Canadian newspapers are reporting that Canada's Accounting Standards Board will align Canadian accounting rules with International Financial Reporting Standards. Much of the debate centered on whether a rules-based or principles-based approach is better for Canadian businesses and investors.
Europe follows the principles-based approach focusing on compliance with the spirit of the rules, while the U.S. follows a rules-based approach. While a rules-based approach provides certainty, it can lead to an almost endless series of loophole recognition and correction. On the other hand, most of Canada's trade is with the U.S.
Canadian companies that are listed on U.S. exchanges can continue to follow U.S. GAAP.