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Status: AcSB Exposure Draft issued with a comment deadline of July 15, 2010. Background
Activities to Date
Next Steps
Related Information
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 March 2009 Exposure Draft, “Adopting IFRSs in Canada II”) 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:
- 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 approved this set of standards in September 2009, for publication by the end of the year. The AcSB 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 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 were considered in the development of the private enterprise standards. It remains the responsibility of the Not-for-Profit Organizations Advisory Committee (AdCom) to make recommendations to the AcSB on the suitability of the standards for not-for-profit organizations. The AdCom is currently assisting the AcSB with its strategy for not-for-profit organizations. In December 2008, the AcSB and the Public Sector Accounting Board (PSAB) issued a joint Invitation to Comment, “Financial Reporting by Not-for-Profit Organizations,” to solicit the views of not-for-profit organizations’ stakeholders with respect to the strategy. The AcSB began deliberations on the comments received on the Invitation to Comment at its September 2009 meeting. At its October 2009 meeting, the AcSB approved the development of an Exposure Draft (ED) addressing the future direction for setting standards for the not-for-profit sector and the timing of the changeover from existing standards. For not-for-profit organizations that are not subject to the CICA Public Sector Accounting Handbook, the AcSB tentatively decided that the ED will propose a free choice of the accounting standards for private enterprises plus the 4400 series of Handbook Sections, appropriately modified to fit with those standards, IFRSs or public sector accounting standards. The AcSB understands that PSAB intends to propose that it adopt a version of the 4400 series of Handbook Sections, appropriately modified to fit with public sector standards. The AcSB also decided that it should work jointly with PSAB in developing ED proposals on this topic, and noted that it expects to reconsider the current requirements of the 4400 series of Handbook Sections, in collaboration with PSAB, after finalizing the strategic direction for this sector. The AcSB also reaffirmed that the existing CICA Handbook – Accounting standards will be maintained for use by not-for-profit organizations at least until the new direction for setting standards for this sector has been approved. Next Steps In co-operation with PSAB, the AcSB will develop an Exposure Draft to be issued early in 2010 to provide stakeholders with the opportunity to provide input on the proposals, including the timing of any changeover from existing standards. Related Information Contact Information Brian Barrington, CA
Consultant, 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 |