When looking at the kind of data that has to be collected for transitioning Canadian GAAP to IFRS standards, it is important to remember that there are additional options to use fair value information under IFRS.
If a company chooses those options, then fair value data will be needed, either at transition alone or subsequently, depending on the options selected.
For instance, with Investment Property, a company has two choices for accounting – the Fair Value option or the Cost option. However, even if the Cost option is selected, the company must disclose fair value information related to the investment property. First, the company will need to access how to determine fair value and second, review how its systems will generate the required information.
The information needs will depend upon the technical requirements of the individual standards.
For example, with regards to Impairment (IAS 36), this standard involves Cash Generating Units (CGU’s). In comparison, Canadian GAAP deals with Asset Groups. As a result, there is a process in place to collect data related to the existing Canadian rules. However to complete the impairment test under IFRS, the company will need to identify the Cash Generating Unit, and collect the required information for this new data class.
I hope this helps. This is one of a series of blogs that is meant to convey information relating to Canada’s transition from Canadian GAAP to IFRS.
For further information, please refer to the ongoing series of IFRS blogs on the Edelkoort Smethurst Schein CPA’s LLP web-site and please remember to contact your accounting professional for further guidance.