Preface

We have prepared this publication to provide an overview of the transition to International Financial Reporting Standards (IFRS) for Canadian companies. This publication reflects public pronouncements by the CICA Accounting Standards Board (the "AcSB") and the Canadian securities regulatory authorities as of the latest practicable date. This publication necessarily contains information in summary form and is intended for general guidance purposes. It is not intended to be a substitute for detailed research and consultation with professional advisers. We intend to follow up with more detailed illustrative financial statements in the coming months. In the meantime Collins Barrow professionals in our various offices are available to assist you with your IFRS implementation needs.

General Requirements

Background

A uniform set of global accounting standards has been in evolution for several decades since the International Accounting Standards Committee ("IASC") was first established in 1973. The current IFRS regime comprises International Accounting Standards ("IASs") first issued by the IASC and, subsequent to April 2001, International Financial Reporting Standards (IFRS) issued by the IASC's successor, the IASB.

The abbreviation IFRS is defined in paragraph 5 of the Preface to International Financial Reporting Standards to include "standards and interpretations approved by the IASB, and International Accounting Standards (IASs) and SIC interpretations issued under previous Constitutions". Compliance with IFRS means that they comply with the entire body of pronouncements released by the IASB including International Accounting Standards, International Financial Reporting Standards and Interpretations originated by the International Financial Reporting Interpretations Committee (IFRIC) or the former Standing Interpretations Committee (SIC).

Canadian Enterprises Subject to IFRS

Effective January 1, 2011 IFRS will be presumed to be Canadian GAAP for all profit-oriented enterprises, unless the entity is specifically "excluded".  The "exclusion" will be "principles based" - i.e. there will not be a "list" of non-publicly accountable enterprises (as is currently the case for differential reporting). Instead, a profit-oriented enterprise will apply IFRSs unless it does not have listed securities or does not hold assets in a fiduciary capacity for broad groups of outsiders. Entities that might have previously concluded that they were non-publicly accountable enterprises (and therefore exempt from the 2011 implementation of IFRS) will need to use professional judgment and make a determination based on their specific facts and circumstances. The recent decision by the AcSB (Decision summary - October 15, 2008) to exempt co-operative enterprises (that are not public companies) from the disclosure requirements of Sections 3862 and 3863 would seem to indicate that a majority of such entities might be subject to the private enterprise GAAP regime. 

 The Office of the Superintendent of Financial Institutions (OSFI) has announced that all federally regulated financial institutions will be subject to the 2011 IFRS deadline and the Public Sector Accounting Standards Board has confirmed that all government business enterprises will be considered to be publicly accountable and will need to fully adopt IFRS. 

Road Map for Adoption - IFRS 1

IFRS 1 sets out the framework for first time adoption of IFRS at the date of transition. That date is the beginning of the earliest period for which an entity presents full comparative information under IFRS in its first IFRS financial statements. This date is not the same as the changeover date, which is the first year a company reports under IFRS.  A first-time