November 2015


The Grant Thornton International IFRS team has published IFRS Viewpoint – Acquisition of investment properties – asset purchase or business combination?

The IFRS Viewpoint series provides insights on applying IFRS in challenging situations. Each edition will focus on an area where the Standards have proved difficult to apply or lack guidance.

This edition considers whether the purchase of an investment property is accounted for as a business combination or as an asset acquisition.


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Changes are coming for large businesses, generally businesses with taxable and zero-rated revenues that exceed the $10 million threshold during their last fiscal year.  These businesses have been required to recapture input tax credits (ITCs) claimed in respect of the provincial part of the Ontario HST paid or payable on specified property and services. Starting July 1, 2015, the recapture rate in Ontario will start to be phased out.

Specified property and services

Generally speaking, the specified property and services to which the recaptured input tax credit (RITC) requirement applies include specified road vehicles, energy, telecommunication services, and certain meals, beverages and entertainment (generally those subject to the 50 percent income tax limitation). Failure to recapture ITCs at the time and in the manner required can result in the imposition of penalties. Penalties can be assessed for both under- or over-reported RITCs.


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New Commitment by the G7 and Release of Implementation Package for Country-by-Country Reporting

In a communiqué released at the end of the annual summit that was held in June 7 and 8 in Elmau (Germany), the G7 reaffirmed its commitment to the Base Erosion and Profit Shifting (BEPS) Project pursued by the Organization for Economic Co-operation and Development (OECD).

The OECD launched the BEPS project in July 2013, at the request of members of the G20. The objective of the BEPS project is to eradicate situations where benefits are not taxed in the jurisdiction in which the economic activities that led to these benefits took place, resulting in a shift of profit toward countries where the tax rate is low. According to the OECD, these situations are possible because national tax rules are not suited for the new economic realities, and have a negative impact on the equity and integrity of the tax system.

Your Raymond Chabot Grant Thornton advisor can help you determine which measures apply to your business and can help you undertake the necessary steps to use them.


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A new global standard on revenue

What this means for the life sciences industry

The International Accounting Standards Board (IASB) and the U.S. Financial Accounting Standards Board have issued their new standard on revenue – IFRS 15 Revenue from Contracts with Customers (ASU 2014-09 or Topic 606 in the U.S.). This bulletin summarizes the new requirements and what they will mean for entities in the life sciences industry that apply International Financial Reporting Standards (IFRS).

Recently issued IFRS 15 replaces IAS 18 Revenue and IAS 11 Construction Contracts and provides new guidance addressing key questions such as:

  • When can I include a performance-based milestone payment in revenue?
  • When do bundled goods or services represent a separate performance obligation?
  • How do I account for collaborative research arrangements with customers?
  • Can extended payment terms affect the total amount of revenue recognized?
  • How should sales- or usage-based royalties be accounted for?
  • How do I know whether I should recognize revenue from an intellectual property licensing arrangement over time or at a point in time?

With IFRS 15’s potential to significantly impact the timing and amount of revenue recognized, entities in the life sciences industry will want to invest time up front to ensure all critical impacts are identified and understood well in advance of implementation.