Important changes proposed for private enterprises
The Accounting Standards Board (AcSB) recently issued an Exposure Draft on Accounting for Redeemable Preferred Shares issued in a Tax Planning Arrangement, specifically for shares issued in transactions commonly known as an “estate freeze”.
According to the proposals, the exception allowing for equity classification (paragraph 3856.23) would be eliminated and these shares would be treated in the same manner as any other redeemable preferred shares, i.e. as a financial liability.
The AcSB welcomes responses to the Exposure Draft before January 15, 2015. Responses are most helpful if they provide specific reasons for or against the proposals.