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Canada

Financial Reporting Framework in Canada

Standards board. Accounting standards and guidance in Canada are established by the Accounting Standards Board of Canada (AcSB), an independent organisation within the Canadian Institute of Chartered Accountants (CICA).

Standards. The accounting section of the Handbook of the Canadian Institute of Chartered Accountants (CICA Handbook - Accounting) contains accounting standards applicable to all types of profit oriented enterprises and not-for-profit organisations in Canada. The Canada Business Corporations Act and provincial corporations and securities legislation generally require companies to prepare financial statements for their shareholders in accordance with GAAP as set out in the CICA Handbook - Accounting. Other legislation applies to financial institutions and other types of reporting entity.

IFRSs in Canada. Application of IFRSs has been mandatory since 2011 although there are still exceptions for investment entities and rate regulated entities. Please see the history of IFRS adoption in Canada below.

Oversight. The Accounting Standards Oversight Council (AcSOC) oversees the activities of the AcSB. AcSOC appoints the members of the AcSB and provides input to the AcSB, primarily in terms of its strategic direction and priorities. AcSOC also assesses and reports on the performance of the AcSB.

Emerging issues. The AcSB has an Emerging Issues Committee (EIC) whose role is to provide timely guidance on new and emerging accounting issues, more quickly than by the regular due process of standard setting. The AcSB advises the EIC of issues that may require action by the EIC (and vice versa).

Simplifications for SMEs. The AcSB has adopted a separate financial reporting standard for entities that do not have public accountability.

Securities regulation. Securities regulation in Canada is the responsibility of 13 provincial and territorial regulators, rather than a national regulator. Therefore provincial and territorial regulators enforce the application of AcSB standards by public companies. There is a coordinating body of securities regulators known as Canadian Securities Administrators (CSA).

History of IFRS adoption in Canada

In January 2006, Canada's Accounting Standards Board (AcSB) ratified a new Strategic Plan for the Direction of Accounting Standards (PDF 139k) that significantly affected the way financial reporting is carried out in Canada. The AcSB pursued separate strategies for three major categories of reporting entities: public companies, private businesses and not-for-profit organisations.

  • For public companies, the AcSB moved to a single set of globally accepted high-quality standards. The AcSB has concluded that this objective is best accomplished by converging Canadian GAAP with International Financial Reporting Standards (IFRSs) over a transitional period. Since 2011 Canadian GAAP has ceased to exist as a separate, distinct basis of financial reporting for public companies.
  • For private businesses, the AcSB has begun, as a matter of urgency, a comprehensive examination of their financial reporting needs and will determine the most appropriate model for meeting those needs. Applying the IFRS for SMEs has been considered but rejected.
  • For not-for-profit organisations, the AcSB continues to apply those elements of GAAP for profit-oriented enterprises that are applicable to their circumstances, and develop other standards dealing with the special circumstances of the not-for-profit sector.

Current status of IFRS adoption in Canada

Application of IFRSs has been mandatory since 2011. For rate regulated entities and investment companies, IFRSs are permitted but not required for 2011. Investment companies benefit from a deferral until 1 January 2014. Rate regulated entities benefit from a deferral until 1 January 2015.

The application of IFRSs in Canada is broader than in Europe and it applies to many more types of entities. Canada has adopted the notion of the publicly accountable entity (PAE) – a concept very similar to the one use in IFRS for SMEs. In that respect many Crown Corporations or State Entities have to apply IFRSs. Similarly, brokerage firms and investment companies not listed but with a broad number of investors are being required to apply IFRSs.

 

Deloitte (Canada) IFRS Resources

Deloitte (Canada) maintains the following sites in relation to IFRS:

  • Main Deloitte Canada IFRS site. This site contains recent IFRS-related news, resources, learning tools, hot topics, links and other useful information on the introduction of IFRS in Canada. Click for access to the site in English or French
  • Center for Corporate Governance. The IFRS specific page contains newsletters, publications, webcasts and other resources related to IFRS. Available in English and French

Related news

  • Canadian report on interim reporting

  • Mar 18, 2014

  • Chartered Professional Accountants Canada (CPA Canada) and the Canadian Investor Relations Institute (CIRI) have published a draft 'discussion brief' on interim reporting strategies. The report takes the view that choices involved in interim reporting should be considered as a strategic matter, designed to maximise the credibility of interim communications, and stakeholder confidence in those communications.

  • Canadian updates on IFRS reporting and other reporting developments

  • Mar 05, 2014

  • Deloitte (Canada) has published an overview of webcasts on IFRS reporting and other reporting developments that will be offered during 2014 and will provide insights on important issues and developments relating to IFRS and ASPE frameworks, developments and guidance for SEC-reporting entities and emerging trends in financial reporting that extend beyond the financial statements.

  • Canadian 'Starter's Guide to Sustainability Reporting'

  • Mar 04, 2014

  • Chartered Professional Accountants of Canada (CPA Canada) has published a guide designed to be a starting point for new or early-stage sustainability reporters. The focus of the guide is to provide a roadmap on how to get started on sustainability reporting, the reporting choices available, the process and resources involved, as well as the relevant tools and guidance available.

  • Canadian overview of ESG disclosure

  • Feb 04, 2014

  • Chartered Professional Accountants of Canada (CPA Canada) and the Toronto Stock Exchange have published an overview of environmental, social and governance (ESG) disclosure. The document outlines key concepts, discusses why users are interested in ESG information and the impacts of capital providers and insurers on setting the ESG agenda, and provides an overview of the various regulatory and reporting frameworks available for ESG disclosure.

