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Not-for-Profit Advisory Committee Notes – December 14, 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.


The Not-for-Profit Advisory Committee received an update on the AcSB’s deliberations of feedback on the Exposure Draft, “Contributions – Revenue Recognition and Related Matters. The Committee also discussed the Board’s tentative decisions regarding the project’s timeline, purpose, and next steps. The Committee supported the Board’s approach to defer the project’s timeline, allowing time for more outreach and consultation with the not-for-profit sector on the best path forward.

The Committee discussed a narrowed set of options to address the Exposure Draft feedback on the proposed approach for recognition of restricted contributions. Committee members discussed recognition and presentation of contributions under two proposed options and considered several illustrative examples. The Committee had mixed views on the potential options and recommended that the AcSB seek additional feedback through outreach with a range of relevant parties in the NFPO sector.

When it meets in January 2024, the AcSB will consider the Committee’s feedback and the results from preliminary outreach activities.

Relief from Recognition of Intangible Assets and Amortization of Goodwill

The Not-for-Profit Advisory Committee discussed challenges related to the recognition of intangible assets acquired in combinations and the subsequent measurement of goodwill. The Committee also explored the idea of providing relief to private enterprises and NFPOs from the recognition of intangible assets acquired in combinations and to allow them to amortize goodwill.

Committee members expressed that, overall, combinations are rare for NFPOs. When an NFPO acquires another NFPO, it is typically accounted for as a merger. There are a growing number of transactions where NFPOs acquire for-profit organizations, leading to a combination and the recognition of intangible assets and goodwill, but this situation remains rare. As a result, goodwill and acquisition-related intangible assets are rarely separately recognized on NFPOs’ balance sheets.

Since it is rarely seen in practice, Committee members did not highlight the need to provide additional relief from the recognition of intangible assets for NFPOs. However, the Committee did not object to providing such relief. Similarly, while goodwill is not prevalent in the not-for-profit sector, the Committee supported the idea of reintroducing the amortization of goodwill for private enterprises and NFPOs.

In January 2024, the AcSB will discuss its ongoing research. The Board will consider input from the Not-for-Profit Advisory Committee, the Small Practitioners Working Group, and the Private Enterprise Advisory Committee in deciding whether to move forward with the project.