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Section 4450 - Reporting controlled and related entities by not-for-profit organizations

Effective date:

January 1, 2012

Published by the AcSB:

December 2010


This Section establishes standards for the presentation and disclosure of controlled, significantly influenced and other related entities in the financial statements of not-for-profit organizations.

The requirements of the Section are summarized in the table below:

Nature of influence Accounting
  • An organization should report each controlled NFPO by consolidating the NFPO or by providing specific disclosures about the controlled NFPO.  If the controlled organization is one of a large number of individually immaterial organizations, it is exempt from consolidation and more limited disclosures are required.
  • An organization should report each controlled profit-oriented enterprise either by consolidating the enterprise or accounting for it using the equity method.
Joint control
  • An organization should report each interest in a joint venture by accounting for it using the proportionate consolidation method or the equity method.
Significant influence
  • An organization that has significant influence in another NFPO is required to make specific disclosures.
  • An organization that has significant influence over a profit-oriented enterprise should account for its investment using the equity method
Economic interest*
  • When an organization has an economic interest in another NFPO over which it does not have control or significant influence, specific disclosures are required.
* An economic interest in another NFPO exists if:  i) the other organization holds resources that must be used to produce revenue or service for the reporting organization; or ii) the reporting organization is responsible for the liabilities of the other organization.

History of Section 3463




December 2010

Part III of the CPA Canada Handbook  issued

Effective for fiscal years beginning on or after January 1, 2012. Earlier application permitted.

September 2014

Amended to incorporate the definition of proportionate consolidation in Section 4450

Effective for annual financial statements relating to fiscal years beginning on or after January 1, 2016. Earlier application is permitted.

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

Not-for-Profit Advisory Committee meetings

Amendments under consideration

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.