New accounting rules for privately owned companies are coming and Canadian entrepreneurs should be getting ready now.
The Canadian Accounting Standards Board (AcSB) is currently studying comments received this summer on the proposed new rules. Those comments are in response to the draft proposal issued by AcSB for new generally accepted accounting principles (GAAP) for private companies.
The new standards are scheduled to be finalized by this December and come into effect for companies with fiscal years beginning on or after January 2011. They are aimed at simplifying rules for private businesses. Companies should be studying how the changes will affect their accounting systems and financial statements and working towards a smooth transition.
A much more complex transition awaits public companies. They must adopt new Canadian GAAP rules based on International Financial Reporting Standards (IFRS). While private enterprises will have the choice of using IFRS or Private Enterprise Accounting, the vast majority are expected to choose the latter.
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