This item is part of Stockwatch's value added news feed and is only available to Stockwatch subscribers.Here is a sample of this item:MCAN Mortgage to change financial reporting standard 2009-10-22 11:33 ET - News Release Mr. Blaine Welch reports
OSFI RELEASES DRAFT ADVISORY REGARDING THE IMPACT OF IFRS ON
REGULATORY CAPITAL RATIOS
MCAN Mortgage Corp. has received notice that the Office of
the Superintendent of Financial Institutions (OSFI) has released a draft advisory regarding, among other things, the calculation of the regulatory capital ratios of
OSFI-regulated entities resulting from the on-balance sheet treatment of assets and liabilities
subject to securitization, as currently required by international financial reporting standards
(IFRS). The draft advisory is open for comment until Dec. 31, 2009.
Under Canadian generally accepted accounting principles currently followed by MCAN in the
preparation of its financial statements, assets and liabilities that are subject to securitization are
treated generally as off-balance sheet items. Under these principles, MCAN has not been
required to reflect such assets or liabilities on its balance sheet, or include them in the calculation
of its regulatory capital ratios. MCAN will begin using IFRS in the preparation of its financial
statements for the financial year commencing Jan. 1, 2011. If the IFRS rules regarding
securitization are implemented in their proposed form, MCAN's assets and liabilities that are
subject to securitization will be considered on-balance sheet items. The draft advisory
contemplates that any assets and liabilities that are accounted for as on-balance sheet exposures
under IFRS that are sold through securitization transactions (including insured mortgages that are
securitized through the Canada Mortgage Bonds program) undertaken after Dec.
31, 2009, will be required to be included in the calculation of a regulated financial institution's
regulatory capital ratios. Accordingly, pursuant to the measures contemplated by the draft
advisory, if the IFRS rules regarding securitization are implemented in their proposed form,
beginning with the fiscal year commencing on Jan. 1, 2011, MCAN will be required to
include any assets and liabilities that were subject to securitization transactions undertaken as of
Jan. 1, 2010, in the calculation of its regulatory capital ratios.
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