Related Discussions

• Contributions – Revenue Recognition and Related Matters – AcSB

• Mar 08, 2023

• At its meeting on March 8-9, 2023, the AcSB discussed feedback received from its Private Enterprise Advisory Committee and Not-for-Profit Advisory Committee on how to address stakeholders’ concerns with recent amendments to Section 3400, Revenue, related to accounting for upfront non-refundable fees or payments. Stakeholders have indicated that the amendments sometimes result in information that is not decision-useful, particularly for entities collecting non-refundable initiation or life membership fees. In November 2022, the Board deferred the effective date of these amendments until January 1, 2025, with earlier application permitted. At this meeting, the AcSB tentatively decided to issue an Exposure Draft to indefinitely defer the effective date of these amendments, with early application permitted, until the project on Evaluating the Preface is complete. The Board also tentatively decided to propose a new disclosure requirement in this Exposure Draft for entities recognizing non-refundable initiation and life membership fees in revenue up front. The Board will discuss these proposed solutions with its Private Enterprise Advisory Committee and Not-for-Profit Advisory Committees at their meetings in May.

• Contributions – Revenue Recognition and Related Matters – AcSB

• Feb 15, 2023

• At its meeting on February 15, 2023, the AcSB discussed and approved an outreach and communications plan for the Exposure Draft on recognition of contributions and related matters. The Board plans to issue the Exposure Draft at the end of March 2023.

• Contributions – Revenue Recognition and Related Matters – NFPAC

• Jan 31, 2023

• At its meeting on January 31, 2023, the Not-for-Profit Advisory Committee received an update on the AcSB’s recent decisions in response to feedback received from the Committee’s fatal flaw review of exposure draft proposals. The Committee recommended wording clarifications to the proposed requirement to disclose information about the availability of an organization’s financial and other assets to meet its requirements related to restricted contributions. The Committee also provided input on the communications and outreach plan for the Exposure Draft. The AcSB will consider the Committee’s feedback on the communications and outreach plan at its meeting on February 15, 2023.

• Contributions – Revenue Recognition and Related Matters – AcSB

• Jan 26, 2023

• At its meeting on January 26, 2023, the AcSB discussed the results of a fatal flaw review of the Exposure Draft completed by members of its Not-for-Profit Advisory Committee and provided feedback on a revised draft. The Board discussed some wording changes to clarify: (i) that an external restriction must be explicitly communicated between the contributor and the organization before or at the time the contribution is made; (ii) that the recognition guidance should be applied to each individual pledge for the recognition of pledges; and (iii) the proposed disclosure requirement related to availability of financial assets to meet an organization’s requirements related to restricted contributions. The AcSB gave permission to begin the balloting process. The Board will discuss an outreach and communications plan at its meeting in February 2023 and plans to issue the Exposure Draft in March 2023.

• Contributions – Revenue Recognition and Related Matters – AcSB

• Dec 14, 2022

• At its meeting on December 14-15, 2022, the AcSB discussed the results of field-testing draft proposals relating to the recognition of revenue from contributions. Generally, respondents reached the conclusions that the Board expected when developing the field-testing scenarios. However, the Board discussed some changes to clarify the proposed guidance based on the results. The Board also discussed illustrative examples to be included in the Exposure Draft, taking into consideration comments received from field-testing participants. The AcSB discussed a revised draft of the Exposure Draft, including the basis for conclusions and proposals related to: (i) presentation and disclosure of contribution revenue; (ii) definition, presentation, and disclosure of net investment income; (iii) definition and disclosure of endowments; (iv) presentation of net assets; and (v) disclosure of restricted cash. The AcSB will discuss the revised draft of the Exposure Draft at its January 2023 meeting. The Board will also consider the results of a fatal flaw review of the Exposure Draft to be completed by its Not-for-Profit Advisory Committee. The Board plans to issue the Exposure Draft in March 2023.

