Friday, September 25, 2009

New Accounting Standards Will Have No Direct Impact on Individuals

While accountants and businesses scramble to put together a plan for converting their financial accounting systems and statements from Canadian Generally Accepted Accounting Principles (GAAP) to the new International Financial Reporting Standards (IFRS), the good news is that IFRS shouldn't impact your personal tax situation -- at least not directly. IFRS is basically a set of accounting rules and principles designed to provide guidance to accountants and others to prepare financial statements. "There are not that many direct implications for individuals since individuals don't have personal financial statements with respect to themselves," said Stan Maj, a tax partner in the financial services group at Ernst and Young LLP in Toronto. However, IFRS might have an impact on public companies that will have to begin following International Accounting Standard 12 (IAS 12) on Income Taxes for fiscal periods beginning Jan. 1, 2011.

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