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Canadian Standards in Transition > Private Enterprises > FAQs

FAQs

NOTE: These FAQs were prepared by the Guidance and Support Group of the Canadian Institute of Chartered Accountants. The views and conclusions expressed are non-authoritative and have not been adapted, endorsed, approved, disapproved or otherwise acted upon by a Board, Committee, governing body or the membership of the CICA or any provincial Institute/Ordre or by the Accounting Standards Board.

General Adoption
First-Time Adoption
Exemptions from Retrospective Application
Standard Specific
Disclosures
Audit

General Adoption
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1. Why is the Handbook now divided into "Parts"?

2. Who can use accounting standards for private enterprises?

3. The definitions of a ‘publicly accountable enterprise’ and ‘private enterprise’ in the Preface are not entirely clear to me and accordingly I am having difficulty deciding which standards I must follow.

4. Can a private enterprise in Canada use the IFRSs for Small and Medium sized Enterprises (IFRSs for SMEs)?

5. Will these standards be applicable to not-for-profit organizations in the future?

6. What is the effective date of accounting standards for private enterprises (ASPE)? When is the earliest that an enterprise can adopt these standards?

7. What is the date of transition for a group of enterprises with different reporting periods?

8. Section 1506, Accounting Changes, requires disclosures about future changes in accounting standards. Do private enterprises have to make these disclosures between now and the adoption of the new standards?

First-Time Adoption
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9. What is the overall approach for transitioning to the new standards?

10. Can my previous accounting policies be ‘grandfathered’ in adopting the standards for private enterprises?

11. First-time Adoption, paragraph 1500.04 states that the opening balance sheet should be presented. Do the note disclosures relating to balance sheet items need to have three sets of numbers, i.e. current year, prior year, and the opening balance sheet?

12. Can the opening balance sheet be presented in the notes?

Exemptions from Retrospective Application
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13. Can the exemptions in Section 1500, First-time Adoption, be applied subsequent to the adoption of the accounting standards for private enterprises?

14. Can the exemptions in Section 1500, First-time Adoption, be used if an enterprise ‘re-adopts’ the standards?

15. How are business combinations affected by the transition to the accounting standards for private enterprises?

16. What are the accounting consequences of revaluing property, plant and equipment as allowed by paragraph 1500.12 on adopting accounting standards for private enterprises?

17. When an entity elects to use the exemption in First-time Adoption, paragraph 1500.12 that allows an entity to measure an item of property, plant and equipment at the date of transition to ASPE at its fair value and use that value as its deemed cost, how is the increase to fair value accounted for?

18. An entity is applying First-time Adoption, paragraph 1500.12 the revaluation option for some items of property, plant and equipment. Can it use a valuation as of a date other than the date of transition?

19. What happens if, as a result of revaluing property, plant or equipment, the estimated useful life of the asset changes?

20. What is the purpose of the exemption in First-time Adoption, paragraph 1500.24 regarding asset retirement obligations?

21. What is the significance of the related party transaction exemption in First-time Adoption, paragraph 1500.25?

31. Can a company that has a Canadian dollar functional currency but reports in US dollars deem the cumulative translation account to be zero on first-time adoption of the accounting standards for private enterprises?

Standard Specific
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23. I understand that investments in traded equity securities are to be held at fair value under accounting standards for private enterprises. Is this an option? Where does an enterprise recognize changes in the value of such instruments?

24. Why does the requirement to hold equity securities traded in an active market at fair value not apply to all quoted investments?

25. How should fees and transaction costs incurred in connection with debt financing arrangements be accounted for?

26. What are the implications of adopting accounting standards for private enterprises for an enterprise that previously followed AcG-18, Investment Companies?

Disclosures
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27. The number of disclosure requirements has been reduced substantially. Does this mean a private enterprise should expect to reduce the number of notes accordingly?

28. On adopting the new standards, does an enterprise need to disclose information about management compensation and government remittances?

29. If an enterprise concludes that it has no significant accounting policy changes on adoption of accounting standards for private enterprises, what sort of disclosure should it make on adoption?

30. How might an enterprise describe the basis of accounting used to prepare the financial statements?

31. I understand that a complete reconsideration was given to each of the disclosure requirements. Does the accounting standards for private enterprises require the boilerplate note regarding measurement uncertainty?

Audit
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32. Where can I find information on the audit or review reporting implications of financial statement preparation in accordance with the accounting standards for private enterprises?

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