Corporate Reporting Briefing

Transcription

1 Corporate Reporting Briefing WHAT SHOULD BE DISCLOSED ABOUT ESTIMATION UNCERTAINTY? APRIL 2016 Purpose of this Briefing Many accounting numbers involve estimates. Both International Financial Reporting Standards (IFRS) 1 and Form F1 Management s Discussion and Analysis (NI F1) 2 issued by the Canadian Securities Administrators (CSA) require disclosures about measurement uncertainty in accounting estimates, although different terminology is used IFRS refers to major sources of estimation uncertainty; Management s Discussion and Analysis (MD&A) requirements refer to critical accounting estimates. While the regulatory requirements are similar to the disclosure requirements in IFRS, they are not identical. The differences potentially affect both what estimates are disclosed and the information provided about them. For the purposes of this Briefing, the term estimation uncertainty is used to refer to measurement uncertainty in accounting estimates in the context of both financial statements and MD&A, unless otherwise specified. Significant judgment is required in deciding the nature and extent of the disclosures to be made about estimation uncertainty in both the financial statements and MD&A. This has resulted in a wide variety of disclosures in practice. Various Canadian securities commissions have expressed concerns about the quality of disclosures around estimation uncertainty; primarily that they lack substance, are boilerplate and are not entity specific. This Briefing includes: a summary of the findings from a survey of estimation uncertainty disclosures for a sample of companies reporting under IFRS 1 International Accounting Standard 1 Presentation of Financial Statements (IAS 1), paragraph The principal requirements for annual and interim disclosures are set out in the Canadian Securities Administrators National Instrument Continuous Disclosure Obligations (NI ) and accompanying Form F1. The complete texts of NI and NI F1 are available here. 1

2 important considerations to aid preparers when they are developing disclosures about major sources of estimation uncertainty in financial statements a comparison of the IFRS and MD&A estimation uncertainty disclosure requirements observations on the reporting practices of the companies surveyed and suggestions on how to improve disclosures about estimation uncertainty Whether MD&A disclosures comply with applicable securities requirements is ultimately a legal matter and should be considered carefully. The information included in this Briefing is for general information purposes only and should not be used as a substitute for consultation with professional advisors. Survey of Reporting Issuers In preparing this Briefing, a review was conducted of items identified as major sources of estimation uncertainty in financial statements and as critical accounting estimates in MD&A. The review was based on a sample of 10 Canadian reporting issuers 3 across a variety of industries in order to: understand existing practice identify areas where improvement may be needed The following was noted in the review: The number of items identified as major sources of estimation uncertainty in the financial statements varied by company. This reflects the different types of transactions undertaken and differences in the significance of the estimation uncertainties in understanding the company s financial position and performance. The number of items identified as a major source of estimation uncertainty ranged from four to 11. There was a high degree of consistency between the major sources of estimation uncertainty disclosed in the financial statements and the critical accounting estimates disclosed in the MD&A. In two instances, additional critical accounting estimates were identified in the MD&A. The critical accounting estimates disclosure in the MD&A largely repeated what was disclosed in the financial statements or cross references to the financial statement disclosures. Most disclosures in both the financial statements and the MD&A focused on how the estimate is calculated and what elements of the calculation may be uncertain. It was less common to see key assumptions quantified, a sensitivity analysis showing the effect on the estimate of a change in assumption or a discussion of how likely it was there would be a significant change from the reported number. This may be because the company thought it was impracticable to provide quantitative data. 3 The sample included the 2014 securities filings of TSX listed Canadian companies reporting under IFRS having market capitalizations of $200 million to $40 billion with the majority in the $2-$3 billion range. 2 Corporate Reporting Briefing April 2016

