Accounting Standards for Private Enterprises (ASPE)

Revised standards: Accounting for common control combinations

The AcSB issued amendments to Section 3840, Related Party Transactions 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. 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 – Accounting for Life Insurance Contracts with Cash Surrender Value

The AcSB issued an exposure draft proposing to issue new Accounting Guideline AcG-21, Accounting for Life Insurance Contracts with Cash Surrender Value. The proposed Guideline addresses the accounting for life insurance contracts that contain a cash surrender component, from the policy owner’s point of view. The proposed Guideline includes guidance on recognition and measurement of cash surrender value of a life insurance policy, presentation of policy premiums and changes in cash surrender value, and disclosures.

Comments are requested by January 31, 2024.

Exposure draft – Revenue – Upfront non-refundable fees or payments

The AcSB issued an exposure draft proposing to indefinitely defer the effective date of application guidance for upfront non-refundable fees or payments in Section 3400, Revenue that is currently effective for fiscal years beginning on or after January 1, 2025, until its project on Evaluating the Preface is complete. The amendments also propose a new disclosure requirement for entities recognizing upfront non-refundable fees or payments in revenue entirely up front.

Comments are requested by January 31, 2024.

Survey - AcSB’s Future Domestic Work Plan Consultation

The AcSB issued a survey to gather input on potential new projects for their 2024-2025 annual plan and beyond. Questions pertain to potential projects for Accounting Standards for Private Enterprises, Accounting Standards for Not-for-Profit Organizations and Accounting Standards for Pension Plans.

Comments are requested by November 30, 2023.

Consultation paper I – Exploring Scalability in Canada

The AcSB issued a consultation paper to gather input from private enterprise, not-for-profit organization (NFPO), and pension plan stakeholders – including financial statement preparers, users, and practitioners – on current key issues and potential solutions related to scaling the standards. The Paper represents only the first phase of consultation activities on this project and the AcSB is seeking the thoughts of stakeholders on potential solutions that would address concerns when applying accounting standards.

The comment period is closed. The AcSB is currently deliberating the feedback received.

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 entities.

• 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)
• ASPE Summary Resources Guide (CPA Canada, 2021)
• ASPE Briefing: Section 3410, 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)
• AcSB Podcast: Addressing Implementation Questions related to retractable or mandatorily redeemable shares issued in a tax planning arrangement (AcSB, 2019)
• Chapter 45: Financial instruments guide (CPA Canada, 2019)

Back to top

Disclaimer

Certain links on this site take you to other websites, resources or tools maintained by third parties over whom CPA Ontario has no control. CPA Ontario provides these links only as a convenience and is not responsible for the contents of any linked website. CPA Ontario makes no representations or warranties regarding, and does not endorse, any linked website, the contents thereof, the information appearing thereon or any of the products or services described thereon. Links do not imply that CPA Ontario sponsors, endorses or is affiliated or associated with the entity that owns or is responsible for any linked website. If you decide to visit any linked websites, you will do so at your own risk. CPA Ontario bears no responsibility whatsoever for the content, accuracy or security of any websites that are linked (by way of hyperlink or otherwise).