• Contributions – Revenue Recognition and Related Matters – AcSB

• Nov 16, 2022

• At its meeting on November 16-17, 2022, the AcSB continued discussing the Exposure Draft proposals and considered feedback from the Not-for-Profit Advisory Committee related to: disclosure of contribution revenue; fund accounting presentation; presentation of net assets; disclosure of restricted cash; and transition. Following a discussion, the AcSB made tentative decisions in respect of each of these issues. The AcSB also discussed a preliminary draft of the Exposure Draft, including the basis for conclusions. The AcSB will continue discussing this project at its December meeting and consider a revised draft of the Exposure Draft. The Board will also discuss the results of field testing its draft proposals relating to the recognition of revenue from contributions. The Board plans to issue an Exposure Draft in March 2023.

• Contributions – Revenue Recognition and Related Matters – AcSB

• Oct 26, 2022

• At its meeting on October 26, 2022, the AcSB continued discussing Exposure Draft proposals and considered feedback from the Not-for-Profit Advisory Committee related to: recognition of revenue from restricted contributions and capital asset contributions; disclosure of endowments; recognition of contributed materials and services; transition; and the effective date. The Board made tentative decisions in respect of each of these items and will continue discussing the Exposure Draft proposals at its November meeting. The Board plans to issue an Exposure Draft in the first quarter of 2023.

• Contributions – Revenue Recognition and Related Matters – NFPAC

• Oct 04, 2022

• At its meeting on October 4, 2022, the Not-for-Profit Advisory Committee received an update on the AcSB’s recent tentative decisions related to the development of an Exposure Draft on the recognition of contributions and related topics. The AcSB will consider the Committee’s feedback at its meetings in October and November 2022 as it continues its discussion of the Exposure Draft proposals. As part of these discussions, the Board will consider the interaction of the tentative decisions for each topic discussed to date, and whether they result in financial reporting that is useful to financial statement users before finalizing the Exposure Draft proposals. The Board intends to issue the Exposure Draft in Q1/2023.

• Contributions – Revenue Recognition and Related Matters – AcSB

• Sep 14, 2022

• At its meeting on September 14-15, 2022, the AcSB continued discussing the Exposure Draft proposals related to the recognition of revenue for restricted contributions, capital asset contributions, endowments, and contributed materials and services. When the Not-for-Profit Advisory Committee meets in October 2022, it will discuss and provide input on these topics and the draft proposals. When the AcSB meets in October 2022, it will consider the Committee’s input and continue discussing the exposure draft proposals. The Board plans to issue an exposure draft in the first quarter of 2023.

• Contributions – Revenue Recognition and Related Matters – NFPAC

• Jul 26, 2022

• At its meeting on July 26, 2022, the Not-for-Profit Advisory Committee received an update on the AcSB’s recent tentative decisions related to the development of an Exposure Draft on the recognition of contributions and related topics. Specifically, the Committee discussed draft proposals relating to endowments, contributed materials and services, pledges and bequests. The Committee agreed that endowment contributions should be recognized as direct increases to net assets in the period in which the organization is entitled to the contribution. For contributions with externally-imposed requirements specifying that the initial contribution amount must be maintained and invested for a fixed term, the Committee advised that they should be accounted for like other types of restricted contributions and not like endowment contributions. The Committee agreed that organizations should continue to have the option to recognize contributed materials and services when specific criteria are met. The Committee also commented on the draft criteria and disclosure proposals. The Committee agreed that pledges should not be recognized until the contributed assets are received. With regards to bequests, they advised that in some scenarios, an organization could become entitled to the contribution before it is received. The Committee also discussed fund accounting presentation, presentation of net assets, and disclosure of restricted cash. The Committee advised that additional guidance on the application of fund accounting presentation would be helpful. However, it should provide some flexibility to allow organizations to present information in a way that is useful to financial statement users. The Committee also provided input on draft presentation and disclosure proposals. The AcSB will consider the Committee’s feedback at its meeting on September 14-15, 2022.

