We are pleased to offer you a webcast on Revenue from Contracts with Customers (IFRS 15).

This session will cover the following topics:

  • The new revenue recognition model;
  • Contract costs, sales including the right of return, license and gross or net sales;
  • Presentation and disclosure;
  • Transition;
  • Planning to implement the standard;

At the end of this training session, you will be able to:

  • explain the basic principles of the new IFRS 15 standard on the recognition of revenue;
  • summarize the different considerations when planning to implement the standard.

For this workshop, our experts include Gilles Henley, Partner and National Director of Professional Standards; Brian Toman, Senior Manager, Risk Management & Accounting Research; and Louise Roy, Senior Manager, Risk Management & Accounting Research.

After watching the webcast, participants may take a test at the end of the session. You will receive a training certificate if two conditions are met:you an swered correctly 3 questions and you listened to at least 80% of the webinar. This training certificate will be applicable to your training hours recognized by the Ordre des CPA du Québec (OCPAQ).

This information session is a courtesy of Raymond Chabot Grant Thornton and will be available in French only.

To access the webcast, please click here: http://www.icastpro.ca/rcgt161124 (use the password : rcgt1124)

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Nancy Jalbert
Partner | CPA, CA | Management consulting

The best management accounting practices are very clear: the following three steps are a must if you want to turn your corporate strategy into concrete action while remaining true to your business context.

Step 1: Strategic Planning

This reflection must take account of certain concepts such as your corporate mission, vision, strengths, weaknesses, the opportunities your company needs to capitalize on and the threats it faces. Through this exercise, you can set your targets and turn them into strategic objectives and an action plan, which will guide you in making short-, mid- and long-term business decisions.

Since a strategic plan is an integral part of a business plan, it’s very likely your banker has already requested a copy to round out your file at the bank and become familiar with your initiatives and needs. Nevertheless, this plan isn’t set in stone; rather, it’s a process that evolves over time. Your strategic planning must reflect any significant changes in your market or event that alters your objectives and targets.

Step 2: The Budget

This phase involves quantifying the strategic initiatives and decisions established during your strategic planning. Your objectives and timelines are illustrated in a budget exercise wherein you estimate the resources needed to achieve your targets.

During the budget process, you will make decisions affecting several operational and financial aspects. For example:

  • Sales volumes and product-specific production;
  • Standard costs for raw materials and supplies;
  • Energy costs;
  • Labour costs;
  • Operational performance;
    • Product line,
    • Product bills of materials;
  • Capitalization initiatives;
  • Etc.

This best practice is an ongoing process that requires a proactive approach. The budget is usually developed at the beginning of the year, and analysis meetings where discrepancies are explained must be a priority for those managing the budget.

Step 3: Costing

The strategic plan provided management with a direction, while the budget was used to evaluate the financial and human resources needed to achieve the objectives for the year. Now you need to ensure that the decisions made in the previous steps will enable the organization to deliver products and services at a cost and sale price that meet profitability objectives and satisfy market constraints.

It’s essential to calculate the cost per product and service. This step brings the decisions and assumptions made in the first two steps together in an operational whole. Various analyses, notably operating costs, costs per product or service, the distribution and profitability cost per client and product will help you measure whether you’re achieving your financial objectives. If objectives are not being achieved, costing will provide indications on which budget items or targets need to be adjusted.

We’ve noticed in our practice that few SMEs perform all three of these steps. Many of them only produce a budget since it’s often required by the bank or their business partners.

Failure to align the strategy, budget and costing often yields results that are below target. The following list of symptoms and scenarios may provide an indication that your strategy, budget and costing are misaligned:

  • Sales are increasing but profits are declining;
  • You’re making or losing money and don’t know why;
  • You’re not able to assess the profitability of your products or services or that of your clients;
  • Your business partners have little faith in your financial forecasting;
  • Cost reduction initiatives are not bearing fruit despite the resources invested;
  • Your business is evolving in a low-margin sector;
  • You don’t produce a yearly budget or financial forecasts;
  • Your costing hasn’t been reviewed in the past year or is unknown;
  • The complexity of your products or services is not reflected in your rate setting;
  • Your clients increasingly require custom products or services and this is not reflected in your rate setting.

Our team of experts can guide you in implementing tools and processes to achieve your objectives.


Please note that this article was co-written with Yann Vandevoorde, Analyst, Raymond Chabot Grant Thornton.

06 Oct 2016  |  Written by :

Ms. Jalbert is a partner at RCGT. She is your expert in strategic and performance consulting for the...

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Melissa La Venia
Senior Manager | B.A., J.D. | Tax

TFSAs have been a favoured investment option for Canadians since they were introduced in 2009. However, they are not a golden opportunity for everyone, particularly U.S. citizens residing in Canada.

Americans are one of the only populations taxed under a system based on citizenship, and not tax residency. Accordingly, their investment decisions must always take into consideration potential U.S. tax impacts. The choice of investment accounts is particularly critical for Americans living in Canada.

