Over four years in the making, the changeover to International Financial Reporting Standards (IFRS) in Canada is in full swing. Canadian public companies with calendar year ends have filed the first two quarter reports in accordance with IFRS.
Described by the Ontario Securities Commission as a fundamental change to reporting standards and one of the most significant changes that issuers will have to deal with over the next few years, IFRS is a massive undertaking not just nationally but internationally involving regulators, accounting standards boards, companies and educational institutions. The International Accounting Standards Board (IASB) continues to work with its global counterparts in order to refine and improve standards based on analysis, feedback and insights emerging from the financial fallout of 2008.
This means that although most of Canada’s public companies know what they need to do to comply with IFRS today and are taking the necessary steps, they will need to stay current on new developments as the standards are finalized. The IASB and its U.S. counterpart, the Financial Accounting Standards Board (FASB), are pursuing convergence projects with the goal of improving financial reporting. In 2010 and 2011, the Boards focussed heavily on three high-priority projects: Leasing, Revenue Recognition and Financial Instruments. These projects are the major projects for which the need for improvement of IFRS and U.S. GAAP is seen as the most urgent. PwC has surveyed Canadian companies with the objective of getting insights into how these projects are perceived and understood as well as their potential impact on Canadian companies.