The future of EIC Abstracts

In 1988 the Canadian Accounting Standards Board (AcSB) established the Emerging Issues Committee (EIC) see -http://www.acsbcanada.org/index.cfm/ci_id/3620/la_id/1.htmto serve the interests of the public by providing a forum for the timely review of emerging accounting issues that are likely to receive divergent or unsatisfactory treatment in practice in the absence of some guidance. The EIC issues EIC Abstracts and as of the beginning of April 2008 we are up to number 170.Will EIC Abtracts be redundant when publicly accountable enterprises adopt IFRS? One answer might be they are surely no longer relevant so let’s expunge them from GAAP - IFRS style, in Canada.

Surely the IASB in London will take up the mantle? This assumption may not be entirely correct. And assumptions are dangerous. The International Accounting Standards Board (IASB) has indicated that it will not provide detailed specific implementation guidance on narrow issues. Read more about IFRIC at http://www.iasb.org/About+Us/About+IFRIC/About+IFRIC.htm
In particular, according to their site, the IFRIC addresses issues of reasonably widespread importance, not issues that are of concern to only a small minority of entities.


The interpretations cover both

1) newly identified financial reporting issues not specifically dealt with in IFRSs;
2)issues where unsatisfactory or conflicting interpretations have developed, or seem likely to develop in the absence of authoritative guidance, with a view to reaching a consensus on the appropriate treatment.

Countless high value volunteer time was spent in the development and promulgation of EIC Abstracts. .With all the high quality input surely there could be something that can be mined that would be a lasting reference when IFRS is adopted?

The CICA had a committee of experts go through the EIC Abstracts in some detail and made recommendations on their disposition upon IFRS adoption. See the discussion and the committee’s conclusions at http://www.acsbcanada.org/4/2/6/6/1/index1.shtml
Many thanks should be given to the members of that group for their yeoman work.


While the experts concluded that the majority of EIC Abstracts can be removed from GAAP for IFRS adopters. There are others that will need to be addressed in coordination with the IASB. Will you be happy with the fact that Standards will be interpreted by IFRIC in the manner set out in their terms of reference? What role should the CICA play in the brave new world of IFRS? I’m sure they would be interested in your ideas.


Are you in a “publicly accountable enterprise” and currently relying on a particular EIC Abstract and what do you see happening on IFRS adoption? Are there potential problems? Please let us know. Others might be in a similar predicament and a devil could be lurking in the shadows. Is this an issue or a non-issue?


Please note that it is unsure how EIC Abstracts will apply to Private Companies in future GAAP world. This topic is currently under study. See the following for a private company discussion http://www.acsbcanada.org/index.cfm?ci_id=29407&la_id=1#next.