The Canadian Accounting Standards Board (AcSB) has confirmed that use of International Financial Reporting Standards (IFRS) will be required in 2011 for publicly accountable profit-oriented enterprises.

IFRS will replace Canada’s current Generally Accepted Accounting Principles (GAAP) for those enterprises. These include listed companies and other profit-oriented enterprises that are responsible to large or diverse groups of stakeholders. The official changeover date is for interim and annual financial statements relating to fiscal years beginning on or after January 1, 2011. Private companies (non-publicly accountable enterprises), and not-for-profit organizations are not required, but are permitted, to adopt IFRS in 2011.

The AcSB originally proposed the 2011 changeover date in January 2006 when it announced its plan to adopt IFRS. It has now confirmed the date after a rigorous review of Canada’s readiness for changeover, including consultations with the public, regulatory authorities, and the independent Accounting Standards Oversight Council.

“With the date firmly established, enterprises can plan for the changeover with certainty about the timetable,” says Paul Cherry, Chair, AcSB. “A significant challenge lies ahead but it will be made far more manageable if business leaders prepare early.”

Companies will have to provide comparative IFRS information for the previous fiscal year. Therefore, enterprises must be ready to prepare comparative information a year prior to the 2011 changeover date. “This clearly demonstrates why planning for the transition to IFRS must begin now,” stresses Cherry.

The Oversight Council, the governing body of AcSB, discussed the changeover date at its meeting last week. According to Doug Hyndman, chairman, the Council was satisfied that the AcSB had followed due process in setting the date and agreed with the decision to confirm the 2011 changeover.

“A firm date provides a focus for action in preparing Canada for the changeover to IFRS,” says Hyndman. “In short, companies, investors, and advisers were all looking for a confirmed date so they can make the commitments necessary to prepare. Now they have it.”

With businesses increasingly making decisions in a global context, the move to IFRS will place Canada on the same reporting playing field as more than 100 other countries, including the U.K. and other EU nations as well as Australia.

Welcoming the Canadian announcement, Sir David Tweedie, chairman of the International Accounting Standards Board stated: “Canada has always shown leadership in promoting the cause of international standards. Its confirmation of the changeover date is welcome news, as it brings another country with a well-established capital market one step closer to the adoption of International Financial Reporting Standards. The pace of movement to a global marketplace has accelerated and underlines why a single set of standards is so important. The goal is a global framework of clear, understandable, relevant and consistent information for investors, and today’s announcement brings that goal nearer to achievement.”

“We recognize this is a significant decision affecting many Canadian companies,” notes Cherry. “Business leaders can be confident that the Accounting Standards Board has carefully considered both the costs and benefits, and that adopting IFRS will serve Canadians well in the emerging global economy.”