In April 2013, the Accounting Standards Board and the Public Sector Accounting Board issued a Statement of Principles entitled "Improvements to Not-For-Profit Standards", which is available here: http://www.frascanada.ca/standards-for-not-for-profit-organizations/documents-for-comment/item73780.pdf.  If you are a private or public sector not-for-profit organization ("NFP") that uses not-for-profit standards as your primary source of generally accepted accounting principles, you should review the changes proposed in the Statement of Principles.

The Statement of Principles sets out 15 proposed principles that will be used to develop a new standard of accounting that will effectively change the way financial reporting is conducted by NFPs.  A few of the proposed changes that may be concerning to NFPs include:
  • Elimination of the current exemption for NFPs with revenues under $500,000. These smaller sized NFPs will now be required to incur the additional administrative expense of recording and amortizing capital assets on its financial statements;
  • Elimination of the deferral and restricted fund method of accounting, thereby affecting the recognition of contributions by NFPs on its financial statements; and
  • Consolidation of financial statements will be required of controlled and related NFPs, which could become a complicated process.
NFPs can voice their opinions and concerns on the proposed changes.  All comments are due by December 15, 2013. They will be posted on the website of each Board, unless you explicitly request confidentiality in your comments submission.

About BLG

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.