Proposal to replace Canadian GAAP with IFRSs

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01 Apr 2005

The Canadian Institute of Chartered Accountants' Accounting Standards Board (AcSB) has issued an Invitation to Comment on its draft strategic plan, Accounting Standards in Canada: Future Directions.

The draft plan includes the AcSB's proposal to follow separate strategies for public companies, private businesses, and not-for-profit organisations. Highlights:
  • For public companies, the AcSB will direct its efforts primarily to participating in the movement toward the global convergence of accounting standards. "The best way to achieve the objective of a single set of globally accepted, high-quality accounting standards is to converge Canadian GAAP with International Financial Reporting Standards (IFRSs) over a transitional period, expected to be five years. At the end of that period, Canadian GAAP will cease to exist as a separate, distinct basis of financial reporting for public companies." The AcSB also acknowledges that US GAAP is an appropriate alternative when regulators and other competent authorities choose to permit its use.
  • For private businesses, the AcSB will clarify that GAAP applies only to entities that have significant external users of their financial statements. For those entities, the AcSB will undertake a comprehensive examination of their financial reporting needs and 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 deadline for written comments on the proposed strategies is 31 July 2005. Click to download the Invitation to Comment (PDF 458k).

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