at fair value through other comprehensive income, are not assessed for impairment.

▪ Impairment losses are no longer recognized when incurred, but rather, a forward-looking expected credit loss model is used to recognize losses expected to occur over the contractual life of the financial asset.

▪ The loss allowance is measured at lifetime expected credit losses for financial assets for which there have been significant increases in credit risk since initial recognition or for which a simplified approach is applied. ▪ Allowances on all other financial assets subject to the impairment requirements are based on 12-month

expected credit losses. ▪ Increased disclosure of an entity’s exposure to credit risk is required for financial instruments subject to the

impairment requirements of IFRS 9. Hedge accounting

▪ On initial application of IFRS 9, an entity may choose to continue applying the hedge accounting requirements of IAS 39, instead of IFRS 9, to all hedging relationships.

▪ The new hedge accounting model under IFRS 9 introduces more principle-based requirements and grants entities greater flexibility in applying hedge accounting to its risk management activities.

▪ The previous 80/125 hedge effectiveness requirements are no longer used; instead, the entity must be able to demonstrate an economic relationship between the hedged items and hedging instruments used.

▪ As the economic relationship or hedging activities of an entity changes, the hedge relationships must be rebalanced by changing the quantities of the hedged items or hedging instruments used. This eliminates the need to discontinue hedge accounting and commence a new hedging relationship.

▪ Hedge accounting can only be discontinued when the qualifying criteria are no longer met. ▪ Regardless of the standard under which hedge accounting is applied, enhanced disclosures surrounding an

entity’s risk management activities are required.

IFRS 9 Financial Instruments (Amendments) In October 2017, the International Accounting Standards Board (IASB) issued amendments to IFRS 9 Financial Instruments, incorporated into Part I of the CPA Canada Handbook – Accounting by the Accounting Standards Board (AcSB) in November 2017, to address the classification of certain prepayable financial assets. The amendments clarify that a financial asset that would otherwise have contractual cash flows that are solely payments of principal and interest but do not meet that condition only as a result of a prepayment feature with negative compensation may be eligible to be measured at either amortized cost or fair value through other comprehensive income. This classification is subject to the assessment of the business model in which the particular financial asset is held as well as consideration of whether certain eligibility conditions are met. The amendments are effective for annual periods beginning on or after January 1, 2019. Earlier application is permitted.

IFRS 10 Consolidated Financial Statements and IAS 28 (Revised) Investments in Associates and Joint Ventures (Amendment) In September 2014, the International Accounting Standards Board (IASB) issued amendments to IFRS 10 and IAS 28, incorporated into Part I of the CPA Canada Handbook - Accounting by the Accounting Standards Board (AcSB) in November 2014. The amendments address an inconsistency between the requirements in IFRS 10 and IAS 28 in dealing with the sale or contribution of a subsidiary by an investor to an associate or joint venture. The amendments



require sales or contributions of assets that constitute a business to be accounted for in accordance with the requirements of IFRS 10 (i.e., full gain or loss recognition). All other sales or contributions of assets would be accounted for in accordance with the requirements of IAS 28 (i.e., gain or loss recognition limited to the extent of the unrelated investors’ interests in the associate or joint venture). In December 2015, the IASB decided to defer the effective date of these amendments until its research project on the equity method has been concluded. Earlier application of the amendments is still permitted. IFRS 15 Revenue from Contracts with Customers (New) In May 2014, the International Accounting Standard Board (IASB) issued a new International Financial Reporting Standard (IFRS) on the recognition of revenue from contracts with customers which was incorporated into Part I of the CPA Canada Handbook – Accounting by the Accounting Standards Board (AcSB) in February 2015. IFRS 15 specifies how and when entities recognize revenue, as well as requires more detailed and relevant disclosures. IFRS 15 supersedes IAS 11 Construction Contracts, IAS 18 Revenue, IFRIC 13 Customer Loyalty Programmes, IFRIC 15 Agreements for the Construction of Real Estate, IFRIC 18 Transfers of Assets from Customers and SIC-31 Revenue – Barter Transactions Involving Advertising Services. The Section provides a single, principles based five-step model to be applied to all contracts with customers, with certain exceptions. The five steps are:

▪ Identify the contract(s) with the customer. ▪ Identify the performance obligation(s) in the contract. ▪ Determine the transaction price. ▪ Allocate the transaction price to each performance obligation in the contract. ▪ Recognize revenue when (or as) the entity satisfies a performance obligation.

