Accounting Standards for Private Enterprises (“ASPE”)
Many of you have likely heard about the new International Financial Reporting Standards (IFRS) that have been rolled out for publicly accountable enterprises. A publicly accountable enterprise is an entity, other than a not-for-profit organization, or a government or other entity in the public sector that has issued debt or equity instruments that are traded in a public market; or, holds assets in a fiduciary capacity for a broad group of outsiders as one of its primary businesses. These standards are effective for years beginning on or after January 1, 2011, but can be adopted earlier should a company choose to do so.
Private enterprises also have accounting standards that have been developed specifically for them. A private enterprise is a profit-oriented entity that is not a publicly accountable enterprise, nor an entity in the public sector. The new standards will seem familiar to most, as they are closely based on the existing CICA Handbook-Accounting. The Accounting Standards Board modified existing standards that had caused significant difficulties to private enterprises in the past. The new standards better meet the needs of private enterprises. These standards are also effect for year-ends beginning on or after January 1, 2011, but can be adopted earlier.
Please speak to your advisor for more information on this very important topic and how your business can prepare for the transition.