cica private enterprise

The CICA’s Guide to

Accounting Standards forPrivate Enterprises in CanadaJune 2010

New Accounting Framework for Private EnterprisesAccounting standards for private enterprises in Canada were issued by the Accounting Standards Board in 2009. The standards are effective for annual financial statements relating to fiscal years beginning on or after January 1, 2011. Earlier application is permitted. The standards can be found in Part II of the CICA Handbook — Accounting.

The CICA’s Website on Accounting Standards for Private EnterprisesFor the latest information to help you manage the transi-tion to the new accounting standards for private enter-prises go to http://www.cica.ca/PE or to the website of your provincial Institute/Ordre.

Make sure to subscribe to receive email updates on new resources and information that are added to the website regularly.

About this GuideThe CICA has prepared this reference guide to help you transition to new Canadian accounting standards for pri-vate enterprises. This guide provides a comparison of new accounting standards for private enterprises (Part II of the revised CICA Handbook — Accounting) to the XFI version (found in Part V of the CICA Handbook — Accounting).

About the CICAThe Canadian Institute of Chartered Accountants (CICA), together with the provincial, territorial and Bermuda Institutes/Ordre of Chartered Accountants, represents a membership of approximately 75,000 CAs and 12,000 students in Canada and Bermuda. The CICA conducts research into current business issues and supports the setting of accounting, auditing and assurance standards for business, not-for-profit organizations and government. It issues guidance on control and governance, publishes professional literature, develops continuing education programs and represents the CA profession nationally and internationally. The CICA is a founding member of the International Federation of Accountants (IFAC) and the Global Accounting Alliance (GAA).

How the CICA Can HelpThe CICA is the recognized leader in providing information and professional education that clarifies and aids in the application of standards in Canada. Chartered Accountants of Canada, through the CICA and the provincial Institutes/Ordre, are committed to helping you prepare for the transi-tion.

Foreword

Faced with an increasingly demanding economic environment, it is vital that private enterprises in Canada have the opportunity to use accounting standards that respond to their needs and the needs of those who use their financial statements.

In 2006, the Accounting Standards Board recognized that one financial reporting framework does not fit all enti-ties. Based on this understanding, the Board developed a strategy tailored specifically to meet the unique reporting needs of Canadian private enterprises.

The new standards are derived from standards in the exist-ing CICA Handbook — Accounting. Changes were confined to areas that were identified by stakeholders as being unnecessarily complex. As a result, most of the accounting policies and practices used by private enterprises have not changed. This should make understanding and adopting the new private enterprise standards more straightforward than implementing a completely new accounting framework.

These made-in-Canada accounting standards for private enterprises are effective for fiscal years beginning on or after January 1, 2011, and include the option to early adopt. Such enterprises also have the option to adopt International Financial Reporting Standards.

Like all standards, the accounting standards for private enterprises will not remain static. Changes will be made to address new circumstances and to keep the standards current. The newly established Private Enterprise Advisory Committee, made up of preparers, business advisors, audi-tors and users will work to ensure modifications continue to satisfy the needs of private enterprises and the users of their financial statements.

I take this opportunity to recognize the efforts of the Non-publicly Accountable Enterprises Advisory Committee, businesses and many other stakeholders who contributed to the development of this significant new set of standards. Their insights were instrumental in ensuring that the standards are of the highest quality and meet the needs of the marketplace.

The CICA is pleased to provide this concise reference guide. Used as a starting point, the comparative information it contains will help you become familiar with the revised framework, easing your efforts to prepare, plan and imple-ment the new Canadian accounting standards for private enterprises.

Ron Salole Vice-President, Standards Canadian Institute of Chartered Accountants

List of Acronyms

AcSB: Accounting Standards Board (Canada)

CICA: Canadian Institute of Chartered Accountants

EIC: Emerging Issues Committee

FOME: Framework for Owner Managed Enterprises

GAA: Global Accounting Alliance

GAAP: generally accepted accounting principles

IFAC: International Federation of Accountants

IFRSs: International Financial Reporting Standards

PICA/Ordre: Provincial Institutes of Chartered Accountants/Ordre des comptables agréés du Québec

XFI: Excluding Financial Instruments

CICA Handbook — AccountingThe CICA Handbook — Accounting was restructured to implement the Accounting Standards Board strategy to adopt different sets of standards for different categories of entities.

Preface

Part I International Financial Reporting Standards

Part II accounting standards for private enterprises

Part III accounting standards for not-for-profit organizations

Part IV accounting standards for pension plans

Part V A complete set of the existing Handbook contents

ContentsThe Evolution of New Accounting Standards for Private Enterprises 1

Who is Affected? 3

Key Changes 5

Preparing for the Transition 9

Options under Accounting Standards for Private Enterprises 11

Timing 11

Implementing Accounting Standards for Private Enterprises 12

Getting Involved 13

Resources Available from Chartered Accountants of Canada 14

Summary Comparison of New Accounting Standards for Private Enterprises 15

About this Comparison 16

1The CICA’s Guide to Accounting Standards for Private Enterprises in Canada

The Evolution of New Accounting Standards for Private Enterprises The need for financial reporting standards that meet the unique needs of private enterprises is not new. Here are some significant milestones in the decade leading up to the approval of standards for private enterprises:

1999: The Accounting Standards Board (AcSB) issued a research report, Financial Reporting by Small Business Enterprises that concluded standards were becoming overly complex for smaller, privately held companies.

2000: The Differential Reporting Advisory Commit-tee was created to provide a private enterprise perspective into the standards setting process.

2002: Differential reporting became effective for private entities that met certain conditions.

2006: The AcSB’s decision to adopt International Financial Reporting Standards (IFRSs) for publicly accountable enterprises changed the overarching system in which differential reporting was embed-ded, requiring a reconsideration of accounting standards for private enterprises.

The AcSB therefore conducted further research into the needs of users of private enterprise financial statements. Stakeholder consultation revealed that while most of the existing standards met their needs, some areas included unneces-sary complexities. The AcSB was told disclosure requirements were becoming overwhelming and costly to prepare.

2007: The AcSB issued an Invitation to Comment and an accompanying Discussion Paper to solicit input on the best approach for the development of standards for private enterprises.

2 The CICA’s Guide to Accounting Standards for Private Enterprises in Canada

The CICA invited comment on a proposed accounting Framework for Owner Managed Enterprises (FOME).

2008: The AcSB made the decision to establish “made-in-Canada” financial reporting standards for private enterprises, based on the standards in the existing CICA Handbook – Accounting (Hand-book). This approach was influenced in part by the response to the FOME. The AcSB established an advisory committee, made up of preparers, auditors and users of private enterprise financial statements, to provide input on the development of the standards and propose solutions to address the issues identified through the 2006 research.

2009: The AcSB issued an Exposure Draft on the pro-posed generally accepted accounting principles (GAAP) for private enterprises.

New accounting standards for private enterprises were issued in December. The standards reduced measurement complexities of those areas identi-fied by stakeholders as problematic and sig-nificantly reduced disclosure requirements. The standards are built from the existing Handbook, which is familiar to many users.

The approval of new standards gives Canadian private enterprises the option of using accounting standards developed specifically for their unique needs or IFRSs.

2010: The new accounting standards for private enterprises are incorporated into the Handbook as Part II.

The AcSB established the Private Enterprise Advisory Committee to provide insight into areas of the standards that require improvement, additional topics that should be addressed and issues arising in practice where implementation guidance might be helpful.


Who is Affected?Any private enterprise can adopt the new standards. There are no qualifiers such as unanimous consent from share-holders.

A private enterprise is a profit-oriented entity that is not a publicly accountable enterprise, nor an entity in the public sector.

The following definition of the term publicly accountable enterprise has been adopted for the purposes of determin-ing which Part of the CICA Handbook – Accounting applies to a reporting entity.

A publicly accountable enterprise is an entity, other than a not-for-profit organization, or a government or other entity in the public sector, that:

(i) has issued, or is in the process of issuing, debt or equity instruments that are, or will be, outstanding and traded in a public market (a domestic or foreign stock exchange or an over-the-counter market, including local and regional markets); or

(ii) holds assets in a fiduciary capacity for a broad group of outsiders as one of its primary businesses.

