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Updated IASB work plan — Analysis

Mar 23, 2017

On March 23, 2017, the International Accounting Standards Board (IASB) updated its work plan following its March 2017 meeting. It reveals that the discussion paper on the principles of disclosure and proposed amendments to IFRS 8 resulting from the post-implementation review are expected next week.

Below is an analysis of all changes made to the work plan since the last update in February 2017.

Research projects

Standard-setting and related projects

Nar­row-scope amend­ments


Post-implementation reviews

The revised IASB work plan is available on the IASB's website.

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Examination of Factors Affecting Financial Statement Placement Order

Mar 22, 2017

In March 2017, Georgia Tech released a report in which anecdotal data suggest that firms are using the placement order of their financial statements to provide emphasis and affect perception about financial performance and position.

Their objective was to see if they can identify systematic differences across firms that would help explain the financial statement placement order employed. They identified a sample of 400 public companies drawn from four different revenue quartiles. In addition to financial data for each firm, they identified the sector in which each firm operates and the firm’s auditor.

They found that the balance sheet is much more likely to be the lead-in financial statement. Of the 400 companies in the sample, 272 (68.00%) present the balance sheet first while 127 (31.75%) present the statement of operations (income statement) first. In examining the factors that may drive the lead-in financial statement decision, they noted that firms leading with the statement of operations are larger based on revenue and total assets. Further, they are more profitable, reporting a higher return on equity and higher net margin.

Their asset turnover and operating cash margin are also higher. Finally, likely attesting to their larger size and debt service capacity, the firms leading with the statement of operations also report higher financial leverage.

Review the full report on the Georgia Tech's website.

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2017-2018 federal budget highlights

Mar 22, 2017

On March 22, 2017, the Minister of Finance, Bill Morneau, presented the 2017-2018 budget in the House of Commons. The budget continues the theme of helping middle class families, growing the economy and creating jobs.

Some of the key features of the budget plan were:

  • The government has introduced the “Innovation and Skills Plan” which will target six key areas: advanced manufacturing, agri-food, clean technology, digital industries, health/bio-sciences and clean resources.
  • The budget proposes a number of additional programs to support innovation and to foster growth in the clean technology sector.
  • The government has indicated its intention to close loopholes that result in unfair tax advantages for some at the expense of others. Furthermore, the budget proposes to invest an additional $523.9 million over five years to build on previous investments to 2 support the Canada Revenue Agency’s efforts to prevent tax evasion and improve tax compliance.

A summary of the economic and tax highlights contained in the budget is outlined in our Canadian tax alert.

For further details, we refer you to the Department of Finance website.

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CSA announces climate change disclosure review project

Mar 21, 2017

On March 21, 2017, the Canadian Securities Administrators (CSA) announced a project to review the disclosure of risks and financial impacts associated with climate change.

The project will gather information on the current state of climate change disclosure in Canada and internationally, and will include consultation with investors and reporting issuers.

Reporting issuers in Canada are currently required to disclose material risks, which may include risks associated with climate change, among other environmental matters, in their periodic disclosure.

CSA Staff intend to review disclosure prepared by large TSX-listed reporting issuers on the material risks and financial impacts associated with climate change as well as related governance processes.

Review the press release on the CSA's website.

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Live Webcast on US Tax Policy and Legislation

Mar 20, 2017

You are invited to attend our live webcast on US Tax policy and legislation on Thursday, March 30, 2017 from 3:00 to 4:00pm ET.

Carl Allegretti, Canadian Tax Leader, will introduce our speakers and Fatima Laher, Tax partner and Clients & Industries Leader will be hosting the session.

Jonathan Traub, Managing Principal, Tax Policy, Deloitte US, will share perspectives on current legislation, including tax impacts, due to the recent US presidential election.

Joel Guberman, Chair and founding partner of Guberman Garson LLP, an independent immigration law firm allied with Deloitte LLP, will provide insights on the recent immigration executive order.

Mark your calendars and register for this webcast.

More information about this event.


Deferral of IFRS 9 Application for Federally Regulated Life Insurers

Mar 20, 2017

On March 20, 2017, the Office of the Superintendent of Financial Institutions (OSFI) issued the final version of its advisory: "Deferral of IFRS 9 Application for Federally Regulated Life Insurers."

