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If you’ve heard that International Financial Reporting Standards (IFRSs) are coming to Canada but still
don’t know what all the fuss is about, it’s time to get on the bus — the “omnibus” that is!
In February of this year, the AcSB confirmed that Canada is moving to IFRSs in 2011, and on April 7, it
released its omnibus Exposure Draft of the international standards that will soon replace Canadian GAAP.
“Adopting IFRSs in Canada” (available at www.acsbcanada.org/download.cfm?ci_id=44313&la_id=1&re_id=0)
gives Canadians the opportunity to comment, by July 31, 2008, on a number of aspects of the conversion to
IFRSs. More importantly, it serves as a reminder that if you haven’t started getting ready for IFRSs, you’d
better start now!
Publicly accountable enterprises must prepare their interim and annual financial statements in accordance
with IFRSs for fiscal years beginning on or after January 1, 2011. But that doesn’t mean you have another two
and a half years to prepare. You’ll also need comparative statements that comply with IFRSs, including, for
those with a calendar year end, an IFRS-compliant balance sheet as at January 1, 2010. Now is the time to get
to know IFRSs, so that you can begin selecting your post-changeover accounting policies, and identify any
systems changes needed to collect the necessary data. You might also consider giving investors, and other
users of your financial statements, a head’s up about what to expect in the future.
Not sure if you’re a publicly accountable enterprise? The omnibus Exposure Draft should give you the
answer, and you have until the end of July to say whether you agree with the AcSB’s definition. As a general
rule of thumb, if you are a profit-oriented entity listed on one of Canada’s stock exchanges, or that holds
assets in a fiduciary capacity for a broad group of outsiders (e.g., banks, credit unions, insurance
companies, securities brokers/dealers, mutual funds, and investment banks), you’ll be moving to IFRSs in the
next few years. If you’re a private company or a not-for-profit organization, the mandatory changeover date
doesn’t apply to you (although you can voluntarily adopt IFRSs once they have been included in the CICA
Handbook – Accounting). But don’t assume you’ll never have to worry about IFRSs. The AcSB is still in the
process of deciding on the appropriate financial reporting strategy for these two groups. The final strategy
may or may not require you to adopt all or part of IFRSs.
As you may have guessed by now, the omnibus Exposure Draft is very different from the exposure documents
you are used to. For starters, it includes the 37 standards and 22 interpretations found in the International
Accounting Standards Board’s (IASB) 2007 “Bound Volume” of IFRSs. The AcSB hopes to incorporate this material
into the Handbook early in 2009, so that it is available when needed by Canadian reporting entities
(including those who wish, and are permitted by their regulators, to start using IFRSs before 2011). Of
course, the Handbook will be updated for any changes the IASB makes to IFRSs before and after 2011, so that
it always includes the most current version of the international standards.
What’s that you say? “37 standards and 22 interpretations! I’ll be lucky to get through all that by 2011,
let alone in time to plan things out and respond to the Exposure Draft!” Don’t panic. Although there is a lot
of reading material, things aren’t as bad as they may seem. The Highlights to the Exposure Draft include an
Appendix with helpful suggestions on how to review the IFRSs. You’ll also be pleasantly surprised at how much
Canadian GAAP and IFRSs have in common. They look very similar, are based on essentially identical conceptual
frameworks, cover many of the same topics and, in many cases, arrive at like conclusions. This is due, in
part, to the fact that some Handbook Sections were written to converge with a particular IFRS. In terms of
responding to the Exposure Draft, keep in mind that because IFRSs have already been deliberated by the IASB,
the AcSB is seeking your input on a limited number of issues. The most important one is whether you think any
of the IFRSs being exposed wouldn’t work in Canada, when they seem to work everywhere else in the world.
Don’t worry if you weren’t the first in line to board the “omnibus.” Just make sure you don’t miss it
entirely. It’s a long walk to IFRSs. Better to start now and pace yourself, than to be in a rush later!
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