2020

Canadian securities regulators provide temporary relief to public companies with delayed annual meetings due to COVID-19

May 01, 2020

On May 1, 2020, the Canadian Securities Administrators (CSA) announced it is providing public companies with temporary blanket relief from certain filing and delivery requirements, which are generally tied to the sending of materials for annual general meetings (AGMs).

With this conditional temporary relief, the CSA is giving public companies until December 31, 2020 to file their executive compensation disclosure. The CSA is also providing companies with temporary relief from the requirements to send, or send upon request, copies of their annual or interim financial statements and management’s discussion and analysis (MD&A) to investors within certain time periods.

Under securities legislation, public companies must meet several deadlines tied to sending investors a management information circular for their AGM. These include requirements to file executive compensation disclosure within 140 days (non-venture companies) or 180 days (venture companies) of their year end. Additionally, public companies that have not sent an annual request form must, within 140 days of their year end, send copies of their annual financial statements and MD&A. Upon request, public companies must also send copies of their annual or interim financial statements and MD&A to investors.  

The CSA is implementing the relief through local blanket orders that are substantially harmonized across the country. Market participants can view these orders on CSA members’ websites.

Companies that intend to delay filing their executive compensation disclosure must first issue a news release disclosing that they intend to do so and should consult the blanket orders to ensure that they comply with the conditions for the relief. Companies are expected to provide investors with sufficient lead time to review executive compensation disclosure before their AGM.

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

Canadian securities regulators to provide blanket relief for market participants due to COVID-19

Mar 18, 2020

On March 18, 2020, in light of recent COVID-19 developments and their impact on market participants, the Canadian Securities Administrators (CSA) will provide temporary relief from some regulatory filings required to be made on or before June 1, 2020.

The blanket relief will provide a 45-day extension for periodic filings normally required to be made by issuers, investment funds, registrants, certain regulated entities and designated rating organizations on or before June 1, 2020. This will include financial statements, management’s discussion and analysis, management reports of fund performance, annual information forms, technical reports, and certain other filings.

The extension applies to all issuers. For those with a December 31 year-end, the extensions are as follows:

TSX-listed issuers

   Original Deadline New deadline 
Annual filing deadline (year-end financials, MD&A and AIF) March 30 May 14
Q1 filing deadline May 15 June 29

TSX-Venture and CSE-listed issuers

   Original Deadline New deadline 
Annual filing deadline (year-end financials, MD&A and AIF) April 29 June 15
Q1 filing deadline June 1 July 14

Issuers choosing to rely on this exemption and that are complying with the conditions of the relief will not need to file applications for management cease trade orders as they will not be noted in default.

The CSA expects to publish further details about the relief shortly.

Review the press release on the CSA's website.

Canadian securities regulators publish blanket relief for market participants due to COVID-19

Mar 23, 2020

On March 23, 2020, further to its announcement on March 18, the Canadian Securities Administrators (CSA) published temporary blanket relief for market participants from certain regulatory filings, as a result of COVID-19.

The blanket relief provides a 45-day extension for periodic filings normally required to be made by issuers, investment funds, registrants, certain regulated entities and designated rating organizations on or before June 1, 2020 and for certain other requirements outlined in the orders. Market participants need to comply with the conditions in the blanket relief to use the extension.

The CSA is implementing the relief through local blanket orders that are substantially harmonized across the country. Market participants can view these orders on CSA members’ websites and are encouraged to contact their principal regulator with any questions.

The CSA is closely monitoring the situation and will consider whether further relief or extension is necessary.

Review the press release on the CSA's website.

CARES Act would provide optional temporary relief from CECL accounting

Mar 27, 2020

On March 27, 2020, US President Trump signed into law the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), which provides relief from certain accounting and financial reporting requirements under U.S. GAAP. However, until actions are taken by the SEC or the FASB, the provisions of the CARES Act are not amendments to US GAAP.

