Adopting Ifrs in Canada
EXECUTIVE SUMMARY
Canada is on the edge of a substantial change that will change the way companies financially report to their investors and stakeholders. Adopting international accounting standards will impact Canadian investors and businesses, and change the way financial information is reported in Canada.
In Canada the accounting standards are set by the Accounting Standards Board of Canada (AcSB). AcSB establishes financial accounting and reporting standards for use by Canadian companies and not-for-profit organizations. The international standards are set by the International Accounting Standards Board (IASB).
By 2011, all of Canada 's 4,500 publicly accountable enterprises will be required to prepare their financial statements according to International Financial Reporting Standards (IFRS). In addition, by the end of 2008, all public audits in Canada will be conducted according to International Auditing Standards (IASs). Canada 's conversion to the International standards will take place over the next four years.
The AcSB will pursue separate strategies for each of the three major business entities in Canada. For public entities, the AcSB 's objective is to move to a single set of globally accepted high-quality standards. The transition to convergence with international financial reporting standards (IFRS) will take place over a five year period (2006 to 2011), with full convergence by the end of 2011.
For private entities, the AsCB has presented three options: A top-down approach based on IFRS for public entities; adoption of the IFRS-SME with or without modifications; an independently developed set of standards. There are many pros and cons of each of the options and all three entail significant changes and would require different implementation times for a smooth transition.
For Not-For-Profit organizations, the AcSB will continue to apply those elements of GAAP for profit-oriented enterprises that are applicable to their circumstances,
Canada is on the edge of a substantial change that will change the way companies financially report to their investors and stakeholders. Adopting international accounting standards will impact Canadian investors and businesses, and change the way financial information is reported in Canada.
In Canada the accounting standards are set by the Accounting Standards Board of Canada (AcSB). AcSB establishes financial accounting and reporting standards for use by Canadian companies and not-for-profit organizations. The international standards are set by the International Accounting Standards Board (IASB).
By 2011, all of Canada 's 4,500 publicly accountable enterprises will be required to prepare their financial statements according to International Financial Reporting Standards (IFRS). In addition, by the end of 2008, all public audits in Canada will be conducted according to International Auditing Standards (IASs). Canada 's conversion to the International standards will take place over the next four years.
The AcSB will pursue separate strategies for each of the three major business entities in Canada. For public entities, the AcSB 's objective is to move to a single set of globally accepted high-quality standards. The transition to convergence with international financial reporting standards (IFRS) will take place over a five year period (2006 to 2011), with full convergence by the end of 2011.
For private entities, the AsCB has presented three options: A top-down approach based on IFRS for public entities; adoption of the IFRS-SME with or without modifications; an independently developed set of standards. There are many pros and cons of each of the options and all three entail significant changes and would require different implementation times for a smooth transition.
For Not-For-Profit organizations, the AcSB will continue to apply those elements of GAAP for profit-oriented enterprises that are applicable to their circumstances,
References: Accounting Standards Board (AcSB). (2006). Accounting Standards in Canada: New Directions. Retrieved June 20, 2007 from http://www.cica.ca/multimedia/Download_Library/Standards/Accounting/English/e_NewDirections.pdf Accounting Standards Board (AcSB). (2007). Financial Reporting by Private Enterprises. Retrieved June 20, 2007 from http://www.acsbcanada.org/client_asset/document/3/7/6/7/9/document_536AFFB9-08B3-015F-9C71A04E7EDB1130.pdf Colapinto, Robert. (2005). The Future Direction of Accounting Standards. CA Magazine. Retrieved July 10, 2007 from http://www.camagazine.com/ Edwards, Greg. (2007). Financial Reporting by Private Enterprises. Canadian Accounting Standards Board. Retrieved June 20, 2007 from http://www.acsbcanada.org/2/9/4/0/7/index1.shtml Hague, Ian P.N. (April, 2005). Standardizing the Standards. CA Magazine. International Accounting Standards Board (AcSB). (2007) About ISAB. Retrieved July 15, 2007 from http://www.iasb.org/About+Us/About+IASB/About+IASB.htm Kooij, Angela. (2007). Canada 's Accounting Standards Board ratifies its strategic plan. Retrieved July 10, 2007 from http://www.cica.ca/index.cfm/ci_id/29532/la_id/1.htm