3 Several companies combined disclosures about accounting estimates and judgments, 4 referring to both in the same paragraph about a specific item such as impairment or provisions for doubtful accounts. Important Considerations for Preparers This Briefing provides important considerations for preparers to enhance the usefulness and quality of their disclosures about estimation uncertainty. Specifically, this Briefing addresses the following questions: 1. Why are disclosures about estimation uncertainty important to users of financial information? Many accounting items can be measured with a high degree of accuracy (e.g., cash, gross receivables, payables, cost of property, plant and equipment and debt). No estimate is required and no estimation uncertainty exists. In some cases, the company may have a choice of accounting policies, each of which may lead to a significantly different measurement of assets and liabilities (e.g., the use of historical cost or fair value or different depreciation methods). Such differences are not a result of estimation uncertainty. Estimation uncertainty occurs when, in following a specific accounting policy, the measurement of an asset or liability requires significant estimation. Management is expected to use its professional judgment in such cases and to provide a neutral, unbiased estimate but there may still be a range of reasonable estimates. Examples of where this occurs include provisions for doubtful accounts, restructuring charges, asset retirement obligations and legal claims, as well as an asset s useful life for use in depreciation, amortization and depletion calculations and the fair value or value in use of an asset used in impairment assessments. IFRS defines the purpose of financial reporting as to provide financial information about the reporting entity that is useful to existing and potential investors, lenders and other creditors in making decisions about providing resources to the entity. 5 The focus on meeting the needs of current and potential investors also applies to It is important that users of financial MD&A, which is intended to supplement and complement the financial information are aware of where estimates have been made for which there is significant potential for the actual outcome to statements. be materially different from the estimate. It is important that users of financial information are aware of where estimates have been made for which there is significant potential for the actual outcome to be materially different from the estimate (e.g., where an obligation may be settled for an 4 Paragraph 122 of IAS 1 requires disclosure of the judgments, apart from those involving estimations, that management has made in the process of applying the entity s accounting policies and that have the most significant effect on the amounts recognized in the financial statements. 5 IASB Conceptual Framework for Financial Reporting, Chapter 1, paragraph OB2. At the time of writing this Briefing the IASB has a project to update the Conceptual Framework. The Exposure Draft proposals do not substantively change the material on the purpose of financial statements and are not expected to have a significant effect on the content of this Briefing. April 2016 Corporate Reporting Briefing 3

4 amount materially different from the estimate). Some estimates contain significant measurement uncertainty (i.e., small changes to observable and unobservable inputs can change the amount of the estimate and, consequently, net income or other measures by a material amount). Understanding the nature and extent of measurement uncertainty associated with these accounting estimates provides greater insight into the quality and variability of reported financial information. 2. When is disclosure of estimation uncertainty required? Paragraph 125 of IAS 1 Presentation of Financial Statements requires that an entity... disclose information about the assumptions it makes about the future, and other major sources of estimation uncertainty at the end of the reporting period, that have a significant risk of resulting in a material adjustment to the carrying amounts of assets and liabilities within the next financial year. Assumptions may relate to future developments such as changes in technology and competition or the outcome of litigation. Other sources of estimation uncertainty are more quantitative in nature, including estimates of economic factors such as the rate of inflation, GDP growth and interest rates that may be used to develop estimated future cash flows. For example, an asset retirement obligation estimate may include an assumption that technology will not change. Such an assumption is different in nature from uncertainties inherent in the estimation of cash flows associated with the asset retirement obligation. Measurement of certain assets and liabilities may also involve uncertainty even though no estimates relating to the future are required. For example, a fair value for an item may be determined by adjusting the fair value of a similar item to reflect quality, geographic, or other differences between the items. Those adjustments may involve estimation uncertainty. (A fair value based on a quoted price in an active market for an identical asset or liability is not subject to estimation uncertainty. Although its value may change in the future, there is no uncertainty about its fair value at the date of the financial statements.) Item 1.12 Critical Accounting Estimates (Item 1.12) of NI F1 requires an analysis of critical accounting estimates in the MD&A. A critical accounting estimate is defined in Instruction (i) of Item 1.12 of NI F1 as follows: An accounting estimate is a critical accounting estimate only if a. it requires your company to make assumptions about matters that are highly uncertain at the time the accounting estimate is made; and b. different estimates that your company could have used in the current period, or changes in the accounting estimate that are reasonably likely to occur from period to period, would have a material impact on your company s financial condition, changes in financial condition or financial performance. 4 Corporate Reporting Briefing April 2016

