Question

When deciding which Framework to use: IFRS or ASPE which one should you use for a small organization whose operation is simple?

A. IFRS
B. ASPE
C. Either IFRS or ASPE depending on the preference
D. Neither IFRS nor ASPE, use a simplified accounting method

Answer 1

For a small organization with simple operations, ASPE tends to be more appropriate due to its simplicity and focus on private entities. However, the choice ultimately depends on the specific needs of the organization and its future growth plans.

Step-by-step explanation:

When deciding which Framework to use for a small organization whose operations are simple, the more appropriate choice is generally B. ASPE (Accounting Standards for Private Enterprises). ASPE is designed specifically for private companies in Canada, and its less complex standards can be more suitable for a small organization without significant international activities. Choosing IFRS (International Financial Reporting Standards) might not be necessary unless there are plans for the organization to operate internationally or there is a specific requirement from stakeholders. The ultimate decision should be based on the particular needs and circumstances of the organization, including future growth plans, current and potential stakeholders, and reporting requirements.