Reported profit or loss could depend upon which rules you use. Granted that's only a difference on paper. But it's still a difference that, some argue, places Canadian companies at a competitive disadvantage in U.S. capital markets, especially when it comes to executing business acquisition strategies. For some Canadian companies, the corporations with whom they are competing for capital are U.S.-based. The best way to increase their profile in U.S. markets may be by using the language of U.S. business.
Investors view accounting standards they are unfamiliar with as a risk.
Like any risk, they assign a penalty to it in assessing their value. For some issuers, a majority of trading takes place in U.S. markets. Their shareholder base has shifted south of the border to such an extent that they feel it is more appropriate to communicate financial information on the basis that is most understandable to U.S. investors. The Canadian Securities Administrators are preparing to release a Discussion Paper on this issue. The Chief Accountant of the OSC, John Carchrae, will be discussing the issue in more detail this afternoon.