This summary of Accounting Standards Board (AcSB) decisions has been prepared for information purposes only. Decisions reported are tentative and reflect only the current status of discussion on projects, which may change after further deliberations by the Board. Decisions to publish Handbook material are final only after a formal ballot process.
The AcSB will respond to change and reprioritize when necessary, ensuring we can address implementation challenges and provide the information users may need in these unique circumstances.
The AcSB values input and feedback from stakeholders and can be reached anytime through our online form.
Standards for Private Enterprises
Detailed Review of Accounting Standards for Private Enterprises
The AcSB continued its discussions on its detailed review of Accounting Standards for Private Enterprises (ASPE). The discussion focused on feedback received to date on each standard in Part II of the CPA Canada Handbook – Accounting, and further information needed from the Board’s advisory committees and working groups to understand the key issues and potential solutions. The Board will start discussions on this project with its Private Enterprise Advisory Committee, Not-for-Profit Advisory Committee, and Small Practitioners Working Group at their July 2024 meetings.
The AcSB emphasized the need to clearly define the project’s scope, as the intent is to act on the most significant and pervasive challenges that can be addressed without negatively impacting the quality of information provided to users. The intent of the review is not to address or fix every issue with each standard. The Board will continue its discussions on defining the project’s scope at its June 2024 meeting.
Standards for Private Enterprises and Standards for Pension Plans
Application Questions
The AcSB discussed application questions from practice and considered input from its Private Enterprise Advisory Committee on the following topics:
- related party business combinations; and
- disclosure of accounting policies.
Related party business combinations
The AcSB discussed and considered input from its Private Enterprise Advisory Committee on an application issue raised regarding the amendments to Section 3840 , Related Party Transactions, in Part II of the Handbook issued in September 2023. These amendments added an option in paragraph 3840.44(b) to either retrospectively restate all prior periods when carrying values are used to account for a combination or prospectively account for these transactions. The question discussed is, when the new option is applied to account for a combination prospectively from the date that the transfer occurred, what comparative figures, if any, are presented?
Committee members advised that this is a common scenario arising in practice.
The AcSB considered various options to address the issue through authoritative or non-authoritative guidance. The Board directed staff to gather further information and decided to continue discussing the question at its June 2024 meeting.
Disclosure of accounting policies
The AcSB discussed a question raised regarding the application of Accounting Standards for Pension Plans in Part IV of the Handbook. Currently, Section 4600, Pension Plans, requires a pension plan to select accounting policies consistent with IFRS® Accounting Standards or ASPE for items that do not relate to its investment portfolio or pension obligation. Section 4600 also requires disclosure of significant accounting policies in paragraph 4600.29(b). The question raised is, when a pension plan selects IFRS Accounting Standards as the underlying framework, should plans use “significant” accounting policies as mentioned in Section 4600 or “material” accounting policies as required in IFRS Accounting Standards?
A potential option to address this question was to explore whether an amendment in Parts II-IV of the Handbook to require disclosure of material accounting policies instead of significant accounting policies would be helpful to entities in determining which policies to disclose. The AcSB considered input from its Private Enterprise Advisory Committee and decided that further input was needed from its Pension Plan Advisory Committee before concluding on the issue. The Board will continue discussing the application question and consider their views at a future meeting.
Standards for Not-for-Profit Organizations
Contributions
Revised project proposal
The AcSB discussed and approved a revised project proposal to develop a new exposure draft that will continue to allow an accounting policy choice for the recognition of restricted contributions and propose improvements to the two existing methods. This new exposure draft will also incorporate relevant proposals and feedback from the first Exposure Draft , “Contributions – Revenue Recognition and Related Matters,” published in 2023.
The AcSB decided not to issue a consultation paper before developing the new exposure draft. Instead, the Board will seek input from interested and affected parties through surveys, outreach activities, and field testing while developing the new exposure draft.
The AcSB will continue discussing the proposals to be included in the new exposure draft at its June 2024 meeting.
Contributed materials and services, and pledges
The AcSB continued deliberating the feedback on relevant proposals in its 2023 Exposure Draft. The Board also discussed input from its Not-for-Profit Advisory Committee. The Board’s discussion focused on recognition of contributed materials and services, and pledges.
In response to the feedback received, the Board tentatively decided to retain the proposals from the previous Exposure Draft to require recognition of receivables when the recognition criteria are met for each individual pledge or bequest. The Board also considered whether to provide illustrative examples for bequests and contributions received through an intermediary. The Board will continue its discussions of illustrative examples at a future meeting.
The AcSB also discussed the proposed recognition criteria for contributed materials and services, as well as the feedback received on these criteria. The Board directed staff to conduct additional research to determine if the proposed recognition criteria would meet the needs of the not-for-profit sector.
The AcSB will seek feedback from its Not-for-Profit Advisory Committee at its July 2024 meeting.
Research
Carbon Credits
The AcSB received an update on its research project, Carbon Credits. The Board discussed research findings and provided feedback on next steps. The findings of this research will be shared internationally at an upcoming IASB Accounting Standards Advisory Forum meeting.
Due Process
AcSB’s Advisory Committees and Working Groups
Not-for-Profit Advisory Committee
The AcSB received an update on the May 1, 2024, Not-for-Profit Advisory Committee meeting. At this meeting, the Committee discussed Contributions, Relief from Recognition of Intangible Assets and Amortization of Goodwill, Insurance Contracts with Cash Surrender Value, Evaluating the Preface, and more. Please see the Not-for-Profit Advisory Committee Meeting Notes – May 1, 2024, for details.
Private Enterprise Advisory Committee
The AcSB received an update on the May 9, 2024, Private Enterprise Advisory Committee meeting. At this meeting, the Committee discussed the AcSB’s Guidance Framework, Relief from Recognition of Intangible Assets and Amortization of Goodwill, Insurance Contracts with Cash Surrender Value, Evaluating the Preface, ASPE application questions, and more. Please see the Private Enterprise Advisory Committee Meeting Notes – May 9, 2024, for details.
IFRS® Accounting Standards Discussion Group
The AcSB received an update on the May 14, 2024, IFRS Accounting Standards Discussion Group meeting. At this meeting, the Group discussed Business Combinations – Disclosures, Goodwill and Impairment; Power Purchase Agreements; Accounting for Deferred Tax Assets under Organization for Economic Co-operation and Development Pillar Two GloBE Rules (IAS 12); and Assessment of Cash-Generating Units in a Production Facility with Multiple Production Lines When One of the Products has a Declining Market Demand (IAS 36).