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Investments and Income Taxes (Proposed Amendments to Sections 3051 and 3465) [Completed]

Effective date:

The amendments to Section 3051 and Section 3465 are effective for fiscal years beginning on or after January 1, 2020 with earlier application

Last updated:

May 2019

Overview

Changes to stan­dards, how­ever small, are time-con­sum­ing for the Ac­count­ing Stan­dards Board (AcSB) to deal with. Ac­cord­ingly, the AcSB has adopted the An­nual Im­prove­ments process to deal ef­fi­ciently with a col­lec­tion of nar­row scope amend­ments to the CPA Canada Hand­book – Part II even though the amend­ments are un­re­lated. These amend­ments would also ap­ply to not-for-profit or­ga­ni­za­tions us­ing the stan­dards in Part III.

The AcSB has adopted an an­nual im­prove­ments process that will amend ac­count­ing stan­dards for pri­vate en­ter­prises to clar­ify guid­ance or word­ing and to cor­rect for un­in­tended con­se­quences, con­flicts or over­sights. Ma­jor im­prove­ments to the stan­dards, such as the is­suance of a new stan­dard, are not in­cluded in the an­nual im­prove­ments process.

The AcSB agreed to re­vise the tim­ing of the An­nual Im­prove­ments process, such that an Ex­po­sure Draft will be is­sued in Sep­tem­ber each year, rather than in Feb­ru­ary, and then fi­nal amend­ments will be re­leased to the CPA Canada Hand­book in the fol­low­ing July.

On September 7, 2018, the AcSB issued:

The Exposure Draft, Investments, to clarify the applicability of the cost-method guidance in Section 3051, Investments; and

The Exposure Draft, Income Taxes, that revises and updates Section 3465, Income Taxes, to remove an outdated example and requires future income tax assets and liabilities to be presented as non-current.

Subsequently, the AcSB finalized these amendments and, on May 31, 2019, issued its Bases of Conclusions with respect to these changes to (i) Section 3051 and (ii) Section 3465. Part II of the CPA Canada Handbook will be amended effective June 2019.

Other Developments

May 2019

On May 31, 2019, issued its Bases of Conclusions with respect to these changes to Section 3051 and Section 3465. Part II of the CPA Canada Handbook will be amended effective June 2019.

February 2019

In February 2019, the AcSB staff updated the status of this project to indicate that the AcSB expects to issue the final Handbook material for both Section 3051 and Section 3465 during Q2/2019.

January 2019

In January 2019, the AcSB staff updated the status of this project to indicate that the AcSB expects to issue the final Handbook material re Section 3051 in Q2/2019 and re Section 3465 in Q3/2019.

September 2018

On September 7, 2018, the AcSB issued:

  • an Exposure Draft, Investments, to clarify the applicability of the cost-method guidance in Section 3051, Investments; and
  • an Exposure Draft, Income Taxes, that revises and updates Section 3465, Income Taxes, to remove an outdated example and requires future income tax assets and liabilities to be presented as non-current.

Stakeholders are encouraged to submit their comments by December 5, 2018.

July 2018

On July 23, 2018, the AcSB confirmed that it is undertaking two new narrow-scope projects with respect to Part II of the CPA Canada Handbook; one with respect to income taxes and one with respect to investments. The AcSB plans to issue the related Exposure Draft(s) in the third quarter of 2018.

 

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