This course provides an in-depth review of Section 3856, Financial Instruments for both private enterprises and not-for-profit organizations. Coverage includes the purpose and scope of the standard, defined terms, recognition, measurement, presentation, derecognition, transitional requirements and resources.

This course provides participants with an in-depth review of Section 3856, Financial Instruments for both private enterprises using ASPE and not-for-profit organizations using ASNFPO. The entire standard will be covered including the guidance for recognition, measurement, presentation, derecognition, hedge accounting and disclosure. The starting point will be an overview of the scope, different types of financial instruments and key definitions. Next a discussion of recognition, measurement, impairment, forgiveness and disclosure of financial instruments for arms-length transactions. This is followed by a discussion of complex issues for financial instruments with related parties, shares in a tax planning arrangement and transfer of receivables. Next a discussion of accounting for derivatives and hedge accounting. Then presentation of financial instruments as debt, equity or hybrid instruments. Finally, a discussion of useful resources.

Participants will have the opportunity to review a number of illustrative examples and exercises. After attending this course, participants will have reviewed in-depth the accounting for financial instruments for both private enterprises and not-for-profit organizations.

Topics Include:

• Overview
  • Purpose and scope
  • Examples of financial instruments
• Definitions
• Recognition
• Initial measurement
  • Arms-length transactions
  • Finance fees and transaction costs
• Subsequent measurement
  • Measurement 
  • Amortized cost
  • Fair value
• How to determine fair value
  • Cost 
• Impacts on financial statements
• Impairment
• Forgiveness
  • Derecognition
  • Disclosures
• Complex Issues
  • Related party transactions
  • Shares issued in a tax planning arrangement
  • Transfer of receivables
• Derivatives and Hedge Accounting
• Presentation
  • Investments
  • Substance over form
  • Debt, equity or hybrid financial instrument
  • Compound financial instruments
  • Offsetting
• Transition
• Resources (with links)

NOTE: This course description has been revised and reflects updates for 2024. If you have any questions, please contact pdevents@cpaontario.ca.

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By the end of this course, participants should be able to:

• The requirements of Section 3856, Financial Instruments for both private enterprises and not-for-profit organizations including recognition, measurement, presentation, derecognition and disclosure.
• The alternative measurement methods for financial instruments and implications on the financial statements.
• The accounting for impairment and forgiveness of financial instruments.
• The initial measurement and presentation for related party transactions.
• The initial measurement, subsequent measurement and presentation for shares issued in a tax planning arrangement.
• The basic concepts of hedge accounting.