5 3. What are some factors to consider in determining whether there is a major source of estimation uncertainty that should be disclosed under IFRS? Determining what constitutes a major source of estimation uncertainty that should be disclosed under IFRS requires significant judgment. Some situations will be very clear and others less so. The decision not to disclose a particular source of estimation uncertainty can be as important as the decision to disclose a particular source of estimation uncertainty. Preparers may consider the following questions and factors in making this determination: a. Do the estimates require management s most difficult, subjective or complex judgments? The assumptions and other sources of estimation uncertainty to be disclosed relate to estimates that require management s most difficult, subjective or complex judgments. 6 Companies are not required to disclose The International Accounting Standards Board every source of estimation uncertainty under IFRS. Companies should consider (IASB) explains that such disclosures would be made in respect whether their disclosures relate to those estimates that require management s of relatively few assets or liabilities (or classes of them) 7 most difficult, subjective or complex because the judgments. IASB expects that only relatively few balances will involve estimates that require management s most difficult, subjective or complex judgments. A key factor to be considered is the complexity of the assumptions that have to be made. As the number of variables and assumptions affecting the possible future resolution of the uncertainties increases, those judgments become more subjective and complex, and the potential for a material adjustment to the carrying amounts of assets and liabilities normally increases. 8 Companies may also consider the following questions when assessing the degree of difficulty, subjectivity and complexity associated with the estimate: What are the types of accounts and transactions to which the accounting estimate relates (i.e., routine transactions or non-recurring or unusual transactions)? Do the assumptions relate to matters within or outside the control of management? To what extent does management use experts in making the accounting estimates? What are the significant estimates reported to the audit committee? Are the sources of estimation uncertainty disclosed by the company consistent with those disclosed by others in the industry? 6 Paragraph 127 of IAS 1 7 Paragraph BC81 of IAS 1 8 Paragraph 127 of IAS 1 April 2016 Corporate Reporting Briefing 5

6 b. Is there a significant risk the estimate will lead to a material adjustment within the next financial year? A material adjustment is one that could reasonably be expected to influence decisions made by users. 9 Disclosure of immaterial items is discouraged by paragraph 30A of IAS 1, which states: An entity shall not reduce the understandability of its financial statements by obscuring material information with immaterial information. Paragraph 125 of IAS 1 specifies that companies should focus their disclosures on those sources of estimation uncertainty that have a significant risk of resulting in a material adjustment to the carrying amounts of assets and liabilities Companies should focus their IFRS disclosures on those sources of estimation within the next financial year rather than over a longer period. The IASB uncertainty that have a significant risk of considered that the longer the resulting in a material adjustment to the future period to which the disclosures relate, the greater the range within the next financial year rather than carrying amounts of assets and liabilities of items that would qualify for disclosure, and the less specific are over a longer period. the disclosures that could be made about particular assets or liabilities. A period longer than the next financial year might obscure the most relevant information with other disclosures. 10 For example, a company may establish a provision for doubtful accounts related to a material long-term receivable. Although there may be a greater risk of a material loss beyond the next financial year, no disclosure is required in the current financial statements if there is not a significant risk of a material adjustment in the next financial year. Although a material adjustment within the next financial year may be possible, disclosure is not required if that possibility is not significant. How significant is interpreted when assessing the risk of a material adjustment is an How significant is interpreted under area of judgment and should be IFRS when assessing the risk of a material considered carefully. When evaluating whether the risk of a material estimation uncertainty is an area of judg- adjustment associated with a source of adjustment within the next financial ment and should be considered carefully. year is significant for a specific estimate, management might consider the following questions: Is the line item to which the accounting estimate relates material? What is the range of reasonably possible amounts? Have the assumptions been stress tested? Is the difference between the recognized amount and the outer limits of the range of reasonably possible amounts material? 9 Paragraph 7 of IAS 1 10 Paragraph BC84 of IAS 1 6 Corporate Reporting Briefing April 2016

7 How does the outcome of accounting estimates differ from the accounting estimates recognized in the prior-year financial statements? Does the difference suggest that there is a higher risk of a material adjustment than previously thought? How do current market conditions affect the risk of a material adjustment? Were there any significant changes in processes and methods used to develop estimates during the past year? (The use of a new estimation technique may increase the risk of a material adjustment.) 4. What disclosures are required about estimation uncertainty under IFRS? Paragraph 125 of IAS 1 requires that: An entity shall disclose information about the assumptions it makes about the future, and other major sources of estimation uncertainty at the end of the reporting period, that have a significant risk of resulting in a material adjustment to the carrying amounts of assets and liabilities within the next financial year. In respect of those assets and liabilities, the notes shall include details of: a. their nature, and b. their carrying amount as at the end of the reporting period. IAS 1 acknowledges that the nature and extent of the information provided will vary according to the nature of the assumption and other circumstances. Paragraph 129 of IAS 1 provides the following examples of the types of disclosures an entity makes: the nature of the assumption or other estimation uncertainty; the sensitivity of carrying amounts to the methods, assumptions and estimates underlying their calculation, including the reasons for the sensitivity; the expected resolution of an uncertainty and the range of reasonably possible outcomes within the next financial year in respect of the carrying amounts of the assets and liabilities affected; and an explanation of changes made to past assumptions concerning those assets and liabilities, if the uncertainty remains unresolved. In addition to the requirements of IAS 1, there are other specific IFRSs that have additional disclosure requirements related to estimation uncertainty. Comparison of IFRS and MD&A Estimation Uncertainty Disclosure Requirements The disclosure requirements in NI F1 are more detailed and extensive than those in IAS 1, reflecting the broader nature of MD&A. In addition, CSA Staff Notice Continuous Disclosure Considerations Related to Current Economic Conditions 11 highlights some specific areas for which disclosure will likely be important to help investors understand the risk and circumstances facing issuers, which include critical accounting estimates. 11 The full text of CSA Staff Notice can be found here. April 2016 Corporate Reporting Briefing 7

