ASPE Section 1100
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Generally Accepted Accounting Principles
Generally Accepted Accounting Principles is part of the Accounting Standards for Private Enterprises (ASPE).
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Conceptual Framework Linkage
A dedicated, standalone hierarchy for filling gaps
ASPE Section 1100 ESTABLISHES what CONSTITUTES Canadian generally ACCEPTED accounting PRINCIPLES for PRIVATE enterprises, and SETS OUT the HIERARCHY of sources an ENTITY consults WHEN a SPECIFIC transaction or EVENT is NOT directly ADDRESSED by an EXISTING ASPE Section. UNLIKE IFRS (WHERE this TOPIC is FOLDED into IAS 8'S broader ACCOUNTING policies discussion), ASPE gives THIS hierarchy ITS OWN dedicated, STANDALONE Section.
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Scope – Establishing What Counts as GAAP
Defining the authoritative source
This Section applies WHENEVER a PRIVATE enterprise PREPARES financial STATEMENTS in ACCORDANCE with Canadian GAAP as SET OUT in PART II of the CPA CANADA Handbook – DEFINING the SOURCES an ENTITY may LEGITIMATELY rely UPON in FORMING its ACCOUNTING policies.
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The Primary Source – Part II of the CPA Canada Handbook
The individual ASPE Sections themselves
The PRIMARY source of GAAP for a PRIVATE enterprise is the INDIVIDUAL Sections COMPRISING Part II of the CPA CANADA Handbook – the ASPE SECTIONS covered THROUGHOUT this poster SERIES. WHERE a SPECIFIC Section directly ADDRESSES a TRANSACTION or EVENT, THAT Section'S guidance GOVERNS, WITHOUT need to CONSULT any OTHER source.
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Where a Specific Section Directly Addresses the Issue
No need to look further
IF an EXISTING ASPE Section DIRECTLY addresses a PARTICULAR transaction or EVENT, an ENTITY simply APPLIES that SECTION'S guidance – THE hierarchy discussed BELOW (Sections 5-6) becomes RELEVANT only WHERE genuine GAPS exist.
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Where No Section Directly Applies – Returning to Section 1000 First
The conceptual framework as the first port of call
WHERE NO specific ASPE Section DIRECTLY addresses a TRANSACTION or EVENT, an ENTITY FIRST returns to SECTION 1000 (FINANCIAL Statement Concepts – see the COMPANION poster) – APPLYING the GENERAL recognition CRITERIA, measurement BASES, and QUALITATIVE characteristics DISCUSSED there to DEVELOP an APPROPRIATE accounting POLICY.
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Permitted Secondary Sources – Looking to Other Frameworks by Analogy
A genuinely distinctive, explicit invitation to borrow from other frameworks
WHERE Section 1000 ALONE does NOT resolve the ISSUE, an ENTITY MAY consider ACCOUNTING treatments in OTHER sources DEALING with SIMILAR or RELATED issues – INCLUDING Part I of the HANDBOOK (Canadian-ADOPTED IFRS), OTHER established ACCOUNTING frameworks (SUCH as US GAAP), and OTHER accounting LITERATURE – a GENUINELY distinctive, EXPLICIT permission to BORROW by ANALOGY from OUTSIDE frameworks, PROVIDED the RESULTING policy remains CONSISTENT with Section 1000'S own CONCEPTS.
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Accepted Industry Practice as a Legitimate Reference Point
A pragmatic acknowledgment of sector-specific convention
ACCEPTED industry PRACTICE may ALSO be a LEGITIMATE reference POINT WHERE it PROVIDES a REASONABLE basis for DEVELOPING an ACCOUNTING policy – REFLECTING that CERTAIN sectors HAVE well-established, WIDELY understood CONVENTIONS that MAY reasonably GUIDE policy DEVELOPMENT even ABSENT a SPECIFIC ASPE Section on POINT.
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Worked Example – Applying the Hierarchy to an Unaddressed Transaction
Working through the source hierarchy step by step
Example: A genuinely novel digital asset transaction
A private enterprise engages in a transaction involving a genuinely novel type of digital asset with no specific ASPE Section addressing it directly.
The company FIRST applies SECTION 1000'S general RECOGNITION and MEASUREMENT concepts. IF this does NOT fully RESOLVE the ISSUE, it MAY then CONSIDER how Part I (IFRS) or US GAAP TREAT similar TRANSACTIONS, DEVELOPING a POLICY BY analogy that REMAINS consistent WITH Section 1000'S own UNDERLYING concepts.
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Worked Example – Choosing Between Two Permitted Secondary Sources
Selecting the most relevant analogy, not simply the most convenient
Example: Choosing between an IFRS and a US GAAP analogy
Both IFRS and US GAAP offer a plausible, but differing, treatment for an unaddressed transaction a private enterprise has encountered.
The company SELECTS the ANALOGY that MOST FAITHFULLY reflects the ECONOMIC substance of ITS OWN transaction and BEST aligns WITH Section 1000'S UNDERLYING concepts – RATHER than simply CHOOSING whichever TREATMENT produces the MOST favorable financial STATEMENT outcome.
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Disclosure Requirements
What Section 1100 requires
Disclosure of the accounting policy developed for a transaction not directly addressed by an existing ASPE Section, per Section 1505Basis for the policy selected, where genuinely significant to understanding the financial statements
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Critical Judgments & Estimates
Where judgment matters most
SIGNIFICANT JUDGMENTS
Whether an existing ASPE Section genuinely fails to address a transaction, or whether it applies by reasonable extensionWhich secondary source (IFRS, US GAAP, industry practice) provides the most relevant analogy
SIGNIFICANT ESTIMATES
Generally minimal – this Section is a source hierarchy, not a measurement standard itself
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Relationship to IAS 8's GAAP Hierarchy
Comparison – ASPE Section 1100 vs IAS 8's hierarchy
FeatureASPE Section 1100IAS 8 (paras 10–12)
Standalone SectionYES – its own dedicated SectionNO – folded into the broader accounting policies standard
Permission to reference other frameworksExplicit – IFRS, US GAAP, other literatureSimilar in spirit – other standard-setters' pronouncements may be considered
CONCEPTUALLY SIMILAR to IAS 8'S own hierarchy for UNADDRESSED issues, but ASPE GIVES this TOPIC its OWN standalone SECTION – a STRUCTURAL, rather than SUBSTANTIVE, point of DIFFERENCE.
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Statement Mapping
Where this Section's principles apply
ConceptStatement(s) affectedNotes
Policy selection for unaddressed transactionsVaries by transactionDetermines which statement(s) are affected based on the transaction's nature
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Related Standards
Cross-reference map
SectionConnection
Section 1000Financial Statement Concepts – the first point of reference before considering any secondary source
Section 1505Disclosure of Accounting Policies – governs how a policy developed under this Section's hierarchy is disclosed
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Quick-Reference Glossary
GAAP hierarchy
The ordered sequence of authoritative sources an entity consults when developing an accounting policy for a transaction not directly addressed by an existing standard.
Accepted industry practice
A widely understood, sector-specific accounting convention that may reasonably guide policy development absent specific ASPE guidance.
Financial statement key (ASPE terminology)
BS Balance Sheet
IS Income Statement
SRE Statement of Retained Earnings / Statement of Changes in Equity
SCF Cash Flow Statement