Guidance Framework

Guidance Framework – Cloud Computing

The AcSB continued its discussion on an application question regarding the disclosure requirements in Accounting Guideline (AcG) 20, Customer’s Accounting for Cloud Computing Arrangements in Part II of the CPA Canada Handbook – Accounting Standards for Private Enterprises.

The submitter asked how paragraphs 35(b) and 36(b)(i) of AcG 20 should apply to disclosing cloud computing costs recognized as an expense in a period. Specifically, they asked whether these disclosures are intended to include all cloud computing costs expensed during the period or only implementation-related costs.

The AcSB agreed that paragraphs 35(b) and 36(b)(i) of AcG 20 require disclosure of all amounts expensed during the period when an entity applies the simplification approach in AcG 20, and all software service costs recognized as an expense during the period. The Board discussed that, consistent with Financial Statement Concepts, paragraphs 1000.14 and 1001.14, preparers should apply professional judgment in assessing the materiality of this information and whether omitting it would influence or change the decisions of financial statement users.

Guidance Framework – Private Equity Funds

The AcSB discussed and considered input from its Private Enterprise Advisory Committee on an application question raised regarding the measurement of investments in private equity investment funds under Section 3856, Financial Instruments in Part II of the Handbook.

The submitter asked whether units of a private equity fund would meet the criteria to be considered “quoted in an active market” under Section 3856. They also asked whether the quoted unit prices or the fund’s net asset value could be used as a measure of fair value of the investment if those criteria are met or if an entity elects to measure the units at fair value in accordance with paragraph 3856.13.

Based on the Committee’s feedback, the AcSB concluded that the Guidance Framework criteria have been met. The Board tentatively decided to explore issuing a non-authoritative resource on the topic and will continue discussions at a future meeting.

Guidance Framework: Going Concern

The AcSB discussed and considered input from its Private Enterprise Advisory Committee, Not-for-Profit Advisory Committee, and Medium and Small Practitioners Advisory Committee regarding the implications of the revised Canadian Auditing Standard (CAS) 570, Going Concern, issued by the Auditing and Assurance Standards Board (AASB) in June 2025, to Parts II and III of the Handbook. The revised auditing standard requires auditors to request that management extend its going concern assessment period to at least 12 months from the date of approval of the financial statements.

To support consistent understanding, staff of the AcSB, AASB, and Public Sector Accounting Standards Board (PSAB) jointly issued a publication in June 2025 to alert management and auditors to the changes to the auditor’s expectation for management’s going concern assessment timeline.

Based on the Committees’ feedback, the AcSB assessed whether the criteria in its Guidance Framework were met to determine if additional guidance or standard setting is needed. The Board concluded that the issue did not meet the criteria and therefore no further action is needed at this time. However, it will continue to monitor developments following the effective date of the revised CAS 570 (periods beginning on or after December 15, 2026) and may revisit the need for additional guidance if circumstances change.

Guidance Framework: Derecognition of Financial Liabilities

The AcSB continued discussing how recent amendments to IFRS 9 Financial Instruments affect Section 3856 Financial Instruments in Part II of the Handbook, regarding the derecognition of financial liabilities.

Although the IASB issued an amendment, there have been no changes to ASPE in this area. Therefore, the AcSB does not expect changes in how these transactions are being accounted for in Canada by entities applying Section 3856.

After considering input from its Private Enterprise Advisory Committee and Medium and Small Practitioners Advisory Committee, the AcSB concluded that further guidance would be helpful to clarify the requirements in ASPE.

The AcSB tentatively decided to provide guidance by issuing a narrow-scope amendment to Section 3856 through an annual improvement. The topic will be added to the list of potential projects to be addressed in the future and may be bundled with other unrelated minor amendments that meet the criteria for annual improvement.

Guidance Framework

The AcSB discussed and approved the proposed guidance framework for domestic standards.

The framework begins with determining whether the issue raised meets the proposed criteria for further discussion. This includes questions related to prevalence and diversity of the issue, and the impact of the accounting outcome on users’ decisions . These criteria will be posted on the AcSB’s website for the public to understand the process and to provide transparency on how the Board considers issues.

If an issue meets the criteria, it will be discussed by the relevant advisory committee at a subsequent meeting. The Committee will seek to understand the judgments involved in coming to accounting conclusions on the issue. All this information will be given to the AcSB to determine the appropriate course of action.

The AcSB decided that, going forward, decision summaries will present application issues that meet the criteria, and that the Committee and the Board have discussed. These decision summaries will be the public’s key source of information about these issues.

Finally, the AcSB considered a formalized risk assessment that will be carried out before issuing a final standard to determine whether areas warrant additional implementation support.