The Private Enterprise Advisory Committee assists the Accounting Standards Board (AcSB) with maintaining and improving accounting standards for private enterprises (ASPE) in Part II of the CPA Canada Handbook – Accounting and with identifying the need for non-authoritative guidance about the standards. The Committee makes recommendations to the AcSB but is not authorized to interpret or provide authoritative guidance on ASPE.
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. Only the AcSB can make such a determination.
Cloud Computing Arrangements
The Private Enterprise Advisory Committee received an update on the AcSB’s recent discussions on the accounting for cloud computing arrangements. The Committee also provided feedback on the staff’s analysis of different approaches to account for implementation costs incurred in a cloud computing arrangement that is a service contract.
The AcSB will consider the Committee’s feedback, as well as feedback from its Not-for-Profit Advisory Committee, at its March 2021 meeting.
Interest Rate Benchmark Reform
The Private Enterprise Advisory Committee considered recent developments in the Canadian Dollar Offered Rate market and discussed its impact on private enterprises in Canada. The Committee considered the impact of interest rate benchmark reform on debt modification accounting and hedge accounting in Section 3856, Financial Instruments.
The AcSB will discuss the Committee’s comments, as well as those received from its Not-for-Profit Advisory Committee, at its April 2021 meeting.
Amendments in Other Frameworks
The Private Enterprise Advisory Committee considered recent amendments issued in other jurisdictions to provide input on whether some or all of the accounting changes in those standards may provide significant benefit to Canadian private enterprises reporting under ASPE. Committee members discussed:
- new or amended standards under U.S. generally accepted accounting principles issued by the U.S. Financial Accounting Standards Board since May 2019; and
- IFRS® Standards issued or amended by the International Accounting Standards Board since May 2019.
The Committee recommended the AcSB consider amendments to IAS 37 Provisions, Contingent Liabilities and Contingent Assets and whether guidance on accounting for onerous contracts would benefit private enterprises applying ASPE.
Other Topics
The Committee also provided input on:
- the prevalence of crypto currency holdings by private enterprises in Canada;
- whether additional guidance or educational materials were needed on going concern; and
- the accounting for rent concessions related to the Canada Emergency Commercial Rent Assistance program.
The Committee did not recommend any standard-setting activities to the AcSB on these items.