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NFPO Combinations – Initial Measurement and Related Disclosures [ED]

Comment period ends on May 14, 2020

Next steps:

The AcSB will review the comments from stakeholders on its Exposure Draft in Q2/2020

Last updated:

March 2020

Overview

At its meeting on June 19, 2018, the AcSB approved a project to provide guidance on the initial measurement of a not-for-profit organization (NFPO) combination and the relevant disclosures.

The project will explore the accounting for combinations completed by:

  • NFPOs applying Part III of the CPA Canada Handbook – Accounting; and
  • to the extent transactions with similar characteristics exist, for-profit enterprises applying Part II of the Handbook.

The Board will consult its Not-for-Profit Advisory Committee, Private Enterprise Advisory Committee and other stakeholders that have completed combinations as part of developing the proposals.

On January 15, 2020, the AcSB released an Exposure Draft seeking feedback on its proposals to introduce new guidance on the accounting for a combination of not-for-profit organizations.

The proposals in the Exposure Draft are as follows: (i) the scope of Section 4449 would include a combination involving two or more NFPOs that are unrelated parties or related parties; (ii) the Section would include a set of criteria to determine when a combination is accounted for as a merger or as an acquisition; (iii) the Section would include initial and subsequent measurement, presentation and disclosure guidance on how to account for a merger or acquisition; and (iv) the Section would apply on a prospective basis for combinations occurring on or after January 1, 2022 with early application permitted.

 

Other developments

March 2020

On April 1, 2020, in light of the evolving uncertainties created by the global COVID-19 crisis and its effects in Canada, the AcSB announced that it has extended the deadline to submit a comment letter from April 14 to May 14, 2020.

January 2020

On January 15, 2020, the AcSB released an Exposure Draft seeking feedback on its proposals to introduce new guidance on the accounting for a combination of not-for-profit organizations. Comments are requested by April 14, 2020.

July 2019

In July 2019, the AcSB staff updated this project to note that the Board expects to issue an Exposure Draft in Q1/2020.

June 2018

At its meeting on June 19, 2018, the AcSB approved a project to provide guidance on the initial measurement of a combination and the relevant disclosures.

 

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