Banks, credit unions, insurance companies, securities brokers/dealers, mutual funds and investment banks typi-cally meet the second criterion above. Other entities may also hold assets in a fiduciary capacity for a broad group of outsiders because they hold and manage financial resources entrusted to them by clients, customers or members not involved in the management of the entity. However, if they do so for reasons incidental to a primary business (as, for example, may be the case for travel or real estate agents, co-operative enterprises requiring a nominal membership deposit or sellers that receive pay-ment in advance of delivery of the goods or services, such as utility companies), that does not make them publicly accountable.


Key Changes The accounting standards for private enterprises contain many parts of the existing Handbook that stakeholders indicated did not cause significant concerns.

Important changes have been made to simplify the pro-cess and better meet the needs of the marketplace. Some key changes are as follows:

Simplification in measurementA significant area of simplification that will affect many private enterprises is financial instruments. A new stan-dard (Section 3856) was developed to replace the various financial instrument sections in the existing Handbook. Section 3856 requires most financial instruments to be measured at cost (or amortized cost). Only equities quoted in an active market and free-standing derivatives are required to be measured at fair value. However, there is an option to measure other financial instruments at fair value if a private enterprise wishes. The standard also covers a number of other important aspects of accounting for financial instruments. The impact of adopting Section 3856 will depend on whether or not the enterprise previ-ously used the XFI version of the Handbook.

Notable simplifications were also made to the account-ing for asset retirement obligations, employee future benefits, development costs, goodwill, and stock-based compensation.

Retaining the choicesDifferential reporting options currently available to private enterprises are retained. Private enterprises continue to have a choice on how to account for investments in subsidiaries, significantly-influenced investees and joint ventures. They will also continue to have the choice of whether to use the future income taxes method or taxes payable to account for income taxes.


Disclosure requirements Required note disclosures have been significantly reduced so as to focus on the needs of the users of private enter-prise financial statements. In particular, there are fewer requirements for disclosure of assumptions, reconciliations and detailed breakdowns of balance sheet and income statement numbers. As a result, the cost of preparing financial statements is lower but sufficient information is provided to give fair presentation of an enterprise’s finan-cial position, operating results and cash flows and to help users gauge when to ask for more information on specific issues or transactions.

To facilitate compliance with disclosure requirements, the standards include a Compilation of Disclosure Require-ments that reproduces all of the specific disclosure requirements contained in the standards.

Emerging Issues Committee AbstractsIn creating a principles-based financial reporting system, the AcSB concluded that it would not be appropriate to include the type of detailed guidance contained in the Emerging Issues Committee (EIC) Abstracts. Therefore, the Abstracts have not been carried forward to the new standards. However, parts of 29 Abstracts were consid-ered to contain significant guidance that was important for private enterprises and this guidance has been incorpo-rated in the standards. These are identified in the compari-son on pages 18-36.

First-Time AdoptionThe guidance for first-time adoption is contained in Sec-tion 1500, First-time Adoption. To ensure that the entity’s first set of financial statements prepared under the new standards is transparent for users and comparable over all periods presented, the overall approach is retroactive application. This means that the financial statements have to be restated in accordance with the new standards and presented as if the entity has always applied these standards.


However, in some cases retrospective application may lead to costs that outweigh the benefits. Section 1500 provides exemptions from the general retrospective appli-cation requirement for certain specific areas. For example, although no changes were made to Section 3840, Related Party Transactions, a company may not have recorded past related party transactions in accordance with Section 3840. Section 1500 allows the company, on first-time adoption, not to restate such prior transactions. As a result of these exemptions, first-time adoption of the new standards will generally be straightforward.

Section 1500 also includes specific prohibitions to the general retrospective application requirement. These are for areas where changes would involve hindsight.

In order for the user to be able to understand the changes when the new standards are adopted, Section 1500 requires the financial statements to show the comparative year prepared on the same basis. Disclosure of changes to the opening retained earnings and a reconciliation of the prior year net income is also required. For example, for an entity’s 2011 calendar year end, it will be required to present its 2010 comparative financial statements using the new standards. In addition, it needs to disclose an opening balance sheet as at January 1, 2010 using the new stan-dards, a reconciliation showing all the changes to the Janu-ary 1, 2010 retained earnings as a result of adopting these standards and a reconciliation of the 2010 net income.


Preparing for the TransitionThe implications of the transition to the new account-ing standards for private enterprises will depend on what accounting standards the entity is currently using: Canadian GAAP, XFI, differential reporting, International Financial Reporting Standards (IFRSs) or non-GAAP. The implications will also depend on the entity’s transactions. Regardless of the entity’s circumstances, becoming famil-iar with the applicable standards should be the first step.

IFRSs or New Accounting Standards for Private Enterprise?Once an entity is familiar with the private enterprise stan-dards it can decide whether adopting the new standards or IFRSs best meets its needs. Questions to consider include the following:

What are the Users’ Needs and Expectations?Users of the entity’s financial statements may want the entity to report on the same basis as its peers in order to maintain comparability. As such, whether the entity adopts IFRSs or accounting standards for private enterprises may be influenced by its industry practice or norm. For example, are its peers predominately publicly accountable entities or international companies that will be applying IFRSs or does the industry consist primarily of private enterprises that will be adopting private enterprise standards?

What are the Entity’s Future Plans?If the entity has plans to go public, issue public debt or access foreign financing (debt or equity) over the next few years, it may be appropriate to adopt IFRSs.

What Financial Reporting Standards are Used by the Consolidated Group?If the entity reports to a foreign parent that complies with IFRSs or has a number of subsidiaries that report in IFRSs, adopting IFRSs may be the preferred choice.


Options under Accounting Standards for Private Enterprises Once an entity has decided to adopt accounting stan-dards for private enterprises it should carefully consider the exemptions available under Section 1500, First-time Adoption, as well as accounting policy choices under the various sections of the new standards going forward.

TimingAlthough the private enterprise standards are effective for years beginning on or after January 1, 2011, private enterprises have the option of early adoption. An entity may wish to adopt the standards for its 2010 year end in order to take advantage of simplification to areas such as employee future benefits or reduced disclosure require-ments. Of course the decision to early adopt will affect the entity’s transition timeline.

One-time disclosure and presentation requirements for the entity’s first set of financial statements issued under the new standards need planning and preparation. Entities need to assess whether resources are available to prepare this information in time for 2010 year ends.

The entity should also consider which exemptions in Section 1500 it may want to select. For example, an entity may choose to apply fair value to its fixed assets. (This exemption allows a one-time revaluation of fixed assets to fair value and may be desirable to some entities.)


Implementing Accounting Standards for Private Enterprises While implementation of the new standards will differ from entity to entity depending on the type of transactions and the existing set of accounting standards used, there are some basic steps to follow:

1. Identify the person or team of people who will be implementing the new standards.

2. Determine the required training and impact on the entity’s human and other resources (e.g. information technology systems to capture and produce the required information).

3. Review Section 1500, First-time Adoption and assess options.

4. Review the entity’s financial statement items and transactions and become familiar with the applicable sections of the standards in order to determine the magnitude of change from current financial state-ments.

5. Draft the notes to the financial statements rather than adapting existing notes to new requirements. This will ensure the entity is not just adding to the notes but is benefiting from the reduction in disclosure. Use the Compilation of Disclosure Requirements in Part II of the CICA Handbook – Accounting.

6. Consider the impact on other areas of business such as debt covenants, banking agreements and employee bonuses.

7. Communicate the differences in the financial state-ments with key stakeholders such as bankers and shareholders.


Getting Involved The Accounting Standards Board is committed to ensur-ing that accounting standards for private enterprises keep pace with the dynamic and changing needs of this vital segment of the Canadian economy.

A national advisory committee has been established to provide ongoing insight. The Private Enterprise Advisory Committee is comprised of volunteers from across Canada who represent a cross-section of stakeholders including financial statement users, financial statement preparers and accounting professionals.

Committee members will advise the AcSB on areas within the framework that require improvement and additional topics that should be addressed. They will also identify issues arising in practice where implementation guidance might be helpful.

