NFPO Combinations – AcSB

Date recorded:

At its meeting on June 18, 2019, the AcSB continued its discussion on the initial measurement of a combination between organizations within the scope of Part III of the CPA Canada Handbook -- Accounting. The AcSB tentatively agreed, subject to further deliberation that:

  1. favorable lease arrangements meet the definition of an asset and should be recognized for combinations that are accounted for as an acquisition;
  2. if prior to a transaction that will be accounted for as an acquisition, the acquiree or both the acquiror and acquiree used the size exemption for the recognition of capital assets and intangible assets, those assets should be remeasured at fair value using the acquisition method at the acquisition date;
  3. guidance should be provided if combining not-for-profit organizations have differing year ends; and
  4. not-for-profit organizations that report their controlled subsidiaries using the disclosure option in accordance with Section 4450, Reporting controlled and Related Entities, need not apply the proposed recognition and measurement principles on the date of acquisition.

The AcSB also considered other drafting proposals and consequential amendments and provided feedback to staff. The Board will continue its deliberations in July 2019.

Review the Executive Summary on the AcSB's Web site.

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