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ASPE, short for Accounting Standards for Private Enterprises, is the rulebook in Part II of the CPA Canada Handbook for private companies that are not publicly accountable. Most small Canadian businesses use it when their accountant prepares financial statements. A private company can also choose IFRS, and either one counts as Canadian GAAP.
Who can use ASPE?
A private enterprise is a profit-oriented business that isn’t publicly accountable. In plain terms, that rules out companies whose shares or debt trade on a public market, and it includes the typical owner-managed corporation. A private company may also pick IFRS, which is Part I of the Handbook, but most don’t, because ASPE asks for less disclosure and gives more room in some policy choices.
Some not-for-profit organizations use ASPE too, through a separate set of rules in the Handbook for them. The conditions are specific, so a not-for-profit should ask its accountant which Handbook part applies.
Where does ASPE show up in your dealings?
Mostly in the statements your accountant hands you at year end. The balance sheet, the income statement and the notes follow ASPE if the company chose it. Banks ask for those statements. Buyers ask for them too when you sell the business. So does anyone else who has to trust your numbers without seeing your books, which is why the framework matters even though you rarely read the standards yourself.
It does not set your taxes. The CRA taxes you under the Income Tax Act, and the two often differ. Accounting depreciation isn’t the same as the capital cost allowance you claim, for instance. So your accountant adjusts accounting profit to get taxable income, and that step is where owners get surprised.
The same profit, two different numbers
| Item | Financial statements (ASPE) | Tax return |
|---|---|---|
| Purpose | Show the business’s results to owners, lenders and buyers | Work out tax owing |
| Rules come from | CPA Canada Handbook, Part II | Income Tax Act and CRA |
| Who sets them | Accounting Standards Board | Parliament |
| Machinery wear | Amortization the owner picks | Capital cost allowance classes |
What does a worked example look like?
Suppose a company posts $60,000 of profit under ASPE. Tax isn’t charged on that figure directly, but as a starting point, the federal small business rate of 9% on $60,000 is $5,400. The real return may adjust that profit up or down. If the accountant records amortization of $8,000 and the tax rules allow a capital cost allowance of $12,000, taxable income falls by $4,000 to $56,000, and the federal tax drops to $5,040.
That $360 difference is the sort of gap that shows up between your statements and your return, and it isn’t an error. A few hundred dollars is a ballpark figure for a small firm, but it grows with the equipment you buy. The corporate tax calculator lets you try your own numbers, and the provincial rate depends on where you operate. For the margin on your own books, use the profit margin calculator.
How do amortization and CCA differ over three years?
For a simple picture, say a company buys $60,000 of equipment. In its ASPE statements it spreads the cost evenly over five years, so amortization is $12,000 a year. For tax, assume it claims capital cost allowance at 20% of the remaining balance each year. This ignores the half-year rule and any accelerated allowance, so it is an illustration of the gap and not a tax calculation.
| Year | ASPE amortization | CCA claimed | Difference |
|---|---|---|---|
| Year 1 | $12,000 | $12,000 | $0 |
| Year 2 | $12,000 | $9,600 | $-2,400 |
| Year 3 | $12,000 | $7,680 | $-4,320 |
The tax deduction starts level with the accounting figure and falls below it from year two. Your accountant tracks these differences and adjusts accounting profit to get taxable income, which is why the statements and the return rarely match. The corporate tax calculator lets you test your own numbers, and our guide on which financial statements a business needs shows what the lender will ask for.
Do you need to read the standards yourself?
Almost never. Your accountant applies them, and your job is to know which framework the statements follow. When a lender or buyer asks, “Are these ASPE statements?”, you want to answer in one word.
Keep one thing handy, though: the name of the framework appears in the notes to your statements, usually in the first note on accounting policies. If you can’t find it, ask.
What should you ask your accountant?
Two questions are worth the phone call. First, “Which framework are my statements on, and why?” A good accountant has a one-sentence answer. Second, “What will change if I want to move to IFRS later?” That one matters if you plan to bring in a foreign investor or sell to a larger buyer, since the switch takes real work on past years.
Say Priya in Halifax runs a small manufacturing company and expects an offer in three years. She might ask about IFRS now, while the books are small, instead of in a rush during due diligence.
Mistakes and limits
A common one is treating statements as if they were the tax return. They aren’t. Another is changing frameworks without a reason. If your lender or a future buyer expects ASPE, ask before you switch. A third is assuming a notice to reader or review report changes which standard you follow. Those reports describe how much a CPA checked. They don’t pick the framework.
ASPE is revised from time to time, so your accountant is the person to ask about current changes. If you’re also planning the financing, the ROI calculator is a rough way to test an investment, but it doesn’t follow accounting standards.
Sources, and how we checked them
The description of ASPE comes from CPA Canada material on Part II of the Handbook and the Financial Reporting and Assurance Standards Canada site. The CPA Canada pages returned an access error when we tried them in November 2026, so the description rests on earlier reading and your accountant should confirm current details. The federal 9% small business rate comes from the CRA corporation tax rates page, read in November 2026. Amounts in the examples are invented round figures.
Frequently asked questions
What does ASPE stand for?
Accounting Standards for Private Enterprises. It is Part II of the CPA Canada Handbook and applies to profit-oriented enterprises that are not publicly accountable, which includes the typical owner-managed corporation. A private company can use it for the statements it gives to a bank, a buyer or its shareholders.
Can a private company use IFRS instead?
Yes. A private enterprise can choose IFRS, which is Part I of the Handbook, or ASPE, and either way its statements can say they follow Canadian GAAP. Most private companies choose ASPE because it asks for less disclosure. Moving to IFRS later, for example before a sale to a larger buyer, takes real work on past years.
Does ASPE decide how much tax I pay?
No. Tax is set by the Income Tax Act, which the CRA administers. Your accountant adjusts accounting profit to get taxable income. Amortization in the statements, for example, is replaced by capital cost allowance on the return, so the two profit figures often differ without any error.
Do publicly traded companies use ASPE?
No. ASPE is for enterprises that are not publicly accountable. Companies whose shares or debt trade on a public market follow IFRS. If you are not sure which side you are on, the first note on accounting policies in your statements names the framework, and your accountant can confirm it in one sentence.
Can a not-for-profit use ASPE?
Some do, under a separate set of rules in the Handbook for not-for-profit organizations. We could not confirm the conditions, so a not-for-profit should ask its accountant which part of the Handbook applies. Do not assume that ASPE for business applies to a charity or association without checking.
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