Any changes to the standards will go through the AcSB’s normal due process, including exposure of draft proposals for comment.

Constituents are encouraged to contact the committee to suggest areas that should be considered:

Greg Edwards, CAPrincipal Accounting Standards Board 277 Wellington Street West Toronto ON M5V 3H2 Canada Email: [email protected]

Telephone: 416- 204-3462 Fax: 416- 204-3412

mailto:[email protected]


Resources Available from Chartered Accountants of Canada The CICA, along with the provincial Institutes/Ordre, provide information and learning opportunities to assist members and the broader business community develop the knowledge and expertise they need to excel in their professional capacities.

We hope this guide helps you by providing a high-level comparison of the new standards to the XFI version of Part V of the CICA Handbook – Accounting. Other resources include:

• Getting Familiar with new Canadian Accounting Standards for Private Enterprises – a free webinar

• Accounting Standards for Private Enterprises FAQ

For more information visit the www.cica.ca/PE or your provincial Institute/Ordre website.

http://www.snwebcastcenter.com/event/?event_id=654

http://www.snwebcastcenter.com/event/?event_id=654

http://www.cica.ca/privateenterprises/faqs/index.aspx

http://www.cica.ca/PE

Summary Comparison of New Accounting Standards for Private Enterprises

(Part II of the revised CICA Handbook — Accounting) to XFI Version (Part V)


The CICA’s Guide to Accounting Standards for Private Enterprises in Canada

About this Comparison

As of December 31, 2009

This comparison has been prepared by the staff of the Accounting Standards Board (AcSB) and has not been approved by the AcSB.

This document provides a high-level comparison of accounting standards for private enterprises (Part II) and the XFI version of Part V of the CICA Handbook – Accounting (Handbook). It covers significant recognition and measurement differences only and does not necessarily include all of the differences that might arise in a particular entity’s circumstances. Presentation and disclosure requirements are not within the scope of this comparison. Presentation requirements for Part II are provided in Section 1520, Income Statement, Section 1521, Balance Sheet, and Section 1540, Cash Flow Statement. A compilation of disclosure requirements is also provided in Part II of the Handbook.

This document should not be used in preparing finan-cial statements. To understand fully the implications of preparing financial statements in accordance with Part II of the Handbook, users of this comparison must refer to the standards themselves.


The standards in Part II and the XFI Version of Part V of the Handbook are based on common conceptual frameworks. Part V of the Handbook was used as a starting point in developing the standards in Part II. Standards in Part V that are largely irrelevant to the private enterprise sector have been excluded from Part II and a limited number of issues that have caused significant concern for private enterprises have been reconsidered. However, the majority of the recognition and measurement requirements in Part V of the Handbook do not cause significant concern for private enterprises and have been retained in Part II “as is”. Emerg-ing Issues Committee (EIC) Abstracts of Issues Discussed have been excluded from Part II but in a limited number of instances, guidance on significant issues addressed in EIC Abstracts has been incorporated into Part II.

This comparison is organized according to Handbook Sec-tions and Accounting Guidelines and reflects standards issued as of December 31, 2009. The term “converged” has been used in the comparison when the standards in Part II are substantially the same as the relevant standards in the XFI version of Part V. Similar requirements compiled in a single standard in Part II that were previously reflected in two or more standards in Part V, are not considered “differences” for the purpose of this comparison.



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his

pre

sen

tati

on

Secti

on

refl

ects

in

co

me s

tate

men

t p

rese

nta

tio

n r

eq

uir

em

en

ts f

rom

oth

er

Secti

on

s –

pre

sen

tati

on

is

ou

tsid

e t

he s

co

pe o

f th

is s

um

mary

co

mp

ari

son

.

N/A

—S

ecti

on

15

21,

Bala

nce

S

heet

Th

is p

rese

nta

tio

n S

ecti

on

refl

ects

bala

nce s

heet

pre

sen

tati

on

req

uir

em

en

ts f

rom

oth

er

Secti

on

s –

pre

sen

tati

on

is

ou

tsid

e t

he s

co

pe o

f th

is s

um

mary

co

mp

ari

son

.

N/A

Secti

on

15

35

, C

ap

ital

Dis

clo

sure

s—

N

o c

orr

esp

on

din

g s

tan

dard

in

Part

II.

N/A

Secti

on

15

40

, C

ash

Flo

w

Sta

tem

en

tS

ecti

on

15

40

, C

ash

F

low

Sta

tem

en

tS

ecti

on

15

40

, P

art

II,

is c

onve

rge

d w

ith

XF

I S

ecti

on

.

Ho

wever, u

nd

er

Part

II,

all

en

terp

rise

s m

ust

pro

vid

e a

cash

flo

w s

tate

men

t.

Sig

nifi

can

t fo

r en

terp

rise

s th

at

do

no

t p

rovid

e

a c

ash

flo

w

state

men

t u

nd

er

XF

I st

an

dard

s

Secti

on

15

82, B

usi

ness

C

om

bin

ati

on

sS

ecti

on

15

82, B

usi

ness

C

om

bin

ati

on

sS

ecti

on

15

82, P

art

II,

is c

onve

rge

d w

ith

XF

I S

ecti

on

.

Secti

on

15

82 is

eff

ecti

ve o

n a

do

pti

on

of

Part

II as

Part

II d

oes

no

t in

clu

de S

ecti

on

15

81.

Sig

nifi

can

t fo

r en

terp

rise

s ad

op

tin

g P

art

II

pri

or

to 2

011



Han

db

oo

k s

tan

dard

sP

art

V (

XF

I)H

an

db

oo

k

stan

dard

sP

art

II

Co

mp

ari

son

of

acco

un

tin

g t

reatm

en

tsS

ign

ifican

ce

* o

f d

iffe

ren

ce

s

Secti

on

15

90

, S

ub

sid

iari

es

Secti

on

15

90

, S

ub

sid

iari

es

Secti

on

15

90

, P

art

II,

is c

onve

rge

d w

ith

XF

I S

ecti

on

, excep

t as

no

ted

belo

w.

Un

der

Secti

on

15

90

, P

art

II,

an

en

terp

rise

may a

cco

un

t fo

r su

bsi

dia

ries

by c

on

solid

ati

ng

th

em

, o

r u

sin

g e

ith

er

the c

ost

or

eq

uit

y m

eth

od

. T

his

is

co

nsi

sten

t w

ith

th

e

dif

fere

nti

al re

po

rtin

g o

pti

on

in

XF

I S

ecti

on

. H

ow

ever

an

invest

men

t in

a s

ub

sid

iary

wh

ose

eq

uit

y s

ecu

riti

es

are

qu

ote

d in

an

acti

ve m

ark

et

is n

ot

acco

un

ted

fo

r at

co

st, b

ut

may b

e a

cco

un

ted

fo

r at

fair

valu

e.

Sig

nifi

can

t fo

r a

sub

sid

iary

th

at

wo

uld

no

w b

e

acco

un

ted

fo

r at

fair

valu

e r

ath

er

than

co

st

Secti

on

16

01,

Co

nso

lidate

d

Fin

an

cia

l S

tate

men

tsS

ecti

on

16

01,

C

on

solid

ate

d F

inan

cia

l S

tate

men

ts

Secti

on

16

01,

Part

II,

is c

onve

rge

d w

ith

XF

I S

ecti

on

. N

on

e

Secti

on

16

02, N

on

-co

ntr

olli

ng

In

tere

sts

Secti

on

16

02, N

on

-co

ntr

olli

ng

In

tere

sts

Secti

on

16

02, P

art

II,

is c

onve

rge

d w

ith

XF

I S

ecti

on

.

Secti

on

16

02 is

eff

ecti

ve o

n a

do

pti

on

of

Part

II as

Part

II d

oes

no

t in

clu

de S

ecti

on

16

00

.

