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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

  • 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.

  • Post-implementation review of IFRS 8 - roundtables and discussions

  • Sep 06, 2012

  • National standard setters around the world are offering discussion forums in order to collect feedback from stakeholders on the International Accounting Standards Board’s (IASB) Post-implementation Review of IFRS 8. The roundtables are intended to help the standard setters provide input to the IASB's deliberations.

  • Canadian research paper on financial reporting measurement issues

  • Jun 15, 2012

  • The Canadian institute of Chartered Accountants (CICA) has 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).

  • Report from recent IFASS meeting released

  • Jun 04, 2012

  • The International Forum of Accounting Standards Setters (IFASS) met in Kuala Lumpur on 29-30 March 2012. A detailed report of proceedings at the meeting has now been released, outlining discussions on numerous topics such as the relationship between standard setters and the IASB, the IASB's work programme and processes, and a report on the possible adoption of IFRS in the United States noting a possible "step back".

  • 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.

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