6.5 IFRS/ASPE Key Differences
| Item | ASPE | IFRS |
|---|---|---|
| Cash equivalents | Equity investments are excluded from this classification. | Preferred shares can be included if there is a specified redemption date and are acquired close to their maturity date. |
| Accounts receivable – initial measurement | Initially measured at net realizable value (net of trade discounts and sales discounts, returns and allowances) in lieu of fair value given their short-term nature (there is no significant interest component). | Same as ASPE |
| Accounts receivable – subsequent measurement | Cost in lieu of amortized cost since there is no significant interest component. | Same as ASPE |
| Accounts receivable – impairment | Impairment is determined by estimating uncollectible accounts using either accounts receivable or credit sales as the basis. Direct write-off of uncollectible accounts directly to bad debt expense is only used under limited circumstances. | Same as ASPE |
| Short-term notes receivable – initial and subsequent measurement | In lieu of fair value, measured at NRV: face value plus stated rate of interest for interest- bearing notes and face value which includes interest for non-interest-bearing notes. |
Same as ASPE |
| Long-term notes receivable – initial measurement | At fair value: Interest bearing: Present value of the expected cash flows discounted at the market rate of interest. Non-interest bearing: Present value of the expected cash flows discounted at the market rate of interest. The interest component is the difference between the proceeds (the present value set by the lender) and the repayment amount. |
Same as ASPE |
| Long-term notes receivable – subsequent measurement | Measured at amortized cost using either the straight-line method or the effective interest method for interest, discounts, or premiums. | Measured at amortized cost using the effective interest rate method for interest, discounts, or premiums. |
| Long-term notes receivable – impairment | If impaired, the receivable is remeasured at the present value of the expected cash flows at the current market interest rate. | If impaired, the receivable is remeasured at the present value of the expected cash flows at the loan’s original effective interest rate. |
| Long-term notes receivable – transaction costs | Capitalized at acquisition and added to discount or premium to be amortized over life of note. | Same as ASPE |
| Derecognition of receivables | When the entity has given up the control of the receivables by meeting all three conditions:
|
When substantially all of the risks and rewards have been transferred:
|
| Derecognition of receivables – sale without resource | If all three conditions met, treat as a sale, otherwise as a secured borrowing. | If condition met, treat as a sale, otherwise as a secured borrowing. |
| Derecognition of receivables – sale with recourse | If all three conditions met, treat as a sale, otherwise as a secured borrowing. | Treat as a secured borrowing. |
| Disclosure of receivables | Are to provide information about:
Less disclosure requirements than IFRS. |
Are to provide information about:
More information required than ASPE, including a reconciliation of any changes in the allowance account and extensive disclosures regarding securitization transactions. |
| Analysis of receivables | Three financial tools:
|
Same as ASPE |
