1. Sec. 2.4 – Accounting Standards
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2. GAAP – IFRS - APSE
- Canadian Institute of Chartered Accountants (CICA) has historically established the standards for Canadian accountants
- The Canadian Generally Accepted Accounting Principles (Canadian GAAP)
- In recent times, the International Financial Reporting Standards (IFRS) has moved Canadian accounting to international standards to help Canadian businesses communicate globally. Over 100 countries are a part of IFRS
- IFRS governs public enterprises while Accounting Standards for Private Enterprises (APSE) governs private businesses

3. Business Entity Concept
A long-standing principle that keeps the accounting for a business organization separate from the personal affairs of its owner, or from any other business or organization
This means that the owner of the business should not place any personal assets, such as family home or cottage, personal automobile on the business balance sheet
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4. Cost Principle
Requires that accountants record the value of assets at their historical cost price
We should not be concerned about the current market value
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5. Continuing Concern Concept
Assumes that a business will continue to operate unless it is known that it will not
This assumption frees the reader of a balance sheet from worrying about the market values of assets and whether debts will have to be paid before they are due

6. Revaluation Model
Contained with IFRS allows for modifications to the cost principle
It outlines an accounting procedure that allows accountants to change the value of particular assets based on market conditions
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7. Classified Balance Sheet (APSE)
Current Assets
Current Liabilities
Long-Term Assets
Long-Term Liabilities
Equity

8. Statement of Financial Position (IFRS)
Long-Term Assets
Equity
Current Assets
Long-Term Liabilities
Current Liabilities

9. Why Statement of Financial Position?
On the Asset side, the inverted order reflects an emphasis on the long-term productive assets of a business, such as property, buildings, and equipment
On the right side, the order stresses the sources of the funds that were used to purchase the assets. The sources of funds begins with the owner(s), followed by the creditors
Most private businesses in Canada choose APSE rather than IFRS
If you see a Statement of Financial Position, you are likely looking at the financial position of a public company

10. Now, let’s get down to work!