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Understanding ASPE Section 1521, Balance Sheet
2 | Understanding ASPE Section 1521, Balance Sheet
Three questions for private business owners: Balance SheetA better working world begins with better questions. Asking better questions leads to better answers. To help preparers of financial statements with Canadian accounting standards for private enterprises (“ASPE”) Section 1521, Balance sheet, we’ve summarized the key aspects of the Section and offer relevant practical considerations for private mid-market companies through answering three commonly asked questions.
n1 Which balance sheet line items are required to be presented separately on the face of the statement versus those that can be disclosed in the notes to the financial statements?
As outlined in paragraphs 1521.04 and 1521.05, the following shall be separately presented on the face of the balance sheet. Note that some of these items may be set out more readily in notes to the financial statements or in attached schedules. When this is done, the balance sheet caption that contains these items is identified:
The following assets should be separately presented or set out in the notes to the financial statements:
� Cash and cash equivalents
� Trade and other receivables
� Government assistance receivable
� Prepaid expenses
� Other financial assets
� Investments in non-consolidated subsidiaries and joint arrangements accounted for using the cost or equity method
� Investments measured using the cost, equity and fair value method
� Property, plant and equipment
� Intangible assets
The following liabilities shall be separately presented or set out in the notes to the financial statements:
� Main classes of current liabilities
� Liabilities for future income taxes
� Liabilities of disposal groups classified as held for sale
� Obligations under capital leases
� Defined benefit liability
� Long-term debt
� Asset retirement obligations
� Other financial liabilities
Equity shall be presented in accordance with the requirements of Section 3251, Equity.
Understanding ASPE Section 1521, Balance Sheet | 3
To learn more about these items or for application guidance, please contact our Private Mid-Market practice at [email protected].
n3 What format is required for the balance sheet?
ASPE has few requirements for the formatting or nomenclature of the balance sheet, but the categories and classifications included in the balance sheet should be clear as to what items are included therein. The balance sheet must use assets, liabilities and equity as captions, generally ordering each line item in terms of liquidity. In addition, if a classified balance sheet is presented the balance sheet must differentiate current from non-current assets and liabilities. Refer to Understanding ASPE Publication for Section 1400, General Standards of Financial Statement Presentation for additional information on classified balance sheets.
n2 What title should be used for the balance sheet?
ASPE does not require the use of any specific titles for the financial statements, provided the statement’s name meets its objectives, the entities financial position at a point in time. For example, the balance sheet has such alternative names as a “statement of financial position” and “statement of condition.” The name chosen depends, in part, upon the nature of the entity as well as management’s preferences.
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1567865 ED NoneThis publication contains information in summary form, current as of the date of publication, and is intended for general guidance only. It should not be regarded as comprehensive or a substitute for professional advice. Before taking any particular course of action, contact Ernst & Young or another professional advisor to discuss these matters in the context of your particular circumstances. We accept no responsibility for any loss or damage occasioned by your reliance on information contained in this publication.