The Grant Thornton International IFRS team has published the 2019 version of IFRS Example Consolidated Financial Statements 2019 (hereinafter the “Example consolidated financial statements”).

The Example consolidated financial statements have been updated to reflect changes in IFRS that are effective for the year ending December 31, 2019. These include the adoption of IFRS 16 Leases which becomes effective for accounting periods beginning on or after January 1, 2019. No account has been taken of any new developments published after April 30, 2019.

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On May 17, 2019, the Finance Minister for Canada released draft legislation relating to the goods and services tax/harmonized sales tax (GST/HST) with respect to cryptocurrencies and other virtual payment instruments.

Digital currencies are based on a decentralized, peer-to-peer (P2P) network that is not supported by any government or central authority. Additionally, financial institutions generally do not manage or oversee digital currency.

For Canadian tax purposes, including the GST/HST, cryptocurrencies are intangible personal property that cannot be considered as money as they are not legal tender in Canada. In fact, only bank notes issued by the Bank of Canada under the Bank of Canada Act and coins issued under the Royal Canadian Mint Act are legal tender in Canada.

For more information, read our On-line Tax Strategies newsletter.

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The Grant Thornton International IFRS team has published Insights into IFRS 16 – Interim periods.

The bulletin Insights into IFRS 16 – Interim periods provides guidance on the recognition of variable lease payments in interim financial statements that are compliant with IAS 34, Interim Financial Reporting.

There appears to be a conflict between the guidance in IFRS 16 on the accounting for variable lease payments that are not based on an index or rate and the guidance in IAS 34 regarding variable lease payments based on sales.

The bulletin explains how to apply the guidance in IFRS 16 and IAS 34 on variable lease payments using examples.

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Many municipalities in Quebec want to show their commitment to prevent corruption by implementing programs and risk management.

In recent years, Quebec municipalities, as well as the provincial government, have not been spared from the corruption concerns that have greatly tarnished the reputation of the municipal and provincial world.

Through scandals and media headlines, this phenomenon is also reflected in the rest of Canada and around the world.

As a result, many municipalities in Quebec want to demonstrate to taxpayers their commitment to preventing corruption and other wrongdoing by implementing programs and risk management in this regard. While some large cities can afford a full-time Inspector General, this isn’t the case for all municipalities.

The International Organization for Standardization (ISO) has instituted ISO 37001 to provide public and private organizations with a mechanism for demonstrating to stakeholders a level of quality assurance and integrity in proxy processes. This is why some municipalities would like to take the necessary steps for aligning with the standard or obtaining ISO 37001 certification.

Did you know that…

According to ACFE’s 2018 Report to the Nations, corruption is the main offence in eleven of the fifteen sectors of activity identified, the main offence in five of the eight high-risk departments and represents 62% of all crimes committed by senior managers and executives, and 77% of all crimes committed in proxy departments.

What are municipalities doing to deal with corruption?

Nowadays, transparency, ethics and social responsibility are values high in demand that somehow reflect the evils of our society: a general lack of trust. This widespread feeling undermines the credibility of the public service, including municipalities on the front lines.

To address this and exhale these values, it becomes imperative for municipalities to have thorough administrative systems and measures in place to manage risk and protect the organization.

Prevention is better than cure

The ISO 37001 standard is recognized throughout the world and defines an anti-corruption management system that establishes the procedures to be introduced for preventing, detecting and mitigating corruption. This standard identifies measures to be implemented within organizations that seek to adopt best practices and demonstrate their commitment to ethics, transparency and accountability.

In concrete terms, the purpose of applying the various clauses of this standard is to train and raise awareness among all municipal staff working directly or indirectly in the field of municipal contracts. Whether the choice is to align with the standard or obtain accredited certification under ISO 37001, organizations must ensure that they have an anti-corruption management system in place to prevent, detect and mitigate risks.

Ethics and compliance – The new tool for prevention, transparency and accountability

For municipalities, adopting such a policy helps show the population that public actors do not evade corruption and that they are taking all necessary measures to fight it by adopting best practices.

In addition, the implementation of ISO 37001 makes it possible to establish a climate of trust and predictability with business partners and set more rigorous parameters in the proxy process. These parameters will motivate, if not require, contractors and suppliers to demonstrate their own commitment to ethics and anti-corruption measures if they wish to continue doing business with municipalities.

Beyond the image and trust aspect that this standard conveys for municipalities, it is also necessary to look at the competitive advantages that it generates for service providers.

Municipal - Villes

Reduce costs and increase productivity

The commitment to adopt ethical practices and a robust compliance program with regard to integrity and anti-corruption provides a clear competitive advantage for providers.

In addition to reducing legal and reputation costs and risks, such a program supports the development of a culture of organizational integrity that results in increased productivity and higher quality products and services.

In a context where municipalities evaluate contracts on the basis of alignment or ISO 37001 certification, providers demonstrating their commitment to ethics and compliance will have a competitive advantage over their competitors.

Restoring confidence

The introduction of these processes is intended to restore citizens’ confidence in their municipal administration. This approach establishes a consistent and predictable regulatory proxy framework based on an ethical organizational culture that enhances transparency and accountability.

In an environment where municipal leaders must demonstrate their proactive actions to counter corruption, collusion and other wrongdoing, the question is not about the need for a compliance program, but about the scope and implementation.

Thanks to the strength of Raymond Chabot Grant Thornton’s network and our partnership with leading experts in the anti-corruption field, we are able to offer a multidisciplinary service focussed on sound risk management and ethical governance.

Through a proven approach, we offer advice and support for the implementation of best practices in compliance and anti-corruption management systems within your organization, which may eventually qualify you to receive, if you wish, international ISO 37001 certification.