The Medium and Small Practitioners Advisory Committee acts in an advisory capacity to the Accounting Standards Board (AcSB) and assists the AcSB in maintaining and improving accounting standards for private enterprises in Part II and accounting standards for not-for-profit organizations in Part III of the CPA Canada Handbook – Accounting.
The AcSB staff has prepared this document based on discussions held during the Committee’s meeting. The meeting notes do not necessarily represent the AcSB’s views, and nothing in them constitutes authoritative guidance on acceptable or unacceptable application of ASPE or ASNPO. Only the AcSB can make such a determination.
Application Questions
The Medium and Small Practitioners Advisory Committee discussed application questions on the following topics:
- disclosures for contracts in progress using the percentage of completion method; and
- derecognition of financial liabilities.
The discussion focused on the prevalence of the issues, diversity-in-practice issues, and how to apply the guidance in the standards and professional judgment to the issues. The AcSB will further discuss these application issues and consider input from the Medium and Small Practitioners Advisory Committee and the Private Enterprise Advisory Committee at a future meeting. These discussions will be reported in the Decision Summary thereafter.
Detailed Review of ASPE
The Medium and Small Practitioners Advisory Committee discussed application issues for the third batch of selected ASPE Standards that included the following: Section 3400, Revenue; Section 3475, Disposal of Long-lived Assets and Discontinued Operations; and Section 3840, Related Party Transactions. The AcSB will discuss this feedback at its March 2025 meeting and will seek feedback on additional application issues from its Private Enterprise Advisory Committee and Medium and Small Practitioners Advisory Committee at their meetings in Q2 2025.
Financial Statement Concepts
The Medium and Small Practitioners Advisory Committee received an update on the AcSB’s tentative decisions about updating financial statement concepts for Parts II and III of the Handbook.
Additionally, the Committee provided feedback on the AcSB’s tentative decision to develop a single set of financial statement concepts covering both Parts II and III of the Handbook. The Committee noted that it will be important to ensure that a single set of financial statement concepts is easy to navigate for application in both Part II and Part III.
The Committee also provided feedback on staff’s proposed definitions of the elements of financial statements, which incorporates selective terminology and guidance from the International Accounting Standard Board’s Conceptual Framework. The Committee emphasized the importance of considering the different types of assets and liabilities recognized by for-profit and not-for-profit organizations as the AcSB begins developing proposals. Some Committee members also noted that increased guidance on the presentation of expenses in the income statement may be helpful and suggested the AcSB consider a separate project on financial statement presentation.
The AcSB will discuss the Committee’s feedback at its meeting in March 2025.
For more information on the background and benefits of the Financial Statement Concepts project, please visit the following webpage: “What You Need to Know about Financial Statement Concepts.”