The Accounting Standards Board has approved the final accounting standards for private enterprises in Canada, the AcSB said Wednesday.

The board establishes financial accounting and reporting standards for use by Canadian companies and not-for-profit organizations.

The new standards will be issued by the end of the year and will be available for 2009 reporting for entities that choose to adopt them early, the AcSB says.

The new standards give Canadian businesses the ability to choose to adopt new “made in Canada” standards or International Financial Reporting Standards (IFRS). Private enterprises must decide which of the sets of standards to adopt for years beginning on or after Jan. 1, 2011.

Private enterprise standards were developed from a lengthy consultation process that ensured that private enterprises of all sizes across Canada were able to provide input into the standard-setting process, the AcSB says.

According to the accounting standards body, the new standards provide businesses, “with standards that are robust, yet more straightforward to implement.”

Notable changes include simplification of recognition, measurement and presentation in areas that were identified as being overly complex, particularly accounting for financial instruments. The simplified accounting requires less use of fair values. The new standards also significantly reduce the burden of disclosure requirements, the AcSB says.

“As part of its overall strategy, the Accounting Standards Board concluded that when it comes to financial reporting standards, one-size does not fit all,” says Tricia O’Malley, chair of the AcSB. “We are pleased to have completed the project and given Canadian private enterprises the standards that they and their users need to function effectively and efficiently.”

“In analyzing the needs of private enterprises and addressing their needs and concerns, the Accounting Standards Board was careful not to make changes simply for the sake of change,” says Brian Drayton, AcSB member and chair of the private enterprise advisory committee.

“Rather, the AcSB took the opportunity to address specific areas that were brought to our attention, such as disclosures, that unnecessarily overloaded preparers without providing benefit to users,” Drayton says.

IE