This site uses cookies to provide you with a more responsive and personalised service. By using this site you agree to our use of cookies. Please read our cookie notice (http://www2.deloitte.com/ca/en/legal/cookies.html) for more information on the cookies we use and how to delete or block them.
The full functionality of our site is not supported on your browser version, or you may have 'compatibility mode' selected. Please turn off compatibility mode, upgrade your browser to at least Internet Explorer 9, or try using another browser such as Google Chrome or Mozilla Firefox.

2020

Accounting considerations for insurers

May 06, 2020

On May 6, 2020, the Accounting Standards Board (AcSB) released a publication on the implications of COVID-19 for insurers.

COVID-19 pandemic affects insurance companies in many ways – from market volatility on investment portfolios to changes in cash flow estimates relating to insurance liabilities.

Review the publication on the AcSB's website.

AcSB endorses Covid-19-Related Rent Concessions (Amendment to IFRS 16)

Jun 12, 2020

On June 12, 2020, the Accounting Standards Board (AcSB) announced that it endorses the amendment that permits lessees not to assess whether particular Covid-19-related rent concessions are lease modifications and, instead, account for those rent concessions as if they were not lease modifications.

Effective for annual reporting periods beginning on or after June 1, 2020, this is now in Part I of the CPA Canada Handbook – Accounting. Earlier application is permitted, including in financial statements not yet authorized for issue at May 28, 2020. The Amendments to the Basis for Conclusions that accompany, but are not part of, IFRS 16 Leases are also now in Part I of the CPA Canada Handbook – Accounting.

Review the announcement on the AcSB's website.

AcSB Exposure Draft – Covid-19-Related rent concessions (Proposed amendment to IFRS 16)

Apr 24, 2020

On April 24, 2020, the Accounting Standards Board (AcSB) issued its Exposure Draft that corresponds to the IASB’s Exposure Draft on this topic. Comments are requested by May 8, 2020.

The AcSB would like input from Canadian respondents on the following additional question regarding the proposed amendments:

The IASB has developed the proposed amendment in accordance with its due process for application around the world. Assuming the Exposure Draft proposal is finalized and approved by the IASB in accordance with its due process, do you think that the proposal is appropriate for application in Canada? If not, please specify which aspects of the proposal, and what circumstances, make the accounting requirements proposed in the Exposure Draft inappropriate.

Review the press release and exposure draft on the AcSB's website.

AcSB issues two resource documents to assist ASPE preparers with possible accounting issues as a result of COVID-19

May 21, 2020

On May 21, 2020, the Accounting Standards Board (AcSB) released two COVID-19 resource documents to assist preparers in preparing financial statements in accordance with Part II of the CPA Canada Handbook – Accounting.

AcSB Response – IASB Exposure Draft, Covid-19-Related Rent Concessions (Proposed Amendment to IFRS 16)

May 08, 2020

On May 8, 2020, the Accounting Standards Board (AcSB) submitted a comment letter responding to this Exposure Draft issued in April 2020.

The letter agrees with the intent of the proposals, but recommends that the relief provided relate to all rent concessions that occur as a direct consequence of COVID-19, rather than limiting the proposal to lease payments due in 2020. The AcSB also recommends that the IASB provide the same relief from applying the lease modification guidance to lessors.

Review the letter on the IASB's website.

AICPA, IESBA and IAASB staff jointly issue guidance on important considerations regarding the use of specialists in the COVID-19 environment

Oct 06, 2020

On October 6, 2020, the Staff of the American Institute of Certified Public Accountants (AICPA), the International Ethics Standards Board for Accountants (IESBA) and the International Auditing and Assurance Standards Board (IAASB) jointly released the publication, "Using Specialists in the COVID-19 Environment: Including Considerations for Involving Specialists in Audits of Financial Statements".

The publication provides guidance to assist professional accountants in business and in public practice determine when there might be a need to use the services of a specialist to assist in performing specific tasks and other professional activities within their employing organizations, and in serving their clients in the COVID-19 environment. The publication also highlights relevant ethical considerations for accountants when thinking about using a specialist, as well as circumstances that indicate a need for a specialist during an audit of financial statements.

