ACCOUNTING

ACCOUNTING STANDARDS FOR PRIVATE ENTERPRISES (ASPE)

Active projects – watch for further activity on these matters

Proposed change Summary Status
Redeemable Preferred Shares Issued in a Tax Planning Arrangement Amendment to Section 3856 regarding the current exemption of classifying redeemable preferred shares issued in a tax planning arrangement as equity. The AcSB reaffirmed its view that the basis for the exception should be on the condition of retention of control of the enterprise and decided that the control of the enterprise must be retained by the party receiving the redeemable preferred shares. The AcSB further decided on the additional conditions necessary to qualify for equity classification which determine that control of the future cash outflows of the enterprise has not changed.

The AcSB noted that at least some of the tax planning arrangements that meet the classification exception under the current guidance will not qualify for the exception under the proposed basis.
Currently in deliberations. The AcSB is expecting to issue a re-exposure draft in the 3rd quarter of 2017.
Agriculture As a result of a lack of specific authoritative guidance, there is diversity in accounting by private enterprises for biological assets and agricultural produce. Stakeholder input to this Discussion Paper will assist the AcSB in deciding whether to develop authoritative guidance, and if so, the issues to be addressed and how they could be addressed. This Discussion Paper was published by the AcSB in December 2015. Currently in deliberations. The AcSB plans to issue an exposure draft by 1st quarter of 2018. The AcSB Agriculture Advisory Group has been formed to assist the AcSB as it works to develop new accounting guidance on agriculture.

Questions?

Here are some resources that will assist in the application of the standards.

Private Enterprise Advisory Committee
This committee assists the AcSB in maintaining and improving accounting standards for private enterprises and advises on the need for non-authoritative guidance about the standards. At the request of the AcSB, the committee may also undertake research into the financial reporting needs of private enterprises.

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Digest of issued standards and amendments

Standards affected Summary of changes Effective date
Section 3056, Interests in Joint Arrangements Amendments clarify that the transitional provisions may not be applied when an enterprise changes its accounting policy choice to consolidate its subsidiaries at any time in the future and that this relief is only available when transitioning to this Section for the first time.

FYI Article – Accounting For Investments: Are You Ready For the Changes?
Annual financial statements relating to fiscal years beginning on or after January 1, 2017.
Section 1591, Subsidiaries Amendments:
  • clarify that the transitional provisions may not be applied when an enterprise changes its accounting policy choice to consolidate its subsidiaries at any time in the future and that this relief is only available when transitioning to this Section for the first time, and
  • explicitly state that an enterprise preparing non-consolidated financial statements is not required to assess whether contractual arrangements give rise to control.
Amendment sets out the underlying principle that an interest in a subsidiary that is subsequently accounted for using the cost method is initially measured on a basis that is similar to other business combinations.

FYI Article – Accounting For Investments: Are You Ready For the Changes?
Annual financial statements relating to fiscal years beginning on or after January 1, 2017.

Annual financial statements relating to fiscal years beginning on or after January 1, 2018.
Section 3051, Investments Amendments add guidance on how to apply the cost method and add two indicators of impairment relating to the acquisition of an additional interest, sale of a portion of an interest or dilution of an investor's interest in an investee.

FYI Article – Accounting For Investments: Are You Ready For the Changes?
Annual financial statements relating to fiscal years beginning on or after January 1, 2018.
2017 Annual Improvements Amendments to Sections 1505, 1506, 1521, 1651, 3031 and 3065. Annual financial statements for fiscal years beginning on or after January 1, 2018.

ACCOUNTING STANDARDS FOR NOT-FOR-PROFIT ORGANIZATIONS (ASNPO)

Questions?

Here are some resources that will assist in the application of the standards.

Not-for-Profit Advisory Committee
This committee's purpose is to advise the AcSB on maintaining and improving ASNPO and in identifying the need for non-authoritative guidance about the standards. The committee makes recommendations to the AcSB but is not authorized to interpret or provide authoritative guidance.

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Active projects – watch for further activity on these matters

Proposed change Summary Status
Accounting Standards Improvements for Not-for-Profit Organizations This exposure draft, issued by the AcSB in February 2017, proposes to replace Sections on tangible capital assets, intangible assets and collections held by Not-for-Profit Organizations. Not-for-Profit Organizations would follow Part II of the Handbook for tangible capital assets and intangible assets, except for items such as contributed assets and write-down of assets. Tangible capital assets, intangible assets and collections will need to be assessed and, if impaired, written down to reflect the decline in their value. Collections would need to be recorded on the statement of financial position, at cost or at nominal value. Comment period ended on May 31, 2017. Currently in deliberations.

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