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Status: Invitation to
Comment (PDF) issued. Comments requested by June 30, 2009.
Background
Activities to Date
Next Steps
Contact Information
Background
In its Strategic Plan, issued early in 2006, the AcSB noted that “one size does not necessarily fit all”
and decided to pursue separate financial reporting strategies for public and private enterprises and
not-for-profit organizations.
As part of the strategy, the AcSB proposed undertaking an examination of the needs of the financial
statement users of not-for-profit organizations and, based on its examination, to determine the most
appropriate financial reporting approach.
Activities to Date
The AcSB has determined to replace Canadian generally accepted accounting principles with International
Financial Reporting Standards (IFRSs) for publicly accountable profit-oriented enterprises (as defined in the
AcSB’s April 2008 Exposure Draft, “Adopting IFRSs in Canada (PDF)”)
with January 1, 2011 as the changeover date.
- The AcSB discussed proposals for developing “made in Canada” financial reporting
standards for private enterprises at its April and May 2008 meetings, and decided on the following
approach:
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- the existing CICA Handbook – Accounting will be used as a starting point;
- the majority of the recognition and measurement standards in the existing Handbook, other than those that
give rise to contentious issues, are relevant to the sector and will be retained with few, if any,
modifications;
- issues in the existing Handbook that have caused significant concern to private enterprises will be
reconsidered, based on cost/benefit considerations;
- the specific disclosure requirements will be re-evaluated and there are expected to be considerably fewer
disclosures than in the existing Handbook;
- reducing the volume of material will be a secondary goal.
The project is reported more fully on the AcSB webpage “Strategic Planning — Private Enterprises.”
The AcSB has agreed that a not-for-profit organization can apply IFRSs if that approach meets the needs of
the users of its financial statements. In agreeing to this approach, the AcSB notes that IFRSs do not, and it
is expected will not, contain any 4400 series equivalent ‘add on’ for not-for-profit organizations.
The AcSB has also agreed to consider permitting not-for-profit organizations to apply the standards for
private enterprises, together with additional standards addressing their unique transactions and
circumstances. Accordingly, the needs of not-for-profit organizations will be considered in the development
of the private enterprise standards.
It will remain the responsibility of the Not-for-Profit
Organizations Advisory Committee (AdCom) to make any recommendations to the AcSB on the suitability of
the standards for not-for-profit organizations. The AdCom is currently assisting the AcSB with the
development of its strategy for not-for-profit organizations.
In December 2008, the AcSB and the Public Sector Accounting Board issued a joint Invitation to Comment (PDF), “Financial Reporting by Not-for-Profit
Organizations,” to solicit the views of not-for-profit organizations’ stakeholders with respect to the
strategy. Until the strategy has been determined and implemented, not-for-profit organizations will continue
to apply current accounting standards.
Once the strategy for not-for-profit organizations has been determined, the AdCom will consider whether
amendments should be made to the 4400 series of Handbook Sections to either make them consistent with the
standards with which they may be associated in the future or to further improve financial reporting by
not-for-profit organizations.
Next Steps
The AcSB will review responses to the Invitation to Comment on the proposals for future financial
reporting by not-for-profit organizations once the comment period ends on June 30, 2009.
Contact Information
Brian Barrington, CA
Principal, Accounting Standards
Telephone: +1 (416) 204-3436
Fax: +1 (416) 204-3412
Canadian Accounting Standards Board
277 Wellington Street West
Toronto ON M5V 3H2 Canada
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