• Contributions - Revenue Recognition and Related Matters – AcSB

• Jul 20, 2022

• At its meeting on July 20-21, 2022, the AcSB continued discussing the Exposure Draft proposals related to the recognition of revenue for restricted contributions and capital asset contributions. The AcSB discussed the proposed guidance for determining whether a contribution is externally restricted. The Board reached a preliminary decision that for a contribution to be externally restricted, the restriction must be: (i) explicitly communicated by the contributor; (ii) sufficiently specific in directing the organization how the resources must be used, beyond being used for the organization’s general mandate; and (iii) substantive. The AcSB discussed factors that would indicate a restriction is substantive, including scenarios where a significant constructive obligation would indicate a restriction is substantive. With respect to the recognition of revenue from restricted contributions, the AcSB reached a preliminary decision that an externally restricted contribution should be deferred and subsequently recognized in revenue when the substantive external restrictions are met. The AcSB reaffirmed its tentative decision from its May 2022 meeting that capital asset contributions should be accounted for consistently with other types of restricted contributions. Therefore, a capital asset contribution should be deferred when there is a substantive external restriction on the use of the asset. For example, a contributed capital asset with an external requirement to use that asset in line with the general mandate of the organization would not be deferred because the requirement is not sufficiently specific and, therefore, is not considered externally restricted. The AcSB will continue discussing the Exposure Draft proposals at its September 2022 meeting and plans to issue an Exposure Draft in the first quarter of 2023.

• Contributions - Revenue Recognition and Related Matters – AcSB

• Jun 22, 2022

• At its meeting on June 22-23, 2022, the AcSB discussed exposure draft proposals relating to endowments; contributed materials and services; pledges; and bequests and reached the following preliminary views:(i) Permanent endowment contributions should be recognized as direct increases in net assets in the period in which the organization is entitled to the contribution as they represent resources that the organization will never be able to access or use for their own benefit. (ii) Organizations should continue to have the option to recognize contributed materials and services when specific criteria are met. (iii) Pledges and bequests should not be recognized until the contributed assets are received since an organization cannot control access to the benefit of these contributions until that point. These preliminary views are subject to discussion with the Not-for-Profit Advisory Committee and further consideration by the AcSB as other aspects of an exposure draft are developed. The AcSB also discussed fund accounting, presentation of net assets, and disclosure of restricted cash. The Board considered how presentation and disclosure requirements can complement the proposed approach for accounting for contributions and improve the relevance of financial statements prepared in accordance with Part III of the CPA Canada Handbook – Accounting. The Not-for-Profit Advisory Committee will discuss and provide input on these proposals at its July 2022 meeting. The AcSB will continue discussing exposure draft proposals at its July 2022 meeting. The Board plans to issue an exposure draft in the first quarter of 2023.

• Contributions – Revenue Recognition and Related Matters – AcSB

• May 18, 2022

• At its meeting on May 18, 2022, the AcSB discussed the Exposure Draft proposals and considered input from its Not-for-Profit Advisory Committee relating to the scope of a new standard; definitions of key terms; and revenue recognition for unrestricted contributions, restricted contributions, and capital asset contributions. Considering the Committee’s feedback, the AcSB discussed the specific factors to include in the guidance for determining whether a contribution is externally restricted and when to recognize revenue from restricted contributions. The Board considered the current definition of a liability in Section 1001, Financial Statement Concepts for Not-for-Profit Organizations, and how it interacts with the draft proposals. With regard to capital asset contributions, the AcSB discussed options for determining when to recognize revenue, and tentatively decided that they should be accounted for consistently with other types of restricted contributions. The AcSB will continue discussing the exposure draft proposals at its June 2022 meeting. The Board plans to issue an Exposure Draft in the first quarter of 2023.

• Contributions – Revenue Recognition and Related Matters – AcSB

• Apr 26, 2022

• At its meeting on April 26, 2022, the AcSB began discussing feedback received from stakeholders, including its Not-for-Profit Advisory Committee, on recent amendments to Section 3400, Revenue related to accounting for upfront non-refundable fees or payments. The Board plans to continue this discussion at its May 2022 meeting.

