21.3 IFRS/ASPE Comparison Flashcards
How are accounting policies determined under IFRS?
Under IFRS, accounting policies are determined by applying the relevant IFRS standards.
If no specific IFRS applies, management uses judgment to select policies that are relevant to users’ needs and are reliable.
This involves considering definitions, recognition criteria, and elements in the IFRS Framework for the Preparation and Presentation of Financial Statements.
How are accounting policies determined under ASPE?
Under ASPE (CPA Canada Handbook), accounting policies are determined by applying the primary sources of GAAP.
If policies are not specified in the CPA Canada Handbook, management develops policies consistent with primary sources, using professional judgment and concepts from Section 1000.
What is the difference in how IFRS and ASPE handle changes in accounting policy?
IFRS: A change in accounting policy can be made only if it results in more reliable and relevant information.
ASPE: A change in accounting policy is allowed if it results in more reliable and relevant information or if it relates to a change in GAAP methods.
How do IFRS and ASPE differ in handling the correction of an error?
IFRS: Allows for full retrospective restatement unless impracticable.
ASPE: Allows correction for specific prior periods, without allowance for impracticability.
How do IFRS and ASPE differ in presentation and disclosure for accounting policy changes or error corrections?
IFRS: Requires an additional balance sheet for retrospective treatment and information on the effect of issued standards not yet effective. The opening statement of financial position must be presented for the earliest comparative period.
ASPE: No requirement for an additional balance sheet for retrospective treatment or reporting on issued standards not yet effective.
