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In March 2018, the Accounting Standards Board (AcSB) issued Section 4433
Tangible Capital Assets Held by Not-for-Profit Organizations in Part III (Accounting Standards for Not-for-Profit Organizations) of the CPA Canada Handbook – Accounting. Section 4433 replaces the existing Section 4431
Tangible Capital Assets Held by Not-for-Profit Organizations.
Section 4433 was issued as part of the AcSB’s program of major improvements to Accounting Standards for Not-for-Profit Organizations (ASNPO) with the purpose of removing redundancies between Part II (Accounting Standards for Private Enterprises) and Part III of the Handbook for tangible capital assets. As a result, duplicate guidance in Section
3061 Property, Plant and Equipment in Part II has been eliminated. Only unique guidance contained in Part III has been carried forward and included in Section 4433 and users of Part III will now be referred to the relevant standards in Part II.
Carried forward to Section 4433 is the accounting policy choice for small organizations with annual revenues less than $500,000 to only make certain disclosures related to tangible capital assets. However, such not-for-profit organizations (NFPOs) are encouraged to follow all of the requirements of Section 4433.
The key changes introduced by Section 4433 are:
Contributed Tangible Capital Assets
Disclosure of Impairment
Section 4433 is effective for annual periods beginning on or after January 1, 2019. Earlier application is permitted. NFPOs apply Section 4433 prospectively to tangible capital assets acquired on or after the application date, with exceptions available. The departures from prospective application can only be applied to the fiscal year in which Section 4433 is first applied. The exceptions are:
The Basis for Conclusions that summarizes the AcSB’s key considerations in reaching its conclusions on this project can be accessed
here. The CPA Canada ASNPO Alert on this topic can be accessed
For more information on the financial reporting library, contact a local
MNP Assurance Professional, or
Jody MacKenzie, Director, Assurance Professional Standards.
This communication contains a general overview of the topic and is current as of April 17, 2019. The application of the principles addressed will depend upon the particular facts and circumstances of each individual case. Accordingly, this publication is not a substitute for professional advice and we recommend that any decisions you take about the application or not of any of the information presented be made in consultation with a qualified professional who can address any variance that may be required to reflect your circumstances. Please contact your local MNP representative for customized assistance with the application of this material. MNP LLP accepts no responsibility or liability for any loss related to any person's use of or reliance upon this material. © MNP LLP 2019. All rights reserved.
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