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AcSB

Not-for-Profit Advisory Committee Notes – January 31, 2023

The Not-for-Profit Advisory Committee’s purpose is to assist the Accounting Standards Board (AcSB) on maintaining and improving the accounting standards for not-for-profit organizations (NFPOs) in Part III 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 accounting standards for NFPOs.

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 accounting standards for NFPOs. Only the AcSB can make such a determination.

Contributions

The Not-for-Profit Advisory Committee received an update on the AcSB’s recent decisions in response to feedback received from the Committee’s fatal flaw review of exposure draft proposals. The Committee recommended wording clarifications to the proposed requirement to disclose information about the availability of an organization’s financial and other assets to meet its requirements related to restricted contributions.

The Committee also provided input on the communications and outreach plan for the exposure draft. The AcSB will consider the Committee’s feedback on the communications and outreach plan at its meeting on February 15, 2023. The Board plans to issue the Contributions exposure draft in March 2023. 

Reporting Controlled and Related Entities

The Not-for-Profit Advisory Committee continued its discussion on identifying issues for further research related to Section 4450, Reporting Controlled and Related Entities by Not-for-Profit Organizations. The Committee provided feedback on the relevance of the principles relating to significant influence and economic interests. The Committee also proposed some improvements to the Section 4450 disclosure requirements and discussed prioritization of research topics related to Section 4450.

The AcSB will consider the Committee’s feedback at its March 2023 meeting.

Insurance Contracts with a Cash Surrender Value

The Not-for-Profit Advisory Committee received an update on the AcSB’s recent tentative decisions on the development of a project to address accounting issues for insurance contracts with a cash surrender value. The Committee discussed alternative accounting treatments, presentation options, and potential disclosure requirements for insurance contracts with a cash surrender value. The Committee also provided feedback on accounting for contributions of insurance contracts with a cash surrender value and payment of policy premiums.

The AcSB will consider the feedback from its Not-for-Profit Advisory Committee and its Private Enterprise Advisory Committee at its April 2023 meeting.