The Grant Thornton International IFRS team has published Hyperinflationary countries, a reminder of the accounting implications of applying IAS 29 Financial Reporting in Hyperinflationary Economies.

IAS 29 requires the financial statements of any entity whose functional currency is that of a hyperinflationary economy to be restated for changes in the general purchasing power of that currency, so that the financial information provided is more meaningful. The Standard lists factors that indicate an economy is hyperinflationary.

In addition to providing a reminder of the accounting implications of applying IAS 29, the publication Hyperinflationary countries provides Grant Thornton International’s view that, until further notice, IAS 29 should be applied by entities whose functional currency is that of the following countries:

  • Argentina;
  • Sudan (and South Sudan);
  • Zimbabwe;
  • Venezuela;
  • Iran;
  • Lebanon.

Entities whose functional currency is that of Iran and Lebanon should be applying IAS 29 for the first time in 2020.

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The Grant Thornton International IFRS team has published Insights into IFRS 16 – Lease incentives.

The document Insights into IFRS 16 – Lease incentives provides guidance on the accounting for lease incentives under IFRS 16 Leases from a lessee perspective.

Granting lease incentives is a common way to encourage a new lessee to sign up to a new lease contract and fill vacant premises. Lease incentives may take various forms depending on the negotiation between the lessee and the lessor.

When accounting for lease incentives in accordance with IFRS 16 Leases from a lessee perspective, questions may arise in how to identify a lease incentive and when the accounting treatment changes depending on how the lease incentive is granted.

The document Insights into IFRS 16 – Lease incentives aims to resolve these lessee accounting questions.

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The pandemic has forced businesses and workers to be flexible. In these challenging times, there’s nothing more valuable than positive leadership.

Reviewing business models. Forecasting new customer needs. Positioning your business in the market. All this requires a lot of thought and frequent adjustments from senior management. Many entrepreneurs compare the challenge to playing Tetris. You have to be agile in order to fit everything in, without missing any pieces, even when your circumstances are constantly changing. Unpredictability has become the norm.

Meanwhile, everyone is talking about agility. The word pops up everywhere, but what does is it really mean? And how can companies promote it?

What is agility?

The dictionary definition associates agility with nimble dancers and quick thinkers. For businesses, being agile involves continually questioning your work while developing products and services.

In the current climate of uncertainty, business leaders need to anticipate what’s around the corner and stay attuned to changes and cues from within their organizations and the market more broadly. Entrepreneurs need to make quick decisions to help their companies adapt in the face of events and the new reality. Leaders and teams need to find new points of reference and ensure they’re still aligned with the core values of their organization and workforce.

Tracking trends and focusing on development

To protect their long-term prospects, businesses need to keep their eyes and ears open while focusing on major development projects, such as those targeting strategic priorities or with high growth potential. It’s critical to be able to get these projects off the ground quickly. And that’s where the agile approach comes in.

By involving employees early in the ideation and execution phases, managers can effectively mobilize teams and increase their engagement in the company’s activities.

Of course, staying on top of new social trends is also important, as it can help leaders decide how to adjust their product lines and practices. For example, the buy local movement has never had so much traction in government and public discourse. The same can be said of self-sufficiency and sustainable development.

Employees, partners and customers will respond favourably to businesses that successfully adjust their position in response to emerging trends and recent events.

Pairing positive leadership and agility

What’s needed is agile, positive leadership. This means turning stumbling blocks into stepping stones that ultimately lead to business growth and stronger team spirit. It’s a practice that should emanate from all organizations and the managers they employ.

When looking at facts, leaders should take a step back and consider different points of view. Asking employees for their perspectives can help you get a better big-picture understanding of the situation. In addition, a crisis or period of change can be an opportunity for some workers to shine. You never know, they might reveal a rainbow of solutions to cut through the dark clouds cast by the pandemic. Take the time to get your workforce involved and listen to what they have to say. It’s true what they say: together, we’re better.

Slowing down before bouncing back

Practicing positive agility also means knowing when to stop, reconnecting with your business’ values and making sure your decisions are aligned with these principles.

  • Do your words reflect your values? Do you pass your values on to your team on a day-to-day basis?
  • Are your work methods and actions consistent and ethical?

