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Adoption of the accounting framework CAS for Not for Profits

Societies that have chosen to  adopted the accounting framework Canadian accounting standards for not-for-profit organizations (ASNPO)  are allowed certain exemptions and options for the retrospective treatment of the adoption of these accounting changes in the following areas:

Fair value of assets;
Employee future benefits;
Financial instruments;
Business combinations; and
Asset retirement obligations

For these organization, a restatement of fair value of certain assets may be of useful. This would entail having an independent appraisal or valuation of those assets, in particular land and buildings, that have been owned for a number of years and are worth more than their original cost. This one time oportunity to restate the values of chosen assets to more accurately reflect their fair value is available in the year of adoption. This would result in a restatement of net assets disclosing the original amounts, amount of change and ending amounts as at the transition date. Once the restatement of the assets has been recorded, this will become the carrying value of those assets.

In order to comply with Canadian accounting standards, the Society’s comparative Statement of Financial Position must be presented showing the balances as at the date of transition and the balances for the comparative date as well as the balances at the end of the current fiscal year.

There are other disclosure requirements in the year of transition from Canadian generally accepted accounting principles to Canadian accounting standards for not-for-profit organizations that will be addressed during the audit engagement.

For more information on this topic feel free to contact our office.
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Saturday, 19 June 2021