Canadian standard-setter sees narrowing differences as a possible intermediate step to global convergence

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15 Mar 2016

In an article for the website of Chartered Professional Accountants of Canada (CPA Canada), Linda Mezon, the recently reappointed Chair of the Canadian standard-setter AcSB, argues that the IFRS Foundation should move beyond focusing on the number of jurisdictions adopting IFRS and also consider the comparability of financial reporting outcomes within global capital markets regardless of which accounting framework is used.

Ms Mezon begins by noting that the AcSB, along with many publicly-accountable enterprises in Canada, has seen the benefits from providing more comparable financial information with companies in other jurisdictions who have also adopted IFRS and that, in fact, the cost of raising capital is lower as a result of Canada’s adoption of IFRS, given that investors can readily compare Canadian entities to those from other jurisdictions. However, she points at the countries that don't use IFRS and notes that there are several significant jurisdictions among them. She comments:

While we are happy and encouraged to see ongoing increases in the number of jurisdictions applying IFRS, more than 50 per cent of the world’s capital markets have either not yet adopted IFRS or don’t require an unreserved statement of compliance with IFRS — and it appears that full adoption is not imminent.

Therefore, Ms Mezon calls on regulators and standard-setters to work toward getting comparable results despite the framework used and to guide their jurisdictions toward globally comparable financial reporting outcomes by focusing on narrowing differences between frameworks. In the end, she notes, working closely together might lead to more jurisdictions ending up using one global set of standards.

Please click to access Accounting Standards Board (AcSB) calls for increased comparability in global financial reporting on the CPA Canada website.

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