When preparing, reviewing, or advising on annual financial statements for a Canadian company.
Accountant-reviewed — general reference, not personal advice
A named accountant has reviewed this Guide as general tax/accounting reference material for AI-assisted workflows. That review does not cover your personal facts, documents, elections, deadlines, residency, filing status, or local procedures — do not rely on it to file, pay, amend, or take a tax position without review by a qualified professional in the relevant jurisdiction.
Accountant-reviewed. Reviewed by Edgar Lautsyus on Jun 21, 2026. Review does not create a client relationship and is not a guarantee for any specific taxpayer or transaction.
Accountant-reviewed
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PAE (publicly accountable)
IFRS (Part I)CPA Canada Handbook Part I; IAS 1
Private enterprise
ASPE (Part II)CPA Canada Handbook Part II
Not-for-profit
ASNPO (Part III)CPA Canada Handbook Part III
Goodwill
ASPE Section 3064: goodwill is not normally amortised as it has an unlimited useful life. Recent updates allow companies to amortise goodwill over 5 years, or a maximum of 10 years.CPA Canada Handbook — ASPE Section 3064.87 (maximum useful life = 40 years); CPA Canada ASPE Briefing
Leases
ASPE: finance/operating; IFRS: right-of-use (IFRS 16)CPA Canada Handbook ASPE s.3065; IFRS 16
Revenue
ASPE: risks/rewards; IFRS: five-step (IFRS 15)CPA Canada Handbook ASPE s.3400; IFRS 15
CBCA
Unanimous shareholder consent (s.163)Canada Business Corporations Act s.163
OBCA (Ontario)
Unanimous shareholder consent (s.148)Ontario Business Corporations Act s.148
CNCA (federal NPO)
Audit req unless revenue < $50K; review < $250KCanada Not-for-profit Corporations Act s.172–180
Charity
Audit if revenue > $250,000CRA — T3010 guide — canada.ca; ITA s.149.1
Audit
CASCPA Canada Handbook — CAS
Review
CSRE 2400CPA Canada Handbook — CSRE 2400
Compilation (NTR)
CSRS 4200CPA Canada Handbook — CSRS 4200
T2 corporate return
6 months after fiscal year-endITA s.150(1)(a)
GIFI
General Index of Financial Information — CRA standard codesCRA — GIFI — canada.ca
Annual return (CBCA)
Within 60 days of anniversaryCBCA s.263; Corporations Canada
Late T2 penalty
5% of unpaid tax + 1%/month (max 12)ITA s.162(1)
Rendered from the facts database · facts last reviewed Jun 21, 2026. General reference only — confirm with a qualified professional before acting.
Reviewed against the cited tax authorities by Nathan Wiebe on 2026-06-21.
Items flagged for further clarification are tracked separately and excluded here.
This block is generated from verified skill_facts — edit the facts, not the prose.
Quick Reference
| Field | Value |
|---|---|
| Country | Canada |
| Currency | CAD |
| Filing authority | Corporations Canada (federal); Provincial corporate registries (provincial) |
| Primary legislation | Canada Business Corporations Act (CBCA); Provincial acts (OBCA, BCBCA, ABCA, etc.) |
| Supporting legislation | Income Tax Act (R.S.C. 1985, c.1); CPA Canada Handbook |
| Accounting standards | IFRS (publicly accountable enterprises); ASPE Part II (private enterprises); ASNPO Part III (not-for-profit) |
| Financial year | Any fiscal year-end chosen by the corporation |
| CRA filing deadline | 6 months after fiscal year-end (corporate tax return T2) |
| Annual return | Within 60 days of anniversary of incorporation (CBCA); varies by province |
| Digital filing | CRA My Business Account (T2); Corporations Canada Online Filing |
Reporting Framework
| Entity type | Applicable standard | CPA Handbook |
|---|---|---|
| Publicly accountable enterprises (PAE) | IFRS as issued by IASB (Canadian-adopted) | Part I |
| Private enterprises | ASPE (Accounting Standards for Private Enterprises) | Part II |
| Not-for-profit organizations | ASNPO | Part III |
| Pension plans | Part IV (specific standards) | Part IV |
| Private enterprise choosing IFRS | IFRS (permitted but not required) | Part I |
Key difference: ASPE vs IFRS
| Area | ASPE | IFRS |
|---|---|---|
| Financial instruments | Simplified (cost/amortised cost focus) | Complex (IFRS 9 — ECL, fair value hierarchy) |
