Not the lonely, boring types you think they are. Get to know your accountant, you might be surprised at what they can do for you.

Often, we imagine accountants as bland characters with brown socks. However, CPAs come in a wide range of colours. Simply find the shade that suits you and your business.

Yes, you’re right, they have a Cartesian side as well and act with discipline and depth to analyze your numbers… but they can also have a vibrant, effervescent side.

The work world is constantly changing and so are accountants. Curious and passionate, they touch on all business sectors and take a keen interest in the issues facing entrepreneurs and their industry.

Motivated by the success of their clients, CPAs take the time needed to fully understand each one’s needs. They can therefore help them at every stage of their business growth, as their expertise covers many aspects, from start-up to financial optimization, and from financial statement analysis to management consulting.

Promoting growth in a time of technologies

Increasingly, accountants are integrating the mastery of technological tools into their practice and acting as analyst-advisors.

The rise of artificial intelligence, advanced analytics, blockchains and cryptocurrencies is forcing companies to transform their ways of doing things in order to remain competitive. Mobile applications, cloud computing and cybersecurity are now part of the daily life of organizations.

Accountants can help you adapt, step by step, at the pace that suits you. They will conduct a 4.0 audit to identify your technology needs and work with you to put in place a game plan to make the changes in the short and longer term, including a financing plan and optimization of the organizational structure.

Implementing promising business strategies

In the current workforce shortage, it’s all the more important to dare to adapt to the market in order to deal with local and international competition. The challenges are daunting so it’s essential to put in place a visionary and effective strategic plan.

Your CPA can see far ahead. As a consultant on the lookout for emerging and enduring trends, he will guide your thinking on the best ways to showcase your business and keep you at the forefront of your market.

Having a successful business transfer

During an acquisition, or to ensure the sustainability of your business, it’s vital to prepare the transition upstream. To do so, your accountant will work with you to establish a solid succession plan to avoid conflicts and the uncertainties of improvisation. Developed over several years, a succession plan is an invaluable tool in the case of a family transfer as well as a buyout and sale.

Providing assurance for your financial information

Of course, your accountant will continue to meet your assurance needs, whether for an audit or compilation engagement or to provide a reasonable or moderate assurance report to your shareholders, creditors or any other users of your financial statements.

Your company can always count on your CPA to advise it and ensure that your financial information complies with current standards.

Addressing Canadian and international tax with confidence

It can be easy to get lost in the maze of a company’s tax system, whether in Canada, the United States or internationally.

To avoid complicating your life and, of course, maximize your situation, it’s advantageous to deal with an expert. Your accountant will continue to be there for you, regardless of the context in which your business operates.

Working in tandem with your accountant

Every entrepreneur wants to work with professionals who have their business at heart. When a climate of trust is established between you and your accountant, it becomes easier to move forward and deal with the issues that arise.

Accountants don’t work alone in their corner. They act as a team with you and in synergy with their collaborators so that their expertise allows your business to stand out. They put all of their energy, determination and experience at your service to ensure your success.

Limited-risk distributors and intra-group service providers: Should you adjust your transfer prices in connection with COVID-19?

As multinational groups face unprecedented negative economic pressures, transfer pricing understandably might not be on the top of priorities.

However, transfer pricing policies will potentially need to be modified to consider the financial and economic impact of COVID-19 when companies finalize their transfer pricing adjustments, to comply with local jurisdiction requirements and be in line with the arm’s length principle.

This is particularly true for companies that have a transfer pricing structure involving limited-risk distributors or services centers, as the profitability of such entities is generally constant from one year to another. The reason for this is that these entities assume limited risk.

Challenging transfer pricing structures

In fact, limited-risk distributors are named this way because they are usually exposed to general market risks, but are not exposed to significant risks with respect to inventory, credit and collection, product liability or foreign exchange.

On the other hand, entities that act as service providers for the benefit of other entities of their group are usually remunerated on a cost plus basis, meaning that their profitability is equivalent to the markup they applied on their costs. Accordingly, these intra-group service centers are not exposed to risks other than general market risks.

The negative impact that the COVID-19 will have on the profitability of many companies challenges these intercompany structures and will need to be reflected in the transfer pricing adjustments for fiscal year 2020.

Although negative results are caused by extraordinary circumstances, they are part of the market risks that should be shared between all entities of a group, including limited-risk distributors and intra-group service providers.

Determining profitability

The profitability of limited-risk distributors and intra-group service centers is usually determined by applying the transactional net margin method and by performing a benchmarking analysis of public companies that have a comparable functions, risks or assets profile.

The profit-level indicators of the companies selected as comparables (operating margin, markup on total costs, return on operating assets, etc.) are used to establish an arm’s length range, and the profitability of the limited-risk distributor or service center is considered to be arm’s length if it falls within this arm’s length range.

When the results of a limited-risk distributor or service center are outside the arm’s length range, transfer pricing adjustments are booked, either at year-end or during the financial year.

The financial results of the public companies used to benchmark the profitability of limited-risk distributors and group service centers will be impacted by COVID-19. The annual financial results of the comparable companies for 2020 will be available in the first half of 2021, and it might be too late for companies to adjust their transfer prices at that time.

While this delay in the availability of financial information might not be an issue in normal times, when the arm’s length range does not vary significantly from one year to another, this could become an issue for the fiscal year 2020.

Look at the quarterly results of the public companies

In these circumstances, a solution could be to look at the quarterly results of the public companies used as comparables and assess the impact of COVID-19 on their profitability in the first half of 2020. The transfer prices of limited-risk distributors and intra-group service providers could then be adjusted to reflect the decrease observed in the market.

These adjustments should be carefully documented by the multinational groups, and reflected in their transfer pricing documentation for fiscal 2020 and beyond. Such documentation will be important to explain changes in transfer pricing policies to tax authorities in the event of an audit, and to explain potential losses for limited-risk distributors and intra-group service providers.

Following numerous requests from the municipal sector for this level of government to be recognized as a true development partner and stakeholder, Bill 122, assented to in June 2017, confirmed this status by giving municipalities new powers.

The Act grants new powers to municipal governments enabling them to generate additional revenues and act with greater autonomy.

Let’s take a look at these new tax and financial measures and see how certain municipalities have chosen to apply them, among others, to non-residential and residential buildings, particularly with respect to transfer duties, commonly known as the welcome tax.

Read this article (in French) in the magazine published by the Corporation des officiers municipaux agréés du Québec (COMAQ).