Different Conceptual Accounting Frameworks for Public and Private Enterprises: An Analysis of Canada's IFRS Transition and Suggestions for International Empirical Work
31 Pages Posted: 6 Mar 2015
Date Written: March 4, 2015
Prior accounting research, coupled with demographic data relating to the current needs of financial statement users, suggests that Canada’s strategy of adopting IFRS for public firms while retaining a classic conceptual framework based on reliability, conservatism and verifiability for private enterprises is a rational strategy that confers a comparative advantage on Canada’s private enterprises relative to their peers in other countries. I propose research projects that could examine that inference as a testable hypothesis, thereby providing evidence standard setters could weigh in determining whether the strategy is worth preserving. I also explain why conservatism can co-exist with unbiased fair values of private enterprises’ equity securities and their derivatives.
Keywords: Accounting standards; private companies
JEL Classification: M41
Suggested Citation: Suggested Citation