Sig

nifi

can

t fo

r en

terp

rise

s ad

op

tin

g P

art

II

pri

or

to 2

011

Secti

on

16

25

, C

om

pre

hen

sive

Reva

luati

on

o

f A

ssets

an

d L

iab

iliti

es

Secti

on

16

25

, C

om

pre

hen

sive

R

eva

luati

on

of

Ass

ets

an

d L

iab

iliti

es

Secti

on

16

25

, P

art

II,

is c

onve

rge

d w

ith

XF

I S

ecti

on

excep

t fo

r th

e a

cco

un

tin

g f

or

inco

me t

ax b

en

efi

ts (

see

1625

.43

-44

).

No

t si

gn

ifican

t



Han

db

oo

k s

tan

dard

sP

art

V (

XF

I)H

an

db

oo

k

stan

dard

sP

art

II

Co

mp

ari

son

of

acco

un

tin

g t

reatm

en

tsS

ign

ifican

ce

* o

f d

iffe

ren

ce

s

Secti

on

16

50

, F

ore

ign

C

urr

en

cy T

ran

slati

on

Secti

on

16

51,

Fo

reig

n

Cu

rren

cy T

ran

slati

on

Secti

on

16

51,

Part

II,

is c

onve

rge

d w

ith

XF

I S

ecti

on

16

50

.

Hed

ge a

cco

un

tin

g (

oth

er

than

a h

ed

ge o

f an

in

vest

men

t in

a s

elf

-su

stain

ing

fo

reig

n o

pera

tio

n)

is a

dd

ress

ed

in

Secti

on

38

56

, P

art

II,

rath

er

than

in

S

ecti

on

16

51,

Part

II,

an

d d

iffe

rs f

rom

XF

I S

ecti

on

16

50

.

No

ne, excep

t fo

r h

ed

ge

acco

un

tin

g

ad

dre

ssed

in

S

ecti

on

38

56

, P

art

II

Secti

on

170

1, S

eg

men

t D

isclo

sure

s—

No

co

rre

spo

nd

ing

sta

nd

ard

in

Part

II.

N/A

Secti

on

175

1, In

teri

m

Fin

an

cia

l S

tate

men

ts—

N

o c

orr

esp

on

din

g s

tan

dard

in

Part

II.

N/A

Secti

on

18

00

, U

nin

corp

ora

ted

Bu

sin

ess

es

Secti

on

18

00

, U

nin

corp

ora

ted

B

usi

ness

es

Secti

on

18

00

, P

art

II,

is c

onve

rge

d w

ith

XF

I S

ecti

on

.N

on

e

Secti

on

30

00

, C

ash

—N

o c

orr

esp

on

din

g s

tan

dard

in

Part

II.

Gu

idan

ce f

rom

X

FI S

ecti

on

in

co

rpo

rate

d in

Secti

on

15

10, P

art

II (s

ee

1510

.07).

N/A

Secti

on

30

10, Te

mp

ora

ry

Inve

stm

en

ts—

No

co

rre

spo

nd

ing

sta

nd

ard

in

Part

II.

Measu

rem

en

t an

d im

pair

men

t re

qu

irem

en

ts a

re p

rovid

ed

in

Secti

on

3

85

6, P

art

II.

Desi

gn

ati

on

as

“tem

po

rary

” is

no

lo

ng

er

rele

van

t.

Fin

an

cia

l in

stru

men

ts a

re c

lass

ified

as

cu

rren

t if

th

ey m

eet

the r

eq

uir

em

en

ts in

Secti

on

15

10,

Part

II.

Sig

nifi

can

t

Secti

on

30

20

, A

cco

un

ts a

nd

N

ote

s R

ece

ivab

le—

No

co

rre

spo

nd

ing

sta

nd

ard

in

Part

II.

Gu

idan

ce f

rom

X

FI S

ecti

on

in

co

rpo

rate

d in

Secti

on

38

56

, P

art

II (s

ee

38

56

.16

-.19

).

N/A



Han

db

oo

k s

tan

dard

sP

art

V (

XF

I)H

an

db

oo

k

stan

dard

sP

art

II

Co

mp

ari

son

of

acco

un

tin

g t

reatm

en

tsS

ign

ifican

ce

* o

f d

iffe

ren

ce

s

Secti

on

30

25

, Im

pair

ed

Lo

an

s—

No

co

rre

spo

nd

ing

sta

nd

ard

in

Part

II.

Gu

idan

ce

pro

vid

ed

in

Secti

on

38

56

, P

art

II,

dif

fers

fro

m t

hat

in S

ecti

on

30

25

(se

e 3

85

6.16

-.19

) in

th

at

alt

ern

ati

ve

measu

rem

en

ts a

re p

oss

ible

. W

hen

measu

rem

en

t o

f im

pair

men

t is

base

d o

n r

eco

vera

ble

am

ou

nts

, th

ese

est

imate

s are

dis

co

un

ted

usi

ng

mark

et

inte

rest

rate

s ra

ther

than

th

e o

rig

inal eff

ecti

ve in

tere

st r

ate

.

Oft

en

no

t si

gn

ifican

t

Secti

on

30

31,

Inve

nto

ries

Secti

on

30

31,

In

ven

tori

es

Secti

on

30

31,

Part

II,

is c

onve

rge

d w

ith

XF

I S

ecti

on

.N

on

e

Secti

on

30

40

, P

rep

aid

E

xp

en

ses

—N

o c

orr

esp

on

din

g s

tan

dard

in

Part

II.

Gu

idan

ce f

rom

X

FI S

ecti

on

in

co

rpo

rate

d in

Secti

on

15

10, P

art

II (s

ee

1510

.06

).

N/A



Han

db

oo

k s

tan

dard

sP

art

V (

XF

I)H

an

db

oo

k

stan

dard

sP

art

II

Co

mp

ari

son

of

acco

un

tin

g t

reatm

en

tsS

ign

ifican

ce

* o

f d

iffe

ren

ce

s

Secti

on

30

50

, Lo

ng

-term

In

vest

men

tsS

ecti

on

30

51,

In

vest

men

tsS

ecti

on

30

51,

Part

II d

iffe

rs f

rom

XF

I S

ecti

on

30

50

.

Sig

nifi

can

t d

iffe

ren

ces

are

no

ted

belo

w.

Un

der

Secti

on

30

51,

Part

II,

an

en

terp

rise

may a

cco

un

t fo

r si

gn

ifican

tly in

flu

en

ced

invest

ees

usi

ng

eit

her

the

co

st o

r eq

uit

y m

eth

od

. T

his

is

co

nsi

sten

t w

ith

th

e

dif

fere

nti

al re

po

rtin

g o

pti

on

in

XF

I S

ecti

on

30

50

. H

ow

ever, a

n invest

men

t in

a s

ign

ifican

tly in

flu

en

ced

in

vest

ee w

ho

se e

qu

ity s

ecu

riti

es

are

qu

ote

d in

an

acti

ve m

ark

et

is n

ot

acco

un

ted

fo

r at

co

st b

ut

may b

e

acco

un

ted

fo

r at

fair

valu

e.

Un

der

Secti

on

38

56

, P

art

II,

an

invest

men

t in

an

eq

uit

y

secu

rity

th

at

is t

rad

ed

in

an

acti

ve m

ark

et

an

d n

ot

sub

ject

to s

ign

ifican

t in

flu

en

ce is

acco

un

ted

fo

r at

fair

valu

e r

ath

er

than

at

co

st.

Th

e im

pair

men

t p

rovis

ion

s in

Secti

on

30

51,

Part

II,

are

co

nsi

sten

t w

ith

th

ose

in

Secti

on

38

56

, P

art

II.

Sig

nifi

can

t



Han

db

oo

k s

tan

dard

sP

art

V (

XF

I)H

an

db

oo

k

stan

dard

sP

art

II

Co

mp

ari

son

of

acco

un

tin

g t

reatm

en

tsS

ign

ifican

ce

* o

f d

iffe

ren

ce

s

Secti

on

30

55

, In

tere

sts

in

Join

t V

en

ture

sS

ecti

on

30

55

, In

tere

sts

in J

oin

t V

en

ture

sS

ecti

on

30

55

, P

art

II,

dif

fers

fro

m X

FI S

ecti

on

.

Sig

nifi

can

t d

iffe

ren

ces

are

no

ted

belo

w.

