Monday, June 23, 2008

IFRSCanada: Are you "publicly accountable"?

As readers of this blog know the CICA has mandated that IFRS be adopted for all "publicly accountable" enterprises effective for fiscal years beginning on or after January 1, 2011.

How do you know if you are "publicly accountable" for this purpose? Please read the CICA Exposure Draft Adopting IFRSs in Canada April 2008. You can find the definition under the Scope section. There may be some surprises here to some of you who have a broad concept of who is "publicly accountable".

Essentially you are "publicly accountable"for this purpose unless you are excepted (read it carefully).

Broadly the exceptions are:

1. Private enterprises who have not issued debt or equity "instruments" in a public market (presumably anywhere including jurisdictions where IFRS has not been adopted - USA?). Entities who are in the process of issuing such "instruments" would also be swept up under this provision ( for example you would seem to be swept in here if you issued such instruments as late as 2010, with no transitional period).

2. Private enterprises who do not hold assets in a fiduciary capacity for a broad group of outsiders.

3 Not for profit enterprises as defined

4. Public sector entities, as defined. However, government business enterprises and business-type enterprises are not covered by this exception (i.e. they would be subject to IFRS).

Interestingly pension funds whether public or private would, it is proposed, receive a special treatment. It is complicated, I will cover it later in a separate posting. Once again you are in unless the CICA says you are out.

The above discussion is very summarized. Do not rely on this discussion to make your decision. Please read the definition carefully. It may not be immediately obvious if you are included. In case of doubt please consult your auditors - well consult them in any case!

Please pay particular attention to VI of the Exposure Draft on Comments Requested. The first question asks for input on who should be covered. Should there be more or fewer exceptions, should there be special transitional provisions? You have until July 31 2008 to provide your input on this and other questions.

The CICA Exposure Draft can be found at

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