Revenue – Upfront Non-refundable Fees or Payments [ED]

The response deadline is January 31, 2024.

Next steps:

Comments will be reviewed by the staff starting in 2024 

Last updated:

November 2023

Overview

In December 2019, the AcSB issued amendments to Section 3400. The amendments provided additional application guidance on the requirements in the standard related to various complex revenue topics, including determining when to recognize revenue from upfront non-refundable fees or payments. The effective date for the amendments was set for fiscal years beginning on or after January 1, 2022. The effective date of Revenue paragraphs 3400.A45-.A48 was subsequently deferred to January 1, 2025, after the Board heard of application challenges from those applying the amendments. In particular, the Board heard that some member-benefit organizations were concerned about the decision usefulness of deferring upfront non-refundable fees over long member durations. They also expressed concerns about the associated cost of applying the amendments. Therefore, the Board decided that more time was needed to research the concerns raised.

In November 2023, the AcSB released for comment proposed amendments to Section 3400, Revenue. 

The proposed amendments would indefinitely defer the effective date of application guidance for upfront non-refundable fees or payments. The amendments also introduce a new disclosure requirement for upfront non-refundable fees or payments recognized in revenue when the enterprise recognizes the fee or payment in revenue upon entering into an arrangement. 

Download the proposed amendments

For further details, refer to the project summary on the AcSB website. 

 

Other developments

November 2023

On November 3, 2023, the AcSB published for comment proposed Exposure Draft – Revenue – Upfront Non-refundable Fees or Payments. 

November 2022

On November 15, 2022, the AcSB issued an amendment to Section 3400, Revenue, to defer the effective date for previously issued amendments relating to upfront non-refundable fees or payments from fiscal years beginning on or after January 1, 2022, to fiscal years beginning on or after January 1, 2025. Earlier application is permitted.

June 2022

On June 30, 2022, the Accounting Standards Board (AcSB) issued an Exposure Draft, Revenue – Upfront Non-refundable Fees or Payments, which proposes amendments to Section 3400, Revenue, in Part II of the CPA Canada Handbook. The amendments would also apply to not-for-profit organizations (NFPOs) applying the standards in Part III of the Handbook, as relevant. The Exposure Draft proposes to defer the effective date of the amendments to January 1, 2025, while it researches the effects of the previously issued amendments. This research will inform the Board’s decisions on how to address the concerns raised by stakeholders. Comments are requested by August 15, 2022.

 

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