Un

der

Secti

on

30

55

, P

art

II,

an

en

terp

rise

may a

cco

un

t fo

r in

tere

sts

in jo

int

ven

ture

s u

sin

g p

rop

ort

ion

ate

co

nso

lidati

on

, th

e c

ost

meth

od

or

the e

qu

ity m

eth

od

. T

his

is

co

nsi

sten

t w

ith

th

e d

iffe

ren

tial re

po

rtin

g

op

tio

ns

in X

FI S

ecti

on

. H

ow

ever

an

invest

men

t in

a

join

t ven

ture

wh

ose

eq

uit

y s

ecu

riti

es

are

qu

ote

d in

an

acti

ve m

ark

et

is n

ot

acco

un

ted

fo

r at

co

st b

ut

may b

e

acco

un

ted

fo

r at

fair

valu

e.

Th

e im

pair

men

t p

rovis

ion

s in

Secti

on

30

55

, P

art

II,

are

co

nsi

sten

t w

ith

th

ose

in

Secti

on

38

56

, P

art

II.

Sig

nifi

can

t

Secti

on

30

61,

Pro

pert

y

Pla

nt

an

d E

qu

ipm

en

tS

ecti

on

30

61,

Pro

pert

y

Pla

nt

an

d E

qu

ipm

en

tS

ecti

on

30

61,

Part

II,

is c

onve

rge

d w

ith

XF

I S

ecti

on

.N

on

e

Secti

on

30

63

, Im

pair

men

t o

f Lo

ng

-liv

ed

Ass

ets

Secti

on

30

63

, Im

pair

men

t o

f Lo

ng

-liv

ed

Ass

ets

Secti

on

30

63

, P

art

II,

is c

onve

rge

d w

ith

XF

I S

ecti

on

.N

on

e



Han

db

oo

k s

tan

dard

sP

art

V (

XF

I)H

an

db

oo

k

stan

dard

sP

art

II

Co

mp

ari

son

of

acco

un

tin

g t

reatm

en

tsS

ign

ifican

ce

* o

f d

iffe

ren

ce

s

Secti

on

30

64

, G

oo

dw

ill a

nd

In

tan

gib

le A

ssets

Secti

on

30

64

, G

oo

dw

ill

an

d In

tan

gib

le A

ssets

Secti

on

30

64

, P

art

II d

iffe

rs f

rom

XF

I S

ecti

on

. S

ign

ifican

t d

iffe

ren

ces

are

no

ted

belo

w.

Inte

rnally

develo

ped

in

tan

gib

le a

ssets

Secti

on

30

64

, P

art

II,

perm

its

an

en

terp

rise

to

make

an

acco

un

tin

g p

olic

y c

ho

ice t

o c

ap

italiz

e o

r exp

en

se

develo

pm

en

t co

sts.

Go

od

will

an

d o

ther

inta

ng

ible

ass

ets

– im

pair

men

t te

stin

gS

ecti

on

30

64

, P

art

II,

req

uir

es

en

terp

rise

s to

test

g

oo

dw

ill a

nd

oth

er

inta

ng

ible

ass

ets

no

t su

bje

ct

to

am

ort

izati

on

on

an

even

ts a

nd

cir

cu

mst

an

ces

basi

s,

rath

er

than

each

year.

Th

is is

co

nsi

sten

t w

ith

th

e d

iffe

ren

tial re

po

rtin

g o

pti

on

in

XF

I S

ecti

on

.

Secti

on

30

64

, P

art

II,

req

uir

es

go

od

will

im

pair

men

t te

stin

g t

o b

e d

on

e a

t th

e r

ep

ort

ing

un

it level,

rem

ovin

g

the r

eq

uir

em

en

t in

XF

I S

ecti

on

to

dete

rmin

e f

air

valu

es

of

ind

ivid

ual ass

ets

an

d lia

bili

ties.

Cert

ain

gu

idan

ce f

rom

EIC

-13

3 h

as

been

in

co

rpo

rate

d

in S

ecti

on

30

64

, P

art

II (s

ee 3

06

4.6

8).

Sig

nifi

can

t



Han

db

oo

k s

tan

dard

sP

art

V (

XF

I)H

an

db

oo

k

stan

dard

sP

art

II

Co

mp

ari

son

of

acco

un

tin

g t

reatm

en

tsS

ign

ifican

ce

* o

f d

iffe

ren

ce

s

Secti

on

30

65

, Lease

sS

ecti

on

30

65

, Lease

sS

ecti

on

30

65

, P

art

II,

is c

onve

rge

d w

ith

XF

I S

ecti

on

, excep

t th

at

the r

eq

uir

em

en

ts f

or

(a)

rem

ovin

g a

lease

lia

bili

ty f

rom

a less

ee’s

bala

nce s

heet,

an

d (

b)

the

imp

air

men

t te

stin

g o

f le

ase

receiv

ab

les

of

a less

or

in S

ecti

on

30

65

, P

art

II,

are

co

nsi

sten

t w

ith

th

ose

in

S

ecti

on

38

56

, P

art

II.

Cert

ain

gu

idan

ce f

rom

th

e f

ollo

win

g E

IC A

bst

racts

has

been

in

co

rpo

rate

d in

to S

ecti

on

30

65

, P

art

II:

• E

IC-1

9 (

see 3

06

5.0

3(r

);•

EIC

-21

(see 3

06

5.2

7);

• E

IC 2

5 (

see 3

06

5.6

4 a

nd

Illu

stra

tive E

xam

ple

s 3

an

d

4);

• E

IC-5

2 (

see 3

06

5.2

5 a

nd

Illu

stra

tive E

xam

ple

5);

an

d•

EIC

-97 (

see 3

06

5.2

6).

No

t si

gn

ifican

t

Secti

on

311

0, A

sset

Reti

rem

en

t O

blig

ati

on

sS

ecti

on

311

0, A

sset

Reti

rem

en

t O

blig

ati

on

sS

ecti

on

311

0, P

art

II,

is c

onve

rge

d w

ith

XF

I S

ecti

on

excep

t th

at

the m

easu

rem

en

t re

qu

irem

en

ts h

ave b

een

si

mp

lified

.

Un

der

Secti

on

311

0, P

art

II,

ass

et

reti

rem

en

t o

blig

ati

on

s are

measu

red

at

the b

est

est

imate

of

the e

xp

en

dit

ure

re

qu

ired

to

sett

le t

he p

rese

nt

ob

ligati

on

at

the e

nd

of

the r

ep

ort

ing

peri

od

, ra

ther

than

at

fair

valu

e.

Sig

nifi

can

t

Secti

on

3210

, Lo

ng

-term

D

eb

t—

No

co

rre

spo

nd

ing

sta

nd

ard

in

Part

II.

Gu

idan

ce p

rovid

ed

in

Secti

on

38

56

, P

art

II.

N/A



Han

db

oo

k s

tan

dard

sP

art

V (

XF

I)H

an

db

oo

k

stan

dard

sP

art

II

Co

mp

ari

son

of

acco

un

tin

g t

reatm

en

tsS

ign

ifican

ce

* o

f d

iffe

ren

ce

s

Secti

on

324

0, S

hare

Cap

ital

Secti

on

324

0, S

hare

C

ap

ital

Secti

on

324

0, P

art

II,

is c

onve

rge

d w

ith

XF

I S

ecti

on

.N

on

e

Secti

on

325

0, S

urp

lus

Secti

on

325

1, E

qu

ity

All

req

uir

em

en

ts in

th

is S

ecti

on

rela

te t

o p

rese

nta

tio

n,

wh

ich

is

ou

tsid

e t

he s

co

pe o

f th

is s

um

mary

co

mp

ari

son

.

Th

e s

co

pe o

f S

ecti

on

325

1, P

art

II,

is b

road

er

than

XF

I S

ecti

on

325

0.

Cert

ain

gu

idan

ce f

rom

EIC

-13

2 h

as

been

in

co

rpo

rate

d

into

Secti

on

325

1, P

art

II (s

ee 3

25

1.10

).

