Notes from the COO

Beyond Numbers,  Apr 2007  by Sampson, Jan

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One size does not fit all when it comes to GAAP

As Canada plans to move toward international accounting standards, the question of what to do with GAAP for private companies is once again at the forefront of discussions-both internationally and here in Canada.

In mid-February, the International Accounting Standards Board (IASB) issued an exposure draft on small and medium-sized entities (SMEs), This exposure draft proposes a simplified, self-contained set of accounting principles for smaller, non-listed companies, based on full, international financial reporting standards (IFRS-more on these in next month's magazine!). You'll find the exposure draft at www.iasb.org under "Open to Comment."

Earlier in February and closer to home, the Accounting Standards Oversight Council (AcSOC) held a public meeting to discuss accounting for non-publicly-accountable enterprises (February 1 -2 in Toronto). Two BC practitioners-Barb Carle-Thiesson, FCA, of Tyce Carle-Thiesson in Nanaimo, and Bob Cole, FCA, of Smythe Ratcliffe LLP in Vancouver-were there to provide input. Our thanks go to both members for making time during their busy season to ensure that AcSOC understood the issues and difficulties faced by medium, small, and micro-sized entities.

As described more fully on AcSOC's website at www.acsoc.ca under "AcSOC News and Updates," Barb, Bob, and other Canadian practitioners spoke about issues such as the increasing complexity and perceived irrelevance of existing standards for many users. As Barb said at the close of her comments: "At the end of the day, if clients and lenders don't understand the financial statements, how useful are they?"

Also at the meeting, diverse solutions were proposed, ranging from basic, stand-alone GAAP to differential reporting to the adoption of the IASB's SME standard.

This spring, the Accounting Standards Board (AcSB), which has conducted research with users of private company financial statements over the past year, will issue a discussion paper ("Invitation to Comment") on non-publicly accountable enterprises that sets out the alternatives being considered.

We encourage every CA to read this document when it's published and to attend upcoming events and meetings organized to discuss these alternatives-these public forums will give you the opportunity to provide more input and to influence the definition of Canadian GAAP for SMEs.

WE NEED YOUR PARTICIPATION AND INPUT!

Jan Sampson, FCA

Copyright Institute of Chartered Accountants of British Columbia Apr 2007
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