You might have heard me talk in First Reference’s Inside Internal Controls newsletter about the evolving financial reporting standards for all organizations—public companies, private organizations, public service organizations and not-for-profits (NPOs)—under the guidance of the Accounting Standards Board (AcSB).
Now that the standards for public companies and private enterprises have been settled, the AcSB is turning its attention to NPOs. The board’s objective is to ensure that accounting standards for not-for-profit organizations “are responsive to the diverse nature of the sector, allow for comparability between the private and public sectors and provide decision-useful financial statements for the multiple and varied users of these statements.”
Not-for-profit organizations currently follow a series of rules in the CICA Handbook – Accounting. Most of the Handbook sections that apply to commercial companies also apply to NPOs. In addition, there are rules for NPO-specific issues in section 4400.
During 2009, the AcSB undertook a series of consultations with various NPO stakeholders. And in March it issued an Exposure Draft (asking for public comment by July 15) to propose the future direction for financial reporting for NPOs. However, the board has already confirmed that the rules in section 4400 of the Handbook will remain the primary source of Canadian generally accepted accounting principles (GAAP) for not-for-profit organizations.
The exposure draft is available here. And for a recent article on the topic by Beth Deazeley, LL.B, click here.
While we’re on the topic of new accounting standards, the AcSB recently issued its Summary Comparison of Part II of the CICA Handbook – Accounting to XFI Version in Part V, a concise “before and after” snapshot of the new financial reporting standards for private organizations that were incorporated into the Handbook in December 2009. This comparison identifies the recognition and measurement differences between the former GAAP rules and the new private enterprise standards and, more importantly, evaluates the significance of the changes. Click here for this useful document.
Since its publication two years ago, Canadian NPOs have come to rely on Not-for-Profit PolicyPro (NPPP) for the model policies, in-depth information and practical tools they need to keep up with the recent changes in law and practice in the sector. For more information about NPPP and to try a 30-day trial, click here.
Colin Braithwaite
First Reference Internal Controls Managing Editor
- Facebook faces privacy questions… again - July 8, 2010
- Ontario introduces not-for-profit corporations act - July 8, 2010
- Draft of new national securities act introduced - June 29, 2010