The standard is effective for annual periods beginning on or after January 1, 2018. Earlier application is permitted. IFRS 15 Revenue from Contracts with Customers (Amendment) In April 2016, the International Accounting Standard Board (IASB) issued amendments to IFRS 15, incorporated into Part I of the CPA Canada Handbook – Accounting by the Accounting Standards Board (AcSB) in August 2016, to clarify some requirements and provide additional transitional relief for entities implementing IFRS 15. The amendments clarify how to:

▪ Identify a performance obligation (the promise to transfer a good or a service to customer) in a contract;

▪ Determine whether a company is a principal (the provider of a good or service) or an agent (responsible for

arranging for the good or service to be provided); and

▪ Determine whether the revenue from granting a license should be recognized at a point in time or over time.

The amendments also include two additional reliefs to reduce cost and complexity for an entity when it first applies IFRS 15. The amendments are effective for annual periods beginning on or after January 1, 2018. Earlier application is permitted. IFRS 16 Leases (New) In January 2016, the International Accounting Standards Board (IASB) issued a new International Financial Reporting Standard (IFRS) on lease accounting which was incorporated into Part I of the CPA Canada Handbook – Accounting by the Accounting Standards Board (AcSB) in June 2016. IFRS 16 supersedes IAS 17 Leases, IFRIC 4 Determining Whether an Arrangement Contains a Lease, SIC-15 Operating Leases – Incentives and SIC-27 Evaluating the Substance of Transactions Involving the Legal Form of a Lease. IFRS 16 introduces a single lessee accounting model that requires a lessee to recognize assets and liabilities for all leases with a term of more than 12 months, unless the underlying asset is of low value. Lease assets and liabilities are initially recognized on a present value basis and subsequently, similarly to other non-financial assets and financial liabilities, respectively. The lessor accounting requirements are substantially unchanged and, accordingly, continue to require classification and measurement as either operating or finance leases. The new standard also introduces detailed disclosure requirements for both the lessee and lessor.



The new standard is effective for annual periods beginning on or after January 1, 2019. Earlier application is permitted for entities that also apply IFRS 15 Revenue from Contracts with Customers. IFRS 17 Insurance Contracts (New) In May 2017, the International Accounting Standards Board (IASB) issued a new International Financial Reporting Standard (IFRS) on insurance contracts which was incorporated into Part I of the CPA Canada Handbook – Accounting by the Accounting Standards Board (AcSB) in March 2018. IFRS 17 supersedes IFRS 4 Insurance Contracts, which was issued as an interim standard in 2004 and allowed entities to account for insurance contracts using a wide variety of accounting practices. IFRS 17 introduces a single principle-based standard to account for all types of insurance contracts to enhance the comparability of financial reporting between entities. The new standard provides guidance on the recognition, measurement, presentation and disclosure of insurance contracts issued. The main features of IFRS 17 include:

▪ Recognition and measurement of groups of insurance contracts as a combination of the current measurement of the future cash flows and the expected profit over the period that services are provided under the contracts

▪ Recognition of profit from a group of insurance contracts over the period the entity provides insurance coverage and as the entity is released from risk, with immediate recognition of a loss if a group of contracts is or becomes loss-making;

▪ Separate presentation of insurance revenue, insurance service expenses and insurance finance income or expenses;

▪ An accounting policy choice to either recognize all insurance finance income or expenses for the reporting period in profit or loss, or a portion of insurance finance income or expenses in comprehensive income; and

▪ An optional simplified measurement approach, the “premium allocation approach”, for simpler insurance contracts.