N/A

Secti

on

326

0, R

ese

rves

Secti

on

326

0, R

ese

rves

Secti

on

326

0, P

art

II,

is c

onve

rge

d w

ith

XF

I S

ecti

on

.N

on

e

Secti

on

328

0, C

on

tractu

al

Ob

ligati

on

sS

ecti

on

328

0,

Co

ntr

actu

al O

blig

ati

on

sA

ll re

qu

irem

en

ts in

th

is S

ecti

on

rela

te t

o d

isclo

sure

s,

wh

ich

are

ou

tsid

e t

he s

co

pe o

f th

is s

um

mary

co

mp

ari

son

.

N/A

Secti

on

329

0,

Co

nti

ng

en

cie

sS

ecti

on

329

0,

Co

nti

ng

en

cie

sS

ecti

on

329

0, P

art

II,

is c

onve

rge

d w

ith

XF

I S

ecti

on

.N

on

e

Secti

on

34

00

, R

eve

nu

eS

ecti

on

34

00

, R

eve

nu

eS

ecti

on

34

00

, P

art

II,

is c

onve

rge

d w

ith

XF

I S

ecti

on

.

Cert

ain

gu

idan

ce f

rom

th

e f

ollo

win

g E

ICs

has

been

in

co

rpo

rate

d in

to S

ecti

on

34

00

, P

art

II:

• E

IC-7

8 (

see 3

40

0.17);

• E

IC-7

9 (

see 3

40

0.2

2);

• E

IC-1

23

(se

e 3

40

0.2

3-.

24

);•

EIC

-14

1 (s

ee 3

40

0.0

7-.

10);

• E

IC-1

42 (

see 3

40

0.0

11);

• E

IC-1

44

(se

e 3

40

0.2

5-.

27);

an

d•

EIC

-15

6 (

see 3

40

0.2

8).

No

ne



Han

db

oo

k s

tan

dard

sP

art

V (

XF

I)H

an

db

oo

k

stan

dard

sP

art

II

Co

mp

ari

son

of

acco

un

tin

g t

reatm

en

tsS

ign

ifican

ce

* o

f d

iffe

ren

ce

s

Secti

on

34

61,

Em

plo

yee

Fu

ture

Ben

efi

tsS

ecti

on

34

61,

Em

plo

yee

Fu

ture

Ben

efi

tsS

ecti

on

34

61,

Part

II d

iffe

rs f

rom

XF

I S

ecti

on

.

Secti

on

34

61,

Part

II,

perm

its

defi

ned

ben

efi

t p

lan

s to

b

e r

eco

gn

ized

an

d m

easu

red

usi

ng

eit

her:

• an

“im

med

iate

reco

gn

itio

n a

pp

roach

,” w

here

by

the a

cco

un

tin

g is

base

d o

n a

fu

nd

ing

valu

ati

on

, th

e f

un

ded

sta

tus

of

the p

lan

is

reco

gn

ized

on

th

e b

ala

nce s

heet

an

d t

here

is

no

defe

rral o

r am

ort

izati

on

of

actu

ari

al g

ain

s an

d lo

sses

or

past

se

rvic

e c

ost

s; o

r•

the “

defe

rral an

d a

mo

rtiz

ati

on

ap

pro

ach

” as

in t

he

XF

I S

ecti

on

, w

hic

h r

eq

uir

es

a s

ep

ara

te v

alu

ati

on

fo

r acco

un

tin

g p

urp

ose

s an

d d

efe

rral an

d a

mo

rtiz

ati

on

is

req

uir

ed

fo

r p

ast

serv

ice c

ost

s an

d p

erm

itte

d f

or

actu

ari

al g

ain

s an

d lo

sses.

Th

e d

efi

nit

ion

of

a d

efi

ned

ben

efi

t an

d d

efi

ned

co

ntr

ibu

tio

n p

lan

has

been

mo

difi

ed

. T

he d

iffe

ren

ce

is n

ot

exp

ecte

d t

o b

e s

ign

ifican

t fo

r m

ost

pri

vate

en

terp

rise

s.

Sig

nifi

can

t



Han

db

oo

k s

tan

dard

sP

art

V (

XF

I)H

an

db

oo

k

stan

dard

sP

art

II

Co

mp

ari

son

of

acco

un

tin

g t

reatm

en

tsS

ign

ifican

ce

* o

f d

iffe

ren

ce

s

Secti

on

34

65

, In

com

e T

axe

sS

ecti

on

34

65

, In

com

e

Taxe

sS

ecti

on

34

65

, P

art

II, is

co

nve

rge

d w

ith

XF

I S

ecti

on

. U

nd

er

Se

cti

on

34

65

, P

art

II, e

ith

er

the t

axe

s p

ayab

le

meth

od

or

the f

utu

re in

co

me t

axe

s m

eth

od

may

be c

ho

sen

. T

his

is

co

nsi

ste

nt

wit

h t

he d

iffe

ren

tial

rep

ort

ing

op

tio

n in

XF

I S

ecti

on

.

Ce

rtain

gu

idan

ce f

rom

th

e f

ollo

win

g E

IC A

bst

racts

h

as

be

en

in

co

rpo

rate

d in

to S

ecti

on

34

65

, P

art

II:

• E

IC-1

04

(se

e 3

46

5.7

5);

an

d•

EIC

-14

6 (

see 3

46

5.6

5).

No

ne

Secti

on

34

75

, D

isp

osa

l o

f Lo

ng

-liv

ed

Ass

ets

an

d

Dis

con

tin

ued

Op

era

tio

ns

Secti

on

34

75

, D

isp

osa

l o

f Lo

ng

-liv

ed

Ass

ets

an

d D

isco

nti

nu

ed

O

pera

tio

ns

Secti

on

34

75

, P

art

II,

is c

onve

rge

d w

ith

XF

I S

ecti

on

.N

on

e

Secti

on

34

80

, E

xtr

ao

rdin

ary

It

em

s—

No

co

rre

spo

nd

ing

sta

nd

ard

in

Part

II.

N/A

Secti

on

35

00

, E

arn

ing

s p

er

Sh

are

—N

o c

orr

esp

on

din

g s

tan

dard

in

Part

II.

N/A

Secti

on

36

10, C

ap

ital

Tran

sacti

on

sS

ecti

on

36

10, C

ap

ital

Tran

sacti

on

sS

ecti

on

36

10, P

art

II,

is c

onve

rge

d w

ith

XF

I S

ecti

on

.N

on

e

Secti

on

38

00

, G

ove

rnm

en

t A

ssis

tan

ceS

ecti

on

38

00

, G

ove

rnm

en

t A

ssis

tan

ceS

ecti

on

38

00

, P

art

II,

is c

onve

rge

d w

ith

XF

I S

ecti

on

.N

on

e



Han

db

oo

k s

tan

dard

sP

art

V (

XF

I)H

an

db

oo

k

stan

dard

sP

art

II

Co

mp

ari

son

of

acco

un

tin

g t

reatm

en

tsS

ign

ifican

ce

* o

f d

iffe

ren

ce

s

Secti

on

38

05

, In

vest

men

t Ta

x C

red

its

Secti

on

38

05

, In

vest

men

t Ta

x C

red

its

Secti

on

38

05

, P

art

II,

is c

onve

rge

d w

ith

XF

I S

ecti

on

.N

on

e

Secti

on

38

20

, S

ub

seq

uen

t E

ven

tsS

ecti

on

38

20

, S

ub

seq

uen

t E

ven

tsS

ecti

on

38

20

, P

art

II,

is c

onve

rge

d w

ith

XF

I S

ecti

on

.N

on

e

Secti

on

38

31,

No

n-m

on

eta

ry

Tran

sacti

on

sS

ecti

on

38

31,

No

n-

mo

neta

ry T

ran

sacti

on

sS

ecti

on

38

31,

Part

II,

is c

onve

rge

d w

ith

XF

I S

ecti

on

.N

on

e

Secti

on

38

40

, R

ela

ted

Part

y

Tran

sacti

on

sS

ecti

on

38

40

, R

ela

ted

P

art

y T

ran

sacti

on

sS

ecti

on

38

40

, P

art

II,

is c

onve

rge

d w

ith

XF

I S

ecti

on

.

