Strategic Planning – Accounting Standards for Private Sector Not-for-Profit Organizations
The planning and consultation process the Accounting Standards Board (AcSB) followed to develop its strategic direction for private sector not-for-profit organizations is summarized below.
For current activities, visit the Standards for Not-for-Profit Organizations (NFPOs) area of the website.
2012 Standards become effective
- Accounting Standards for NFPOs are mandatory for Canadian private sector not-for-profit organizations for years beginning on or after January 1, 2012.
- These organizations may apply accounting standards for NFPOs in the CICA Handbook – Accounting (Part III) or International Financial Reporting Standards (IFRSs) in the Handbook (Part 1). Earlier application is permitted.
2011 Issue standards into Canadian GAAP
- In December, Accounting Standards for NFPOs are issued as Part III of the CICA Handbook – Accounting.
- Section 1501, First-time Adoption by Not-for-Profit Organizations, requires standards in Part III to be adopted retrospectively, but also provides alternatives for specific situations when that may not meet a cost/benefit test.
2010 Expose and approve standards
- In March, the AcSB issued an Exposure Draft, “Accounting Standards for Not-for-Profit Organizations.” For not-for-profit organizations that are not subject to the CICA Public Sector Accounting Handbook, the Exposure Draft proposes a free choice to adopt accounting standards for not-for-profit organizations, which include the 4400 series of Handbook Sections, with reference to standards for private enterprises when appropriate, or IFRSs. As well, the Exposure Draft seeks input on the timing of the changeover from the pre-changeover standards in Part V of the Handbook.
- In September, the AcSB discusses comment letters received on its Exposure Draft and approves the accounting standards substantially as proposed in the Exposure Draft.
Develop guidance on first-time adoption
- The AcSB also decides that, at the date of transition, private enterprises applying Part II of the Handbook should be permitted to carry forward unrecognized actuarial gains and losses and past service costs that were determined in accordance with a previously applied standard equivalent to Section 3461 in Part II of the Handbook.
- In September, the AcSB issued an Exposure Draft, “Adoption of Accounting Standards for Private Enterprises – Employee Future Benefits (Proposed amendment to First-time Adoption, Section 1500).” The AcSB stated that if Section 1500 is amended as proposed, a similar amendment would be made to Section 1501 in Part III.
- The proposed amendment would not affect the existing requirement for organizations to recognize any unamortized transitional asset or unamortized transitional obligation in opening net assets at the date of transition to accounting standards for NFPOs in Part III.
2009 Consider feedback
- The AcSB considers the comments received on the Invitation to Comment and develops tentative conclusions.
2008 Solicit views on future direction for setting standards and changeover date
- In December, the AcSB and the Public Sector Accounting Board issue 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.
2006 Approve new strategic plan
- The AcSB approves a strategic plan to govern its activities in the next few years.
- In the Strategic Plan, “Accounting Standards in Canada: New Directions,” the AcSB notes that “one size does not fit all” and decides to pursue separate financial reporting strategies for publicly accountable enterprises, private enterprises and not-for-profit organizations.
2005 Consult on tentative conclusions
- After considering the input received, the AcSB presents its tentative conclusions to the Accounting Standards Oversight Council (AcSOC) at its February public meeting.
- The AcSB’s tentative conclusion is that separate strategies for each of the distinct categories of reporting entity should be developed (i.e., publicly accountable enterprises, private enterprises and not-for-profit organizations).
- In March, the AcSB issues an Invitation to Comment on its Draft Strategic Plan after considering the advice received from the AcSOC. The AcSB proposes to undertake a comprehensive examination of the needs of the users of not-for-profit organizations’ financial statements and then determine the most appropriate financial reporting model to meet those needs.
- In September, the AcSB begins its review of the comments received in response to the Draft Strategic Plan. Overall, the responses are supportive of the strategies that had been proposed.
- At its October public meeting, AcSOC reviews the comments and concurs with the AcSB’s tentative conclusion that it had a basis for proceeding to finalize a plan.
2004 Begin consultations on future direction of accounting standards
- The AcSB embarks on a process to develop a new five-year plan for the period 2006-2011 to reconsider its previous strategies of harmonizing with U.S. GAAP while working to support the international convergence of accounting standards.
- In May, the AcSB seeks public input through its Invitation to Comment, “Accounting Standards in Canada: Future Directions,” and a series of public roundtable meetings and other consultations with stakeholders.
- The Invitation to Comment asked whether Canada should:
- maintain its own standard-setting capability;
- maintain its own GAAP or adopt either US GAAP or IFRSs;
- continue with the twin objectives of harmonization and convergence; and
- consider modifying current Canadian GAAP requirements to provide better information to the users of financial statements of various different types of entities through, for example, a wider application of differential reporting.
- A wide range of interested parties provide considerable feedback to the AcSB with Invitation to Comment responses.
Resources – Strategic Direction for Private Sector Not-for-Profit Organizations
- “Accounting Standards in Canada: New Directions” (January 4, 2006)
- Extracts from AcSB Decision Summaries concerning planning discussions (updated following AcSB meetings)
- Invitation to Comment, “Accounting Standards in Canada: Future Directions — Draft Strategic Plan” (March 31, 2005)
- “Comparison of Canadian GAAP and IFRSs” (April 28, 2005)
- “Implications of Moving to IFRSs for Existing Canada/US GAAP Differences” (May 19, 2005)
- Invitation to Comment, “Accounting Standards in Canada: Future Directions” (May 31, 2004)
- Discussion Paper, with links to background information (June 24, 2004)
- Summary of comments received from roundtable meetings (October 28, 2004)
- Accounting Standards Board Plan 2003-2005 (August 2003)
Documents for Comment
- Exposure Draft, “Adoption of Accounting Standards for Private Enterprises – Employee Future Benefits (Proposed amendment to First-time Adoption, Section 1500)” (September, 2010)
- Exposure Draft, “Accounting Standards for Not-for-Profit Organizations” (March 2010)
- Invitation to Comment, “Financial Reporting by Not-for-Profit Organizations” (December 2008)
- CAmagazine: “New standards for NPFOs” (December 2011)
- FYI Newsletter
- "Adoption of a New Accounting Framework for Not-for-Profit Organizations" (Special Edition 2011)
- "Watch for Developments on Two Fronts" (May 2011)
- "New Financial Reporting Framework...Has arrived!" (Special Edition 2010)
- "Standards in Transition" (August 2010)
- "Proposed New Strategy" (March 2010)
Background Information and Basis for Conclusions
- “Accounting Standards for Not-for-Profit Organizations” (March 2011)
Need more information? Contact the AcSB.