Section 4014 of the CARES Act offers optional temporary relief from applying the FASB’s current expected credit losses (CECL) standard (ASU 2016-13) for certain entities. Any guidance developed by the SEC or FASB to address the CARES Act’s impact on US GAAP would most likely take into account both the scope and length of any optional deferral, will likely take into account whether any deferral should apply to all entities that were otherwise required to adopt the CECL, and would more clearly define the date of adoption if an entity chose the deferral. For more information, see Deloitte's related Heads Up newsletter as well as the CARES Act, which is available on the US Senate's website.

Other than US Senate and Congress, the IASB has concluded that the existing requirements within IFRS 9, Financial Instruments (including the IASB's CECL model) need not be changed, removed nor added to. On Friday, the IASB only released a statement to support the consistent application of requirements in IFRS 9.

The IASB's position is supported by several other communications on the application of IFRS 9 during the COVID-19 crisis.

  • The Office of the Superintendent of Financial Institutions (OSFI) in Canada has released a statement that includes guidance on Applying IFRS 9 in extraordinary circumstances that will allow companies to remain compliant with IFRS as issued by the IASB
  • the Prudential Regulation Authority (PRA) of the Bank of England has released a statement Covid-19: IFRS 9, capital requirements and loan covenants that offers an annex with guidance consistent with IFRS 9 to assist firms in making well-balanced and more consistent ECL estimates and in determining how to treat payment holidays and similar schemes for accounting and regulatory purposes

All statements agree that IFRS 9 is principles-based and requires the use of experienced credit judgement and that the current situation does not lead to an undifferentiated, automatic transfer of financial instruments from Level 1 to Level 2 or even Level 3.

Earlier last week, ESMA already concluded that the principles-based nature of IFRS 9 includes sufficient flexibility to faithfully reflect the specific circumstances of the COVID-19 outbreak and the associated public policy measures.

CFOs worry coronavirus may lead to global downturn

Mar 16, 2020

On March 16, 2020, Accounting Today released an article on the potential for COVID-19 to lead to a global economic downturn is the top concern of finance leaders in the U.S. and Mexico.

All of the CFOs and finance leaders surveyed said their business is experiencing some impact as a result of coronavirus. However, 90 percent of the finance leaders polled said their business would return to normal in less than three months if COVID-19 were to end immediately, which seems unlikely as the pandemic continues to spread around the world.

Review the full article on Accounting Today's website.

Challenges for corporate reporting after COVID-19

May 29, 2020

In May 2020, Accounting Today released the following articles on the pandemic.

Your firm and the pandemic: Better after broken

During stressful times like these, it’s natural to feel like everything around you is broken. Everyone is out of sorts. The economy seems frozen. Your clients’ personal and business finances are in disarray. The headlines are nothing but doom and gloom. But at times like these, when it seems like we’re in a war zone, it’s a great opportunity to rebuild.

Has coronavirus changed bookkeeping forever?

The global health and economic crisis triggered by coronavirus is a heavy burden for businesses. Even those for whom remote working is possible had to solve the problem of accessing the data they need in order to stay operational. Traditional bookkeeping software is typically installed on a dedicated computer drive, only accessible by a licensed user through a desktop application on their machine.

The challenges for corporate reporting after COVID-19

Businesses have already been grappling with the very real risks and opportunities posed by climate change. And now, it appears inevitable that COVID-19 will have a permanent impact on the way businesses think and communicate about human, social and manufactured capital as well.

Coronavirus affecting plans at IAASB

The International Auditing and Assurance Standards Board released its 2020-2023 strategy and 2020-2021 work plan, while acknowledging that the COVID-19 pandemic could throw those plans out of whack. Both the strategy and work plan were developed before the outbreak of the pandemic, but the IAASB said the strategic objectives remain relevant. With the advent of the coronavirus, the work plan is subject to change. The IAASB is now developing guidance on audit considerations in response to the pandemic. The IAASB is also improving its interactions with national audit standard-setters, regulators and independent audit oversight regimes.