The new standard is effective for annual periods beginning on or after January 1, 2021. Earlier application is permitted for entities that also apply IFRS 9 Financial Instruments and IFRS 15 Revenue from Contracts with Customers. IAS 1 Presentation of Financial Statements (Amendment) In October 2018, the International Accounting Standards Board (IASB) issued amendments to IAS 1 to clarify the definition of material and how it should be applied, as well as to align the definition of material across IFRS standards and other publications. The amended definition of material states: Information is material if omitting, misstating or obscuring it could reasonably be expected to influence the decisions that the primary users of general purpose financial statements make on the basis of those financial statements, which provide financial information about a specific reporting entity. The amendments are effective for annual periods beginning on or after January 1, 2020 and are required to be applied prospectively. Earlier application is permitted. IAS 7 Statement of Cash Flows (Amendment) In January 2016, the International Accounting Standards Board (IASB) issued amendments to IAS 7 which were incorporated into Part I of the CPA Canada Handbook – Accounting by the Accounting Standards Board (AcSB) in April 2016. The amendments are part of the IASB’s Disclosure Initiative to address some of the concerns expressed about existing presentation and disclosure requirements. The amendments require entities to provide disclosures that enable users of the financial statements to evaluate both cash flow and non-cash changes in liabilities arising from financing activities. These amendments are effective for annual periods beginning on or after January 1, 2017. Earlier application is permitted.



IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors (Amendment) In October 2018, the International Accounting Standards Board (IASB) issued amendments to IAS 8 to clarify the definition of material and how it should be applied, as well as to align the definition of material across IFRS standards and other publications. The amended definition of material states: Information is material if omitting, misstating or obscuring it could reasonably be expected to influence the decisions that the primary users of general purpose financial statements make on the basis of those financial statements, which provide financial information about a specific reporting entity. The amendments are effective for annual periods beginning on or after January 1, 2020 and are required to be applied prospectively. Earlier application is permitted.

IAS 12 Income Taxes (Amendment) In January 2016, the International Accounting Standards Board (IASB) issued amendments to IAS 12 which were incorporated into Part I of the CPA Canada Handbook – Accounting by the Accounting Standards Board (AcSB) in April 2016. The amendments clarify how to account for deferred tax assets related to debt instruments measured at fair value.

The amendments clarify the following aspects around the recognition of deferred tax assets for unrealized losses:

▪ Decreases in the carrying amount of a fixed-rate debt instrument for which the principal is paid on maturity give rise to a deductible temporary difference if the debt instrument is measured at fair value and its tax base remains at cost.

▪ An entity’s estimate of future taxable profit may include amounts from assets it expects to recover in excess of their carrying amounts if there is sufficient evidence that it is probable the entity will achieve this.

▪ An entity’s estimate of future taxable profit excludes tax deductions resulting from the reversal of deductible temporary differences.

▪ An entity assesses whether to recognize the tax effect of a deductible temporary difference as a deferred tax asset in combination with other deferred tax assets. If tax law restricts the utilization of tax losses so that an entity can only deduct tax losses against income of a specified type(s) (e.g. if it can deduct capital losses only against capital gains), the entity must still recognize a deferred tax asset in combination with other deferred tax assets, but only with deferred tax assets of the appropriate type.

These amendments are effective for annual periods beginning on or after January 1, 2017. Earlier application is permitted. IAS 19 Employee Benefits (Amendment) In February 2018, the International Accounting Standards Board (IASB) issued narrow-scope amendments to IAS 19 Employee Benefits, incorporated into Part I of the CPA Canada Handbook – Accounting by the Accounting Standards Board (AcSB) in April 2018, to specify how to determine pension expenses when changes to a defined benefit pension plan occur. The amendments clarify the following:

▪ When a defined benefit plan amendment, curtailment or settlement occurs and an entity remeasures its net defined benefit liability or asset, the updated assumptions from this remeasurement are used to determine current service cost and net interest for the remainder of the reporting period after the change to the plan; and

▪ The effect of a plan amendment, curtailment or settlement on the asset ceiling requirements. The amendments are effective for annual periods beginning on or after January 1, 2019. Earlier application is permitted.



