Candice M. Turner, "Answers to Practical FATCA Questions for Canadian Financial Institutions", Tax Management International Journal, Vol. 43, No. 8, August 8, 2014, p. 484.

The use of the Treasury Regulation definition of "preexisting obligation" is not specifically addressed, in the IGA, the implementing legislation, or the official explanatory notes to the implementing legislation (the "explanatory notes"). However, the CRA Guidance provides that where a holder of a pre-existing individual account opens a new account with the same financial institution, there is no need to re-document the account so long as the due diligence requirements have been or are in the process of being carried out and, where a threshold has been applied in connection with the pre-existing account, the financial institution's computerized systems are able to link the new account to the pre-existing account. [fn 10: Reg. §1.1471-1(b)(98)(ii).] In effect, this would incorporate the expanded definition in the Treasury Regulations without the requirement that the two, accounts be treated as "consolidated obligations."…

The IGA also requires reporting of accounts closed during the year. [fn 13: IGA Article 2(2)(1)(4).] The IGA does not, however, address how accounts closed during the year are to be treated for purposes of the due diligence rules. The CRA Guidance also does not address this issue. Given that the IGA seems to require looking at the account balances that could potentially be aggregated at one moment in time, it is reasonable to conclude that closed accounts should not be aggregated for purposes of the due diligence rules. Indeed, if the value of the closed account immediately prior to closure were aggregated with values of other accounts at a later date, funds moved from the closed account to a new account could be subject to double counting. Thus, although no clear authority has addressed this point, closed accounts should likely not be taken into account in applying the aggregation rules.