ASPE Accounting Insights – Improvements to Accounting for Common Control Combinations
The Accounting Standards Board (“AcSB”) issued amendments to Section 3840, Related Party Transactions and Section 3856, Financial Instruments in September 2023. The amendments are relevant to entities applying the standards in Part II of the CPA Canada Handbook, Accounting Standards for Private Enterprises, and addresses certain application challenges encountered by entities applying the standards. More critically, the amendments reduce reporting burden for entities accounting for common control combinations, in particular, in cases where the combination has no commercial substance and is accounted for at carrying values (for example, an internal reorganization where the changes in ownership interest is not-substantive).