8 Paragraph 125 of IAS 1 requires disclosure about assumptions and other estimation uncertainties that have a significant risk of resulting in a material adjustment to the carrying amounts of assets and liabilities within the next financial year. NI51-102F1, in contrast, refers to matters for which different estimates that your company could have used in the current period, or changes in the accounting estimate that are reasonably likely to occur from period to period, would have a material impact on your company s financial condition, changes in financial condition or financial performance. In many situations, the two will result in very similar disclosures, but other situations may require different or additional disclosures in the MD&A than in the financial statements. For example, an entity might determine that the cash flow forecasts used in impairment testing for a certain cash generating disclosure requirements are similar to the While the MD&A estimation uncertainty unit (CGU) are unlikely to deviate significantly within the next year because the key not identical. The differences potentially disclosure requirements in IFRS, they are assumptions used in developing those forecasts are only likely to deviate significantly and the information provided about them. affect both what estimates are disclosed over a longer time horizon. In this case, the entity might conclude that no disclosure is required under IFRS because no significant risk exists of a resulting material adjustment to its assets or liabilities within the next year. In contrast, under NI F1, more disclosure may be required in this instance because it requires consideration of a longer-term time frame. IAS 1 requires disclosure of information about the entity s assumptions and other estimation uncertainties as identified above but does not prescribe the form of the specific disclosures. Paragraph 129 of IAS 1 states that the nature and extent of the information provided vary according to the nature of the assumption and other circumstances and goes on to provide examples of the types of disclosures an entity makes. Some of these examples are similar to the disclosure items specified in NI F1; however, NI F1 sets these out as items that should be included as part of an analysis of critical accounting estimates (subject to materiality). It is important to note that paragraph 131 of IAS 1 recognizes that in some instances, it is impracticable 12 to disclose the extent of the possible effects of an assumption or another source of estimation uncertainty at the end of the reporting period. Specific disclosures are required in those instances. The following table compares the IAS 1 and NI F1 disclosure requirements related to estimation uncertainty and highlights that while there are similarities, they are different. In addition, NI F1 contains disclosure requirements with no equivalent in IAS 1. There is, in fact, no reason to expect the requirements would produce the same disclosure since they were developed independently of each other. In general, it appears that NI F1 will frequently require highlighting a larger number of items and more detail than does IAS The term impracticable is defined in paragraph 7 of IAS 1 which states: Applying a requirement is impracticable when the entity cannot apply it after making every reasonable effort to do so. 8 Corporate Reporting Briefing April 2016

