The Grant Thornton International IFRS team has published a new guide, Intangible assets in a business combination – Identifying and valuing intangibles under IFRS 3 (hereafter the “guide”). The guide reflects the interaction of the requirements of IFRS 3 Business Combinations with those of IFRS 10 Consolidated Financial Statements and IFRS 13 Fair Value Measurement. It includes practical guidance on the detection of intangible assets in a business combination and also discusses the most common methods used in practice to estimate their fair value.

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Pierre Fortin
Partner | CPA, CA | Management consulting

In the 1990s, we sought to “satisfy” our customers, but today this is no longer enough. Our aim now is to provide them with positive and memorable “experiences”.

With over a decade of studies and established practises in customer experience, we are in an even better position to assess managerial progress and dispel the confusion that periodically arises regarding the difference between customer satisfaction and customer experience.

Over time, customer satisfaction was associated with the way customer contentment was targeted and measured in relation to customers’ expressed expectations, particularly concerning products, services and prices.

Emotional impact

This is still true, but we now know that customer satisfaction is only one analytical factor. The problem with most customer satisfaction measurements is that they only assess the organization’s response to the expectations expressed by its customers, but not the emotional impact of an experience, a relationship or a simple interaction.

Since emotional impact is an important vector, even the most important vector, of the decision to buy, we often are dealing with an incomplete picture, if we rely exclusively on the concept of customer satisfaction. Instead, customers must be provided with experiences that will not only meet their expectations and their needs, but generate positive emotions during different interactions between the customer and the organization.

While many customers may remain loyal to an organization due to their satisfaction, they may leave it if they find something better elsewhere. Recent studies have shown that 60% to 80% of customers claimed to be satisfied or very satisfied before leaving an organization for the competition! This means that, while customer satisfaction is an important step in the quest to generate value with outstanding service, it should not be the final objective.


In reality, an organization’s final objective with its customers is twofold: the customer’s intention to return (loyalty) and the customer’s propensity to recommend (recommendation). Walt Disney, who was in the avant-garde in many respects, especially concerning customer service, had already discerned these concepts in his day:

Do what you do so well that they will want to see it again and bring their friends. – Walt Disney

A well-considered and well-executed customer experience improves the organization’s chances of achieving its objectives, which have a strategic value beyond mere customer satisfaction.

Needless to say, building greater customer loyalty increases a customer’s short-term value (increase in the customer’s shopping cart of goods or services), as well as his or her long-term value (recurrence of purchases over the customer’s life cycle).

Become ambassador

In addition, the customers’ greater propensity to recommend the organization causes them to become ambassadors of this organization or its brand of their own free will, thus creating a powerful – and free – advertising tool!

During the past decade, a multitude of organizations have made the transition from a mentality of executing tasks to a mentality of providing experiences to their customers. We need only consider Apple, Amazon and Videotron, among others. These companies have left a positive imprint on their customers.

In a world where competition increasingly reduces the differences between products, prices and even services, dynamic organizations bet on the customer experience to stand out and stay competitive.

12 Nov 2013  |  Written by :

Pierre Fortin is a partner at Raymond Chabot Grant Thornton. He is your expert in Management...

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

Did you know that the destruction of a building, as was the case for many properties in downtown Lac-Mégantic, is an actual disposition for tax purposes and can represent a heavy tax burden for the owner?

The destruction of a building represents an involuntary disposition for the purposes of the Income Tax Act. Very often, the proceeds of disposition come from the amount of insurance received as compensation. A capital gain or recaptured depreciation then could be realized and trigger a tax expense.

Fortunately, a tax election exists, commonly known as “replacement property election”, that allows a taxpayer to defer recognition of income or a capital gain when there has been an involuntary disposition of “former property” (destruction, expropriation or theft).

The main conditions required to exercise such a tax election are as follows:

  • It is reasonable to conclude that the property was acquired by the taxpayer to replace the former property;
  • The property was acquired by the taxpayer and is used by the taxpayer or a related person for a use that is the same or similar to the use to which the taxpayer or the related person put the former property.
  • If the taxpayer or a related person used the former property to earn income from a business, the property must have been acquired for the purpose of earning income from the same or a similar business or for a person related to the taxpayer who uses it for this purpose.

A certain correlation or cause-and-effect relationship must exist between the involuntary disposition of the building and the acquisition of the new building. In particular, they must have the same physical features.

The tax authorities consider that the geographical location of the replacement property is not a determining factor. The replacement property thus could be constructed elsewhere than at the initial location of the subject property.

Finally, to be valid, such tax election must be made within 24 months of the end of the taxation year of the deemed disposition or destruction of the property.

Please do not hesitate to consult us if you have any questions about replacement property election or any other tax question.

30 Oct 2013  |  Written by :

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

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Danielle Loranger
Senior Manager | Lawyer, D. Fisc. | Tax

You have just learned that you have been appointed the liquidator of your brother’s estate (succession). Here are some useful lessons to ensure that you are released from all the deceased’s tax liabilities.

As a liquidator (formerly known as the testamentary executor), you have responsibilities. According to the tax laws, you must:

  • File all the income tax returns required for the deceased person and his/her succession;
  • Ensure that all the current taxes are paid;
  • Inform the beneficiaries about the taxation of the amounts they receive from the estate (succession).

You must also ensure that you obtain the necessary authorizations and clearances to avoid incurring your personal liability for the tax debts of the deceased.

Québec – Authorization to distribute the property of the estate (succession)

In Québec, the liquidator must obtain a certificate authorizing the distribution of the property of the estate (succession) before distributing any funds, and even before paying bills. Failing to request such a certificate may be costly. Any amount distributed before this certificate is obtained will render the liquidator personally liable for the tax liabilities of the deceased, up to the limit of the amounts distributed without authorization. However, the tax authorities allow distribution of funds or payment of bills, without a certificate, up to a limit of $12,000.

For this purpose, a prescribed form must be filed as soon as possible after obtaining the inventory of the deceased person. In addition to basic information on the deceased, this form will present his assets and liabilities and the amounts already distributed or paid since the death.

Federal – Clearance Certificate

The liquidator (legal representative) must obtain a Clearance Certificate for federal tax purposes. As in the case of Québec, failure to obtain this certificate will render the liquidator personally liable. However, the scope of this liability will not be related to the valuables distributed before the certificate is obtained. In fact, contrary to the rules in Québec, the Clearance Certificate can only be requested once all the income tax returns have been filed and assessed – in other words, after the estate (succession) is liquidated. It is generally suggested that the liquidator retain a certain amount until the Clearance Certificate is obtained, in order to cover the tax debts that could appear during the analysis of the application.

Given the special tax consequences applicable in case of death and the possible liability of the liquidator, it may be wise to consult a tax specialist.

Please do not hesitate to consult our team specializing in this field.  It will be their pleasure to assist you.

15 May 2013  |  Written by :

Ms. Loranger is your expert in taxation for the Sherbrooke office. Contact her today!

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