Cert

ain

gu

idan

ce f

rom

th

e f

ollo

win

g E

IC A

bst

racts

has

been

in

co

rpo

rate

d in

to S

ecti

on

38

40

, P

art

II:

• E

IC-6

6 (

see 3

84

0.4

4(a

));

• E

IC-7

7 (

see 3

84

0.3

8);

• E

IC 8

9 (

see 3

84

0.4

4(b

)); an

d•

EIC

-10

3 (

see 3

84

0.3

3).

No

ne

Secti

on

38

41,

Eco

no

mic

D

ep

en

den

ceS

ecti

on

38

41,

Eco

no

mic

D

ep

en

den

ceA

ll re

qu

irem

en

ts in

th

is S

ecti

on

rela

te t

o d

isclo

sure

s,

wh

ich

are

ou

tsid

e t

he s

co

pe o

f th

is s

um

mary

co

mp

ari

son

.

N/A

Secti

on

38

50

, In

tere

st

Cap

italiz

ed

Secti

on

38

50

, In

tere

st

Cap

italiz

ed

All

req

uir

em

en

ts in

th

is S

ecti

on

rela

te t

o d

isclo

sure

s,

wh

ich

are

ou

tsid

e t

he s

co

pe o

f th

is s

um

mary

co

mp

ari

son

.

N/A



Han

db

oo

k s

tan

dard

sP

art

V (

XF

I)H

an

db

oo

k

stan

dard

sP

art

II

Co

mp

ari

son

of

acco

un

tin

g t

reatm

en

tsS

ign

ifican

ce

* o

f d

iffe

ren

ce

s

—S

ecti

on

38

56

, F

inan

cia

l In

stru

men

tsS

ecti

on

38

56

, P

art

II, d

iffe

rs f

rom

eq

uiv

ale

nt

req

uir

em

en

ts u

nd

er

XF

I st

an

dard

s.

Th

e r

eq

uir

em

en

ts

in S

ecti

on

38

56

, P

art

II, c

orr

esp

on

d t

o o

r re

pla

ce

gu

idan

ce in

Se

cti

on

s 3

02

0, 3

02

5, 3

210

, 3

86

0, A

cG

-4,

AcG

-12 a

nd

AcG

-13

.

Th

e s

ign

ifican

t d

iffe

ren

ce

s b

etw

ee

n t

he g

uid

an

ce o

n

fin

an

cia

l in

stru

me

nts

in

XF

I st

an

dard

s an

d S

ecti

on

3

85

6, P

art

II, in

clu

de t

he f

ollo

win

g:

• In

ve

stm

en

ts in

eq

uit

ies

that

are

tra

de

d in

an

acti

ve

mark

et

are

me

asu

red

at

fair

valu

e, w

ith

ch

an

ge

s re

co

gn

ize

d in

net

inco

me

. A

n e

nti

ty m

ay a

lso

ir

revo

cab

ly e

lect

on

in

itia

l re

co

gn

itio

n t

o m

easu

re

an

y o

the

r fi

nan

cia

l in

stru

me

nt

at

fair

valu

e.

De

rivati

ve

s, o

the

r th

an

th

ose

in

qu

alify

ing

he

dg

es,

co

nti

nu

e t

o b

e m

easu

red

at

fair

valu

e.

• A

sin

gle

mo

de

l is

ap

plie

d t

o t

he r

eco

gn

itio

n a

nd

m

easu

rem

en

t o

f im

pair

me

nt

for

all

fin

an

cia

l ass

ets

.•

All

fin

an

cia

l in

stru

me

nts

are

re

co

gn

ize

d o

n t

rad

e

date

.•

Tra

nsa

cti

on

co

sts

on

fin

an

cia

l in

stru

me

nts

m

easu

red

at

am

ort

ize

d c

ost

are

cap

italiz

ed

.

Tra

nsa

cti

on

co

sts

on

fin

an

cia

l in

stru

me

nts

m

easu

red

at

fair

valu

e a

re e

xp

en

sed

.•

Th

e e

qu

ity c

om

po

ne

nt

of

co

nve

rtib

le d

eb

t an

d

warr

an

ts o

r o

pti

on

s is

sue

d w

ith

, an

d d

eta

ch

ab

le

fro

m, fi

nan

cia

l liab

ilit

ies

may b

e m

easu

red

at

ze

ro.

Sig

nifi

can

t



Han

db

oo

k s

tan

dard

sP

art

V (

XF

I)H

an

db

oo

k

stan

dard

sP

art

II

Co

mp

ari

son

of

acco

un

tin

g t

reatm

en

tsS

ign

ifican

ce

* o

f d

iffe

ren

ce

s

• H

ed

ge a

cco

un

tin

g is

availab

le b

y d

esi

gn

ati

on

fo

r re

lati

on

ship

s sp

ecifi

ed

in

th

e S

ecti

on

if

the c

riti

cal

term

s o

f th

e h

ed

gin

g in

stru

me

nt

matc

h t

ho

se o

f th

e

he

dg

ed

in

stru

me

nt.

• P

refe

rre

d s

hare

s is

sue

d in

a s

pe

cifi

ed

tax p

lan

nin

g

arr

an

ge

me

nt

mu

st b

e c

lass

ifie

d a

s e

qu

ity. (T

his

is

co

nsi

ste

nt

wit

h t

he d

iffe

ren

tial re

po

rtin

g o

pti

on

in

X

FI S

ecti

on

38

60

.)

Ce

rtain

gu

idan

ce f

rom

th

e f

ollo

win

g S

ecti

on

s,

Acco

un

tin

g G

uid

elin

es

an

d E

IC A

bst

racts

an

d h

as

be

en

in

clu

de

d in

Se

cti

on

38

56

, P

art

II:

• S

ecti

on

30

20

(se

e 3

85

6.1

6-.

19);

• S

ecti

on

30

25

(se

e 3

85

6.1

6-.

19);

• A

cG

-4 (

see 3

85

6.0

7);

• A

cG

-12 (

see 3

85

6, A

pp

en

dix

B.)

;•

AcG

-13

(se

e 3

85

6.3

0-.

36

);•

EIC

-88

, 9

6 a

nd

10

1 (s

ee 3

85

6.2

6-.

29

);•

EIC

-14

9 (

see 3

85

6.2

0-.

23

); a

nd

• E

IC-1

58

(se

e 3

85

6.1

4).

Secti

on

38

60

, F

inan

cia

l In

stru

men

ts –

Dis

clo

sure

an

d P

rese

nta

tio

n

—N

o c

orr

esp

on

din

g s

tan

dard

in

Part

II.

Gu

idan

ce

pro

vid

ed

in

Secti

on

38

56

, P

art

II.

N/A



Han

db

oo

k s

tan

dard

sP

art

V (

XF

I)H

an

db

oo

k

stan

dard

sP

art

II

Co

mp

ari

son

of

acco

un

tin

g t

reatm

en

tsS

ign

ifican

ce

* o

f d

iffe

ren

ce

s

Secti

on

38

70

, S

tock-

base

d

Co

mp

en

sati

on

an

d O

ther

Sto

ck-

base

d P

aym

en

ts

Secti

on

38

70

, S

tock-

base

d C

om

pen

sati

on

an

d O

ther

Sto

ck-

base

d

Pay

men

ts

Secti

on

38

70

, P

art

II,

dif

fers

fro

m X

FI S

ecti

on

.

Secti

on

38

70

, P

art

II,

rep

laces

the m

inim

um

valu

e

meth

od

(i.e

., th

e a

bili

ty t

o ig

no

re v

ola

tilit

y in

m

easu

rin

g s

tock-b

ase

d c

om

pen

sati

on

) w

ith

th

e

calc

ula

ted

valu

e m

eth

od

. U

nd

er

the c

alc

ula

ted

valu

e

meth

od

an

en

terp

rise

est

imate

s th

e v

ola

tilit

y t

hat

is

use

d a

s an

in

pu

t to

a s

tock o

pti

on

pri

cin

g m

od

el b

ase

d

on

an

ap

pro

pri

ate

secto

r in

dex.

Sig

nifi

can

t

Secti

on

410

0, P

en

sio

n P

lan

s—

No

co

rre

spo

nd

ing

sta

nd

ard

in

Part

II.

