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The IFRS requirements in Canada apply to publicly accountable enterprises: they must use IFRS Accounting Standards for all interim and annual financial statements. Most private companies don’t have to, though the option is open to them.
That one line sorts most readers. If your company doesn’t sell shares or debt to the public, you are almost certainly under a different set of rules, and the rest of this page tells you which one and why the tax side still cares.
Which companies must follow IFRS in Canada?
The Accounting Standards Board sets the standards and splits them into parts. Part I is IFRS Accounting Standards, for publicly accountable enterprises. Part II is Accounting Standards for Private Enterprises, known as ASPE, for private sector companies that are not publicly accountable. Part III covers not-for-profit organizations and Part IV covers pension plans.
| Part of the CPA Canada Handbook | Who uses it |
|---|---|
| Part I, IFRS Accounting Standards | Publicly accountable enterprises, and private companies that choose it |
| Part II, ASPE | Private companies that aren’t publicly accountable |
| Part III | Not-for-profit organizations |
| Part IV | Pension plans |
The CRA describes the same split: publicly accountable enterprises are required to use IFRS, and most private companies can adopt it if they want. Canada.ca doesn’t define “publicly accountable” in full, so check the definition in Part I of the Handbook if your company is near the line.
Should a private company choose IFRS anyway?
Usually no, unless something pushes you. A parent company abroad, a plan to list, or an investor who wants IFRS numbers are the normal triggers.
The CRA expects extra records when a business first adopts IFRS, including a reconciliation of equity at the changeover. Switching back is a separate question with its own rules, so decide with your accountant, for a reason you can write down.
Picture Marcus, who owns a small software company in Kitchener and has an offer from a European buyer. The buyer’s auditors will want IFRS numbers. Marcus is better off asking his accountant about the switch early than scrambling during due diligence.
What does it cost to switch?
Mostly your accountant’s time, and the time can add up. Statements move from ASPE to IFRS with a restated opening balance sheet, more disclosure in the notes and, often, new valuation work on things like financial instruments. A small company with simple books may find it manageable. One with leases, stock options or foreign currency may not.
So don’t switch because IFRS sounds more serious. Switch because somebody who matters, a buyer, an investor or a parent company, needs it, and ask for a rough estimate of the extra hours first. Fees vary by firm, so get quotes in writing.
What does IFRS change for your tax return?
Less than people fear. The Income Tax Act doesn’t require any particular accounting standard to work out profit. The CRA says statements prepared under IFRS are an acceptable starting point for taxable income, and where its guidance mentions GAAP, that reads as IFRS for a business that reports under IFRS. It wants IFRS applied consistently to every tax filing and every year.
The profit you report is where the tax starts, not where it ends. Tax rules then adjust it, and the CRA asks you to document each adjustment on Schedule 1.
To feel how much a difference in taxable income matters, use the corporate tax calculator. For an Ontario corporation on $300,000 of active business income it shows about $35,088 of tax. At $320,000 it shows $37,427. A $20,000 gap in accounting treatment, if it carried through to taxable income, would cost $2,339. The calculator uses a blended 2026 Ontario small business rate, so treat those as estimates.
What records does the CRA expect from IFRS filers?
This applies to publicly accountable enterprises that adopted IFRS from 2011, and to others who chose it. The CRA’s books and records guidance for IFRS filers asks you to keep reconciliations from the GIFI amounts on the return to the IFRS statements, and from the statements to the books. You keep the original cost and the tax cost of assets. You document each IFRS amount that changes the income calculation on Schedule 1, with the reason.
All of the records and supporting documents must be kept for a period of six years that starts at the end of the tax year to which the records relate.
Books and records guidance for IFRS filers, canada.ca
Records of acquisitions, disposals and the share registry are kept indefinitely.
A quick note on returns: the GIFI schedules still use the same codes whichever framework you follow. Corporations with gross revenue or assets of $1 million or more file Schedules 100, 101 and 125.
Does federal company law name IFRS?
The regulations under the Canada Business Corporations Act say annual financial statements must be prepared using Canadian generally accepted accounting principles, and they list the statements to include. So a federally incorporated company needs its statements done under an accepted framework, which in practice means IFRS or ASPE, as applicable. The regulation’s own wording decides, and provincial acts may word this differently.
If you’re weighing two frameworks, try out the business numbers first with the profit margin calculator and the ROI calculator. They don’t apply a standard, but they show whether the gap between two treatments would even change a decision.
Where the numbers come from
The framework split comes from the Accounting Standards Board’s own pages. The CRA‘s pages on IFRS, books and records, and taxable income give the tax treatment, and its GIFI and record-keeping pages give the schedules and the six-year period. The Canada Business Corporations Regulations, 2001 supply the GAAP rule. The tax figures are from our calculator on 2026 rules. For the detail of any particular standard, check Part I of the Handbook.
Frequently asked questions
Who must use IFRS in Canada?
Publicly accountable enterprises must use IFRS Accounting Standards for all interim and annual financial statements.
Can a private company use IFRS?
Yes. Most private companies can choose IFRS, though many use Accounting Standards for Private Enterprises (ASPE) instead.
Does the CRA accept IFRS statements for tax?
It treats IFRS statements as an acceptable starting point for taxable income and expects them to be applied consistently across filings and years.
What extra records do IFRS filers keep?
Reconciliations between GIFI, the IFRS statements and the books, plus asset cost records and support for each amount that changes the income calculation.
How long should the records be kept?
Six years from the end of the tax year they relate to, with acquisition, disposal and share registry records kept indefinitely.
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