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Narrow-scope Clarifying Amendments to Section 1591 and Section 3056 [Completed]

Effective date:

The amend­ments are generally ef­fec­tive for fis­cal years be­gin­ning on or af­ter Jan­u­ary 1, 2018 with earlier ap­pli­ca­tion per­mit­ted. The amendments with respect to the transition provisions are effective for fiscal years beginning on or after January 1, 2017. CPA Canada issued the final amendments to Part II of the Handbook in December 2016.

Last up­dated:

December 2016


The narrow-scope amendments to Section 1591, Subsidiaries and Section 3056, Interests in Joint Arrangements clarify:


Transitional provisions

The transitional provisions in Section 1591 and Section 3056 were developed to provide relief only on transition to the new standards and when an enterprise prepares its first financial statements using accounting standards for private enterprises. The amendment will clarify that the transition provisions may not be applied when an enterprise changes its accounting policy choice to consolidate its subsidiaries at any time in the future.
2. Subsidiaries – Accounting for a subsidiary controlled through a combination of contractual arrangements and voting interest
The AcSB agreed to clarify how the voting interest, if any, that an investor holds in a subsidiary controlled through a combination of voting rights and contractual arrangements should be accounted for when using the cost method.
3. Subsidiaries – Evaluating contractual arrangements for control: Enterprises electing not to consolidate
The AcSB agreed to clarify that an enterprise is not required to assess whether contractual arrangements give rise to control when subsidiaries are not consolidated.


Other developments

December 2016

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

May 2016

On May 25, 2016, the Accounting Standards Board (AcSB) released an Exposure Draft to clarify Section 1591, Subsidiaries, and Section 3056, Interests in Joint Arrangements, in response to stakeholder feedback. Stakeholders are encouraged to submit their comments by August 2, 2016. The proposed narrow-scope amendments are intended to clarify guidance or wording and to correct for unintended consequences, conflicts or oversights, similar to the process for annual improvements.


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