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.
Reporting Controlled and Related Entities
The Not-for-Profit Advisory Committee received an update on the AcSB’s March 2023 discussion about the accounting for reporting controlled and related entities. This update noted the purpose of the Board’s research is to consider how to improve transparency in financial statement disclosures about the relationships NFPOs have with related and controlled entities.
The Committee discussed an analysis of the current environment and considered how the analysis might inform improvements to Section 4450, Reporting Controlled and Related Entities by Not-For-Profit Organizations. The Committee provided feedback on staff’s research on the definitions of controlled and related entities used by standard setters in other jurisdictions and discussed how these definitions could be used to improve the definitions in Section 4450.
The Committee will continue discussing the staff’s research on improving the disclosure requirements of related and controlled entities at its July 2023 meeting.
Insurance Contracts with a Cash Surrender Value
The Not-for-Profit Advisory Committee received an update on the AcSB’s April 2023 discussions and tentative decisions on developing a project to address accounting issues for insurance contracts with cash surrender value.
The Committee provided feedback on potential solutions to provide guidance on the recognition, measurement, and presentation of insurance contracts with cash surrender value. The Committee also discussed the disclosures that would provide decision-useful information. In addition, the Committee discussed the accounting options for contributions of life insurance policies with cash surrender value received by NFPOs.
The AcSB will consider the feedback from its Not-for-Profit Advisory Committee at its June 2023 meeting.
Revenue
The Not-for-Profit Advisory Committee received an update on the AcSB’s March 2023 discussions and tentative decisions to address stakeholders’ concerns with recent amendments to Section 3400, Revenue, related to accounting for upfront non-refundable fees or payments.
The Committee provided feedback on the AcSB’s tentative decision to issue an exposure draft to indefinitely defer the effective date of these amendments, with early application permitted, until the project on Evaluating the Preface is complete. The Committee also provided feedback on the Board’s tentative decision to propose a new disclosure requirement in this exposure draft for entities recognizing non-refundable initiation and life membership fees in revenue up front.
The AcSB will consider the feedback from its Not-for-Profit Advisory Committee and Private Enterprise Advisory Committee at the June 2023 Board meeting.
Other Topics
The Not-for-Profit Advisory Committee considered the results of its member-feedback survey for the 2022-2023 fiscal year to assess the volunteers’ level of satisfaction. Committee members raised no further comments.