| Leases | Finance/operating distinction | IFRS 16 — right-of-use model |
| Revenue | Risks/rewards transfer model | IFRS 15 — five-step model |
| Goodwill | Not normally amortised (unlimited useful life); may amortise over 5 years or max 10 years | Not amortised; annual impairment test |
| Employee benefits | Simplified pension accounting | IAS 19 — full actuarial measurement |
Canada does not have statutory "size thresholds" determining accounting framework in the way EU countries do. Instead:
Size Thresholds criteria
| Criterion | Determining factor |
|---|---|
| Public accountability | If securities are publicly traded or entity holds assets in fiduciary capacity → must use IFRS |
| Private enterprise | May choose ASPE or IFRS |
| Audit requirement | Determined by corporate statute and shareholder agreement (not size per se) |
Provincial variations (examples)
| Jurisdiction | Audit waiver condition |
|---|---|
| CBCA (federal) | Unanimous shareholder consent (s.163) |
| OBCA (Ontario) | Unanimous shareholder consent (s.148) |
| BCBCA (British Columbia) | Shareholder resolution; no exemption for reporting issuers |
| ABCA (Alberta) | Unanimous shareholder consent |
| Quebec (QBCA) | Shareholder resolution; restrictions for certain entities |
Under ASPE (Section 1400, 1521) and CBCA/provincial statutes:
Required Financial Statements
| Document | ASPE | IFRS |
|---|---|---|
| Balance Sheet / Statement of Financial Position | Required | Required |
| Income Statement / Statement of Comprehensive Income | Required | Required (+ OCI) |
| Statement of Retained Earnings / Changes in Equity | Required (retained earnings) | Required (full equity) |
| Statement of Cash Flows | Required | Required |
| Notes to Financial Statements | Required | Required (full IFRS disclosure) |
| Comparative information | Encouraged (not mandatory under ASPE) | Mandatory (minimum one prior period) |
Year-End Adjustments Checklist
| # | Adjustment | Canada-specific notes |
|---|---|---|
| 1 | Amortization/depreciation | ASPE 3061; systematic and rational; CCA rates for tax (not accounting) |
| 2 | Provisions | ASPE 3290; likely, estimable contingencies |
| 3 | Employee benefits | ASPE 3462; accrued vacation, bonus; pension funding vs expense |
| 4 | Bad debt allowance | ASPE 3856; incurred loss model (not ECL for ASPE) |
| 5 | Inventory | ASPE 3031; lower of cost (FIFO/weighted average) and NRV; no LIFO |
| 6 | Income taxes | ASPE 3465; taxes payable method OR future income taxes method (choice) |
| 7 | Foreign exchange | ASPE 1651; temporal method; current rate for monetary |
| 8 | Leases | ASPE 3065; finance/operating classification |
| 9 | Government assistance | ASPE 3800; cost reduction or income approach |
| 10 | Goodwill impairment | ASPE 3064; test when events indicate; not normally amortised (unlimited life); may amortise over 5 years or max 10 years |
| 11 | Related party transactions | ASPE 3840; measured at exchange amount or carrying value |
| 12 | Scientific Research & Experimental Development (SR&ED) | Capitalise or expense; ITC recognition |
ASPE does not prescribe a rigid format. Common Canadian presentation:
Revenue
Cost of goods sold
─── Gross profit ───
Expenses:
Selling expenses
General and administrative expenses
Amortization of capital assets
Amortization of intangible assets
─── Total expenses ───
─── Income from operations ───
Other income (expenses):
Interest income
Interest expense
Gain (loss) on disposal of assets
Foreign exchange gain (loss)
─── Total other income (expenses) ───
─── Income before income taxes ───
Provision for income taxes (current and future/deferred)
─── Net income for the year ───
Common Canadian ASPE presentation:
ASSETS
Current assets
Cash and cash equivalents
Short-term investments
Accounts receivable
Inventories
Prepaid expenses
Current portion of notes receivable
Capital assets (Property, plant and equipment)
Land
Buildings (net of accumulated amortization)
Equipment (net of accumulated amortization)
Leasehold improvements (net)
Intangible assets
Goodwill
Patents, trademarks, licences