• Contributions – AcSB

• Mar 23, 2022

• At its meeting on March 23-24, 2022, the AcSB approved a project proposal to develop an Exposure Draft to improve the guidance on accounting for contributions and related topics. The Exposure Draft will be based on the proposed approach explored in the Consultation Paper, recognizing revenue from contributions based on the type of contribution and its characteristics. The AcSB discussed the project timeline and will continue the discussion at its May 2022 meeting. The Board plans to issue an Exposure Draft in the first quarter of 2023.

• Contributions – Revenue Recognition and Related Matters – AcSB

• Jan 19, 2022

• At its meeting on January 19-20, 2022, the AcSB finished discussing stakeholders’ feedback on the Consultation Paper. The Board considered feedback from stakeholders and from its Not-for-Profit Advisory Committee on the topic of special types of contributions, including capital asset contributions, endowments, contributed materials and services, and bequests. The Consultation Paper included the following topics: pledges; capital asset recognition exemption; recognition of revenue from contributions; fund accounting; presentation of net assets; disclosure of restricted cash; and special types of contributions. The AcSB also discussed next steps for the project. Based on the feedback, the Board decided to move forward with a project that explores the approach proposed in the Consultation Paper that recognizes revenue from contributions based on the type of contribution and its characteristics. The Board will discuss a project proposal for developing an exposure draft at its meeting in March 2022.

• Contributions – Revenue Recognition and Related Matters – NFP Advisory Committee

• Oct 19, 2021

• At its meeting on October 19, 2021, the Not-for-Profit Advisory Committee discussed the stakeholder feedback received on the Consultation Paper. With regards to contributed materials and services, the Committee advised the AcSB that NFPOs should continue to be given a choice whether to recognize these items when the recognition criteria are met. With respect to the criteria, the Committee observed that the criterion related to whether the contributed materials and services would have otherwise been purchased can be subjective. The Committee advised the Board to reconsider this criterion. The Committee supported capital assets contributions with similar characteristics being accounted for the same. However, the Committee had mixed feedback on what recognition method provided the most useful information. With regard to endowments and bequests, the Committee noted that the current guidance on the definition of endowments is clear. However, there is diversity in practice regarding how this guidance is applied. The Committee thought additional application guidance such as illustrative examples could help to address this diversity. Similarly, the Committee thought that the guidance on how to recognize endowment income is clear. However, the Committee advised the AcSB that providing illustrative examples or other application guidance on endowment income would be challenging given the complexity and diversity in the terms of the underlying endowment agreements. The AcSB will consider the Committee’s comments at its meeting on December 6-7, 2021.

• Contributions – Revenue Recognition and Related Matters – AcSB

• Sep 15, 2021

• At its meeting on September 15-16, 2021, the AcSB continued to discuss stakeholders’ feedback received on the Consultation Paper. The Board considered feedback from comment letters and roundtables on the topic of special types of contributions, including capital asset contributions, endowments and contributed materials and services. The Not-for-Profit Advisory Committee will discuss the topic of special types of contributions at its meeting in October 2021, and the Board will consider this feedback at its meeting in November 2021.

• Contributions – Revenue Recognition and Related Matters – AcSB

• Jul 21, 2021

• At its meeting on July 21-22, 2021, the AcSB continued to discuss stakeholders’ feedback received on the Consultation Paper. The Board considered feedback from comment letters, roundtables, and the Not-for-Profit Advisory Committee on the topics of recognition of revenue from contributions, presentation, and disclosure. The AcSB plans to discuss the topic of special types of contributions at its meeting in September 2021. The Not-for-Profit Advisory Committee will discuss this topic at its meeting in October 2021 and the Board will consider this feedback at its meeting in November 2021.

• Contributions – Revenue Recognition and Related Matters – NFP Advisory Committee

• Jun 22, 2021

• At its meeting on June 22, 2021, Not-for-Profit Advisory Committee discussed the stakeholder feedback received on the Consultation Paper, “Contributions – Revenue Recognition and Related Matters,” about revenue recognition and fund accounting presentation. With regards to revenue recognition, the Committee advised the AcSB: (i) further guidance in the standard and illustrative examples would help clarify whether a contribution is externally restricted; and (ii) when determining when to recognize a contribution as revenue, the characteristics identified in the Consultation Paper are relevant. With regards to fund accounting presentation, the Committee advised the AcSB that further guidance in the standard would help clarify when and how to apply fund accounting presentation. The AcSB will consider the Committee’s comments at the Board meeting on July 21-22, 2021.

