Private Enterprise Advisory Committee
Meeting Notes
April 14, 2016

The Private Enterprise Advisory Committee’s purpose is to assist the Accounting Standards Board (AcSB) in maintaining and improving accounting standards for private enterprises (ASPE) in Part II of the CPA Canada Handbook – Accounting and in identifying the need for non-authoritative guidance about the standards. The Committee makes recommendations to the AcSB but is not authorized to interpret or provide authoritative guidance on ASPE.

This document has been prepared by the staff of the AcSB and is based on discussions during the Committee’s meeting. The meeting notes do not necessarily represent the views of the AcSB and nothing in them constitutes authoritative guidance on acceptable or unacceptable application of ASPE. Only the AcSB can make such a determination.

Subsidiaries and Investments

Committee members continued their discussion of the responses received on the AcSB’s Exposure Draft, “Subsidiaries and Investments,” issued in September 2015, and agreed to recommend the following to the AcSB:

  • A requirement to expense acquisition-related costs for investments subject to significant influence when the equity method is applied should be added to Section 3051, Investments, consistent with the Exposure Draft proposal to expense acquisition-related costs when the cost method is used.
  • The transition provisions in Section 1591, Subsidiaries, should be amended to clarify the requirements when there is contingent consideration outstanding or the initial accounting for the subsidiary is incomplete.
  • The transition provisions in Section 1500, First-time Adoption, should be amended to clarify that the amendments apply from the date of transition.
  • The transition provisions in Sections 1506, Accounting Changes, and 1582, Business Combinations, should be amended to not permit prospective application of the consequential amendments to these Sections.

The Committee also discussed a proposal to provide additional clarity to the scope out of common control transactions, and agreed to recommend to the AcSB that the drafting of these amendments be revisited by staff in light of that discussion.

The AcSB will deliberate the Committee’s recommendations at its May 2016 meeting.

Subsidiaries and Interests in Joint Arrangements

The Committee was advised of the AcSB’s decision to issue an exposure draft to propose several clarifications to Sections 1591 and 3056, as recommended by the Committee.  

Committee members discussed the proposals and made recommendations relating to some minor issues.