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Vol. 10-08
February 19, 2010

Tentative decision to provide a choice of standards for not-for-profit organizations

Derived from the AcSB's December 2009 FYI Newsletter and its January 2010 Decision Summary

In December 2008, the AcSB and the Public Sector Accounting Board (PSAB) issued a joint Invitation to Comment, “Financial Reporting by Not-for-Profit Organizations (NFPOs),” to solicit the views of stakeholders with respect to a strategy for setting standards for this sector.

The AcSB began deliberations on the comments received on the Invitation to Comment at its September 2009 meeting. At its October 2009 meeting, the AcSB approved the development of an Exposure Draft (ED) addressing the future direction for setting standards for the not-for-profit sector and the timing of the changeover from existing standards.

Here is an overview of the tentative decision expected tp be elaborated in the ED:

• For not-for-profit organizations that are not subject to the CICA Public Sector Accounting Handbook, the AcSB tentatively decided that the ED will propose a free choice between the three following frameworks:

  1. the accounting standards for private enterprises plus the 4400 series of Handbook Sections, appropriately modified to fit with those standards (hereafter referred to as the new accounting framework for NFPOs);

  2. the IFRSs; or

  3. the public sector accounting standards.

• The AcSB proposes that the accounting framework for NFPOs would comprise, in addition to existing Sections 4400-4470, Sections derived from the following standards in the new private enterprises accounting framework:

  • Section 1000, Financial Statement Concepts;

  • Section 1100, Generally Accepted Accounting Principles;

  • Section 1400, General Standards of Financial Statement Presentation;

  • Section 1500, First-time Adoption; and

  • Section 3031, Inventories.

  The Sections derived from these standards would contain material that was eliminated in developing the new accounting framework for private enterprises because it was not relevant. These Sections would contain material specifically adapted to NFPOs. A NFPO applying the new accounting framework would also apply the standards in the private enterprises accounting framework to the extent that those standards are of general applicability, or pertain to the organization’s circumstances and there is no relevant standard in the new accounting framework for NFPOs.

The AcSB indicated that the Exposure Draft would be issued early in 2010.

This Week in Review

Standard-setting Activities Digest
The Standard-setting Activities Digest (the Digest), published on a monthly basis not only represents an excellent starting point towards the original published text of the standard-setting organization but also present a single source of reference for current standards, future standards, exposure drafts and projects. You may register here to receive automatically a publication alert in your email. The following items have been released this week and will be included in the next edition of the Digest:
 

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