IFRS for SMEs not an option for Canadian private enterprises

10 Aug 2010

In its Strategic Plan, issued in January 2006, the Canadian Accounting Standards Board (AcSB) noted that "one size does not necessarily fit all" and decided to pursue separate strategies for public enterprises, private enterprises and not-for-profit organizations.

In May 2007, the AcSB published an Invitation to Comment (ITC) and accompanying Discussion Paper to solicit stakeholders' views as to the best approach for developing standards for private enterprises. The ITC identified three possible approaches to developing private enterprise GAAP:

a top-down approach based on public enterprise GAAP (i.e., IFRSs) but providing for differences on a number of topics;
adoption of the IFRS for Small and Medium-sized Entities (IFRS for SMEs);
an independently developed set of standards.

Based on the responses to the ITC the AcSB decided in May 2008 to develop a set of "made in Canada" financial reporting standards for private enterprises, which were finally published in 2009. Private enterprises in Canada now have the choice between the newly developed, simpler and more limited version of Generally Accepted Accounting Principles (GAAP) and the full International Financial Reporting Standards (IFRS). The IFRSs for SMEs is not an option available to Canadian private enterprises.

In order to assist the AcSB in maintaining and improving the accounting standards for private enterprises, the AcSB established the Private Enterprises Advisory Committee in 2010. The Committee normally meets four times a year, and a summary of discussions of each Committee meeting is made available after each meeting. The meeting notes of the first meeting of the Committee are now available on the AcSB's website. Click for: