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Private Enterprises - Definition

Proposed Definition from April 2009 Exposure Draft

1. has not issued, and is not in the process of issuing, debt or equity instruments that are, or will be, outstanding and traded in a public market (a domestic or foreign stock exchange or an over-the-counter market, including local and regional markets); and
   
   
2. does not hold assets in a fiduciary capacity for a broad group of outsiders as one of its primary businesses.
   

As a result of the second criteria, banks, credit unions, insurance companies, securities brokers/dealers, mutual funds and investment banks typically are not private enterprises. Other entities may also hold assets in a fiduciary capacity for a broad group of outsiders because they hold and manage financial resources entrusted to them by clients, customers or members not involved in the management of the entity. However, if they do so for reasons incidental to their primary businesses (as, for example, may be the case for some travel or real estate agents, or cooperative enterprises requiring a nominal membership deposit), they are not considered to be publicly accountable.

This definition is consistent with the proposed definition of a publicly accountable enterprise in the AcSB's March 2009 exposure draft, "Adopting IFRSs in Canada, II".

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