Accounting Standard for Private Enterprises (ASPE)
The ASPE regarding the financial statement presentations and disclosures:
Reducing the disclosure requirements in the financial statements by almost half for small and medium enterprises (SME) doesn’t mean that private enterprises can omit or reduce the notes to the financial statements as long as these notes are essential for financial statement’s users and related to a specific transaction.
Overall the presentation of the financial statements has to be fair according to section 1400 General Financial statement presentation.
- The private enterprises should disclose in a separate paragraph the government remittances as current assets or current liabilities; this fact is very important to the financial statement’s users to rank the priority of the liabilities to other creditors.
- Adopting ASPE for the first time require the enterprises to disclose the accounting policies and any changes to the current accounting policies (if any), Any net income reconciliation in prior year of adoption that was needed to arrive to the current net income as a result of any changes in accounting policies.
- Disclosure required for all Canadian enterprises that they are following the Canadian Standards for private enterprises, or for some Canadian enterprises; they can refer to Canadian GAAP, if they wish to follow the Canadian GAAP to meet contractual or legislative requirements. However these enterprises have to be clear regarding the relationship between the Canadian standard for Private Enterprises and the Canadian GAAP.
- For the Measurement Uncertainty for any future obligations, the users of the financial statements are interested to know any measurements uncertainty that the entity may face in the future by a clear and fair disclosure in the financial statement notes.
In general the ASPE recommend a clear language and fair presentation of the financial statements, disclosures are required for a specific transactions and the activities undertaken by the private enterprise.