Financial statement preparers that apply Accounting Standards for Private Enterprises (ASPE) or Accounting Standards for Not-for-Profit Organizations (ASNPO) will want to review their revenue recognition accounting policies to consider additional guidance. For many entities, accounting for revenue can be complex as every revenue stream, sales contract, and transaction can be unique. This additional guidance, now included in Section 3400 Revenue (in Part II of the CPA Canada Handbook – Accounting), eliminates room for interpretation in many areas; however, professional judgment will still be required.
In this three-part series, we explain some of the additional guidance contained in Section 3400 and provide practical insights to help financial statement preparers and users evaluate the impact of these changes on an entity’s financial statements.
Practitioners are encouraged to read this series of publications alongside Section 3400 to fully understand the requirements, as accounting for revenue contains many nuances. As entities prepare their financial statements under amended Section 3400, it’s important to also take note of CPA Canada’s publication, “ASPE briefing: Additional guidance added to Section 3400 Revenue”, which provides:
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