Canada’s new accounting standards for private
enterprises (ASPE) will not limit a company’s ability to raise
capital or debt as long as they provide additional disclosures when
required, new research has found.
The Accounting Standards Board of Canada
finalised the ASPE in September last year. The ASPE provide private
Canadian companies with an alternative to IFRS, which Canada is
adopting as of 1 January 2011.
The ASPE has significantly fewer disclosures
than existing Canadian GAAP and IFRS. A 2009 study, conducted by
Financial Executives International (FEI) Canada and KPMG Canada,
had raised concerns that simplifying accounting standards for
private enterprises (ASPE) could lead to difficulties in accessing
credit.
But new follow-up research from KPMG and FEI
found lenders support the reduced disclosures, as long as the
preparers of financial statements exercise sound professional
judgment and provide additional disclosures where circumstances
warrant.
The report, The Role of Disclosures in the
Financial Statements of Private Business in Accessing Credit,
surveyed senior financial executives in private companies in Canada
between 22 February and 17 March 2010. It also includes insights
obtained at a research forum held in March.
