The Grant Thornton International IFRS team has published a revised version of the guide The Road to IFRS – a practical guide to IFRS 1 and first-time adoption. The guide deals with the application of IFRS 1 First-time Adoption of International Financial Reporting Standards by entities issuing their first financial statements prepared in accordance with International Financial Reporting Standards (IFRS).

With the exception of IFRS 9 Financial Instruments, the revised guide has been updated to reflect changes and updates in IFRS 1 and other IFRS that have been issued as of June 2012, including those that are not yet in mandatory effect.

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The Grant Thornton International IFRS team has published a new guide, Under control? A Practical Guide to IFRS 10 Consolidated Financial Statements. This guide is a useful tool that will assist management in transitioning to and applying IFRS 10 Consolidated Financial Statements.

By issuing IFRS 10 in May 2011, the International Accounting Standards Board (IASB) introduced new requirements on assessing control. IFRS 10 redefines “control” and provides extensive new guidance on applying the new definition. IFRS 10 applies to all investees and replaces both IAS 27 Consolidated and Separate Financial Statements and SIC-12 Consolidation – Special Purpose Entities.

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The Grant Thornton International IFRS team has published a new external guide: IAS 7: Statement of Cash Flows – a guide to avoiding common pitfalls and application issues. The guide aims to:

  • remind management of the basic requirements for preparing the statement of cash flows;
  • highlight interpretative and practical application issues noted by regulators and commentators; and
  • provide insights on avoiding the common pitfalls and application issues that regulators and our IFRS experts see in practice.

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Simon Gareau
Senior Manager | Lawyer, D.E.S.S. Fisc. | Tax

Did you know that, under certain circumstances, you can claim a tax deduction for purchasing Canadian works of art?

Whether they are individuals, partnerships, corporations or trusts, taxpayers who acquire an eligible work of art can claim an annual capital cost allowance equal to 20% of the amount paid for federal purposes and 33 1/3% of the amount paid for Quebec purposes.

Eligible works of art

Eligible works of art are:

  • Prints, etchings, drawings, paintings and other similar works of art whose cost is not less than $200;
  • Hand-woven tapestry or carpets, or handmade appliqués, whose cost is not less than $215 per square metre;
  • Engravings, lithographs, wood engravings, or maps made before 1900;
  • Antique furniture or any other antique object, produced more than 100 years before it was acquired and whose cost is not less than $1,000.

Conditions

  • The work of art must have been created by an artist who was a Canadian citizen or permanent resident at the time it was created;
  • The work of art must have been acquired from a person with whom the purchaser was dealing at arm’s length;
  • The work of art must have been acquired solely for the purpose of generating business income, for example, to decorate the reception area, a conference room, hallway or a shareholder’s office, and be visible to the enterprise’s clients.

In the future, taxpayers who sell an eligible work of art that subsequently appreciates in value, must pay tax on the taxable capital gain and, as necessary, add the recapture of the capital cost allowance claimed over the years to the their business income.

Lastly, taxpayers also have the option to donate works of art to charitable organizations and obtain a charitable contribution credit.

Do not hesitate to contact us if you have any questions regarding the owning works of art as part your business activities, or for all other inquiries.

20 Jul 2012  |  Written by :

Mr. Gareau is your expert in taxation for the Sherbrooke office. Contact him today!

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