Accounting for Subsidiaries under the Cost Method and the Equity Method (Amendments to Sections 1591 and 3051) [Completed]

Effective date:

The amendments are effective for fiscal years beginning on or after January 1, 2018, with earlier application permitted. The AcSB issued the final Handbook amendments in December 2016.

Last updated:

December 2016


Section 1591, Subsidiaries, provides an accounting policy option for private enterprises to either consolidate its subsidiaries or account for its subsidiaries using the equity method or the cost method. This project examines whether the requirements of Section 1582, Business Combinations, should apply when a private enterprise chooses to account for its subsidiaries using the cost or the equity methods of accounting.


Other developments

December 2016

In December 2016, CPA Canada issued the final amendments to Sections 1591 and 3051 of Part II of the Handbook in respect of this pro­ject.

January 2016

In January 2016, the CPA Canada staff updated this project to advise that the AcSB expects to issue the final Handbook amendments in Q4/2016.

September 2015

On September 24, 2015, the AcSB issued an Exposure Draft that proposes to clarify the accounting for a subsidiary and an investment subject to significant influence when the cost method is used. The proposals are intended to provide guidance on how to apply the cost method in Sections 1591, Subsidiaries and 3051, InvestmentsComments are requested by January 6, 2016.

November 2013

In November 2013, the AcSB approved a project to clarify certain issues in accounting for subsidiaries under the cost method and the equity method.


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