Canada's transition to International Financial Reporting Standards, while improving transparency and comparability of Canadian companies, will likely not affect credit ratings, according to a new report from Moody's Investor Service.
"Overall, the transition is unlikely to have a broad impact on credit ratings," said Anna Zubets, Moody's vice president and senior accounting analyst. "As a change in the medium of communicating financial results does not usually have a significant impact on the economic position of an entity."
In February, 2008, the Canadian Accounting Standards Board confirmed Jan. 1, 2011 as the changeover date to replace Canadian Generally Accepted Accounting Principles with IFRS for all Canadian Publicly Accountable Enterprises or PAEs.
The ratings agency's report identifies the most commonly expected accounting policy changes and first-time adoption exemptions, based on the latest annual and interim financial reports of selected Canadian non-financial rated issuers transitioning to IFRS.
The report, "Analyzing the Canadian IFRS Transition for Non-Financial Corporations," is available at www.moodys.com
Meanwhile, The Canadian Institute of Chartered Accountants also has prepared "The CICA's Guide to IFRS in Canada" on the upcoming changes, which includes a comparison of the current CICA Handbook standards with the comparable IFRS standards.
The guide can be accessed at: http://www.cica.ca/
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