The Office of the Superintendent of Financial Institutions in Canada issued a letter this week updating Federally Regulated Financial Institutions (FRFIs) on matters dealing with IFRS. (FRFIs include banks, trust companies, insurance companies and pension funds that fall under federal jurisdiction.)
The letter deals with:
- The Canadian Securities Administrators (CSA) disclosure requirements
- The OSFIs requirement for all FRFIs to submit semi annual reports detailing the progress made to the move to IFRS.
The letter clarifies that the MD&A and other disclosures made under Staff Notice 52-320 will not be required to be filed with the OSFI since the mandated semi annual "progress reviews" will be sufficient for OSFI's purposes.
The letter provides guidance "setting out OSFI's expectations with respect to the content of such reports".
Appendix A to their letter deals with the required information with some granularity
The headings are:
- IFRS Project Structure
- IFRS Project Status
- Identify Significant Accounting Impacts (specific potential areas are cited)
- Evaluate Significant Accounting Changes
Attachment 1 to their letter sets out a "Sample Project Management Framework" together with specific OSFI "requests "for information on the progress of the plan.
The first progress report can be filed at any time but no later than 60 days following the FRFI's 2008 fiscal year end. For example, for banks with October 31 year ends that would mean the first progress report would be due by December 30 2008! After the initial filings the semi annual reports will be required to be filed at "any point during the last three months of the relevant semi-annual period, but no later than 30 days from the end of such period".
The letter is clearly required reading for anybody involved with reporting in FRFIs. It is also required reading, I suggest, for Provincially regulated financial institutions. Undoubtedly, we will see guidance coming soon for them. (I have not seen any yet. Please let me know if you are aware of any guidance and I will let readers know about the specifics).
Financial Executives have been asking about how much granularity they should disclose about their IFRS project plan. You should read the OSFI letter even if you are not in an FRFI or a financial institution even - it will give you some guidance on this point. You may be surprised!