Accounting Standards for Private Enterprises (ASPE)

New accounting guideline – Accounting for Life Insurance Contracts with Cash Surrender Value

The AcSB issued new Accounting Guideline AcG-21, Accounting for Life Insurance Contracts with Cash Surrender Value in September 2024. The Guideline provides guidance on recognition and measurement of cash surrender value of a life insurance policy, presentation and disclosure of policy premiums and changes in cash surrender value.

Effective for annual periods beginning on or after January 1, 2026, with earlier application permitted.

Section 1500, First-time Adoption has been amended to permit a first-time adopter to apply the transitional provisions in AcG-21.

Section 1582, Business Combinations has been amended to provide an exception to the requirement to measure identifiable assets at their acquisition-date fair values for cash surrender value.

Revised standard – Revenue – Upfront non-refundable fees or payments

The AcSB issued amendments to Section 3400, Revenue in May 2024 to indefinitely defer the effective date of application guidance for upfront non-refundable fees or payments that were issued in December 2019. Earlier application is permitted, including in financial statements not yet authorized for issue.

The amendments also require an enterprise to disclose the nature and amount of upfront non-refundable fees or payments recognized in revenue when the enterprise recognizes the fee or payment in revenue upon entering into the arrangement.

The disclosure requirement is effective for annual financial statements relating to fiscal years beginning on or after January 1, 2025, with earlier application permitted.

Revised standards: Accounting for common control combinations

The AcSB issued amendments to Section 3840, Related Party Transactions in September 2023 to:

• clarify that business combinations under common control that meet the criteria specified in paragraph 3840.44(a) should be accounted for in accordance with Section 1582, Business Combinations and the reference to “exchange amount” previously included in paragraph 3840.44(a) has been removed; and
• provide an option in paragraph 3840.44(b) to either retrospectively restate all prior periods when carrying amounts are used to account for a combination or prospectively account for these transactions.

Amendments to Section 3856, Financial Instruments have also been issued to clarify that financial assets acquired, or financial liabilities assumed when a business is transferred between two enterprises under common control are to be measured using the principles in Section 3840.44, not Section 3856.

Effective for annual reporting periods beginning on or after January 1, 2025, with early application permitted.

New accounting guideline – Customer’s accounting for cloud computing arrangements

The AcSB issued new accounting guideline (AcG-20) on accounting for cloud computing arrangements that is applicable to private enterprises and NFPOs in November 2022. The guideline provides guidance on:

• accounting for a customer’s expenditures in a cloud computing arrangement
• determining whether a software intangible asset exists in the arrangement

The guideline also includes an optional simplification approach to permit an enterprise to expense as incurred the expenditures related to the elements in the arrangement within the scope of Section 3064, Goodwill and Intangible Assets.

Effective for annual periods beginning on or after January 1, 2024, with earlier application permitted.

Section 1506, Accounting Changes has been amended to include AcG-20 as a situation when an enterprise may change its accounting policy without meeting the “more relevant information” criterion described in paragraph 1506.06(b).

Exposure Draft – Amendments to Section 3041, Agriculture

The AcSB issued an exposure draft in March 2025 proposing narrow-scope amendments to Section 3041, Agriculture. The amendments would apply to private enterprises applying the standards in Part II of the Handbook and to not-for-profit organizations applying the standards in Part III of the Handbook, as relevant. The AcSB proposes to remove certain disclosure requirements for agricultural inventories and clarify the amortization requirement for productive biological assets managed on a collective basis. The proposals also clarify the accounting when there is a change to the useful life of productive biological assets.

Comments are requested by May 12, 2025.

Exposure Draft – Accounting for Common Control Combinations

The AcSB issued an exposure draft in December 2024 proposing narrow-scope amendments to Section 3840, Related Party Transactions. Paragraph 3840.44(b) allows an option to either retrospectively restate prior periods when carrying amounts are used to account for a combination under common control, or to prospectively account for these transactions from the date the transfer occurred. However, the paragraph does not provide guidance on whether comparative figures are required to be presented when the transaction is accounted from prospectively. The proposed amendment would allow an option in paragraph 3840.44(b) to account for the combined enterprise either as a new entity or as a continuation of one of the combining enterprises when the combination under common control is accounted for prospectively.

The comment period is closed. The AcSB deliberated feedback received on the exposure draft at its March 2025 meeting. Final amendments are expected to be issued in Q3 2025.

Additional non-authoritative guidance

To stay ahead of the curve, find additional non-authoritative guidance to help you navigate the application of the Accounting Standards for Private Enterprises.

Complimentary Resources

• Potential Impacts of Trade Relations with the United States on the Financial Statements of Private Enterprises (CPA Ontario, 2025)
• Effects of Climate-related Risks and Opportunities on ASPE Financial Statements: Awareness Document (AcSB, 2024)
• Agricultural Inventories and Productive Biological Assets (AcSB, 2025)
• Disposal of long-lived assets and Discontinued Operations (AcSB, 2025)
• Leases (AcSB, 2025)
• Economic Dependence (AcSB, 2025) 
• Financial Instruments and Fair value measurement (AcSB, 2025)
• Consolidation and control (AcSB, 2025)
• Property, plant and equipment and intangible assets (AcSB, 2024)
• Impairment of long-lived assets (AcSB, 2024)
• Contingent Liabilities (AcSB, 2024)
• Impairment of Inventories (AcSB, 2024)
• Section 3041, Agriculture – How to apply the disclosure requirements for the net realizable value model (AcSB, 2023)
• In Brief: Section 3465, Income Taxes – International Tax Reform – Pillar Two Model Rules (AcSB, 2023)
• Framework for Reporting Performance Measures – voluntary guidance for enhanced decision making (AcSB, 2021)
• AcSB Podcast: Addressing Implementation Questions related to retractable or mandatorily redeemable shares issued in a tax planning arrangement (AcSB, 2019)

Resources available by subscription from CPA Canada

• Guide to ASPE: Financial Instruments (CPA Canada, 2024)
• Financial Reporting Alert: 2022 Amendment to Revenue, Section 3400 (CPA Canada, 2022)
• ASPE Briefing: Section 3041, Agriculture (CPA Canada, 2021)
• ASPE Briefing: Section 3462, Employee Future Benefits – A Focus on Defined Benefit Plans (CPA Canada, 2021)
• ASPE Briefing: Section 3400, Revenue (CPA Canada, 2021)
• ASPE Briefing: Accounting for Investments (CPA Canada, 2020)
• ASPE Alert: Accounting for related party financial instruments and significant risk disclosures (CPA Canada, 2019)
• An introduction to accounting for cryptocurrencies under ASPE (CPA Canada, 2019)
• ASPE Briefing: Retractable or mandatorily redeemable shares issued in a tax planning arrangement (CPA Canada, 2019)
• ASPE alert: Amendments to investments and income taxes (CPA Canada, 2019)
• ASPE briefing: Amalgamations of wholly owned enterprises (CPA Canada, 2017)

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