Document Properties
- Type of Publication: Letter
- Date: July 30, 2010
- References: Guideline for Banks / BHC / FBB / T&L / Co-op / Life / P&C / IHC
To:
- Banks,
- Foreign Bank Branches,
- Bank Holding Companies,
- Federally Regulated Trust and Loan Companies,
- Cooperative Credit Associations,
- Federally Regulated Life Insurance Companies
(incl. Fraternal Benefit Societies),
- Federally Regulated Property and Casualty Insurance
Companies,
- Insurance Holding Companies
The guidelines referred to in this letter have been revised or
rescinded in order to reflect the adoption of International Financial
Reporting Standards (IFRSs). Amendments to the following guidelines,
which remain in force, are effective for fiscal years beginning
on or after January 1, 2011.
| C-1 |
Impairment - Sound Credit Risk Assessment and Valuation
Practices for Financial Instruments at Amortized Cost (previously
Impaired Loans) |
| C-2 |
Collective Allowances - Sound Credit Risk Assessment and
Valuation Practices for Financial Instruments at Amortized
Cost (previously General Allowances for Credit Risk) |
| D-1, D-1A, D-1B |
Annual Disclosures |
| D-5 |
Accounting for Structured Settlements |
| D-6 |
Derivatives Disclosure |
| D-9 |
Source of Earnings Disclosure (Life Insurance Companies) |
| D-10 |
Accounting for Financial Instruments Designated as Fair
Value Option |
| E-12 |
Inter-Segment Notes for Life Insurance Companies |
Many of OSFI’s existing guidelines provide additional guidance
to FREs when applying Canadian Generally Accepted Accounting Principles
(CGAAP) or make reference to CGAAP when providing non-accounting
guidance. As these guidelines were not prepared under IFRSs, OSFI
has revised them as necessary to reflect the implementation of IFRSs
in Canada.
OSFI’s guidelines were reviewed in two phases, as described below.
Phase 1 – Core guidelines:
Phase 1 comprised those guidelines associated with the four IFRSs
core policy workstreams identified as having the most impact when
moving to IFRSs, namely:
- loan provisioning: Guidelines C-1 and C-5,
- fair value option: Guideline D-10,
- securitization: Guidelines D-3, D-4, D-8, and
- insurance: Guidelines D-5, D-7,
as well as the annual disclosure Guidelines D-1, D-1A and D-1B.
On April 30, 2010, OSFI issued proposed revisions to these core
workstream guidelines and recommendations for rescission for public
comment by June 15, 2010.
Phase 2 – Consequential guidelines:
Phase 2 comprised all other OSFI guidelines which may be impacted
by the adoption of IFRSs which were not considered in Phase 1, namely:
| D-2 |
Accounting for READC Project Financing |
| D-6 |
Derivatives Disclosure |
| D-9 |
Source of Earnings Disclosure (Life Insurance Companies) |
| E-12 |
Inter-Segment Notes for Life Insurance Companies |
As a result of the reviews, OSFI determined that a number of its
guidelines will no longer be necessary when IFRSs are implemented.
As such, the following guidelines will be rescinded for fiscal years
beginning on or after January 1, 2011 but will remain effective
for fiscal years beginning before January 1, 2011:
| D-2 |
Accounting for READC Project Financing Arrangements |
| D-3 |
Accounting for NHA Mortgage Backed Securities |
| D-4 |
Transfers of Financial Assets with Recourse |
| D-7 |
Accounting for Reinsurance of Short-Term Insurance Contracts
by Property & Casualty Insurance Enterprises |
| D-8 |
Accounting for Transfers of Receivables including Securitizations |
Questions concerning guidelines applicable to Deposit Taking Institutions
should be addressed to Renée Chen, Director, Accounting Policy Division,
at (416) 973-2055, by facsimile at (416) 952-1662 or by e-mail at
Renee.Chen@osfi-bsif.gc.ca.
Questions on guidelines applicable to insurers should also be addressed
to Mark Causevic, Director, Accounting Policy Division, at (416)
973-8933, by facsimile at (416) 952-1662 or by e-mail at Mark.Causevic@osfi-bsif.gc.ca.
- Mark E. White
- Assistant Superintendent
- Regulation Sector