Public companies and the move to international accounting

Over the next five years, public companies in Canada will move to financial reporting using IFRS. Bulletin #3 offers suggestions and a tentative timetable to manage the process as Canadian accounting standards go global. Further Bulletins will present more information on aspects of change involved in the transition to international financial reporting standards for publicly accountable enterprises and changes in the accounting standards for private companies and not-for-profit organizations. The series is available at www.acsbcanada.org.

IFRS Model Financial Statements

What would IFRS financial statements look like if they were to illustrate the typical presentation and disclosures required of a company preparing consolidated financial statements? Deloitte has prepared model financial statements to illustrate a UK company reporting for 2005, for the first time, under IFRS (for a first-time adopter, special rules apply under IFRS 1). Model financial statements have also been developed for existing preparers. To access these “models” and other useful checklists and questionnaires, see Deloitte’s IAS PLUS.

IASB/FASB Conceptual Framework Project

The International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB) have published a draft of the first two chapters of a Conceptual Framework for Financial Reporting. The draft defines the objective of financial reporting and the qualitative characteristics of financial information useful for making decisions. Future chapters will address technical definitions, as well as the measurement, recognition and presentation of information in financial statements.

Private Company Strategies: New Directions

Over the next five years, Canadian accounting standards will move in new directions. Standards for public companies will converge with International Financial Reporting Standards (IFRS). That strategy was outlined in Bulletin #1. What about private companies — those that are not publicly accountable to a wide constituency? Should they also use IFRS? The research includes undertaking a comprehensive examination of financial statement user needs and determining the most appropriate financial reporting model to meet those needs. Private Company Strategies: New Directions (Bulletin #2) is an initial report on that research.

Canada’s new IFRS Advisory Committee (IAC)

The objective of Canada’s IFRS Advisory Committee (IAC) is to provide support to the Canadian Accounting Standards Board on technical issues arising during the incorporation of International Financial Reporting Standards (IFRS) into Canadian GAAP, and beyond. IAC meetings are normally open to the public, but portions will be held in camera at the discretion of the Chair. The inaugural meeting (scheduled for August 16, 2006 in Toronto, Canada) will cover: the structure of the International Accounting Standards Board (IASB) and its upcoming agenda; the IAC terms of operation and responsibilities; and the implementation plan for incorporating IFRS into Canadian GAAP for publicly accountable entities.