A new committee has been formed to assist the Accounting Standards Board (AcSB) in maintaining and developing the private enterprise accounting standards.
The new Private Enterprises Advisory Committee will not only help to determine the path on which the standards will evolve, but also play a role in other aspects of financial reporting, such as implementation and application guidance needed for this sector.
The committee consists of a diverse group of stakeholders from across the country with extensive experience in financial reporting by different types of private enterprises.
This ensures that views are provided from a broad range of perspectives and should result in the best possible recommendations being made to the AcSB.
The committee has also established an associate program. Associates are individuals with whom the committee and its staff can consult on issues such as:
- which aspects of the standards, if any, are causing difficulties and where modifications should be considered;
- whether certain changes being considered by the committee are acceptable to private enterprises, or whether there are other alternatives that might be more appropriate; and
- other issues related to the standards that the AcSB should be made aware of.
The AcSB is still looking to add associate members who are financial statement users.
The first and second committee meetings were held on June 15 and August 31. There were a number of administrative and organizational activities on the agenda for these meetings. However, the committee also held preliminary discussions on a number of accounting topics such as revenue recognition, employee future benefits, subsequent events, agriculture and leases. Meeting notes, which summarize of the committee’s discussions, are posted on the AcSB’s website shortly after each meeting. Copies of meeting notes can be found there.
To examine IFRS changes
In the future, the committee will examine changes to International Financial Reporting Standards (IFRSs) to determine whether similar changes should also be made to the accounting standards for private enterprises. This does not mean that the private enterprise standards are on a path to converge with IFRSs. They are a long-term solution focused on the needs of the private enterprise marketplace.
The overall goal is to ensure the standards continue to meet the needs of Canada’s private enterprise sector. The challenge in doing so is picking the right areas to make changes and making those changes at the right time.
It is intended that no changes will be made to the standards for 2 years (unless a critical issue arises). Thereafter, major changes will be grouped together and made every other year.
This grouping of changes is intended to minimize “standards overload” by reducing the ongoing effort to monitor, understand and apply changes to standards. However, the due process will be consistent with past practice — each major change will be individually published for comment. As a two-year cycle could be too long for making minor changes, there will be, if necessary, an annual project to introduce minor improvements to the standards.
The best way to keep up to date with the AcSB activities is to subscribe to receive email notifications. The AcSB website has several pages devoted to accounting standards for private enterprises so that interested parties can see what the committee and AcSB are discussing.
It is important that stakeholders communicate any issues that they have with the accounting standards for private enterprises to the AcSB. This is the only way the board can be sure that the standards are meeting the needs of this sector.
Content in this section is provided in partnership with the Business Development Bank of Canada. BDC provides entrepreneurs with financing, venture capital and consulting services. To find out more go to BDC.ca.
Follow us on Twitter: