SDG Accountants provides world-class tax and accounting services in Toronto. From cross-border tax concerns to on-site bookkeeping, or even just general corporate filing requirements, we work directly with our clients across the globe to guide them through the complexities of their Canadian accounting requirements. No matter the distance, our Toronto Accountant team goes the extra mile to ensure that your Accounting and Tax concerns are expertly handled, with the utmost care. Contact us to book an initial consultation.
In Canada profit-oriented businesses have 3 options to select from:
- IFRS – International Financial Reporting Standards
- ASPE – Accounting Standards for Private Enterprises
- NON-GAAP – Cash Accounting or Accounting for Tax Purposes
A business should consider its future goals and vision when choosing to adopt reporting standards. I.e. If a start-up is planning an initial public offering in the next couple of years; it may be optimal to choose IFRS (as this is the required accounting standard for Public Companies). Although, since the U.S. has not adopted IFRS, they use their own set of standards known as U.S. GAAP. Therefore, if a start-up is trying to attract U.S. investment that should be taken into consideration as well.
Most businesses we deal with are small and medium-sized businesses across the Greater Toronto Area. In practice, these businesses are not actually obligated to use any of the 3 standards noted above, and they have the option to choose any standards they want. Practically, speaking most private businesses should use ASPE, aka private GAAP. ASPE is most likely the best choice for your Toronto-based business. This may make your business more credible in the long run if you consider selling, arranging to finance, raising equity capital, or even just complying with industry norms. Most importantly, your Toronto business should have a tailored approach and take these factors into consideration.
Small owner-managed businesses that are not required to be audited or have a review engagement may see it advantageous to prepare financials in accordance with tax purposes. Essentially, the financials would be prepared in the same format and structure that they would appear to be on your corporate tax return or sole proprietor return. There is minimal disclosure for external users, and these types of statements sometimes overlap with GAAP, although not in all aspects. Keep in mind, that if preparing statements for tax purposes it may be costlier to convert your statements to ASPE later down the road.
“Their expertise extends well beyond accounting. If you want to work with professionals that make accounting understandable and are always looking out for your financial interests, SDG Accountant is the right choice!”