April 2016


The Grant Thornton International Ltd IFRS Team has published Telling your story: Making your financial statements an effective communication tool.

The average length of financial statements prepared under IFRS has been growing for many years as a result of new standards and amendments published by the IASB. In the coming years, new standards on revenue, financial instruments and leasing will add even more disclosures.

All this increases the burden on you when preparing financial statements. Disclosures are added for good reasons – they enable investors to understand complex transactions within the Financial statements. However, as a result financial statements are becoming cluttered, making truly important information hard to find.

The standards are only one issue – companies are struggling to apply the materiality concept to their disclosures. This lack of clarity on how to apply materiality to financial statements is perceived as one of the main reasons for overloaded financial statements.

With support from regulators and standard setters, many companies are revising their approach to Financial statement preparation – and looking for innovative ways to improve the look and feel of their financial statements. Companies are recognizing that financial statements are not merely a compliance document but also a critical means for communicating with investors.

This publication explains and illustrates four key tools you can use to make your financial statements an effective communication tool.


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March 2016


The Grant Thornton International Ltd IFRS Team has published Get ready for IFRS 9 – The impairment requirements, the second issue in a series of publications intended to help you prepare for IFRS 9 (2014) Financial Instruments.

IFRS 9 (2014) fundamentally rewrites the accounting rules for financial instruments. While IFRS 9’s mandatory effective date of January 1, 2018 may seem a long way off, companies really need to start evaluating the impact of the new standard now. As well as the impact on reported results, many companies will need to collect and analyze additional data and implement changes to systems.

Under IFRS 9, recognition of impairment no longer depends on a reporting entity first identifying a credit loss event. IFRS 9 instead uses more forward-looking information to recognize expected credit losses. The second issue in the series of publications has been written to assist companies in understanding the impairment requirements under IFRS 9 and to provide practical insights related to these requirements. This edition includes the following sections:

  • Scope of the new impairment requirements;

  • The general (or three-stage) impairment approach;

  • Simplified model for trade receivables, contract assets and lease receivables;

  • Purchased or originated credit-impaired financial assets;

  • Presenting credit losses;

  • Disclosures; and

  • Practical insight – next steps.



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Federal Budget, March 22, 2016

The Trudeau government’s first budget follows through on several election promises. Its main objective is stimulating growth. However, the significant deficit, which we can expect in coming budgets as well, is a call to prudence, in particular to avoid generating negative impacts on how Canada is being evaluated, especially by credit rating agencies.


According to the government, boosting the Canadian economy can be achieved through a series of measures designed to assist the middle class and communities. One key measure is a $11.9B injection in the first phase of a five-year infrastructure plan, with $3.4B over three years to modernize and rehabilitate public transit and $5B over five years for green infrastructure projects, water and wastewater systems across Canada.

In this respect, Raymond Chabot Grant Thornton wishes to point out, that for such projects, considering each project’s life cycle cost should be an integral part of its evaluation. To maximize the returns on all strategic projects, it’s essential to ensure that the construction budget takes account of operating, maintenance, financing and other costs to ensure they are a long-lasting success in Canadian communities.

Postsecondary education and research institutions

The government also considers institutional research a key issue. It has therefore increased financing for fundamental research by $95M annually and is investing $2B over three years in a new Post-Secondary Institutions Strategic Investment Fund to modernize on-campus research, commercialization and training facilities.

On the innovation front, the government has also opted to invest $800M over four years for innovation networks and clusters designed to increase collaboration and create value through innovation.

Moreover, the Canada Student Grant will be increased by 50%, from $2,000 to $3,000 per year for students from low-income families, and from $800 to $1,200 per year for students from middle-income families.


As arts and culture are a driving force in the economy, the government has announced investments of about $1.9M over five years. These targeted investments will be provided to, among others, the Canada Council for the Arts, Telefilm Canada, the National Film Board and unique programs that will allow our artists to shine on the international stage.

Labour-sponsored venture capital corporation tax credit

Lastly, the government has decided to restore the labour-sponsored venture capital corporation tax credit, an initiative Raymond Chabot Grant Thornton applauds as an efficient measure to boost business growth.

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The IASB has published IFRS 16, completing its longrunning project to overhaul lease accounting.

IFRS 16 will require lessees to account for leases “on-balance sheet” by recognizing a “right-of-use” asset and a lease liability.

For many businesses, however, exemptions for short-term leases and leases of low value assets will greatly reduce the impact. IFRS 16 also:

• changes the definition of a lease;

• sets requirements on how to account for the asset and liability, including complexities such as non-lease elements, variable lease payments and option periods;

• changes the accounting for sale and leaseback arrangements;

• largely retains IAS 17 Leases’ approach to lessor accounting;

• introduces new disclosure requirements.