Calgary-based Humpty's Restaurants International Inc. announced on October 1, 2009, that on September 30, 2009, it had successfully finalized its previously announced plan to privatize the company. Up until this date, Humpty's was a public company and would have been required to adopt IFRS in 2011 if it had stayed public. When Humpty's announced its plan to go private, it stated that the company had not relied on issuing new shares for financing for many years.
Instructions
Explain why Humpty's owners might have decided to make it a private company before it was required to adopt IFRS. Support your answer with reference to the objective of financial reporting, qualitative characteristics, and the accounting constraints.
Taking It Further
A Canadian private company may choose to prepare its financial statements using IFRS or ASPE. In what circumstances might a Canadian private company choose to report under IFRS rather than ASPE?