Using data to orchestrate a stronger coronavirus recovery

What is the economic forecast for businesses in the foreseeable future? The lockdown that has been damaging our economy will come to an end, which means businesses need to start planning how they intend to recover. The U.S. government has tried to jumpstart the economy with a $2 trillion stimulus package. The great unknown is whether it will be enough. The good news is that before COVID-19, most organizations were collecting data about their businesses — data that can now provide insights into their recovery.

Combating COVID-19 with resilience

Oct 31, 2020

Global responses to the coronavirus disease 2019 (COVID-19) outbreak continue to rapidly evolve. COVID-19 has already had a significant impact on global financial markets, and it may have accounting implications for many entities.

This page includes resources that highlight some of the key accounting and disclosure issues to be considered by entities that may arise as a result of COVID-19 in preparing their financial statements applying IFRS Standards for periods ending on or after December 31, 2019.

In addition, the Government of Canada and certain provincial governments have introduced measures to support Canadians and stimulate the economy. We anticipate that more incentives to support businesses and individuals are to come, as Canada navigates through the evolving COVID-19 crisis. Our Tax and Legal team is closely monitoring all government announcements, and will provide regular updates on any Canadian government support available.

Coronavirus and political unrest: Determining compensation in uncertain times

Feb 13, 2020

On February 13, 2020, the National Association of Corporate Directors (NACD) released a blog on how US companies doing business in China are grappling with how to determine bonus payouts for 2019 and incentive plan goals for 2020 given the political unrest in Hong Kong and the recent coronavirus outbreak that began in the city of Wuhan.

Starting in summer 2019 and increasing in scale and violence over the course of the year, protests have disrupted businesses in and around Hong Kong, an important financial hub and consumer market. Additionally, over the last six weeks, the global spread of the coronavirus has had a significant and far-reaching economic impact. Given these extraordinary circumstances, Compensation Advisory Partners (CAP) has outlined approaches that compensation committees can take to determine 2019 executive bonuses and plan for 2020.

Review the full blog on the NACD blog's website.

Coronavirus is disrupting global value chains - Here’s how companies can respond

Feb 27, 2020

On February 27, 2020, the World Economic Forum (WEF) released an article on how it is clear that the COVID-19 (coronavirus) outbreak is disrupting manufacturing and global value chains, with consequences for businesses, consumers and the global economy.

Many CEOs are scrambling to respond to urgent questions about how to protect their employees, ensure supply security, mitigate the financial impact, address reputational risks, and navigate market uncertainty, which is driving down demand. Global value chains, which are essential engines of economic development and GDP growth, have traditionally been designed to optimize for cost competitiveness. The coronavirus underlines the need for companies to focus on risk competitiveness as well. According to conservative estimates from Reuters, China’s economic growth is expected to slow to 4.5 percent in the first quarter of 2020—the slowest pace since the 2008 financial crisis and could cost the global economy $1.1 trillion in lost income.

Review the full article on the WEF's website.

Coronavirus: policy design for stable population recovery

Mar 29, 2020

On March 29, 2020, the International Federation of Automatic Control (IFAC) released a blog on how the economic impact of non-pharmaceutical interventions (NPIs) such as physical distancing and confinement can be significant to an extent and depth that are not yet fully known.

The research on Covid19 is changing rapidly and flattening the curve has quickly become a widely known strategy to reduce the peak demand on healthcare thanks to very important and public work of dedicated teams of epidemiologists around the world. The goals tend to be to first to bring the caseload under initial control and then manage a long-term return to normal while minimizing both death rates and economic impact. More specifically comparing and contrasting strategies such as (a) mitigation, which focuses on slowing but not necessarily stopping epidemic spread (having the so-called reproduction number R0 small but larger than 1), and (b) suppression, which aims at reversing epidemic growth, thus reducing case numbers to low levels (R0 smaller than 1). Indeed, NPI’s can be implemented that change R0 in order to control epidemic spread. What we are proposing is a systematically designed feedback strategy to change R0 through modulation of NPI’s.

Review the blog on IFAC's website.

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