Canada: Accounting changes for preferred shares postponed; “estate freeze”

Canada: Accounting changes for preferred shares

The Accounting Standards Board of Canada (AcSB) is postponing the proposed effective date for changes to the accounting for preferred shares. The new effective date is to be no earlier than fiscal periods beginning on or after 1 January 2018.

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The AcSB's proposed new accounting treatment, outlined in a recent Exposure Draft, would have brought the accounting treatment of redeemable and retractable preferred shares issued under certain tax planning arrangements (e.g., a typical “estate-freeze” transaction) in line with the current treatment for other redeemable preferred shares.

Read a July 2015 report prepared by the KPMG member firm in Canada: Estate Freeze Transactions - Big Accounting Shake-Up Put On Hold

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