IAS 28 Investments in Associates and Joint Ventures (Amendments) In October 2017, the International Accounting Standards Board (IASB) issued amendments to IAS 28 Investments in Associates and Joint Ventures, incorporated into Part I of the CPA Canada Handbook – Accounting by the Accounting Standards Board (AcSB) in November 2017, to clarify the accounting for long term interests in associates or joint ventures. The amendments clarify that IFRS 9 Financial Instruments, including its impairment requirements, apply to long-term interests in an associate or joint venture to which the equity method is not applied. The amendments are effective for annual periods beginning on or after January 1, 2019. Earlier application is permitted.

IAS 40 Investment Property (Amendment) In December 2016, the International Accounting Standards Board (IASB) issued amendments to IAS 40, incorporated into Part I of the CPA Canada Handbook – Accounting by the Accounting Standards Board (AcSB) in March 2017, to provide guidance on transfers of property under construction or development that was previously classified as inventory to, or from, investment properties. The amendments clarify that such a transfer should only be made when there has been a change in use of the property supported by evidence. Further, a change in management’s intentions for the use of property by itself does not constitute evidence of a change in use. These amendments are effective for annual periods beginning on or after January 1, 2018. Earlier application is permitted.

IFRIC 22 Foreign Currency Transactions and Advance Consideration (New) In December 2016, the International Accounting Standards Board (IASB) issued a new International Financial Reporting Interpretations Committee (IFRIC) interpretation, incorporated into Part I of the CPA Canada Handbook – Accounting by the Accounting Standards Board (AcSB) in March 2017, on accounting for transactions that include the receipt or payment of advance consideration in a foreign currency. The interpretation covers foreign currency transactions when an entity recognises a non-monetary asset or non-monetary liability arising from the payment or receipt of advance consideration before the entity recognises the related asset, expense or income. The following consensuses were arrived at regarding this issue:

▪ The date of the transaction, for the purpose of determining the exchange rate, is the date of initial

recognition of the non-monetary prepayment asset or deferred income liability; and,

▪ If there are multiple payments or receipts in advance, a date of transaction is established for each payment

or receipt.

The new interpretation is effective for annual periods beginning on or after January 1, 2018. Earlier application is permitted.

IFRIC 23 Uncertainty over Income Tax Treatments (New) In June 2017, the International Accounting Standards Board (IASB) issued a new International Financial Reporting Interpretations Committee (IFRIC) interpretation, incorporated into Part I of the CPA Canada Handbook – Accounting by the Accounting Standards Board (AcSB) in September 2017, to specify how to reflect the effects of uncertainty in accounting for income taxes. IAS 12 Income Taxes provides requirements on the recognition and measurement of current or deferred income tax liabilities and assets. However, it does not provide a specific requirement for the accounting for income tax when the application of tax law to a particular transaction or circumstance is uncertain. As a result, the interpretation aims to reduce the diversity in how entities recognise and measure a tax liability or tax asset when there is uncertainty over income tax treatments. The new interpretation is effective for annual periods beginning on or after January 1, 2019. Earlier application is permitted.



Exposure Drafts

Onerous Contracts – Cost of Fulfilling a Contract (Proposed Amendments to IAS 37) In December 2018, the International Accounting Standards Board (IASB) published an Exposure Draft (ED), Onerous Contracts – Cost of Fulfilling a Contract. The proposed amendments would specify that in assessing whether a contract is onerous under IAS 37 Provisions, Contingent Liabilities and Contingent Assets, the cost of fulfilling a contract includes both the incremental costs and an allocation of costs that relate directly to contract activities. The proposed amendments also include examples of costs that do, and do not, relate directly to a contract. An effective date for the proposed amendments has not yet been determined.

