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.
Detailed Review of ASPE
The Private Enterprise Advisory Committee discussed the AcSB’s approach for determining which issues will be addressed through this project. Committee members generally agreed with the Board’s proposed approach for defining the project’s scope, as they thought it would ensure the project focuses on the most significant and pervasive challenges that can be addressed without negatively impacting the quality of information provided to users. The Committee also discussed application issues in Section 3031, Inventories, Section 3110, Asset Retirement Obligations, and Section 3856, Financial Instruments, in Part II of the CPA Canada Handbook – Accounting Standards for Private Enterprises (ASPE) that might be addressed through this project. The Board intends to use this feedback to help draft a consultation paper. The Board will discuss this feedback at its September 2024 meeting and will seek feedback on additional application issues from the Private Enterprise Advisory Committee, Not-for-Profit Advisory Committee, and Small Practitioners Working Group at their meetings in October and November 2024.
Financial Statement Concepts
The Private Enterprise Advisory Committee received an overview of the AcSB’s project to update Financial Statement Concepts in Parts II and III of the Handbook. This project will focus on:
- clarifying the purpose and intended use of Financial Statement Concepts; and
- ensuring Financial Statement Concepts are appropriate for private enterprises and not-for-profit organizations in Canada.
The Committee discussed the AcSB’s decision to move Financial Statement Concepts to a separate location within the Handbook outside of accounting standards. This is consistent with the approach used by other national and international standard setters for their conceptual frameworks.
Committee members acknowledged that this decision is not likely to alter current practice. Nevertheless, they emphasized the need to clearly communicate that this change does not diminish the significance of concepts nor signal a shift in the objectives of ASPE. The Committee also highlighted the necessity for additional educational materials to effectively convey the intended use and application of Financial Statement Concepts.
In October 2024, the Committee will begin to discuss topics to be updated in Financial Statement Concepts as part of this project.
Strategic Research – Preface
The Private Enterprise Advisory Committee received an overview of feedback from the AcSB’s advisory committees and working group regarding its strategic initiative to evaluate the Preface of the Handbook. The Committee provided additional feedback on the financial reporting requirements for certain types of entities, such as social enterprises, small health and wellness funds, and sports and social clubs. The Board will discuss the Committee’s feedback at its meeting in November 2024.