Accounting Standards for Private Enterprises

Exposure Draft, Income Taxes


The Accounting Standards Board (AcSB) proposes, subject to comments received following exposure, to amend INCOME TAXES, Section 3465 in Part II of the CPA Canada Handbook – Accounting. These amendments would remove an outdated example on “eligible capital expenditures” and remove the requirement to classify future income tax assets and liabilities as current and non-current when the future income taxes method is applied. This amendment would also apply to not-for-profit organizations using the standards in Part III of the Handbook, as relevant.

Staff Contact(s)

Lester Cheng, CPA, CA

Director, Accounting Standards Board

How to reply

Respond with your comment letter (in a Word file) to by December 5, 2018

Support Materials


The eligible capital property (ECP) rules in Section 14 of the Canadian Income Tax Act were repealed and replaced by new Class 14.1 of Schedule II to the Canadian Income Tax Regulations, effective on January 1, 2017. The example in INCOME TAXES, paragraph 3465.14(f), provides guidance on accounting for ECP for Canadian private enterprises, which is no longer applicable.

Section 3465 requires that future income tax assets and liabilities be classified as current and non-current, when the future income taxes method is applied. Unlike Section 3465, the International Accounting Standards Board’s guidance in IAS 12 Income Taxes includes a disclosure requirement to identify the types of temporary deferred tax differences. Also, a recent amendment to U.S. generally accepted accounting principles eliminated the requirement to segregate deferred tax assets and liabilities into current and non-current components since feedback indicated that it does not provide useful information to users of the financial statements.