TORONTO, Oct. 31 /CNW/ - With quarterly financial reports to investors on
the horizon, many Canadian businesses are wrestling with the task of assessing
how the asset-backed commercial paper (ABCP) liquidity crunch is affecting
their financial health.
Canadian companies prepare their financial statements using Canadian
Generally Accepted Accounting Principles, which requires the value of
investments to be assessed and any impairment to the value of those assets to
be fully recognized. The current "freeze" on the ABCP market created by the
Montreal Accord agreement in August makes it difficult for businesses to put
values on these assets and raises other questions of presentation and
To help business deal with this situation, the staff of the Canadian
Accounting Standards Board has posted on its web site a commentary relating to
asset-backed commercial paper (ABCP) subject to the Montreal Accord. The
eight-page document titled "Non-Bank-Sponsored Asset-Backed Commercial Paper -
Financial Reporting Commentary" can be found at www.acsbcanada.org.
"This action is being taken to assist businesses in dealing with the
issue," said Paul Cherry, Chair, Accounting Standards Board. "There is
uncertainty in today's marketplace so it is difficult to account for these
investments. The focus of the document is to assist businesses in providing
useful information to their investors under current circumstances."
The Accounting Standards Board establishes financial accounting and
reporting standards for use by Canadian companies and not-for-profit
organizations. It also participates in the development of internationally
accepted accounting standards. The Board sets its financial accounting and
reporting standards after an extensive process of consultation with
organizations and individuals that are interested in or affected by the
standards. The standards contribute to enhanced decision making by
continuously improving the quality of financial and other information about
organizational performance reported by Canadian entities.
For further information:
For further information: Or to arrange and interview, contact Tobin
Lambie, CICA Manager, Media, (416) 204-3228, firstname.lastname@example.org