Our second edition of 2014 starts with a summary of the International Accounting Standards Board (IASB)’s latest standards, IFRS 14 Regulatory Deferral Accounts and IFRS 15 Revenue from Contracts with Customers. We then consider a number of items in the IASB’s project pipeline including its post-implementation review of IFRS 3 Business Combinations, its proposals on macro hedging and some proposed amendments to IAS 1 Presentation of Financial Statements.

The newsletter then moves on to a round-up of IFRS-related news at Grant Thornton, and a more general round-up of activities affecting the IASB. We end with an overview of the implementation dates of newer standards, some of them being not yet effective, and the proposals that the IASB currently has out for comment.

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Provincial Budget, June 4, 2014

Balancing the budget may be critical, but there is no denying that the new government has limited means. Finance Minister, Carlos J. Leitão has chosen to table a stringent budget to stimulate economic recovery with the intention of reducing the budget deficit to $2.35 billion this year and eliminate it by next year.


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Quite often a business plan is wrongly considered a series of more or less fictitious numbers, intended to reassure potential partners or investors. But the business plan allows entrepreneurs to verify that their idea holds the road and to develop assumptions for their project’s future. Based on the business plan, you can ask yourself a range of questions about every aspect of the creation and development of your business, and provide key answers. It thus becomes a management tool that helps you plan your success and, in the monthly following your startup, to determine whether your business is operating according to your expectations.

In the context of a business startup process (one to three years) and with a view to drafting your business plan, here is our experts’ advice.

Understand your readers

Following a ready-made formula presented in outlines offered on the Web or elsewhere doesn’t guarantee a good business plan. Your business plan must adapt to your target readers, whether a lender, an investor or a business partner. Ask yourself what factors to highlight to convince them of the credibility, interest and viability of your business project, and adapt your content accordingly. In most cases, your readers primarily want to understand the project and its development potential, and to validate its feasibility and the credibility of the entrepreneurs who will ensure its performance.

Demonstrate your knowledge of the market

You must demonstrate your understanding and knowledge of the target market, particularly through reliable and valid data. To support your credibility and your knowhow and to dictate the major directions of your positioning/development plan, you must be armed with a judicious market study. Many entrepreneurs do not consider the possible strategic and financial impact of a competitive market, or jump in without validating whether the target clienteles could be interested in their product or service. The market study then becomes the cornerstone to validate your business project’s viability. This data will also serve to establish your financial forecasts and your marketing strategy.

Remedy your weak points

Avoid being too optimistic and masking the project’s weak points. Certainly, the business plan must make the readers want to get involved and must be positive, but it must also be realistic and shed light on your project’s negative points and challenges. If you ignore the negatives, your readers could doubt reliability of the data and your transparency as an entrepreneur. Instead show how you will remedy the weak points.

Ensure the overall coherence of your data

Relying on overabundant figures and being too optimistic in your financial forecasts will not reassure your banker or your investors. A more realistic approach will allow the investor or the lender to understand your medium-term vision and will help you gain credibility. Don’t rely exclusively on forecasts to “sell” your idea, because the business plan is not only financial. Your qualities as an entrepreneur and the innovative aspects of your project will interest your readers. Beyond your financial forecasts, they will verify the coherence among sales, market share, costing (your production cost per product or service delivered), selling price and the necessary investment.

Know how to summarize your project

Many potential investors will have little time to read your plan. You must know how to summarize your project. A decision-making summary presenting your project as convincingly as possible and including the major factors that establish its credibility and relevance must necessarily be included in your document. It is a preferable to write this summary at the end, when you have mastered the subject perfectly. A good summary presented at the beginning of the document can convince the reader to be interested in the details of your business plan.

Finally, the business plan must establish convincing proof that the project is realistic. Although the projected timeline and the expected sales may vary in reality, a good business plan will acquire its full meaning by guiding the long-term operation of your business. It must be more than a report. It must be a management tool for the entrepreneur, taking the form of a solid argument stating where you want to go, how to get there and the best way to achieve it.

This article was co-written with Chantal Gravel, Senior Manager, Assurance (St-Georges).

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Impairment of Assets: A guide to applying IAS 36 in practice

The Grant Thornton International IFRS team has published a new guide, Impairment of Assets: A guide to applying IAS 36 in practice.

This guide has been written to assist management in understanding the requirements of IAS 36 while highlighting some common areas of confusion seen in practice. More specifically, it:

• summarizes the overall objective and basic requirements of IAS 36;
• provides a step-by-step guide to performing an impairment assessment (including testing for an impairment and recording or reversing an impairment loss, when required in accordance with IAS 36);
• highlights interpretative and practical application issues that arise when performing these steps; and
• offers insights on best practices to address these issues.

Download the publication.