This summary of Accounting Standards Board (AcSB) decisions has been prepared for information purposes only. Decisions reported are tentative and reflect only the current status of discussion on projects, which may change after further deliberations by the Board. Decisions to publish Handbook material are final only after a formal ballot process.
The AcSB will respond to change and reprioritize when necessary, ensuring we can address implementation challenges and provide the information users may need in these unique circumstances.
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Standards for Not-for-Profit Organizations
Contributions
The AcSB discussed the results of field-testing draft proposals relating to the recognition of revenue from contributions. Generally, respondents reached the conclusions that the Board expected when developing the field-testing scenarios. However, the Board discussed some changes to clarify the proposed guidance based on the results. The Board also discussed illustrative examples to be included in the exposure draft, taking into consideration comments received from field-testing participants.
The AcSB discussed a revised draft of the exposure draft, including the basis for conclusions and proposals related to:
- presentation and disclosure of contribution revenue;
- definition, presentation, and disclosure of net investment income;
- definition and disclosure of endowments;
- presentation of net assets; and
- disclosure of restricted cash.
The AcSB will discuss the revised draft of the exposure draft at its January 2023 meeting. The Board will also consider the results of a fatal flaw review of the exposure draft to be completed by its Not-for-Profit Advisory Committee. The Board plans to issue the exposure draft in March 2023.
Standards for Private Enterprises and Not-for-Profit Organizations
Insurance Contracts with Cash Surrender Value
The AcSB discussed the research on accounting for insurance contracts with cash surrender value. Currently, Part II and Part III of the CPA Canada Handbook – Accounting do not specifically address the accounting for the cash surrender value of an insurance contract.
The AcSB discussed feedback from the Private Enterprise Advisory Committee and the Not-for-Profit Advisory Committee that there is diversity in practice for both the initial and ongoing recognition, presentation, and measurement of the cash surrender value in an insurance contract and accounting for the premiums paid.
Based on the feedback, the Board tentatively decided that the cash surrender value of an insurance contract is an asset that should be recognized at the cash surrender amount. The Board also discussed presentation options for insurance premiums and the change in cash surrender value.
The AcSB directed staff to prepare a project proposal for consideration at its March 2023 meeting.
Parts II and III Priorities and Amendments to Other Frameworks
As part of its ongoing activities to maintain high-quality domestic standards, the AcSB considers whether amendments made to accounting frameworks in other jurisdictions, if incorporated into Canadian standards, would significantly improve Parts II and III of the CPA Canada Handbook – Accounting. The Board discussed recommendations from its Private Enterprise Advisory Committee and its Not-for-Profit Advisory Committee on recent amendments made to the following frameworks:
- U.S. generally accepted accounting principles (GAAP) issued by the Financial Accounting Standards Board;
- IFRS® Accounting Standards issued by the IASB; and
- Not-for-profit specific amendments made to:
- New Zealand GAAP issued by the New Zealand Accounting Standards Board;
- Australian accounting standards issued by the Australian Accounting Standards Board; and
- U.K. GAAP issued by the U.K.’s Financial Reporting Council.
The AcSB agreed with the Committees’ recommendation to include the definition of accounting estimates on the list of topics considered for the Board’s future projects. The Board will continue to assess the priority of projects as part of its ongoing discussion on its 2023-2024 Annual Plan.
Relevance of Financial Reporting
Scaling the Standards
The AcSB reviewed a preliminary draft of its consultation paper on strategic initiatives related to the Preface to the CPA Canada Handbook – Accounting and scalability of the standards, as set out in the 2022-2027 Strategic Plan.
The AcSB will review a final draft of the consultation paper at its January 2023 meeting. The Board expects to issue the consultation paper in March 2023.
Due Process
AcSB’s Advisory Committees
Small Practitioners Working Group
The AcSB discussed the mandate of the new Small Practitioners Working Group and strategies to recruit members. The Board approved the Terms of Reference for the Group. The AcSB will begin recruiting members in January 2023.
IFRS® Discussion Group
The AcSB received an update on the December 5, 2022 IFRS® Discussion Group meeting.
At this meeting, the Group discussed:
- Primary Financial Statements;
- Impact of Climate-related Risk on Financial Statements;
- Special Purpose Acquisition Companies (SPAC): Accounting for Warrants at Acquisition; and
- Canadian Interest Rate Benchmark Reform: Cessation of Canadian Dollar Offer Rates (CDOR).
Annual Plan
The AcSB discussed an initial draft of its annual plan for the year beginning on April 1, 2023, including a reassessment of the Board’s key risks.
The AcSB made preliminary decisions on the activities to undertake in 2023-2024, including considering new activities to add to its work plan related to Accounting Standards for Private Enterprises, Accounting Standards for Not-for-Profit Organizations, and Accounting Standards for Pension Plans.
The AcSB will continue to evaluate its activities in the coming months and plans to approve the 2023-2024 annual plan in March 2023.