There are several new accounting standards for not-for-profit organizations, which were added to the CPA Canada standards and guidance collection on Knotia back in March 2018. These three new standards are effective for fiscal years beginning on or after January 1, 2019. We have summarized the highlights of these changes below:
Section 4433, Tangible Capital Assets Held by Not-for-Profit Organizations provides guidance on contributed assets and write-downs of assets. In the new standard tangible capital assets are written down to fair value or replacement cost to reflect partial impairments when conditions indicate that the assets no longer contribute to an organization’s ability to provide goods and services, or that the value of future economic benefits or service potential associated with the tangible capital assets are less than their net carrying amounts.
Section 4434, Intangible Assets Held by Not-for-Profit Organizations provides guidance on contributed assets and write-downs of assets. Intangible assets are written down to fair value or replacement cost to reflect partial impairments when conditions indicate that the assets no longer contribute to an organization’s ability to provide goods and services, or that the value of future economic benefits or service potential associated with the intangible assets are less than their net carrying amounts.
Section 4441, Collections Held by Not-for-Profit Organizations requires all collections to be recorded on the statement of financial position at either cost or nominal value, and is to be applied retrospectively.
If you would like to discuss how the new standards could impact your clients please contact us.