Non-GAAP and Other Financial Measures Disclosure (Proposed National Instrument 52-112) In September 2018, the Canadian Securities Administrator (CSA) issued a consultation paper on Proposed National Instrument 52-112 (the “Instrument”), Proposed Companion Policy 52-112, Non-GAAP and Other Financial Measures Disclosure, and related proposed consequential amendments and changes. The proposed Instrument aims to enhance the quality, usefulness, and transparency of the information provided to investors by establishing the comprehensive disclosure requirements for issuers that disclose non-GAAP and other financial measures. The Instrument proposes an updated definition of non-GAAP financial measures and introduces the concept of segment measures, capital management measures, and supplementary financial measures together with associated disclosure requirements. The proposed Instrument requires a non-GAAP financial measure to be disclosed only if it meets the specified criteria on labelling, prominence, consistency, location, identification, and usefulness. It also requires a quantitative reconciliation to the most directly comparable financial measure presented in the issuer’s financial statements, subject to certain exceptions for ratios and financial outlook. The disclosure requirements for segment measures and capital management measures similarly focus on proper labeling, prominence, comparability, and quantitative reconciliation. The proposed Instrument complements the Securities Acts of various jurisdictions in Canada and will apply to all issuers, including investment funds, except SEC foreign issuers. It relates to all documents (e.g., Management’s Discussion and Analysis, press releases, the Annual Information Form, prospectuses, etc.) including other written communications in websites or social media. An effective date for the proposed Instrument has not yet been determined.

Accounting Policies Changes (Proposed Amendments to IAS 8) In March 2018, the International Accounting Standards Board (IASB) published an Exposure Draft (ED), Accounting Policy Changes. The ED proposes to introduce a new threshold for voluntary changes in accounting policy that result from an agenda decision. The proposed threshold would include a consideration of the expected benefits to users of financial statements from applying the new accounting policy retrospectively and the cost to the entity of determining the effect of retrospective application. An effective date for the proposed amendments has not yet been determined. In December 2018, the IASB tentatively decided not to amend IAS 8 to specify when entities apply accounting policy changes resulting from agenda decisions published by the IFRS Interpretations Committee. Other aspects of the proposed amendments to IAS 8 will be discussed at a future meeting.



Accounting Policies and Accounting Estimates (Proposed Amendments to IAS 8) In September 2017, the International Accounting Standards Board (IASB) published an Exposure Draft (ED), Accounting Policies and Accounting Estimates. In October 2017, the Accounting Standards Board (AcSB) issued an ED that corresponds to the IASB’s ED on this topic. The proposed amendments will help entities distinguish accounting policies from accounting estimates. The proposed amendment would clarify:

▪ How accounting policies and accounting estimates relate to each other, by:

(i) Explaining that accounting estimates are used in applying accounting policies; and

(ii) Making the definition of accounting policies clearer and more concise;

▪ That selecting an estimation technique, or valuation technique, used when an item in the financial

statements cannot be measured with precision, constitutes making an accounting estimate; and

▪ That, in applying IAS 2 Inventories, selecting the first-in, first-out (FIFO) cost formula or the weighted

average cost formula for interchangeable inventories constitutes selecting an accounting policy.

An effective date for the proposed amendments has not yet been determined. Property, Plant and Equipment - Proceeds before Intended Use (Proposed Amendments to IAS 16) In June 2017, the International Accounting Standards Board (IASB) published an Exposure Draft (ED), Property, Plant and Equipment – Proceeds before Intended Use. In July 2017, the Accounting Standards Board (AcSB) issued an ED that corresponds to the IASB’s ED on this topic. The proposed amendments will prohibit an entity from deducting from the cost of an item of property, plant and equipment any proceeds from selling items produced while bringing that asset to the location and condition necessary for it to be available for use. Instead, the proceeds from selling such items, and the costs of producing those items, would be recognized in profit or loss. In November 2018, the IASB tentatively decided to proceed with the proposed amendments with some modifications. The IASB will discuss the modifications at a future meeting. An effective date for the proposed amendments has not yet been determined.

