Publicly traded corporations must use IFRS because multinational corporations that wanted a

reporting system that remained consistent across the multiple jurisdictions in which they were
reporting (e.g., businesses with operations and reporting requirements in Germany, France and
Switzerland). IFRS was designed to deal with complicated situations faced by multinational and
public corporations. For example, IFRS might suggest an annual valuation performed by an
actuary for a specific type of asset. Additionally, while IFRS is well recognized globally, the
United States (US) has not yet adopted it. This means that a Canadian company trying to attract
US investors would often be better served reporting under US GAAP than IFRS.

Private corporations, whose users can have different needs than those of publicly traded
corporations, have a choice between using IFRS or ASPE. ASPE were developed to reduce the
complexity and cost of financial reporting for private companies, recognizing that there are
normally fewer users of private company financial statements. Generally, the users of private
company financial statements also have access to financial information beyond that available to
the users of public company financial statements.
Most private corporations choose to use ASPE, although there are exceptions. There are a
number of reasons that a private company may adopt IFRS. These include: it is considering
accessing public debt or equity markets in the future, it wants to be able to compare its financial
results with competitors that use IFRS, or it has foreign subsidiaries that are required to use IFRS
and it wants a common set of accounting standards across the company
Plans to issue equity for growth, obtain external financing from Canadian and Foreign
Banks, competing with public companies for access to credit, is a foreign subsidiary
whose parent reports in accordance with IFRS 

Cash accounting vs Accrual accounting

Cash account:
+In cash account, incomes and expenses are only recognised via cash.
+Only cash incomes, cash expense.
+Simple and easy to understand
+We can get how much cash the business generated
Accrual account:
+In accrual account, incomes and expenses are recognised when they are done
+All expenses and incomes
+Complex and difficult to understand.
Key conceptual framework items:

 Objective of general purpose financial reporting s to provide financial

information about a company that is useful to existing and potential investors, lenders, and
other creditors in making decisions about providing resources to the company. Those
decisions involve buying, selling, or holding equity and debt instruments and providing or
settling loans and other forms of credit. They also include assessing management's
stewardship of the company's assets
 Qualitative characteristics of useful financial information the two fundamental
qualitative characteristics of useful financial information are (1) relevance including
predicative value. Confirmatory value, materiality and (2) faithful representation including
complete, neutral, and free from errors.
 Underlying assumption
 Elements of financial statements
 Measurement of the elements of financial statements
Balance in the cash account at the beginning of the month + Deposits made during the month -
Cheques issued during the month.