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Section 1625 - Comprehensive revaluation of assets and liabilities

Effective date:

January 1, 2011

Published by the AcSB:

December 2009

Reach out to our Section 1625 Specialist

Jon Kligman


This Section establishes recognition, measurement and disclosure standards dealing with the comprehensive revaluation of assets and liabilities by profit-oriented enterprises in order to establish a new cost basis. The Section permits comprehensive revaluation of an enterprise's assets and liabilities in two circumstances:

  1. where all or virtually all of the equity interests of the enterprise have been acquired in one or more transactions between non-related parties by an acquirer who controls the enterprise after the transaction(s) or
  2. where the enterprise has been subject to a financial reorganization and the same party does not control the enterprise both before and after the reorganization 

and in either situation new costs are reasonably determinable.

Comprehensive revaluation when the conditions in (a) are met is often referred to as "push down" accounting. This accounting provides symmetry between the carrying amount of the assets and liabilities reported in the acquired enterprise's financial statements and the carrying amount of assets and liabilities reported in the consolidated financial statements of the parent. This accounting is permitted but not required when the conditions in Section 1625 are met.

A financial reorganization is a substantial realignment of the equity and non-equity interests of an enterprise such that the holders of one or more of the significant classes of non-equity interests and the holders of all of the significant classes of equity interests give up some (or all ) of their rights and claims upon the enterprise. This may occur when an enterprise in financial difficulty undergoes a financial reorganization under statutory process (such as the Companies' Creditors Arrangement Act).

History of Section 1625




December 2009

Part II of the CPA Canada Handbook  issued

Effective for fiscal years beginning on or after January 1, 2011.

Note: The above summary does not include details of consequential amendments made as the result of other projects.

Correction list for hyphenation

These words serve as exceptions. Once entered, they are only hyphenated at the specified hyphenation points. Each word should be on a separate line.