The publication was developed by the Staff of the AICPA under the auspices of a Working Group formed by the IESBA and national ethics standard setters (NSS) from Australia, Canada, China, South Africa, the UK and the US. Chaired by Mr. Richard Fleck, IESBA Deputy Chair, the Working Group’s mandate is to develop implementation support resources to assist accountants effectively apply the International Code of Ethics for Professional Accountants (including International Independence Standards) when facing circumstances created by the COVID-19 pandemic. The publication benefited from input from IESBA and IAASB Staff.

Review the press release and publication on the IESBA's website.

APESB and IESBA staff collaborate on ethics guidance for professional accountants navigating COVID-19 circumstances

Jul 31, 2020

On July 31, 2020, the Staff of the Accounting Professional & Ethical Standards Board (APESB) and the International Ethics Standards Board for Accountants (IESBA) released a publication that illustrates the application of the IESBA Code to scenarios in taxation and valuation services.

The publication, Applying the Code’s Conceptual Framework in COVID-19 Circumstances: Scenarios in Taxation and Valuation Services, provides guidance to professional accountants in applying the conceptual framework in the International Code of Ethics for Professional Accountants (including International Independence Standards) (the Code) during certain circumstances brought on by the COVID-19 pandemic.

The publication uses four hypothetical scenarios covering services or activities relating to taxation and valuation services. Two scenarios include guidance for professional accountants in public practice, and two scenarios are focused on professional accountants in business.

Review the press release on the IESBA's website.

Auditing, reporting and recovering from the pandemic

Sep 01, 2020

Review these articles

Audit committee and auditor oversight update

This Update summarizes recent developments relating to public company audit committees and their oversight of financial reporting and of the company’s relationship with its auditor. This update includes: (i) COVID-19 disclosure and financial reporting guidance: Part III, (ii) IIA and IFAC issue an audit committee call to action on COVID-19; (iii) G&A finds that 90 percent of the S&P 500 publish a sustainability report; (iv) Want to improve the reliability of your ESG reporting? The CAQ suggests asking your auditor for help; (v) Protiviti’s annual survey finds rising SOX compliance costs; (vi) Thinking of replacing your auditor’s tax services? Get ready for a higher tax bill – At least temporarily; and (vii) The Audit Blog

Auditing goes remote

The COVID 19 pandemic dramatically altered the day-to-day existence of most companies. Though businesses may have had remote-work contingency plans in place, few could have expected the need to implement these procedures almost overnight. And just as state governments enacted shutdowns requiring all non-essential workers to work remotely, many businesses were working with their auditors to finalize year-end financial statement audits and other attest reporting.

Key considerations for issuers and auditors regarding going-concern analysis

Issuers in the United States and their auditors have related, but distinct, obligations to evaluate on a periodic basis whether there is substantial doubt about the issuer’s ability to continue as a going concern. In normal times, this evaluation, conducted with an appropriate level of diligence, results as to almost all major public companies in the conclusion that there is no substantial doubt about the entity’s ability to meet its obligations in the months to come.

But these are not normal times. As the COVID-19 crisis takes an ever-greater toll on the American economy, and as multiple well-known companies declare bankruptcy, the going-concern assessment has taken on new relevance for issuers, auditors, and others in the financial-reporting community.  As a result, the number of issuer filings that contain a going-concern disclosure appears to have substantially increased. In this piece, we review some of the significant considerations that apply to the going-concern analysis from both the issuer’s and the auditor’s perspectives.

Digital Transformation: Powering the great reset

COVID-19 is a watershed moment for the digital transformation of business. The rules for success have changed and are ever more reliant on harnessing the power of digital models to create new value and experiences. Accelerating digital transformation, with purpose, is essential for companies to survive and thrive in the new normal. Successful leaders will now seize the opportunity to advance a new trajectory for digital transformation that aligns with the changing role of business: to be a powerful enabler of long-term value creation for all its stakeholders.

Boards beware: Increase in cyber attacks reveals new weaknesses

As the pandemic persists, corporate leadership must closely follow cybersecurity risks, vulnerabilities, and threats as bad actors take advantage of increased work-from-home scenarios—in which companies perhaps haven’t fully focused on security. These risks left unchecked have the potential to put company assets and viability in peril.