Tax-free Savings Accounts (TFSAs) were introduced in the 2008 Canadian federal budget and have been gaining in popularity ever since. With a TFSA, an individual can invest funds with future returns being earned tax-free. Unlike an RRSP, a TFSA is not a retirement savings plan and individuals of all ages can use it.

The U.S. “TFSA”

TFSAs resemble the U.S. tax-free retirement investment vehicle known as a Roth IRA. Nevertheless, the TFSA does not benefit from the same tax treatment in the U.S. as the Roth IRA.

Under the Internal Revenue Code, Section 408A, a Roth IRA must be a retirement savings plan to qualify for tax-free treatment, which is not the case for a TFSA. U.S. tax legislation therefore does not recognize a TFSA as a tax-free account.

TFSAs were introduced after the last update of the Canada-U.S. Tax Treaty and do not benefit from the new provisions applicable to RRSPs. In other words, income earned in a TFSA held by a U.S. citizen residing in Canada will be taxed in the United States.

Note that the Treaty allows the deferral of U.S. income tax with respect to income accrued in RRSPs until such time as a distribution is made.

Tax Uncertainty

The Internal Revenue Service has not adopted an official position on the taxation of TFSAs. U.S. tax specialists therefore are attempting to navigate the grey area by referring to the IRS policy regarding an RRSP, which is considered a foreign trust that is protected under the Tax Treaty.

This protection does not apply to TFSAs and experts may instead refer to the historical RRSP tax treatment only as a guide.

U.S. tax specialists therefore are advising U.S. citizens who have a TFSA to file a U.S. foreign trust return. Taxpayers who forget or chose not to file such a return may be liable for an annual penalty of $10,000 USD.

Despite the many benefits of TFSAs in Canada, there may be more problems than benefits for a U.S. citizen owning such an account. Until TFSAs fall within the scope of the Canada-U.S. Tax Treaty, tax specialists generally advise against Americans owning such investment vehicles.


Note: this text was originally published (in French) on www.conseiller.ca.

16 Sep 2016  |  Written by :

Mrs. La Venia is a Manager at RCGT. She is your expert in US and International Taxation for the...

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Emilio B. Imbriglio
President and Chief Executive Officer | FCPA, FCA, MBA, CFE, ICD.D.

The news that a large Quebec company was being sold rekindled the debate on the protection of our head offices. This is both an emotional and economic issue.

We discuss, we document, we question, and rightly so. It’s awkward for a government to get involved in an international and local economic situation where caution is usually de rigueur.

In the context of multinationals, protecting head offices proves to be complex.

Implementing protective mechanisms, such as giving more power to directors in a hostile takeover or limiting the voting rights of “travelling” shareholders, could be efficient solutions to discourage foreign investors. However, knowingly erecting obstacles to transactions could make Quebec businesses less attractive, thereby decreasing their value.

Delicate succession situation

While it’s essential for us to ponder such issues, they shouldn’t overshadow our responsibility concerning the delicate situation of our entrepreneurial succession. With the thousands of SMEs that must find a buyer, without which they’ll be forced to close, the issue of protecting Quebec head offices takes on another dimension we’d be remiss to ignore.

Quebec needs to take a two-pronged approach and tackle both the aspects impacting Quebec company takeovers and the under-investment in modernization that occurs in the years preceding a business transfer. These two issues are threatening a large number of organizations.

The baby-boomers who gave Quebec an unprecedented entrepreneurial edge are approaching 60. They may not be as well-known as Serge Godin or Alain Bouchard, but the 98,000 business owners who are planning on retiring by 2020—with only 60,000 to fill their ranks—will have a huge impact on the economy of Quebec and its regions.

The thousands of business transfers are an opportunity to promote the implementation of strategic initiatives by buyers based on innovation, global marketing, digitization and the modernization of facilities, to be even more competitive.

How to support passing the torch

The Quebec government has the flexibility and tools needed to make passing the torch easier and to support the efficient pursuit of business for buyers. It could implement a fair tax incentive for entrepreneurs to enable their children to take over the family business or provide the proper resources to efficiently plan the transition to the next generation.
It’s also necessary to implement tax treatment to enhance the capital gains exemption on business transfers by promoting sustainable and intergenerational businesses. We need to double down on our efforts to reduce the weight of administrative constraints that make businesses less competitive by adding costs that don’t necessarily create value.

A financial services firm, caterer, construction company and dry cleaning chain are small head offices that play big a role in revitalizing Quebec’s many regions. As big decision-making centres, they use professional services, take out advertising, buy locally, train and hire staff, and get involved in the community on their own scale. End to end, the contribution of such businesses is just as significant as large international head offices, and we need to take notice with as much passion.

Open letter published in La Presse + (May 29, 2016 issue)

03 Jun 2016  |  Written by :

Mr. Imbriglio is partner and the President & CEO of Raymond Chabot Grant Thornton. He is in charge...

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