IFRS Discussion Group considers non-authoritative guidance

“Guidance that is not an integral part of [IFRS] does not contain requirements for financial statements.” This sentence from IAS 8 refers to non-authoritative guidance and leaves a reader wondering — should it be followed?

The distinction between authoritative and non-authoritative guidance can be found in paragraph nine of International Accounting Standard (IAS) 8 Accounting Policies, Changes in Accounting Estimates and Errors. Guidance that requires mandatory application is authoritative. However, material that is non-authoritative may also help stakeholders interpret and apply International Financial Reporting Standards (IFRS).

SOURCES OF NON-AUTHORITATIVE GUIDANCE

In general, there is a demand for guidance because IFRS are principles-based and involve the use of professional judgment. The IFRS Discussion Group discussed the following types of material that is non-authoritative:

  • IFRS Interpretations Committee agenda decisions (i.e., rejection notices)
  • staff agenda papers prepared for the International Accounting Standards Board (IASB) or IFRS Interpretations Committee meetings
  • education materials produced by the IFRS Foundation

If you have not considered any of the above material before, then this discussion will definitely be intriguing for you. A variety of people, ranging from industry preparers to auditors and regulators, expressed their views on this topic.

THE GROUP DISCUSSED SOME COMMONLY-ASKED QUESTIONS:

  • Despite the fact that non-authoritative guidance is not mandatory, is the common view that it should still be followed?
  • If it is followed, should a resulting accounting change be applied prospectively or retrospectively?
  • If applied retrospectively, should the change be considered a change in accounting policy, a correction of an error or something else?

To find out, read the Group’s meeting report or listen to the audio webcast.

VALUE OF THE DISCUSSIONS

Although the Group was not created to provide authoritative interpretations of IFRS, or to reach a consensus position on the issues discussed, the real value comes from listening to the different perspectives that Group members bring given their expertise in IFRS. Their views will broaden your perspective and provide ideas on how to approach a challenging issue from many angles.

WHAT IS THE IFRS DISCUSSION GROUP?

The IFRS Discussion Group is a committee of the Accounting Standards Board (AcSB). Its purpose is to identify and raise awareness of IFRS application issues arising in Canada. When appropriate, the Group makes recommendations to the AcSB to refer issues to the IASB or IFRS Interpretations Committee.

An extensive amount of work has been performed since the Group was established in 2009. To date, the Group has held 21 meetings and discussed over 160 issues — quite a lot. And, for your convenience, the topics have all been archived in the online searchable database.

SUBMIT AN ISSUE AND JOIN THE DISCUSSIONS

Do you have an issue you’re currently dealing with? If so, submit the issue for consideration and discuss it with the Group members. Meetings are open to the public for observation.

About the Author

Davina Tam, CPA, CA, CPA, CA

Principal, Accounting Standards Board

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