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, 2021 (was for fiscal years beginning on or after January 1, 2020), with earlier application permitted. |
Last updated: |
August 2020 |
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The Exposure Draft, Income Taxes, that revises and updates Section 3465, Income Taxes, to remove an outdated example and requires future income tax assets and liabilities to be presented as non-current.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.
At its meeting on April 15, 2020, as a result of the impact of the Covid 19 pandemic, the AcSB decided to defer the effective date of these amendments to Section 3051 and Section 3465 by one year to fiscal years beginning on or after January 1, 2021. Earlier application continues to be permitted. The relevant amendments to the CPA Canada Handbook – Accounting Part II were issued on August 1, 2020.
Other Developments
August 2020
On August 1, 2020, the material deferring the effective date of these amendments to Section 3051 and Section 3465 to fiscal years beginning on or after January 1, 2021, with earlier application permitted, was issued to the CPA Canada Handbook – Accounting Part II.
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.