8. How do IFRSs compare with pre-changeover Canadian GAAP?

Similarities:

• The two sets of standards are based on a similar conceptual framework, and the style and form of the individual standards are similar.
• A number of standards are substantially the same including inventories, segmented reporting and accounting changes.
• The Accounting Standards Board (AcSB) adopted converged standards issued jointly by the International Accounting Standards Board and the US Financial Accounting Standards Board. The new business combinations standard is an example, which is mandatorily effective January 1, 2011, allowed for early adoption.

Differences:

The most pervasive differences that may have affected a company depending on its circumstances were:

• Impairment – Under IFRSs impairments are generally triggered more often; unlike under pre-changeover Canadian GAAP, however, impairments under IFRSs can be reversed.
• Securitization – IFRSs are fundamentally different in this area.
• Revaluations – Some IFRSs including Property, Plant and Equipment, Investment Property and Intangibles allow the re-valuation of assets under certain circumstances.
• IFRS 1, First-time Adoption of International Financial Reporting Standards. There is no pre-changeover Canadian GAAP equivalent for IFRS 1, which provides special one-time options for enterprises converting to IFRSs from their national GAAP. Some items within IFRS 1 are optional and some are required.
• Oil and gas companies and rate-regulated companies in particular, were significantly affected by the change to IFRSs. Recent amendments to IFRS 1 assisted entities with oil and gas assets in their transition to IFRSs. The amendments were made as a result of issues identified by the Canadian oil and gas sector and considerable involvement of the AcSB.

The CICA’s Guide to IFRS in Canada includes the AcSB’s summary comparison of current Canadian GAAP to IFRS. The AcSB’s detailed comparison is also available.