New Canadian Guidance for Combinations of Not-for-Profit Organizations
Mar 01, 2021
On March 1, 2021, Section 4449, Combinations by Not-for-Profit Organizations, was added to Part III of the CPA Canada Handbook. This new Section provides the accounting requirements for the recognition, initial measurement and disclosure of a combination by not-for-profit organizations.
The main features of Section 4449 are as follows: (i) the scope of the Section includes combinations involving two or more not-for-profit organizations that are unrelated parties or related parties; (ii) a set of criteria to determine when a combination is accounted for as a merger or as an acquisition; and (iii) guidance on how to account for a merger or an acquisition.
Section 4449 applies prospectively to annual financial statements relating to fiscal years beginning on or after January 1, 2022. Earlier application is permitted.
