diff --git a/docs/architecture/README.md b/docs/architecture/README.md
index d61da19b5fd..091ba899dc6 100644
--- a/docs/architecture/README.md
+++ b/docs/architecture/README.md
@@ -29,6 +29,7 @@ To suggest an ADR, please make use of the [ADR template](./adr-template.md) prov
 | ------ | ----------- | ------ |
 | [001](./adr-001-coin-source-tracing.md) | ICS-20 coin denomination format | Accepted, Implemented |
 | [002](./adr-002-go-module-versioning.md) | Go module versioning | Accepted |
+| [003](./adr-003-ics27-acknowledgement.md) | ICS27 acknowledgement format | Accepted |
 | [015](./adr-015-ibc-packet-receiver.md) | IBC Packet Routing | Accepted |
 | [025](./adr-025-ibc-passive-channels.md) | IBC passive channels | Deprecated |
 | [026](./adr-026-ibc-client-recovery-mechanisms.md) | IBC client recovery mechansisms | Accepted |
diff --git a/docs/architecture/adr-003-ics27-acknowledgement.md b/docs/architecture/adr-003-ics27-acknowledgement.md
new file mode 100644
index 00000000000..dc2e3256ba6
--- /dev/null
+++ b/docs/architecture/adr-003-ics27-acknowledgement.md
@@ -0,0 +1,118 @@
+# ADR 003: ICS27 Acknowledgement Format
+
+## Changelog
+* January 28th, 2022: Initial Draft
+
+## Status
+
+Accepted
+
+## Context
+
+Upon receiving an IBC packet, an IBC application can optionally return an acknowledgement. 
+This acknowledgement will be hashed and written into state. Thus any changes to the information included in an acknowledgement are state machine breaking. 
+
+ICS27 executes transactions on behalf of a controller chain. Information such as the message result or message error may be returned from other SDK modules outside the control of the ICS27 module. 
+It might be very valuable to return message execution information inside the ICS27 acknowledgement so that controller chain interchain account auth modules can act upon this information. 
+Only determinstic information returned from the message execution is allowed to be returned in the packet acknowledgement otherwise the network will halt due to a fork in the expected app hash. 
+
+## Decision
+
+At the time of this writing, Tendermint includes the following information in the [ABCI.ResponseDeliverTx](https://github.com/tendermint/tendermint/blob/release/v0.34.13/types/results.go#L47-#L53):
+```go
+// deterministicResponseDeliverTx strips non-deterministic fields from
+// ResponseDeliverTx and returns another ResponseDeliverTx.
+func deterministicResponseDeliverTx(response *abci.ResponseDeliverTx) *abci.ResponseDeliverTx {
+	return &abci.ResponseDeliverTx{
+		Code:      response.Code,
+		Data:      response.Data,
+		GasWanted: response.GasWanted,
+		GasUsed:   response.GasUsed,
+	}
+}
+```
+
+### Successful acknowledgements
+
+Successful acknowledgements should return information about the transaction execution. 
+Given the determinstic fields in the `abci.ResponseDeliverTx`, the transaction `Data` can be used to indicate information about the transaction execution. 
+The `abci.ResponseDeliverTx.Data` will be set in the ICS27 packet acknowledgement upon successful transaction execution.
+
+The format for the `abci.ResponseDeliverTx.Data` is constructed by the SDK. 
+
+At the time of this writing, the next major release of the SDK will change the format for constructing the transaction response data. 
+
+#### v0.45 format
+
+The current version, v0.45 constructs the transaction response as follows:
+```go
+    proto.Marshal(&sdk.TxMsgData{
+        Data: []*sdk.MsgData{msgResponses...}, 
+    }
+```
+
+Where `msgResponses` is a slice of `*sdk.MsgData`. 
+The `MsgData.MsgType` contains the `sdk.MsgTypeURL` of the `sdk.Msg` being executed.
+The `MsgData.Data` contains the proto marshaled `MsgResponse` for the associated message executed. 
+
+#### Next major version format
+
+The next major version will construct the transaction response as follows:
+```go 
+    proto.Marshal(&sdk.TxMsgData{
+        MsgResponses: []*codectypes.Any{msgResponses...}, 
+    }
+```
+
+Where `msgResponses` is a slice of the `MsgResponse`s packed into `Any`s.
+
+#### Forwards compatible approach
+
+A forwards compatible approach was deemed infeasible. 
+The `handler` provided by the `MsgServiceRouter` will only include the `*sdk.Result` and an error (if one occurred). 
+In v0.45 of the SDK, the `*sdk.Result.Data` will contain the MsgResponse marshaled data. 
+However, the MsgResponse is not packed and marshaled as a `*codectypes.Any`, thus making it impossible from a generalized point of view to unmarshal the bytes. 
+If the bytes could be unmarshaled, then they could be packed into an `*codectypes.Any` in antcipation of the upcoming format.  
+
+Intercepting the MsgResponse before it becomes marshaled requires replicating this [code](https://github.com/cosmos/cosmos-sdk/blob/dfd47f5b449f558a855da284a9a7eabbfbad435d/baseapp/msg_service_router.go#L109-#L128). 
+It may not even be possible to replicate the linked code. The method handler would need to be accessed somehow.
+
+For these reasons it is deemed infeasible to attempt a fowards compatible approach. 
+
+ICA auth developers can interpret which format was used when constructing the transaction response by checking if the `sdk.TxMsgData.Data` field is non-empty. 
+If the `sdk.TxMsgData.Data` field is not empty then the format for v0.45 was used, otherwise ICA auth developers can assume the transaction response uses the newer format.
+
+
+#### Decision
+
+Replicate the transaction response format as provided by the current SDK verison. 
+When the SDK version changes, adjust the transaction response format to use the updated transaction response format. 
+Include the transaction response bytes in the result channel acknowledgement. 
+
+A test has been [written](https://github.com/cosmos/ibc-go/blob/v3.0.0-beta1/modules/apps/27-interchain-accounts/host/ibc_module_test.go#L716-#L774) to fail if the `MsgResponse` is no longer included in consensus.
+
+### Error acknowledgements
+
+As indicated above, the `abci.ResponseDeliverTx.Code` is determinstic. 
+Upon transaction execution errors, an error acknowledgement should be returned including the abci code. 
+
+A test has been [written](https://github.com/cosmos/ibc-go/blob/v3.0.0-beta1/modules/apps/27-interchain-accounts/host/types/ack_test.go#L41-#L82) to fail if the ABCI code is no longer determinstic.
+
+## Consequences
+
+> This section describes the consequences, after applying the decision. All consequences should be summarized here, not just the "positive" ones.
+
+### Positive
+
+- interchain account auth modules can act upon transaction results without requiring a query module
+- transaction results align with those returned by execution of a normal SDK message.
+
+### Negative
+
+- the security assumptions of this decision rest on the inclusion of the ABCI error code and the Msg response in the ResponseDeliverTx hash created by Tendermint
+- events are non-determinstic and cannot be included in the packet acknowledgement
+
+### Neutral
+
+No neutral consequences.
+