Reimagining the urban office

The Covid-19 pandemic has abruptly challenged a decade of corporate real estate and workplace design decisions by calling into question the purpose of large centralized office locations. With many organizations maintaining work-from-home policies for the foreseeable future, we argue that now is an optimal time to plan for a post-pandemic workplace strategy by revisiting the conventional wisdom behind the centralized office. A more distributed model throughout cities and geographic regions, we believe, would better support employee performance and organizational resiliency while contributing to the improvement of the urban landscape and local communities.

Don’t let the pandemic sink your company culture

If you are like many of the executives with whom we’ve been talking over the last few months, you and your leadership team invested years cultivating an effective culture — one that is both strategically relevant, because it prioritizes the behaviors essential to the success of your business, and strong, in the sense that employees trust that it is real and value it. Such cultures help companies attract and retain great people and contribute to fantastic bottom-line performance.

Emerging pathways towards a post-COVID-19 reset and recovery

The COVID-19 crisis and the political, economic, and social disruptions it has caused have exposed the inadequacies of our current economic systems. Amid global concern for lives, livelihoods, and the planet, leaders find themselves at a historic crossroads for shaping the recovery and are challenged to reset economies on a new trajectory of more inclusive and sustainable growth. This edition of the World Economic Forum’s Chief Economists Outlook sets out a high-level agenda for a path forward on three key challenges: How can economic policy be retooled to reduce inequality and improve social mobility? What will be the new sources of economic growth? How will success be defined?

Q2 Reporting: How should a U.S. public company quantify the impact of COVID-19?

U.S. public companies are thinking about how to quantify the effects of COVID-19 in their second-quarter public disclosures. Unlike the first quarter, they have now seen three full months of COVID-19 impact, with complex effects that varied within the period and across geographies and segments.  The effects are important for understanding Q2 results, and for anticipating results going forward – which in turn implicates a host of issues, including liquidity, funding, covenant compliance, impairment testing and going concern analysis. So there are good reasons to try to quantify the impact of COVID-19, and the SEC has encouraged “robust disclosure and engagement” in the COVID-19 context, with particular emphasis on the need for forward-looking disclosures.

Fast-track solution for COVID-19 dispute resolution

COVID-19 has made it difficult for many companies to perform some of their contractual obligations, giving rise to a high number of corporate disputes, particularly relating to the application of force majeure and change in law provisions. The volume and similarity of potential claims means traditional dispute resolution methods are too slow, burdensome and costly to expedite swift resolution. With this in mind, we have developed NRF Covid Resolve, a dispute resolution process supported through a single online platform, that aims to achieve an outcome for each dispute within six weeks – or four weeks if arbitration-only.

Canadian securities regulators remind issuers of importance of disclosure in financial reporting

May 29, 2020

On May 29, 2020, given the significant impacts that the COVID-19 pandemic continues to have on Canadian public companies, the Canadian Securities Administrators (CSA) is reminding reporting issuers of the importance of disclosing high quality financial information to investors.

The CSA encourages issuers to visit the CSA COVID-19 Information Hub for further guidance and information, including COVID-19: Continuous Disclosure Obligations and Considerations for Issuers that discusses a number of important issues, and to consider this information when preparing financial reports and other disclosure documents.

Also, the International Organization of Securities Commissions (IOSCO) issued IOSCO Statement on Importance of Disclosure about COVID-19. The CSA supports the IOSCO Statement.

Review the press release on the CSA's website.

Canadian securities regulators provide update on changes to regulatory work in light of COVID-19

Apr 09, 2020

On April 9, 2020, the Canadian Securities Administrators (CSA) stated that it is currently focusing its regulatory efforts on helping market participants and investors address challenges created by COVID-19.

On March 18, the CSA announced that all CSA proposals currently out for comment would have their comment periods extended by 45 days. Until at least May 30, 2020, the CSA will also not publish any new proposals for comment.

CSA members continue to be in close contact with the companies and firms they regulate, and based on these discussions, will consider proceeding with burden reduction initiatives if they are immediately helpful to businesses in responding to COVID-19.

As the situation evolves, the CSA will consider whether additional relief for market participants is warranted. We will also consider actions to support investors and ensure they are treated fairly during this difficult time. The needs of both stakeholder groups are important, and CSA members will consider and balance these needs as we fulfil our mandates.

Review the press release on the CSA's website.

Correction list for hyphenation

These words serve as exceptions. Once entered, they are only hyphenated at the specified hyphenation points. Each word should be on a separate line.