Not-for-Profit Advisory Committee Meeting Notes – November 14, 2018

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 – Revenue Recognition and Related Matters

The Committee gave input on the current practice issues, the need for additional guidance, and the various options to account for capital contributions, endowments, pledges, bequests, and contributed materials and services. The AcSB will consider this input in its development of a consultation paper and will discuss at its January 2019 meeting.


The staff presented a verbal update of the AcSB’s discussion at its November 2018 meeting on the criteria for determining if a combination is considered a merger. The Committee advised on the staff’s proposed accounting requirements if a combination is accounted for as a merger. In addition, Committee members gave input on issues that may arise when accounting for the combination as an acquisition. The Board will discuss this input at its January 2019 meeting.


The staff gave an update to the Committee on the project relating to Section 3400, Revenue, in Part II of the Handbook. It includes developing solutions that address stakeholder needs with regards to Section 3400, and the project milestones relevant to the Committee.

The staff asked for input on the challenges NFPOs face with applying the guidance included in Section 3400 relating to:

  • bill-and-hold arrangements;
  • multiple-element arrangements;
  • percentage of completion method;
  • reporting revenue gross or net; and
  • upfront non-refundable fees/payments.

Part II Developments

As part of its mandate to monitor changes in Part II that may affect NFPOs, the staff gave the Committee a summary of the following current activities:

  • Accounting for Related Party Financial Instruments and Significant Risk Disclosures: On October 31, 2017, the AcSB issued the Exposure Draft, with comments due by January 29, 2018. Generally, comments supported the proposals, but suggested that more clarification. Final amendments will be issued in the Handbook on December 1, 2018. The amendments will be effective for fiscal years beginning on or after January 1, 2020, with early application permitted.
  • Agriculture: The Board issued the Exposure Draft on July 2018, with comments due by October 31, 2018. It proposed a new section in Part II of the Handbook to provide accounting guidance to agricultural producers. The Board will begin deliberating the feedback received through comment letters and roundtable discussions at its December 2018 meeting.
  • AcSB’s other priority topics: The staff presented updates to the Committee on the following topics:
    • Related Party Transactions;
    • Financial Instruments – Hedging; and
    • Financial Statements Concepts.

New Practice Issues

The Committee discussed the transitional provisions when an NFPO no longer meets the $500,000 capital asset size exemption. This exemption will be discussed with the Committee at a future meeting as part of the Contributions project.

Public Sector Accounting Board (PSAB) Update

The staff updated the Committee on the following PSAB activities: