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This summary of Emerging Issues Committee (EIC) decisions has been prepared for information purposes only. Decisions reported reflect only the current status of discussion on projects, which may change after further deliberations. Decisions to publish Abstracts, amendments thereto or Draft Abstracts are final only after a formal ballot process.
For more detailed information on EIC projects, please contact the EIC Secretary. |
Abstract Approved Mining Exploration Costs Draft Abstract D78, “Accounting for Mining Enterprises for Exploration Costs when an Impairment Test Is Required,” was issued for public comment by March 16, 2009. The Draft Abstract proposed changes to EIC-126 to provide additional guidance for mining exploration enterprises on when an impairment test is required. The Committee agreed to withdraw EIC-126, “Accounting by Mining Enterprises for Exploration Costs,” and issue a final Abstract consistent with D78. The Basis of Application reads as follows: “The Committee reached a consensus that the accounting treatment in this Abstract should be applied to financial statements issued after the date of issuance of this Abstract.” EIC-174 was posted on the AcSB website on March 27, 2009. Potential Projects Amendment to EIC-107 — Application of CICA 3465 to Mutual Fund Trusts, Real Estate Investment Trusts, Royalty Trusts and Income Trusts Under the consensus reached in the second issue of EIC-107, one of the criteria for not recognizing any future income tax assets or liabilities on temporary differences in the trust is that the trust is contractually committed to distribute all or virtually all of its taxable income. The Committee discussed whether a trust should be permitted to apply EIC-107 if it has the intent to distribute all of its taxable income, but is not contractually committed to do so, and agreed to refer this item to the AcSB for addition to the EIC agenda. Amendment to EIC-111 — Determination of Substantively Enacted Tax Rates under CICA 3465 EIC-111 provides guidance on the application of the term “substantively enacted” when changes are proposed to the income tax laws. The Committee discussed the situation in which a minority government had substantively enacted changes in accordance with EIC-111, but the changes were not fully enacted due to the calling of an election. The Government was re-elected but did not proceed with certain parts of the changes in its next budget. Although Issue 6 of EIC-111 addresses situations in which substantively enacted legislation dies on the Parliamentary order paper prior to enactment due to the calling of an election, the wording of the consensus contemplates that the proposed changes would continue to be substantively enacted unless the Government has lost the election and the new Government indicates that it will not reintroduce the proposed change. The Committee noted that paragraph 3465.58 states that “a substantively enacted tax rate or income tax law should be used only when there is persuasive evidence that the government is committed to enacting the proposed change in the foreseeable future” and, accordingly, decided that it would not add this issue to its agenda. |