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

See all articles by Daniel B. Thornton

Daniel B. Thornton

Smith School of Business at Queen's University

Date Written: March 4, 2015

Abstract

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

Thornton, Daniel B., Different Conceptual Accounting Frameworks for Public and Private Enterprises: An Analysis of Canada's IFRS Transition and Suggestions for International Empirical Work (March 4, 2015). Accounting Perspectives, Forthcoming. Available at SSRN: https://ssrn.com/abstract=2573944

Daniel B. Thornton (Contact Author)

Smith School of Business at Queen's University ( email )

143 Union Street, #358
Kingston, Ontario K7L 3N6
Canada
613-328-5213 (Phone)
613-533-2321 (Fax)

HOME PAGE: http://smith.queensu.ca

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