Th

e a

cco

un

tin

g

stan

dard

s fo

r p

en

sio

n p

lan

s can

be f

ou

nd

in

Part

IV

.N

/A

Secti

on

4211

, L

ife In

sura

nce

E

nte

rpri

ses

– S

pecifi

c Ite

ms

—N

o c

orr

esp

on

din

g s

tan

dard

in

Part

II.

N/A

Secti

on

425

0, F

utu

re-

ori

en

ted

Fin

an

cia

l In

form

ati

on

—N

o c

orr

esp

on

din

g s

tan

dard

in

Part

II.

N/A

Secti

on

44

00

, N

ot-

for-

pro

fit

Org

an

izati

on

s—

No

co

rre

spo

nd

ing

sta

nd

ard

in

Part

II.

Part

III h

as

been

re

serv

ed

fo

r th

e a

cco

un

tin

g s

tan

dard

s fo

r n

ot-

for-

pro

fit

org

an

izati

on

s.

N/A

AcG

-2, F

ran

ch

ise F

ee

Reve

nu

eA

cG

-2, F

ran

ch

ise F

ee

Reve

nu

eA

cG

-2, P

art

II,

is c

onve

rge

d w

ith

XF

I G

uid

elin

e.

No

ne

AcG

-3, F

inan

cia

l R

ep

ort

ing

b

y P

rop

ert

y a

nd

Casu

alt

y

Insu

ran

ce C

om

pan

ies

—N

o c

orr

esp

on

din

g G

uid

elin

e in

Part

II.

N/A



Han

db

oo

k s

tan

dard

sP

art

V (

XF

I)H

an

db

oo

k

stan

dard

sP

art

II

Co

mp

ari

son

of

acco

un

tin

g t

reatm

en

tsS

ign

ifican

ce

* o

f d

iffe

ren

ce

s

AcG

-4, F

ees

an

d C

ost

s A

sso

cia

ted

wit

h L

en

din

g

Acti

vit

ies

—N

o c

orr

esp

on

din

g G

uid

elin

e in

Part

II.

Gu

idan

ce p

rovid

ed

in

Secti

on

38

56

, P

art

II (s

ee

38

56

.07).

N/A

AcG

-7, T

he M

an

ag

em

en

t R

ep

ort

—N

o c

orr

esp

on

din

g G

uid

elin

e in

Part

II.

N/A

AcG

-8, A

ctu

ari

al L

iab

iliti

es

of

Lif

e In

sura

nce

En

terp

rise

s –

Dis

clo

sure

—N

o c

orr

esp

on

din

g G

uid

elin

e in

Part

II.

N/A

AcG

-9, F

inan

cia

l R

ep

ort

ing

b

y L

ife In

sura

nce

E

nte

rpri

ses

—N

o c

orr

esp

on

din

g G

uid

elin

e in

Part

II

N/A

AcG

-11,

En

terp

rise

s in

th

e

Deve

lop

men

t S

tag

e—

No

co

rre

spo

nd

ing

Gu

ide

lin

e in

Part

II.

N/A

AcG

-12, Tr

an

sfers

of

Rece

ivab

les

—N

o c

orr

esp

on

din

g G

uid

elin

e in

Part

II.

Gu

idan

ce

pro

vid

ed

in

Secti

on

38

56

, P

art

II (s

ee 3

85

6,

Ap

pen

dix

B).

N/A

AcG

-13

, Hed

gin

g

Rela

tio

nsh

ips

—N

o c

orr

esp

on

din

g G

uid

elin

e in

Part

II.

Gu

idan

ce

pro

vid

ed

in

Secti

on

38

56

, P

art

II (s

ee 3

85

6.3

0-.

36

).

AcG

-14

, D

isclo

sure

of

Gu

ara

nte

es

AcG

-14

, D

isclo

sure

of

Gu

ara

nte

es

AcG

-14

, P

art

II,

is c

onve

rge

d w

ith

XF

I G

uid

elin

e.

No

ne


Han

db

oo

k s

tan

dard

sP

art

V (

XF

I)H

an

db

oo

k

stan

dard

sP

art

II

Co

mp

ari

son

of

acco

un

tin

g t

reatm

en

tsS

ign

ifican

ce

* o

f d

iffe

ren

ce

s

AcG

-15

, C

on

solid

ati

on

of

Vari

ab

le In

tere

st E

nti

ties

AcG

-15

, C

on

solid

ati

on

o

f V

ari

ab

le In

tere

st

En

titi

es

AcG

-15

, P

art

II,

is c

onve

rge

d w

ith

XF

I G

uid

elin

e. A

cG

-15

, P

art

II,

do

es

no

t ap

ply

to

an

en

terp

rise

th

at

ch

oo

ses

to p

rep

are

no

n-c

on

solid

ate

d fi

nan

cia

l st

ate

men

ts.

No

ne

AcG

-16

, O

il an

d G

as

Acc

ou

nti

ng

– F

ull

Co

stA

cG

-16

, O

il an

d G

as

Acc

ou

nti

ng

– F

ull

Co

stA

cG

-16

, P

art

II,

is c

onve

rge

d w

ith

XF

I G

uid

elin

e.

No

ne

AcG

-17,

Eq

uit

y-l

inke

d

Dep

osi

t C

on

tracts

—N

o c

orr

esp

on

din

g G

uid

elin

e in

Part

II.

AcG

-18

, In

vest

men

t C

om

pan

ies

AcG

-18

, In

vest

men

t C

om

pan

ies

AcG

-18

, P

art

II,

is c

onve

rge

d w

ith

XF

I G

uid

elin

e.

No

ne

AcG

-19

, D

isclo

sure

s b

y

En

titi

es

Su

bje

ct

to R

ate

R

eg

ula

tio

n

AcG

-19

, D

isclo

sure

s b

y

En

titi

es

Su

bje

ct

to R

ate

R

eg

ula

tio

n

All

req

uir

em

en

ts in

th

is G

uid

elin

e r

ela

te t

o d

isclo

sure

s,

wh

ich

are

ou

tsid

e t

he s

co

pe o

f th

is s

um

mary

co

mp

ari

son

.

N/A

The Institute of Chartered Accountants of Bermuda31 Queen Street Boyle Building, 3rd FloorHamilton, Bermuda HM 11 (441) 292-7479 www.icab.bm

The Institute of Chartered Accountants of Nova Scotia1791 Barrington Street, Suite 1410 Halifax, Nova Scotia B3J 3L1 (902) 425-3291 www.icans.ns.ca

The New Brunswick Institute of Chartered Accountants55 Union Street, Suite 250 Mercantile Centre Saint John, New Brunswick E2L 5B7 (506) 634-1588 www.nbica.org

The Institute of Chartered Accountants of Prince Edward Island56 Water Street, 2nd FloorCharlottetown, PEI C1A 7K7 (902) 894-4290 www.icapei.com

The Institute of Chartered Accountants of Newfoundland and Labrador95 Bonaventure Avenue, Suite 501 St. John’s, Newfoundland A1B 2X5 (709) 753-7566 www.ican.ca

Ordre des comptables agréés du Québec680, rue Sherbrooke Ouest, 18e étageMontréal, Québec H3A 2S3 (514) 288-3256 1 800 363-4688 www.ocaq.qc.ca

The Institute of Chartered Accountants of Ontario 69 Bloor Street East Toronto, Ontario M4W 1B3 (416) 962-1841 1 800 387-0735 www.icao.on.ca

The Institute of Chartered Accountants of Manitoba 500–161 Portage Avenue East Winnipeg, Manitoba R3B 0Y4 (204) 942-8248 1 888 942-8248 www.icam.mb.ca

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The Institute of Chartered Accountants of British ColumbiaSuite 500, One Bentall Centre 505 Burrard Street, Box 22 Vancouver, British Columbia V7X 1M4 (604) 681-3264 1 800 663-2677 www.ica.bc.ca

If you are in the Yukon, please contact the Institute of Chartered Accountants of British Columbia.

If you are in the Northwest Territories or Nunavut, please contact the Institute of Chartered Accountants of Alberta.

Provincial Institutes/Ordre

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