  • Canadian study shows IFRS adoption had significant impact on financial statements

  • Nov 08, 2013

  • A new report by the Certified General Accountants Association of Canada (CGA-Canada) reveals that the adoption of International Financial Reporting Standards (IFRS) has had a noticeable impact on the financial statements of Canadian-listed companies. The source of the differences in financial reporting is linked to a broad range of accounting adjustments.

  • IFRS transition date for Canadian investment funds announced

  • Oct 07, 2013

  • The Canadian Securities Administrators (CSA) announced that they have finalised changes that will transition financial reporting for investment funds to IFRS. While reporting issuers and registrants generally were required to transition as of 1 January 2011, the transition date for investment funds was deferred in order to allow for the IASB's exception from consolidation for investment companies to be in place prior to the transition.

  • CPA Canada raises concerns about IIRC's integrated reporting proposals

  • Jul 19, 2013

  • Chartered Professional Accountants of Canada (CPA Canada) has publicly released its comment letter on the International Integrated Reporting Council (IIRC) Consultation Draft of the International Integrated Reporting Framework. Whilst CPA Canada agrees with the concept of an integrated report, concerns are raised in the letter about various matters, including organisational preparedness to generate integrated reports, a perceived lack of demand for integrated reports by providers of financial capital, and the IIRC's proposed timing for finalisation of its proposals.

  • Survey on IFRS transition costs in Canada

  • Jul 16, 2013

  • The Canadian Financial Executives Research Foundation (CFERF), published the results of an online survey on 'The costs of IFRS Transition in Canada'. They reveal that IFRS transition costs in Canada were generally in line with expectations.

  • G8 stress the need for transparency in the use of natural resources

  • Jun 19, 2013

  • Meeting in Lough Erne in Northern Ireland on 17-18 June 2013, the Group of Eight (G8) finance ministers discussed the themes of 'Tax, Trade and Transparency' and agreed to make sure the world’s poorest people benefit from the natural resources of their various countries by improving the transparency of their extractive industries and land rights.

  • Webinar on the benefits and challenges of integrated reporting

  • May 13, 2013

  • In its series of webinars on a variety of topics provided free of charge for members and non-members, the Canadian Institute of Chartered Accountants (CICA) is offering a webinar on the International Integrated Reporting Council (IIRC)'s consultation draft of an International Integrated Reporting Framework.

  • ASAF membership announced

  • Mar 19, 2013

  • The IFRS Foundation has announced the membership of the newly founded Accounting Standards Advisory Forum (ASAF) that is designed to formalise and streamline the relationships between the IFRS Foundation and IASB with the global standard-setting community, in order to bring important regional perspectives to the IASB’s technical work and to offer feedback on the most important issues of the day.

  • EFRAG comments on the CICA research paper on financial reporting measurement issues

  • Jan 25, 2013

  • In June 2012, the Canadian institute of Chartered Accountants (CICA) posted to its website a reasearch paper "Toward a Measurement Framework for Financial Reporting by Profit-oriented Entities" to stimulate study and debate, and to provide input for the International Accounting Standards Board (IASB) and Financial Accounting Standards Board (FASB). The European Financial Reporting Advisory Group (EFRAG) has commented on the paper.

  • Report from recent IFASS meeting released

  • Jan 17, 2013

  • A report has been issued summarising the discussions at a meeting of the International Forum of Accounting Standard Setters (IFASS, formerly the NSS) held in Zurich on 22-23 October 2012. The meeting covered a broad range of topics, including the future relationships between the IASB and regional and national standard setters, topical issues in financial reporting, reports from regional groups and administrative matters.

  • Paul Cherry selected as an Officer of the Order of Canada

  • Dec 31, 2012

  • Paul Cherry, the IFRS Advisory Council Chairman, has been appointed to be an Officer of the Order of Canada, for 'his commitment to improving financial reporting, notably through his leadership in developing international accounting standards'. The Order of Canada is Canada’s senior civilian honour, recognising a lifetime of outstanding achievement, dedication to community, and service to the country.

  • Canada provides guidance on timing of disclosures on new and revised IFRSs

  • Dec 14, 2012

  • The Accounting Standards Board of Canada (AcSB) has issued proposed amendments to the Preface to the CICA Handbook to clarify the authority for financial reporting requirements in Canada and the basis for adopting IFRSs into Canadian GAAP. The proposals discuss whether entities can adopt pronouncements issued by the IASB before incorporation into Canadian GAAP, and how the disclosure requirements of IAS 8 should be applied in the context of an endorsement regime. As such, the observations in the proposals may be relevant for other regimes adopting an 'endorsement' regime for IFRS.

  • CICA report on IFRS adoption in Canada

  • Dec 07, 2012

  • The Canadian Institute of Chartered Accountants (CICA) has published a report outlining the results of a review of the transition to International Financial Reporting Standards in Canada.

  • ESMA Chair discusses U.S. IFRS adoption, global consistency in IFRS

  • Dec 03, 2012

  • The European Securities and Markets Authority (ESMA) has released the text of a speech given by Steven Maijoor (ESMA Chair) to a recent Audit Quality Symposium held by the Canadian Public Accountability Board. In the speech, Mr Maijoor reiterated many of his previous comments, including disappointment at a lack of a decision on IFRS in the United States, and consistency in application of IFRS on a global basis.

  • AcSB reflects on Canadian IFRS adoption strategy

  • Sep 12, 2012

  • The Canadian Accounting Standards Board (AcSB) has released its annual report for the 2011-2012 year, which includes reflection on AcSB's strategy of adopting IFRSs for Canadian publicly accountable enterprises and permitting their use by other entities.

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