In its 2011-2012 Annual Report, the Canadian Accounting Standards Board (AcSB) provides a detailed assessment of the 2011 Canadian adoption of IFRS for public companies (http://www.frascanada.ca/accounting-standards-board/news-and-publications/annual-reports/index.aspx).
While noting that the adoption of IFRs was, in the main, successful, AcSB noted that such adoption presented some major challenges, which were:
- Dealing with the lack of specific accounting guidance for rate regulated enterprises;
- Advancing the development of guidance for investment entities under IFRSs;
- Dealing with the implications for affected entities of ongoing agenda projects resulting from the IASB and FASB convergence projects on revenue recognition, leases, financial instruments and insurance contracts; and
- Addressing practical implementation issues arising from a lack of clarity or specific guidance in some IFRSs.
Additionally, they note that global adoption of IFRS continues. However, they will monitor the activities of several major economies that are in discussion about future IFRS adoption. Those jurisdictions include the United States, Japan, India, and China. In the report, the AcSB notes that “the possible adoption of IFRSs in the United States was a matter of particular interest to the AcSB and some of its stakeholders in 2011-2012”.
Certainly, the staff of the U.S. SEC will want to read the AcSB annual report. It includes several important observations concerning the adoption and use of IFRS. Additionally, in the report, AcSB offers some strategies for managing the adoption, such as establishing a task force to identify and communicate specific IFRS challenges to the IASB and delaying the adoption of IFRS for investment companies until the IASB completes the related agenda project.
In concluding, AcSB noted:
“AcSB is satisfied that it achieved its objectives [of] advancing the implementation of its IFRS strategy in 2011-2012. Due to circumstances beyond the control of the AcSB, primarily the effect on global standard setting of the 2008 financial crisis and the ensuing economic turmoil, the road to first-time adoption of IFRSs in Canada posed challenges that were not contemplated in the 2006-2011 Strategic Plan. As is usual in standard setting, some stakeholders the AcSB heard from are not pleased positions taken or proposed by the AcSB or the IASB on individual technical issues . . . However, by the end of the 2011-2012 operating year, the AcSB and most of its stakehlders had achieved the objective of introducing IFRSs into Canadian practice. The AcSB is satisfied that it is making progress towards its long-term objective for the publicly accountable enterprise sector”.