New Not-for-Profit Accounting Standards Projected to be Released Late 2010
Article by Esther S.J. Oh
The opportunity to comment on the exposure drafts of the new accounting standards closed on July 15, 2010. The Accounting Standard Board for Private Enterprises (“ASPE”) and the Public Sector Accounting Board (“PSAB”), that encouraged all involved in the public and private not-for-profit sector to provide comments, continues to project the final versions of the accounting standards to be in place by late 2010. The effective date is still likely January 1, 2012 with earlier application permitted.
As background, there are two accounting boards of Canada, ASPE and PSAB, who together on March 10, 2010 released exposure drafts of new accounting standards for comment. ASPE proposes that not-for-profit organizations (“NPOs”) and other private enterprises use the accounting standards, International Financial Reporting Standards (“IFRS”) or the new ASPE for Private Enterprises supplemented by certain unique standards for NPOs. PSAB proposes that government not-for-profit organizations (“GNPOs”) follow the PSA Handbook supplemented by the same unique standards for NPOs. The supplementary standards are similar to material that was developed in the 1990s, colloquially referred to as the 4400 series standards. Moving towards adoption of the international standards is seen as an opportunity for Canadian businesses to increase access to international capital markets. The exposure drafts are available online at: http://www.acsbcanada.org/documents-for-comment/item35455.pdf and http://www.psab-ccsp.ca/documents-for-comment/item35463.pdf.
On June 22, 2010 KPMG, a Canadian accounting firm, offered a webcast to clarify the accounting changes and the differences between a NPO and a GNPO, a distinction that was previously unnecessary. A GNPO is differentiated from a NPO because the government controls the organization’s policies and finances. The webcast is available for replay online at: http://www.kpmg.com/Ca/en/IssuesAndInsights/ArticlesPublications/Pages/Accounting-Standards-for-Not-for-Profit-Oganizations.aspx.
For further details about the impact the new accounting standards will have on not-for-profit and charity organizations see Carters.ca for Accounting Standards Board Adopts New Standard and Proposes Changes to Another: The Effect on Not-for-Profit and Charitable Organizations, online at http://www.carters.ca/pub/bulletin/charity/2008/chylb132.pdf.
Article originally appears in Carters Charity Law Update – July/August 2010