• Contributions – Revenue Recognition and Related Matters – AcSB

• May 05, 2021

• At its meeting on May 5, 2021, the AcSB continued to discuss stakeholders’ feedback received on the Consultation Paper. The Board considered feedback from comment letters and roundtables on the topic of recognition of revenue from contributions. The Not-for-Profit Advisory Committee will discuss this topic at its meeting in June 2021 and the Board will consider this feedback at its meeting in July 2021. The AcSB will continue to discuss the feedback on the remaining topics of the Consultation Paper over a series of meetings. The Board plans to discuss the topic of special types of contributions at its meeting in July 2021.

• Contributions – Revenue Recognition and Related Matters – AcSB

• Mar 23, 2021

• At its meeting on March 23-24, 2021, the AcSB began discussing stakeholders’ feedback on the Consultation Paper. The Board considered feedback from comment letters, roundtables, and the Not-for-Profit Advisory Committee on the topic of asset recognition, which includes pledges and the capital asset recognition exemption. The AcSB will continue to discuss the feedback on the Consultation Paper over a series of meetings. The Board plans to discuss the topics of recognition of revenue from contributions and special types of contributions at its meeting in May 2021.

• Contributions – Revenue Recognition and Related Matters – NFP Advisory Committee

• Feb 25, 2021

• At its meeting on February 25, 2021, the Not-for-Profit Advisory Committee (NFPAC) received an update on stakeholder feedback received on the Consultation Paper. The Committee discussed feedback from the Consultation Paper on the topic of asset recognition, including pledges and the capital asset recognition exemption. Regarding pledges, the Committee advised the AcSB: (i) Most NFPOs are not currently recognizing pledges. The ones that do have a history of collection and can estimate a provision for uncollectable amounts; (ii) The nature of the pledge may affect whether it is recognized as an asset; and (iii) Disclosure of additional information related to pledges may be useful to users; however, this information could be provided in documents other than the annual financial statements. Regarding the capital asset recognition exemption, the Committee advised the Board: (i) Removing the capital asset recognition exemption would have disproportionately negative impacts on smaller NFPOs; (ii) If the capital asset recognition exemption is retained, the information that is required to be disclosed about capital assets is sufficient; (iii) If the capital asset recognition exemption is retained, it should be based on revenue, but the current threshold should be adjusted for inflation; and (iv) A simplified transitional provision would be helpful for organizations that previously applied the exemption and are recognizing assets for the first time. The AcSB will consider the Committee’s comments at the Board meeting on March 23-24, 2021.

• Contributions - Revenue Recognition and Related Matters – AcSB

• Jun 16, 2020

• At its meeting on June 16, 2020, the AcSB approved the revised plan for obtaining feedback on the Consultation Paper issued on May 19, 2020. The planned outreach activities include virtual roundtables and targeted consultation that will take place throughout the comment period ending on December 15, 2020. The Board will monitor stakeholders’ ability to participate in the planned outreach activities and adjust the plan if necessary.

• Contributions – Revenue Recognition and Related Matters – AcSB

• May 13, 2020

• At its meeting on May 13, 2020, the AcSB discussed the comment period and the outreach plan for the Consultation Paper, “Contributions – Revenue Recognition and Related Matters.” The AcSB decided to issue the Consultation Paper with an extended comment-period deadline of December 15, 2020, to allow stakeholders more time to respond in light of the COVID-19 pandemic. The Consultation Paper was issued on May 19, 2020.The AcSB also discussed the outreach activities planned for obtaining feedback on the Consultation Paper and directed staff to revisit the timing of these outreach events. The Board decided that all outreach activities will be done virtually because of the COVID-19 pandemic.