Investors are being warned about accounting changes that
publicly traded Canadian companies need to make in 2011.
They have to begin compiling their financial statements according
to International Financial Reporting Standards (IFRS) instead of
Canadian Generally Accepted Accounting Principles (GAAP). And the
transition will alter accounting figures and financial ratios -- as
a
reportfrom the Certified General Accountants Association of
Canada (CGA-Canada) highlights.
"Investors and their advisors need to be particularly vigilant
during this transition phase," cautions Rock Lefebvre,
Vice-President, Research and Standards, CGA-Canada. "Comparing
financial ratios under the two reporting regimes isnt
straightforward."
Cash-flow analysis may be a much more reliable assessment tool, he
adds.