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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

Correction list for hyphenation

These words serve as exceptions. Once entered, they are only hyphenated at the specified hyphenation points. Each word should be on a separate line.