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Definition of Not-for-Profit Organizations The Accounting Standards Board (AcSB) and the Public Sector Accounting Board (PSAB) are assessing the strategic direction of financial reporting standards for not-for-profit organizations (NFPOs) in Canada. Following extensive consultations with stakeholders, the boards are proposing NFPOs in the public and private sectors should continue to use the current 4400 series of standards, but use different financial reporting foundations. The PSAB proposes that government NFPOs follow the CICA Public Sector Accounting Handbook. The AcSB proposes private sector NFPOs be given a choice to follow new accounting standards for not-for-profit organizations or International Financial Reporting Standards. Both boards encourage all organizations involved in the public and private not-for-profit sectors to provide comments on the proposed reporting options. Background The AcSB and PSAB are working to ensure that accounting standards for NFPOs 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. The existing accounting standards used by the not-for-profit sector — those from the CICA Handbook – Accounting— will continue to apply, unchanged, until proposed new directions for NFPOs in both the public and private sectors are developed and published for comment, consultation is conducted, and the standards are finalized. Some NFPOs are considering whether to adopt International Financial Reporting Standards (IFRSs). It is important to note that although Canadian publicly accountable enterprises are required to adopt IFRSs on January 1, 2011, NFPOs are not required to make a choice or to follow the same transition schedule. The transition to a new strategy for not-for-profit financial reporting will be based on a separate timeline that allows adequate time to plan and transition successfully. Until a new direction has been established, all organizations should continue to follow the existing accounting standards found in the CICA Handbook – Accounting. For more information: Accounting Standards Board Public Sector Accounting Board |