(November 2 – 15:10 ET) – Canadian companies feeling disadvantaged by the current differences between Canadian and U.S. accounting standards for business deals, mergers and acquisitions are getting some relief. The Accounting Standards Board of the Canadian Institute of Chartered Accountants has announced approval of an interim measure.
Until a final, harmonized Canadian/US standard for business combinations is developed, Canadian companies will be permitted to present goodwill charges on a net-of-tax basis as a separate line item in the income statement for all years reported. The measure also allows companies to present earnings-per-share information, which excludes the goodwill charge.
The separate net-of-tax form of presentation for goodwill charges was proposed in a September 1999 exposure draft that includes a comprehensive reconsideration of business combination accounting. The full exposure draft can be downloaded from the CICA’s web site, under Standards and Guidance, Accounting Standards, Documents for Comment. The comment for these proposals is November 30, 1999.
Approval of the interim measure was based on feedback the AcSB received in response to a fast-tracked portion of the September exposure draft. Depending on the comments the AcSB receives on the full exposure draft, the final standard on business combinations may differ from the interim measure.
-IE Staff
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