Evaluating the Preface

The AcSB approved its “Evaluating the Preface: Project Summary,”  which summarizes the results of its research and its rationale for concluding the project. This document will be posted on the Board’s website in May 2025.

As the AcSB has concluded its Evaluating the Preface project, the Board will consider resuming its research project on Revenue –Upfront Non-refundable Fees or Payments when discussing its future agenda priorities.

Pension Plan Advisory Committee Notes – October 28, 2024

The Committee discussed the AcSB’s strategic initiative to evaluate the Preface to the Handbook and whether the Preface is directing small health and wellness funds to the most suitable framework to meet their reporting needs.

The Committee advised that for small health and wellness funds that are acting as intermediaries and not holding assets in a fiduciary capacity, further research may be needed to assess whether Part IV of the Handbook is meeting the financial reporting needs. The Committee advised that this may not be limited to small health and wellness funds and therefore any research should be broader to include other types of plans as well.

The AcSB will consider the Committee’s feedback at its meeting in February 2025.

Not-for-Profit Advisory Committee Notes – July 23, 2024

The Not-for-Profit Advisory Committee received an overview of feedback from the AcSB’s advisory committees and working group regarding its strategic initiative to evaluate the Preface of the Handbook. The Committee provided additional feedback on the financial reporting requirements for certain types of entities, such as social enterprises and sports and social clubs. The Board will discuss the Committee’s feedback at its meeting in November 2024.

Private Enterprise Advisory Committee Notes – July 18, 2024

The Private Enterprise Advisory Committee received an overview of feedback from the AcSB’s advisory committees and working group regarding its strategic initiative to evaluate the Preface of the Handbook. The Committee provided additional feedback on the financial reporting requirements for certain types of entities, such as social enterprises, small health and wellness funds, and sports and social clubs. The Board will discuss the Committee’s feedback at its meeting in November 2024.

Private Enterprise Advisory Committee Notes – May 9, 2024

Strategic Research – Preface

The Private Enterprise Advisory Committee received an overview of the AcSB’s research project on the Preface to the Handbook and preliminary research findings. The Committee discussed the purpose of the Preface and whether the Preface directs entities to apply the most appropriate accounting framework based on entities’ reporting needs and objectives.

The Committee discussed some types of entities, such as co-operatives or sports and social clubs, that apply different accounting frameworks depending on their ownership structure or purpose (i.e., member-benefit organizations versus for-profit clubs). Some members indicated that there can be differences in how these entities operate, which is why a different framework is applied . None of the members indicated that there are issues with how entities use the Preface to determine the part of the Handbook to apply, nor did they indicate that any changes to the Preface are needed.

The Committee also discussed certain types of non-listed entities that apply Part I of the Handbook, and considered whether a different framework such as ASPE would better meet their reporting needs. For captive and mutual insurance entities, some Committee members noted that IFRS® Accounting Standards are relevant as they include a standard on insurance contracts whereas ASPE does not. For smaller, less complex government business organizations, some members noted that IFRS can be onerous to apply; however, a member also noted that scaling the requirement to apply a framework based on size and/or complexity could be challenging.

The AcSB will discuss the Committee’s feedback at its meeting on June 19-20, 2024, as part of its ongoing research project on Evaluating the Preface.

Not-for-Profit Advisory Committee Meeting Notes – May 1, 2024

The Not-for-Profit Advisory Committee received an overview and preliminary research findings of the AcSB’s research project on the Preface to the CPA Canada Handbook – Accounting. The Committee discussed the Preface’s purpose and whether it directs entities to apply the most appropriate accounting framework based on their reporting needs and objectives.

The Committee indicated that in some scenarios an entity’s purpose changes over time. In such cases, an entity should consider whether they are still applying the most appropriate accounting framework.

The Committee also noted that in some cases it might not be clear which part of the Handbook to apply. For example, social enterprise entities, which are becoming more common, are typically set up to be profitable but can operate like an NFPO or vice versa.

The Committee also discussed some types of entities (e.g., sports and social clubs) that apply different accounting frameworks depending on their ownership structure or purpose (e.g.., member-benefit organizations versus for-profit clubs). Some members indicated that there can be differences in how these entities operate, which is why a different framework would be applied.

The AcSB will discuss the Committee’s feedback at its June 19-20, 2024, meeting as part of its ongoing Evaluating the Preface project.