Availability of a Refund from a Defined Benefit Plan (Proposed Amendments to IFRIC 14) In June 2015, the International Accounting Standards Board (IASB) published an Exposure Draft (ED), Remeasurement on a Plan Amendment, Curtailment or Settlement/Availability of a Refund from a Defined Benefit Plan. In July 2015, the Accounting Standards Board (AcSB) issued an ED that corresponds to the IASB’s ED on this topic. The ED is proposing to amend IAS 19 Employee Benefits and IFRIC 14 The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction. The objective of the project is threefold.

First, to assess the availability of refunds from a defined benefit plan by:

▪ Considering other parties’ power to enhance benefits for plan members or wind up the plan without the entities’ consent, including whether the surplus recognized should include amounts that other parties can use for other purposes without the entities’ consent; and

▪ Considering statutory requirements, contractually agreed terms, and constructive obligations. Second, to clarify the interaction between the asset ceiling and past service costs or the gain or loss on settlement by providing the following clarifications:

▪ That past service costs or a gain or loss on settlement is recognized in profit and loss; and ▪ That changes in the effect of the asset ceiling are recognized in other comprehensive income as a result of

the reassessment of the asset ceiling based on the updated surplus. Third, to address accounting when a plan amendment, curtailment or settlement occurs, by specifying that:



▪ Assumptions applied to a remeasurement of the net defined liability or asset are used to determine the current service cost and net interest after the remeasurement.

In February 2018, the IASB issued narrow-scope amendments to IAS 19. The amendments to IAS 19 are be effective for annual periods beginning on or after January 1, 2019, with earlier application permitted. The IASB will perform further work to assess whether a more principles-based approach can be established in IFRIC 14 for assessing the availability of a refund of a surplus. An effective date for the proposed amendments to IFRIC 14 has not yet been determined. Classification of Liabilities (Proposed Amendments to IAS 1) In March 2015, the Accounting Standards Board (AcSB) published an Exposure Draft (ED), Classification of Liabilities in response to the International Accounting Standards Board’s (IASB) ED of the same name, issued in February 2015. The ED is proposing to amend IAS 1 Presentation of Financial Statements. The objective of the project is to clarify the criteria for the classification of a liability as either current or non-current by:

▪ Making the link between the settlement of the liability and the outflow of resources from the entity clear; and ▪ Providing clarification that the classification of a liability as either current or non-current is based on the

entity’s rights at the end of the reporting period. In November 2018, the IASB tentatively decided to proceed with certain proposed changes from the ED, and will continue to discuss the classification of liabilities with equity settlement features at a future meeting. An effective date for the proposed amendments has not yet been determined.

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100% Made in Canada. Why is this important? Because it defines who we are and our approach to business. It has helped shape our values, our collaborative approach and the way we work with our clients, engaging them every step of the way. Our history gives us a unique perspective. We know Canada because we are a part of Canada. All of our decisions are made here – decisions that drive Canadian business and help us all further achieve success. And the sense of strong Canadian commitment, being a part of every community we live and work in, and always being there through prosperous and challenging times. Being 100% Canadian is something we wear proudly because we know the great opportunities that exist here. The opportunities that have been afforded to our firm, the same opportunities that we deliver to our clients.

ABOUT MNP MNP is a leading national accounting, tax and business consulting firm in Canada. We proudly serve and respond to the needs of our clients in the public, private and not-for-profit sectors. Through partner-led engagements, we provide a collaborative, cost-effective approach to doing business and personalized strategies to help organizations succeed across the country and around the world.

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