Other assets
Long-term investments
Due from related parties
Total assets
─────────────────────────────────────
LIABILITIES
Current liabilities
Bank indebtedness
Accounts payable and accrued liabilities
Income taxes payable
Current portion of long-term debt
Deferred revenue
Long-term liabilities
Long-term debt
Obligations under capital leases
Future income tax liability (or deferred tax)
Total liabilities
─────────────────────────────────────
SHAREHOLDERS' EQUITY
Share capital
Contributed surplus
Retained earnings
Total shareholders' equity
Total liabilities and shareholders' equity
Notes to Financial Statements
| # | Disclosure | ASPE | IFRS |
|---|---|---|---|
| 1 | Significant accounting policies | Required (Section 1505) | Required (IAS 1/IAS 8) |
| 2 | Capital assets / PPE | Required (Section 3061) | Required (IAS 16) |
| 3 | Financial instruments | Required (Section 3856) | Required (IFRS 7 — extensive) |
| 4 | Related party transactions | Required (Section 3840) | Required (IAS 24) |
| 5 | Commitments and contingencies | Required (Section 3290) | Required (IAS 37) |
| 6 | Income taxes | Required (Section 3465) | Required (IAS 12) |
| 7 | Revenue | Simplified | Required (IFRS 15 — extensive) |
| 8 | Leases | Required (Section 3065) | Required (IFRS 16) |
| 9 | Employee benefits / pensions | If applicable (Section 3462) | Required (IAS 19) |
| 10 | Subsequent events | Required (Section 3820) | Required (IAS 10) |
| 11 | Going concern | Required if uncertainty | Required (IAS 1) |
| 12 | Segment information | Not required | Required (IFRS 8 — listed) |
Filing Requirements
| Item | Detail |
|---|---|
| Corporate tax return (T2) | Filed with CRA within 6 months of fiscal year-end |
| Financial statements attached to T2 | Required — GIFI (General Index of Financial Information) coded |
| GIFI | Standard classification system for mapping financial statement lines to T2 |
| Annual return (CBCA) | Within 60 days of anniversary of incorporation |
| Provincial annual return | Varies (e.g., Ontario: within 6 months of fiscal year-end) |
| Public companies (securities filings) | File with provincial securities commissions (e.g., OSC, BCSC) — within 90 days of year-end (annual) |
| Filing format | T2 electronically via CRA My Business Account or certified tax software |
| Late filing penalty — T2 | 5% of unpaid tax + 1% per month (max 12 months) |
| Failure to file penalty | CRA can assess federal penalty + provincial equivalent |
Assurance levels for CRA
| Level | Standard | When used |
|---|---|---|
| Audit | CAS (Canadian Auditing Standards) | Required by statute or shareholders; PAEs |
| Review | CSRE 2400 | Lender requirements; shareholder preference |
| Compilation (Notice to Reader) | CSRS 4200 | Owner-managed private companies; no assurance |
Audit Requirements
| Category | Requirement |
|---|---|
| Publicly accountable enterprise (PAE) | Mandatory audit (CAS) |
| CBCA private corporation | Audit required UNLESS unanimous shareholder waiver (s.163) |
| OBCA private corporation | Audit required UNLESS unanimous shareholder consent (s.148) |
| Federal not-for-profit (CNCA) | Audit required unless revenue < CAD 50,000 (review permitted < CAD 250,000) |
| Provincial NPO | Varies by province and revenue thresholds |
| Registered charity | Audit if revenue > CAD 250,000 (CRA requirement) |
Practical guidelines (lender-driven)
| Loan amount | Typical assurance required |
|---|---|
| < CAD 250,000 | Compilation (Notice to Reader) often accepted |
| CAD 250,000–1,000,000 | Review engagement typically required |
| > CAD 1,000,000 | Audit typically required |
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Review status
Accountant-reviewed
Reviewed by a named licensed practitioner against the stated sources, as general reference material.
Accountant-reviewed · Guide version 10
Reviewed by Edgar Lautsyus · 21 June 2026
A named accountant reviewed this complete Guide version within the stated scope. It is not a guarantee.
View review record →Other Canada computations in the OpenAccountants Tax Library.
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