TD Bank 2014 Annual Report Download - page 107

TD BANK GROUP ANNUAL REPORT 2014 MANAGEMENT’S DISCUSSION AND ANALYSIS 105
The amendments to IAS 19 are effective for annual periods begin-
ning on or after January 1, 2013, which was November 1, 2013, for
the Bank, and have been applied retrospectively. On November 1, 2011,
the transition date, the amendments resulted in an increase to deferred
tax assets of $74 million, a decrease to other assets of $112 million, an
increase in other liabilities of $98 million, and a decrease to retained
earnings of $136 million.
Disclosures – Offsetting Financial Assets and Financial Liabilities
The amendments to IFRS 7, Financial Instruments: Disclosures (IFRS 7),
issued in December 2011 provide common disclosure requirements
intended to help investors and other users to better assess the effect
or potential effect of offsetting arrangements on a company’s financial
position. While the IFRS 7 amendments will result in additional
disclosures, the amendments did not have a material impact on the
Consolidated Financial Statements of the Bank. The IFRS 7 amendments
are effective for annual periods beginning on or after January 1, 2013,
which was November 1, 2013, for the Bank. The disclosures required
by the IFRS 7 amendments have been presented on a retrospective basis
by the Bank as at October 31, 2014. Refer to Note 6 for the disclosures
required by the IFRS 7 amendments.
FUTURE CHANGES IN ACCOUNTING POLICIES
The IASB continues to make changes to IFRS to improve the overall
quality of financial reporting. The Bank is actively monitoring all of the
IASB’s projects that are relevant to the Bank’s financial reporting and
accounting policies.
The following standards have been issued, but are not yet effective on
the date of issuance of the Bank’s Consolidated Financial Statements.
The Bank is currently assessing the impact of the application of these
standards on the Consolidated Financial Statements and will adopt
these standards when they become effective.
Presentation – Offsetting Financial Assets and Financial Liabilities
In December 2011, the IASB issued amendments to IAS 32, Financial
Instruments: Presentation, (the IAS 32 amendments) which clarified
the existing requirements for offsetting financial assets and financial
liabilities. These amendments are effective for annual periods begin-
ning on or after January 1, 2014, which will be November 1, 2014,
for the Bank. The Bank expects that certain bilateral transactions
related to reverse repurchase and repurchase agreements, and
amounts receivable from or payable to brokers, dealers, and clients
will no longer qualify for offsetting under the new guidance.
The Bank estimates the impact of adopting the IAS 32 amendments
will result in an increase in total assets and total liabilities of approxi-
mately $11 billion and $16 billion as at November 1, 2013, the transition
date, and October 31, 2014, respectively. There will be no impact to
opening equity, cash flows, or earnings of the Bank.
Levies
In May 2013, the IFRS Interpretations Committee (IFRIC), with the
approval of the IASB, issued IFRIC 21, Levies (IFRIC 21). IFRIC 21
provides guidance on when to recognize a liability to pay a levy
imposed by government, which is accounted for in accordance
with IAS 37, Provisions, Contingent Liabilities and Contingent Assets.
IFRIC 21 is effective for annual periods beginning on or after
January 1, 2014, which will be November 1, 2014, for the Bank,
and is to be applied retrospectively.
IFRIC 21 is expected to change the pattern and timing of
recognition of certain levies paid by the Bank, in that it requires
the obligation for these levies to be recognized at specific points
in time in accordance with their applicable legislation. This change
in timing of recognition is not expected to have a material impact
on the financial position, cash flows, or earnings of the Bank on
an annual basis.
Financial Instruments
In July 2014, the IASB issued the final version of IFRS 9, Financial
Instruments (IFRS 9), which replaces the guidance in IAS 39, Financial
Instruments: Recognition and Measurement (IAS 39). This final version
includes requirements on: (1) Classification and measurement of finan-
cial assets and liabilities; (2) Impairment; and (3) Hedge accounting.
Accounting for macro hedging has been decoupled from IFRS 9 and
will now be considered and issued as a separate standard. IFRS 9 is
effective for annual periods beginning on or after January 1, 2018,
which will be November 1, 2018, for the Bank, and is to be applied
retrospectively with certain exceptions. Early adoption of IFRS 9 is
permitted. IFRS 9 also permits early application of changes in the own
credit risk provision, prior to adopting all other requirements within
IFRS 9. The Bank is currently assessing the impact of adopting IFRS 9,
including early application of the own credit risk provision.
Novation of Derivatives and Continuation of Hedge Accounting
In June 2013, the IASB issued amendments to IAS 39 which provides
relief from discontinuing hedge accounting when novation of a derivative
designated as a hedge accounting instrument meets certain criteria.
The IAS 39 amendments are effective for annual periods beginning
on or after January 1, 2014, which will be November 1, 2014, for the
Bank, and is to be applied retrospectively. The IAS 39 amendments are
not expected to have a material impact on the financial position, cash
flows, or earnings of the Bank and have been retained in the final
version of IFRS 9.
Revenue from Contracts with Customers
In May 2014, the IASB issued IFRS 15, Revenue from Contracts with
Customers, which clarifies the principles for recognizing revenue and
cash flows arising from contracts with customers. The standard is
effective for annual periods beginning on or after January 1, 2017,
which will be November 1, 2017, for the Bank, and is to be applied
retrospectively. The Bank is currently assessing the impact of adopting
this standard.