When going after agility, it’s easy to get off track. If you’re not careful, your judgement can become clouded as you rush to act quickly.

In order to stay on course despite the occasional sea change, keep your organization’s mission in mind and remind yourself why you invested so much time into building your business. Now more than ever, the key to staying afloat is to keep your focus on your organization’s brand identity and make sure it’s effectively conveyed to customers and employees. Otherwise, your company’s image could take a hit, leaving scars that last.

Developing positive agility starts with springing into action, spotting opportunities and responding quickly. At the same time, keep in mind that your teams need to move in step with you, with the same drive and skill.

If you’d like to discuss strategies for getting your business back on track, contact our team of experts. We’ll be happy to help you implement effective best practices for today’s turbulent times.

 

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Do you think the digital shift only concerns certain industries? Make no mistake: organizations in all sectors can make the most of it.

A 4.0 transformation is essential for your business in order to increase your competitiveness, especially during this pandemic and in the post-pandemic period. Regardless of your industry − retail, construction, services, tourism, bio-food or other − you must adapt to new standards and to a clientele whose needs have changed. Digital and technology will help you meet this evolving demand and to remain competitive.

Let’s take a closer look at what digital transformation can do for you. What are its benefits and, concretely, how can you use it in your market for your business activities.

Competitive advantages for your business

Integrating digital technologies makes it possible to significantly improve all of the organization’s processes, in terms of both operations and the customer experience.

There are numerous benefits to the 4.0 transformation, such as:

  • Reducing your costs by automating activities and improving the flow of information within your organization;
  • Responding to your customers’ needs more quickly and forging stronger ties with them;
  • Increasing your production capacity and product quality;
  • Attracting and retaining talent within your organization through an enhanced technology experience.

Businesses with high digital maturity are 62% more likely than their peers to have experienced strong sales growth over the past three years. In these times of pandemic, the most proactive organizations will have a significant competitive advantage and will therefore benefit from it.

What does a digital shift entail?

This advancement, called “digital transformation”, “4.0 shift” or “industry 4.0”, consists of using new technologies to increase communication between your organization’s various components (individuals, machines, products, suppliers, distributors, etc.).

In other words, it is about optimizing the organization’s processes and services to make it more competitive, through the acquisition, processing, evaluation and interpretation of data.

What can the digital transformation do for you?

Here are tangible examples of the benefits of the 4.0 shift in different activity sectors.

Retail sales

The integration of digital technologies enhances the customer experience by allowing consumers to view inventory status, configure products, evaluate delivery times and track the progress of products.

For example, a clothing retailer could offer its customers the opportunity to integrate a photo of themselves into its online shopping platform so that they can virtually try on certain models, sizes and colours of clothes they are interested in. The customer process could then be automated all the way through to the transaction and shipping.

Distribution

The customers of a building materials distributor, for example, could have access, via the Web, to all the products that are offered, with an illustration and their various characteristics. Customers could also find out about inventory availability, order and pay for products online, and then track the shipment progress.

Tourism

Imagine air flights are cancelled due to a snowstorm. Using artificial intelligence tools, a travel agency could automatically identify affected customers, offer them new flights, re-plan their travel itinerary and change their hotel reservation.

Manufacturing

By installing sensors on machines, real-time data can be collected and production can be proactively monitored to identify and correct problems. Another application: monitoring production with cameras makes it possible to check product quality and automate the reject process.

Agri-food

Automating farming activities and using data can help increase yields and reduce production costs, among others. For example, there are a growing number of applications for continuously monitoring the growth and health of animals and automatically regulating their diets based on the data collected.

Transformation through a step-by-step process

You have to prepare for a digital shift. It’s best to go gradually, without skipping any steps and by prioritizing projects according to your resources (human, material, technological and financial) and your ability to manage this change.

  • Think about your needs, the processes to be improved and how to stay competitive;
  • Define your strategic objectives;
  • Prepare a complete organizational diagnosis.

This diagnosis is carried out by means of an industry 4.0 audit, which is used to develop a digital action plan to achieve the strategic objectives.

All industries are eligible for financial assistance under the Ministère de l’Économie et de l’Innovation du Québec’s Audit Industrie 4.0 program.

Do you have questions about the digital transformation? Our experts will be more than happy to answer them.