Both IFRS and Canadian GAAP are based on similar conceptual frameworks. Many of the basic concepts in IFRS (e.g., the going concern assumption, accrual accounting) are similar to Canadian GAAP. Many recognition and measurement principles are similar, as is the general structure and content of the financial statements.
The framework is not an international accounting standard in and of itself and nothing in the framework overrides a specific accounting standard. The IASB notes that there may be a few rare cases where the framework is in conflict with a specific standard and, in these cases; the standard would override the framework. Where there is no specific standard, the framework should govern the accounting. The framework is similar to North American frameworks although some of the labels are different.
According to the framework, users of financial statements are all parties and individuals who use general purpose financial statements to make decisions. The overall objective of financial reporting is to produce financial statements that present fairly the results of operations and the financial position. This is sometimes referred to as a “true and fair view” of the company and its financial position.
To meet the objective, the information shown on financial statements should be useful to mass people. The characteristics of useful information are:
1. understandability, which creates less confusion and are more likely to be understood by users internationally. The more understandable information for users, the more confidence and interested in for investor to make their decisions;
2. relevance, which must be... [continues]
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