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Not-for-Profit Advisory Committee Notes – June 22, 2021

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.

Interest Rate Benchmark (IBOR) Reform in Canada

The Not-for-Profit Advisory Committee discussed the proposals to include in an exposure draft to amend Section 3856, Financial Instruments, addressing issues related to debt modification and hedge accounting resulting from IBOR reform. The Committee advised the AcSB that the proposed amendments should:

  • provide optional relief for debt modifications directly related to IBOR reform, allowing entities to account for these modifications as a continuation of the existing contract rather than an extinguishment; and
  • allow entities to update their hedge documentation to reflect changes resulting from IBOR reform without discontinuing hedge accounting.

The AcSB will consider the Committee’s comments at the Board meeting on July 21-22, 2021.

AcSB’s 2022-2027 Draft Strategic Plan

The Committee received an overview of the proposals in the AcSB’s 2022-2027 Draft Strategic Plan. The Committee discussed the proposals relating to accounting standards for NFPOs, including the preface and scalability of the standards, and reporting beyond traditional financial statements.

The Committee provided the following feedback on the AcSB’s proposed strategies:

  • The reporting landscape for NFPOs has evolved since Part III of the Handbook was established. Accordingly, Committee members agreed it would be beneficial to reconsider aspects of the preface that require certain types of entities to apply a given part of the Handbook;
  • Scaling the standards would benefit small NFPOs with limited resources and would also enhance the relevance as user needs are not the same for all NFPOs; and
  • NFPOs report information outside of their financial statements to funders and other users. Such information includes impact metrics and other key performance indicators. Committee members agreed there is an opportunity and a need to enhance the relevance of this information.

Committee members were also reminded about the comment deadline of October 15, 2021, and how they can submit responses, including providing feedback through the online community platform,

The AcSB will consider the Committee’s comments when the Board begins deliberating the feedback received on its Draft Strategic Plan.


The Committee discussed the stakeholder feedback received on the Consultation Paper, “Contributions – Revenue Recognition and Related Matters,” about revenue recognition and fund accounting presentation.

With regards to revenue recognition, the Committee advised the AcSB:

  • further guidance in the standard and illustrative examples would help clarify whether a contribution is externally restricted; and
  • when determining when to recognize a contribution as revenue, the characteristics identified in the Consultation Paper are relevant.

With regards to fund accounting presentation, the Committee advised the AcSB that further guidance in the standard would help clarify when and how to apply fund accounting presentation.

The AcSB will consider the Committee’s comments at the Board meeting on July 21-22, 2021.

Implementation of Accounting Standards for NFPOs during the COVID-19 Pandemic

The Committee discussed financial reporting issues arising from the COVID-19 pandemic, including going concern. The Committee recommended that no further implementation support is needed at this time.

The AcSB will consider the Committee’s comments at the Board meeting on July 21-22, 2021.

Other Topics

The Committee also discussed the results of its member-feedback survey for the 2020-2021 fiscal year to assess the volunteers’ level of satisfaction. Committee members raised no further comments.