The Accounting Standards Board (AcSB) wants to improve financial reporting by not-for-profit organizations (NFPOs) by creating contribution recognition guidance that results in financial statements that are less complex and more understandable for financial statement users. This project will affect Canadian NFPOs applying the standards in Part III of the CPA Canada Handbook – Accounting Standards for NFPOs.
To achieve these objectives, this project will aim to:
- make improvements to the existing contribution revenue recognition methods (the restricted fund method and deferral method);
- clarify certain definitions related to the accounting for contributions;
- make improvements to the accounting for special types of contributions, including endowments, capital asset contributions, and contributed materials and services; and
- enhance presentation and disclosure requirements to provide better information to financial statement users.