The advisory is in response to the September 2016 International Accounting Standards Board (IASB) approved amendment to IFRS 4, Insurance Contracts, allowing companies whose activities are predominantly connected with insurance to defer the application of IFRS 9, Financial Instruments, until January 1, 2021.

Review the advisory on the OSFI's website.

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CAQ publishes report on enhancing financial reporting to fight fraud

Mar 16, 2017

On March 16, 2017, the Center for Audit Quality (CAQ) of the American Institute of Certified Public Accountants (AICPA) released a report on addressing challenges for highly subjective and complex accounting areas as key for stemming fraud and reducing the number of restatements.

The report is based on two workshops held last year and contains several general recommendations, as well as recommendations focused on revenue recognition accounting policies.

General accounting policies and procedures:

  • Accounting policies must adhere to technical accounting guidance. It is critical that these policies be understandable to non-accountants who may not be conversant in the nuances of technical accounting.
  • Accounting policies must be reviewed at regular intervals and companies should have a process to identify and monitor changes in activities that have a potential impact on accounting.
  • Policies must be tested in the field prior to implementation, and then monitored for compliance post-implementation.

Revenue recognition accounting policies and procedures:

  • The revenue recognition policy should be granular, because even slight differences in interpretation can have a major impact on revenue recognition.
  • Where possible, contract terms should be standardized and reflect how transactions at a contract level relate to the requirements of accounting standards.
  • Deviations from typical contract terms that have implications for revenue recognition should be well documented.
  • Clear responsibility and communication lines among legal, business, and finance should be created so that all key players understand and approve of transactions.

The report also includes some recommendations about internal control over financial reporting.

Review the report on the CAQ's website.

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2017-2018 Alberta budget highlights

Mar 16, 2017

On March 16, 2017, the Minister of Finance, Joe Ceci, introduced Budget 2017, “Working to make life better.” The following is a summary of the tax highlights contained in the budget.

The budget anticipates economic growth in Alberta to be 2.6%, with the 2017-18 deficit expected to be $10.3B, a modest decrease from the $10.8B deficit in the prior year. It is expected that revenue will increase from $42.9B to $45.0B, while expenses will increase from $53.7B to $54.9B, with a further $0.5B reflected as a “risk adjustment” intended to provide a buffer against fluctuations in non-renewable resource revenue.

Deficits are projected to continue in 2018-19, with $9.7B projected, and 2019-20, with $7.2B projected. The budget did not predict when the province would return to balanced budgets or a surplus.

The announced changes to taxation in Alberta are outlined in our Canadian tax alert.

For further details, we refer you to the Ministry of Finance website.

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Guidance for disclosure improvements following a review of investment entities

Mar 16, 2017

On March 16, 2017, the securities regulatory authorities in Ontario, Alberta, and Saskatchewan (the participating jurisdictions) released CSA Multilateral Staff Notice 51-349 "Report on the Review of Investment Entities and Guide for Disclosure Improvements," which summarizes key findings from an Ontario Securities Commission staff review of the continuous disclosure of reporting issuers that meet the definition of an investment entity under IFRS 10, Consolidated Financial Statements.

OSC staff reviewed the compliance of 12 investment entities, which represent over 90 per cent of the collective market capitalization of the investment entities subsector in Ontario. The purpose of the review was to improve disclosure in material areas, assess accounting areas which require the exercise of significant judgement, and to inform policy related issues.

Review the press release on the CSA's website and Staff Notice on the participating jurisdictions' websites.

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IESBA Meeting Highlights March 13 - 15, 2017

Mar 15, 2017

On March 15, 2017, the International Ethics Standards Board for Accountants (IESBA) released the highlights of its March 13 - 15, 2017.

Discussion points included:

  • Professional Skepticism
  • Technology and Innovation
  • Part C of the Code
  • Strategy and Work Plan
  • Future Strategy and Work Plan
  • Fees
  • Long Association
  • IFAC Anti-Corruption Initiative

Review the highlights and the podcast on the IESBA's Web site.

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