Exploring Trends. Embracing Opportunities. IFIC Annual Leadership Conference / Financial Reporting

Transcription

1 Exploring Trends. Embracing Opportunities. Financial Reporting

2 Financial Reporting Panel Gary Chin, EY (moderator) Edna Man, AGF Management Ltd. Sandy MacDonald, CIBC Mellon Robert Schauer, BMO Global Asset Management James Loewen, KPMG 2

3 Session Overview This session will address 1. Recent Updates to IFIC s Accounting Guidelines 2. IFRS Implementation Retrospective 3. Accounting & Reporting Developments 3

4 IFIC Bulletin #22 Guidelines for Correction of Portfolio NAV Errors Key changes from previous 2000 version: 1. Introduction of 3 key concepts in determining whether there is a NAV error 2. Reduction of de minimus amount from $50 to $25 CAD for purpose of re-processing investor accounts 3. Additional guidance provided with respect to action items that should be considered subsequent to the completion of the error correction Bulletin is drafted with the aim to provide a guideline with respect to NAV error correction, hence investment fund managers should determine their own policy as they see fit 4

5 IFIC Bulletin #22 Guidelines for Correction of Portfolio NAV Errors What is a NAV error? 3 key concepts: i. A NAV differential ii. Breach of the standard of care iii. Exceeds the 50 basis points materiality threshold $ 25 CAD de minimus amount: The reduced amount is comparable and consistent with amounts proposed by other foreign jurisdictions 5

6 IFIC Bulletin #22 Guidelines for Correction of Portfolio NAV Errors Other considerations: Review root cause of error Devise appropriate communication strategy to impacted investors Consider updating applicable policies and procedures Report error to various governing bodies, as applicable 6

7 IFRS Implementation Retrospective All Canadian Funds have now adopted IFRS Major changes to presentation, disclosure and basis of calculation Iterative process as most clients changed presentation from interim to year end including new year end disclosures on structured entities and offsetting table

8 IFRS Implementation Retrospective Key wins for Canadian Funds: 1. IFRS changes to obtain special rules for investment entities to allow non consolidation 2. Introduction of interest for distribution purposes concept versus effective interest 8

9 IFRS Implementation Retrospective IFIC Accounting Advisory Working Group role Issue identification and resolution Industry Forum with leading industry participants and audit firms Working with CPA, IASB and regulators IFRS Toolkit

10 IFRS Implementation Retrospective Experience with Auditors Auditors particularly the big 4 firms have continued to drive the implementation effort in providing guidance to the industry Play a vital role in achieving changes, through IFIC, with the regulators and the various accounting bodies Focus on the practical application of the standards as opposed to theoretical The firms have done an outstanding job in proactively resolving issues on an ongoing basis

11 IFRS Implementation Retrospective Current Status Widely differing acceptable presentations: Income statement Disclosures Statement of Cash Flows : definitions Overall given the scale of the changes and restatements IFRS implementation went surprisingly well

12 Accounting & Reporting Developments IAS 32 revisiting offsetting disclosures IFRS 9 to early adopt or not ED - Measuring Quoted Investments in Subsidiaries, Joint Ventures and Associates at Fair Value IFRS 15 impact on Managers Other 12