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.
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Research
Crypto-asset Activities
The AcSB continued discussing the accounting for crypto-asset lending arrangements from the lender’s perspective. The Board considered the merits of a technical analysis on accounting for crypto-asset lending arrangements and the potential next steps to take on this accounting issue. The Board decided to conduct further research before deciding on any next steps.
Standards for Not-for-Profit Organizations
Contributions
The AcSB continued discussing exposure draft proposals and considered feedback from the Not-for-Profit Advisory Committee related to:
- recognition of revenue from restricted contributions and capital asset contributions;
- disclosure of endowments;
- recognition of contributed materials and services;
- transition; and
- the effective date.
The AcSB discussed the revised proposed criteria for determining whether a contribution is externally restricted. The Board tentatively decided that for a contribution to be externally restricted, the restriction must:
- be explicitly communicated between the organization and the contributor; and
- require the resources be used for a designated purpose and/or used within a designated period of time.
The AcSB reaffirmed its tentative decision that capital asset contributions should be accounted for differently than other types of contributions. To address stakeholder concerns related to volatility in the statement of operations, the Board tentatively decided that capital asset contributions related to amortizable capital assets would be deferred and recognized as revenue on the same basis as the related amortization expense. Capital asset contributions related to assets that will not be amortized would be recognized as direct increases in net assets.
The AcSB discussed the proposed disclosure requirements relating to endowments. To add transparency to the financial statements, the Board tentatively decided that an organization should disclose:
- qualitative information about how the organization monitors the value of its endowments and compliance with the related endowment agreements; and
- information that allows users to understand, on an aggregate basis, the extent of endowments where the fair market value is less than the amount required to be maintained permanently.
The AcSB discussed the recognition of contributed materials and services. The Board tentatively decided that when an organization elects to recognize contributed materials and services if the recognition criteria are met, the policy should be applied consistently to all types of contributed materials and services.
The AcSB tentatively decided that the new standard should be applied retrospectively, with transition relief provided for capital asset contributions that were fully recognized in revenue prior to the beginning of the earliest period presented in the financial statements.
The AcSB also discussed the effective date of the new standard and recognized that stakeholders will require adequate time to adopt the new standard. Based on the current timeline, the Board tentatively decided that the proposed effective date of the new standard would be January 1, 2026, with earlier application permitted.
The AcSB will continue discussing the exposure draft proposals at its November meeting. The Board plans to issue an exposure draft in the first quarter of 2023.
Due Process
Annual Plan
The AcSB received a quarterly update on the activities relating to its 2022-2023 Annual Plan, including identifying potential project-related risks and mitigating factors. The Board decided to continue with activities as planned and to monitor whether updates to the Annual Plan are required. The Board will begin its process for developing next year’s annual plan at its December 2022 meeting.
The AcSB also discussed the process and format for reporting the Board’s performance related to its Annual Plan to the Accounting Standards Oversight Council (AcSOC) and AcSOC’s Performance Review Committee for the period ending March 31, 2023. The Board will discuss its report on performance at a future meeting.