9 IAS 1 and NI F1 Disclosure Requirements on Estimation Uncertainty 13 IAS 1 NI F1 Observations Overall objective Disclose information about major sources of estimation uncertainty at the end of the reporting period that have a significant risk of resulting in a material adjustment. Overall objective Disclose information about critical accounting estimates that require the company to make assumptions about matters that are highly uncertain at the time the accounting estimate is made; and if different estimates that the company could have used in the current period, or changes in the accounting estimate that are reasonably likely to occur from period to period, would have a material impact. IAS 1 focuses on estimation uncertainty at the end of the reporting period. NI F1 refers to estimation uncertainty at the time the accounting estimate is made. Differences include: significant risk (IAS 1) vs. matters that are highly uncertain and changes are reasonably likely to occur (NI F1) Both IAS 1 and NI F1 use the term material to describe the adjustment or impact of the estimation uncertainty. The definition of material in a regulatory context is a legal one and may be different from the definition in IFRS. Disclosure of estimation uncertainty is only required where there is a significant risk of material adjustment to the carrying amounts of assets and liabilities within the next financial year. Analysis of critical accounting estimates includes those estimates that would have a material impact on the company s financial condition, changes in financial condition or financial performance. IAS 1 focuses on balance sheet items. NI F1 also requires consideration of financial condition and financial performance, which presumably requires consideration of estimates affecting both the income and cash flow statements. Financial condition is a broader concept. Part 1(p) of NI F1 explains the use of the term financial condition. Per Part 1(p), financial condition reflects the overall health of the company and includes your company s financial position (as shown on the statement of financial position) and other factors that may affect your company s liquidity, capital resources and solvency. This may include, for example, the effect that different estimates may have on the classification of debt as long term. NI F1 does not specify a time frame against which to evaluate the material impact of the estimate. 13 The information in the table is not a complete analysis and has been developed based on the guidance and detailed requirements set out in paragraphs of IAS 1 and Item 1.12 of NI F1. The interpretation of MD&A requirements is a legal matter. The analysis included in the table is for general information purposes only and does not constitute legal advice. April 2016 Corporate Reporting Briefing 9

10 IAS 1 NI F1 Observations Detailed requirements and guidance 14 Describe assets and liabilities subject to estimation uncertainty and include details of their nature and their carrying amounts at the end of the reporting period. Detailed requirements Identify the financial statement line items affected by the accounting estimate. Explain the significance of the accounting estimate to the company s financial position, changes in financial position and financial performance. NI F1 includes specific requirements to disclose significance of the estimate to financial position and performance. Describe the nature of the assumption or other estimation uncertainty. Describe critical accounting estimates, including a description of the accounting estimate; the methodology used in determining the critical accounting estimate; the assumptions underlying the accounting estimate that relate to matters highly uncertain at the time the estimate was made. NI F1 has more explicit requirements for disclosing how the estimate was derived. Describe the sensitivity of carrying amounts to the methods, assumptions and estimates underlying their calculation, including the reasons for the sensitivity. Indicate the expected resolution of an uncertainty and the range of reasonably possible outcomes within the next financial year. Describe any known trends, commitments, events or uncertainties the company reasonably believes will materially affect the methodology or the assumptions described. If applicable, explain why the accounting estimate is reasonably likely to change from period to period and have a material impact on the financial presentation. Both IAS 1 and NI F1 refer to disclosure about potential changes to estimates. The NI F1 requirement is for a description of why the estimate might change. 14 IAS 1 requirements are based on requirements in paragraphs 125 and 131 and examples of disclosures in paragraph Corporate Reporting Briefing April 2016

11 IAS 1 NI F1 Observations Detailed requirements and guidance 14 Explain changes made to past assumptions concerning those assets and liabilities if the uncertainty remains unresolved. Detailed requirements Discuss changes made to critical accounting estimates during the past two financial years including the reasons for the change and the quantitative effect on the company s overall financial performance and financial statement line items. The focus in IAS 1 is on unresolved uncertainties while the NI requirements relate to all changes to critical accounting estimates during the past two financial years and not just to those for which uncertainty remains unresolved. If it is impracticable to disclose the extent of the possible effects of estimation uncertainty, disclose that it is reasonably possible that a material adjustment may be required in the next financial year. 15 In addition to qualitative disclosure, companies should provide quantitative disclosure when quantitative information is reasonably available and would provide material information to investors. Differences include: impracticable (IAS 1) vs. reasonably available (NI F1) IAS 1 requires specific disclosure when quantitative disclosure is impracticable while NI F1 does not have a similar requirement. Identify the reportable segments of the company s business that the accounting estimate affects if there is more than one reportable segment. Identification of the reportable segments that the accounting estimate affects is not required by IAS 1. NI F1 requires additional disclosure based on information reported in the segment note in the company s financial statements. 15 Paragraph 131 of IAS 1 April 2016 Corporate Reporting Briefing 11

