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. The AcSB has approved a plan for adopting IFRSs in full by incorporating IFRSs into the CICA Handbook as Canadian GAAP for all publicly accountable profit-oriented enterprises starting in 2011. This includes listed companies and some other classes of enterprises that have relatively large or diverse classes of financial statement users, including investment funds. Years ending 31 December 2010 will be the last year of reporting under current Canadian GAAP. The audit report and basis of presentation note will refer to either (a) conformity with IFRSs or (b) conformity with both IFRSs and Canadian GAAP. With permission of the relevant Provincial securities regulator, some listed companies (but not financial institutions) are permitted to adopt IFRSs before 2011. Canadian public companies whose securities are registered with the US Securities and Exchange Commission are currently allowed to use US GAAP as their financial reporting framework. They will continue to have that option.

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).

Canada's Plan for Incorporating IFRSs into Canadian GAAP: Chronology

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

  • For public companies, the AcSB's objective is to move 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. Australia and the European Union have already adopted IFRS and other countries have convergence programs underway. The AcSB will develop and publish a detailed implementation plan for achieving convergence later this year. The AcSB expects that the transition period will take approximately five years, but the precise timing will depend on many factors, and will be continuously monitored throughout the process. At the end of that period, Canadian GAAP will cease 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.
  • For not-for-profit organisations, the AcSB will continue 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.

The AcSB recognises that some Canadian public companies that have significant market followings in the United States might prefer to use US GAAP. The Canadian Securities Administrators already permit those Canadian public companies that are SEC registrants to use US GAAP instead of Canadian GAAP.

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

Checklist of Standard-setting Activities in Canada

A monthly newsletter from Deloitte (Canada) that briefly describes new rules and standards that affect financial reporting from Canadian standard-setters and regulators. This newsletter briefly describes those pronouncements and other regulatory and professional developments and indicates their effective date, transition application, and entities affected. There are hyperlinks to underlying details.
Newsletter in English (PDF) Newsletter in French (PDF)

Related news

  • Canadian AcSB explains rate regulated entities IFRS deferral

  • May 08, 2012

  • The Canadian Accounting Standards Board (AcSB) has released a 'Q&A' document providing more insight into its decision to defer the mandatory changeover date to International Financial Reporting Standards (IFRSs) for entities with qualifying rate-regulated activities.

  • Update on IFRSs for Canadian investment funds

  • Apr 02, 2012

  • Reproduced from the DeloitteLINK publication and related to CSA Staff Notice 81-320 (Revised) - Update on International Financial Reporting Standards for Investment Funds, which was first published 8 October 2010, revised 23 March 2011 and 30 March 2012.

  • Canadian regulator decides against allowing early adoption of recent IFRSs by certain entities

  • Nov 01, 2011

  • The Canadian Office of the Superintendent of Financial Institutions (OSFI), an independent agency of the Government of Canada that supervises and regulates Canadian banks, insurers, and federally registered private pension plans, has issued a letter in which it concludes entities which it regulates should not early adopt many standards recently issued by the IASB. .

  • Private sector task force final report to G20

  • Oct 07, 2011

  • The Private Sector Task Force of Regulated Professions and Industries has published a final report, Regulatory Convergence in Financial Professions and Industries, to the deputies of the G20. The report focuses on the private sector's point of view in regards to global regulatory convergence.

  • Private sector task force interim report to G-20

  • Jul 19, 2011

  • The Private Sector Task Force of Regulated Professions and Industries has published an interim report, Regulatory Convergence in Financial Professions and Industries, to the deputies of the G-20. The report focuses on the private sector's point of view in regards to global regulatory convergence.

  • More than 70 jurisdictions apply ISAs

  • Jul 11, 2011

  • On June 30 2011, Prof. Arnold Schilder, the Chairman of the IAASB, delivered a speech on global progress in the use of the Clarified International Standards on Auditing (ISAs) at the 2011 annual conference on Accounting and Accountability for Regional Economic Growth in Latin America and the Caribbean (referred to as CReCER after its Spanish/Portuguese acronym).

  • Canada releases basis of conclusions on move to IFRSs

  • Jul 05, 2011

  • With many Canadian companies currently in their first year of reporting under IFRSs, the Canadian Accounting Standards Board (AcSB) has recently released a publication setting out its rationale and process for adopting IFRSs, rather than alternative frameworks such as United States Generally Accepted Accounting Practices (US GAAP), or retaining a separate domestic Canadian GAAP.

  • Upcoming Canadian quarterly technical update webcast

  • Jun 03, 2011

  • Deloitte (Canada) is holding a quarterly technical update webcast on Tuesday, 21 June 2011. Discussion will include key issues related to reporting under IFRS (2011 represents the mandatory IFRS changeover for many entities in Canada) – including special tips and reminders for second quarter reporting and an update on recently issued new IFRS standards.

  • G20 finance ministers will watch convergence efforts

  • Apr 16, 2011

  • The G20 Finance Ministers and Central Bank Governors met in Washington DC on 14-15 April 2011. They agreed, among other things, to closely watch the progress of the IASB and FASB's convergence efforts.

  • Canadian study reveals impact of IFRS transition

  • Mar 23, 2011

  • A new study by the Certified General Accountants Association of Canada (CGA-Canada), The Effects of IFRS on Financial Ratios: Early Evidence in Canada, outlines the findings from a comparison of the financial statements of Canadian companies that early adopted IFRS and statements prepared under pre-changeover Canadian GAAP.

  • Updated Canadian guides on the changeover to IFRSs

  • Mar 07, 2011

  • The Canadian Institute of Chartered Accountants (CICA) has published the following new or updated guides dealing with the assurance and other implications of Canada's transition to IFRSs (links are to the CICA website):

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