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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 aren’t publicly accountable. It’s the set of rules most small Canadian businesses use when their accountant prepares financial statements. A private company can choose it, or it can choose IFRS instead, 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. We couldn’t confirm the exact conditions from a source we could open, so a not-for-profit should ask its accountant which Handbook part applies.
Where ASPE shows 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 |
A worked example
Suppose a company books $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 books 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. 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.
Mistakes and limits
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.
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. We couldn’t confirm the most recent amendments from a source we could open, 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.
Where the numbers come from
The description of ASPE comes from CPA Canada’s material on Part II of the Handbook and from the Financial Reporting and Assurance Standards Canada site. The federal 9% small business rate comes from the CRA and our 2026 data file. Amounts in the example are invented round figures for illustration.
Frequently asked questions
What does ASPE stand for?
Accounting Standards for Private Enterprises. It is Part II of the CPA Canada Handbook.
Can a private company use IFRS instead?
Yes. A private enterprise can choose IFRS (Part I of the Handbook) or ASPE, and either way it can say its statements follow Canadian GAAP.
Does ASPE decide how much tax I pay?
No. Tax is set by the Income Tax Act. Your accountant adjusts accounting profit to get taxable income.
Do publicly traded companies use ASPE?
No. ASPE is for enterprises that aren't publicly accountable.
Can a not-for-profit use ASPE?
Some do, under a separate section of the Handbook. We couldn't confirm the conditions, so ask your accountant.
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Information only. This page is general information, not tax, legal or accounting advice. Tax-Services.ca is an independent publisher: we don't prepare or file tax returns or offer tax services, and we have no connection with the CRA, Revenu Québec, any government or any company named on this page. Check the figures that matter with an official source or a qualified professional.