12 Estimation Uncertainty Disclosures in Practice This section includes observations on reporting practices of the 10 companies surveyed as part of this Briefing and suggests ways in which disclosures about estimation uncertainty could be improved in financial statements and MD&A. Companies should regularly review the effectiveness of their disclosures and ensure they are providing users with meaningful insights into the significant uncertainties relating to management s estimates. Disclosures Should Be Entity Specific Users of financial statements often comment that financial statement disclosures are boilerplate in nature and do not provide sufficiently useful information about the specific company circumstances. Similar comments have been made by the CSA about MD&A disclosures. Companies should regularly review the effectiveness of their estimation uncertainty disclosures and ensure they are providing users with meaningful insights into the significant uncertainties relating to management s estimates. In the survey, it was noted that companies often include in their estimation-uncertainty disclosure a generic description of the accounting policy that repeats or summarizes the requirements of the relevant IFRS together with a general statement that estimates are required in measuring the item. More entity-specific disclosures included: identification of the specific key assumptions underlying the accounting estimate one company described the key uncertainties in measuring inventories, which included expected sales volumes and prices, shrinkage, and changes in product offerings other companies identified certain assumptions required to estimate impairment or asset retirement obligations (e.g., future cash flows, including assumptions about future sales, commodity prices, margins, market conditions and taxes), explained how some or all these assumptions were developed, and showed how the discount rate was derived discussion of the uncertainties associated with significant balances specific to the company and with which financial statement users might not be familiar, such as gift cards, guarantees and franchisee loans identification of the CGUs used for impairment testing sensitivity analysis highlighting how changes in assumptions may impact the estimate Include Quantitative Information Where Possible This may be difficult for some uncertainties but, for a number of uncertainties, quantitative disclosures are both possible and informative. Quantitative information makes the disclosures more entity specific. 12 Corporate Reporting Briefing April 2016

13 Examples from the survey include: key assumptions made for impairment tests and asset retirement obligations the amount by which the recoverable amount of key assets exceeded book value a factor analysis explaining the year-over-year changes in asset retirement obligations Examples of the sensitivity analysis provided include: the effect on depreciation of a 50% reduction in residual values for certain assets the percentage change in the discount rate that would result in the impairment of a CGU the effect of a one-percentage-point change in interest rates on the carrying amount of an interest rate swap the effect of possible changes in commodity prices, inflation and the discount rate on asset retirement obligations the effect of a one-percentage-point increase in the estimated future costs to complete all ongoing long-term contracts on gross margin Review Disclosures by Other Companies in Similar Industries Judgment is required in determining the appropriate disclosures that should be made about estimation uncertainty. There is no standard template; appropriate disclosure will depend on the specific circumstances of each company. Nevertheless, a review of disclosures by other companies in the same industry is often helpful. Companies in the same or similar industries often have similar transactions and similar circumstances and, as a result, may well have similar estimation uncertainties. Avoid Duplication Because IFRS already requires disclosure about estimation uncertainty, the notes to the financial statements might provide largely what the MD&A requires. In practice, there is often significant duplication of estimation uncertainty disclosures in the financial statements and the MD&A. Because the MD&A should be read in conjunction with the financial statements, a user would not likely benefit from different versions of the same information. It makes sense that the MD&A does not repeat information provided in the notes to the financial statements if the discussion clearly cross-references specific information in the relevant notes. For example, the MD&A of one company surveyed included a heading Critical Accounting Estimates which included a cross-reference to the relevant financial statement note. Within the financial statement note, all information on asset retirement obligations, including the accounting policy and discussion of uncertainties (such as key assumptions and sensitivities) was included. This approach makes it easier for the financial statement user to find the entire discussion of estimation uncertainties and reduces clutter in the annual report by eliminating duplication. Companies should, however, ensure that any incremental disclosures required by NI F1 are included in MD&A. April 2016 Corporate Reporting Briefing 13

14 Comments on this Briefing or suggestions for future Briefings should be sent to: Rosemary McGuire, CPA, CA Principal, Reporting & Capital Markets Research, Guidance and Support Chartered Professional Accountants of Canada 277 Wellington Street West Toronto ON M5V 3H2 DISCLAIMER This paper was prepared by the Chartered Professional Accountants of Canada (CPA Canada) as non-authoritative guidance. CPA Canada and the authors do not accept any responsibility or liability that might occur directly or indirectly as a consequence of the use, application or reliance on this material. COPYRIGHT Copyright 2016 Chartered Professional Accountants of Canada All rights reserved. This publication is protected by copyright and written permission is required to reproduce, store in a retrieval system or transmit in any form or by any means (electronic, mechanical, photocopying, recording, or otherwise). For information regarding permission, please contact permissions@cpacanada.ca 14 Corporate Reporting Briefing April 2016