Section 1500 - First-time adoption

Effective date:

January 1, 2011 except for subsequent amendments

Published by AcSB:

December 2009 


An entity applies Section 1500 First time adoption when it first adopts accounting standards for private enterprises (ASPE). When an entity adopts ASPE, its first set of financial statements prepared in accordance with ASPE will contain an opening balance sheet at the date of transition (i.e. the beginning of the earliest comparative period). The opening balance sheet and all subsequent periods contained in the first set of ASPE financial statements are prepared in accordance with those ASPE standards in effect at the end of the year the entity adopts ASPE, with certain limited exceptions.

Section 1500 provides a list of "exemptions" which an entity can elect to take that have the result of allowing the entity not to restate certain transactions. The exemptions include allow the first time adopter:

  • the ability to elect not to restate business combinations but to apply a simplified set of rules
  • the ability to use "fair value" as a "deemed cost" at the date of transition for select assets
  • the ability to deem cumulative translation differences to be zero
  • the ability to elect not to restate assets or liabilities relating to related party transactions

Section 1500 also provides a list "exceptions" where the entity is prohibited from retrospectively applying an ASPE standard or portion thereof. Exceptions exist for: the derecognition of financial assets and financial liabilities, hedge accounting, estimates in the opening balance sheet, and non-controlling interests.

Section 1500 prescribes that when an entity has to change its accounting in order to conform with the ASPE standards, it records an adjustment for the difference in retained earnings at the date of transition. In the year of adoption of ASPE, an entity shall disclose the amount of each adjustment to retained earnings and a reconciliation of net income reported in the most recent previously issued financial statements to its net income reported under ASPE for the same period.

History of Section 1500




December 2009

Part II of the CPA Canada Handbook  issued

This new Section prescribes how a private enterprise changes its accounting basis when applying the standards in Part II for the first time.

February 2011

Optional additional transitional election

Paragraph .14 has been amended to permit an entity that accounts for its defined benefit plans using the deferral and amortization approach described in Section 3461, Employee future benefits in Part II of the Handbook, to carry forward at the date of transition to accounting standards for private enterprises any unrecognized actuarial gains and losses and past service costs that were determined previously in accordance with Section 3461, Employee future benefits in Part V of the Handbook, or an equivalent basis of accounting such as IAS 19 Employee Benefits in Part I of the Handbook.

March 2012

Annual improvements

This Section has been amended as follows:

  • Paragraph .11(e) has been added to provide an exemption from retrospective restatement of goodwill at the date of transition.
  • Paragraph .18 has been amended to permit an entity that has a cumulative translation difference for domestic operations to deem that cumulative translation difference to be zero at the date of transition.
These amendments are effective for periods beginning on or after January 1, 2011.
Other editorial changes and corrections introduced in March 2012.
April 2021


2021 An­nual im­prove­ments


This Sec­tion has been amended to clarify that an enterprise that applied accounting standards for private enterprises in a previous reporting period, but whose most recent annual financial statements were not prepared in accordance with accounting standards for private enterprises, can apply Section 1500 again or can apply the standards retrospectively in accordance with Accounting Changes, Section 1506. The amendments also include disclosure requirements in this regard.  These amendments are effective for annual financial statements relating to fiscal years beginning on or after January 1, 2022. Earlier application is permitted.

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

Private Enterprise Advisory Committee Meeting Notes

  • November 7, 2017 - Items to Consider as Part of the 2019 Annual Improvements: Application of First-time Adoption Exemptions
  • April 14, 2016 - Responses received on the AcSB’s Exposure Draft, “Subsidiaries and Investments”

Amendment under consideration

  • None

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