Difference between IFRS and Canadian GAAP
Both of these two are accounting standards that are used in Canada. IFRS is an accounting standard that is used internationally while the second one is only used by the businesses in Canada. For uniformity for the entrance of the various financial transactions across the world, IASB (International Accounting Standards Board) formulated guidelines called the International Financial Reporting Standards that are used all over the world. However different parts of the world have come up with their own standards that are used in making financial statements. These reflect the various cultures that are in different parts of the world, it due to this reason that Canadian GAAP were developed to cater for the local businesses in Canada. To cope up with the current trend in business, Canada is also slowly adopting the use of IFRS for uniformity of its local businesses to the global business. This does not mean that there are no dissimilarities between these two standards. It is high time that we acquaint ourselves with these differences between IFRS and Canadian GAAP
Even though these two are almost the same, there are some few distinctions that you need to note when you are interpreting the financial statements that are made by the two standards. We are going to tackle three major differences that we feel that should be clarified to avoid any problem while interpreting.
IFRS’ impairment is triggered more whereas in Canadian GAAP these impairments are sometimes reversed.
It is the major part in which the disparities between these two standards arise.
Revaluations of assets, plant and equipment that are used in plants, properties that are invested and those assets that are not tangible is done in IFRS whereas it is not done in Canadian GAAP
The other disparities that arise between these two standards are in presentation of financial statements, provisions, leases and related parties in accounting.
However close examinations shows that irrespective of the above differences, these two standards are almost similar. It is known that Canadian GAAP is borrowing so much from IFRS.
IFRS are international accounting standards that are formulated by IASB and are used to create uniformity of financial statements all over the world.
These are accounting principles that are accepted in Canada, they have gone through many changes that reflect the cultures and traditions of the Canadian people.
Even though the difference between these two standards exist, Canadian GAAP is borrowing much from IFRS