Second Quarter Update

Transcription

1 Second Quarter Update Tuesday, June 27, 2017 kpmg.ca/quarterlyupdate International ), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. 1

2 Welcome Download today s presentation at kpmg.ca/quarterlyupdate International ), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. 2

3 Agenda Financial reporting and assurance updates Trevor Hammond IFRS standards update Reinier Deurwaarder Transfer pricing update and audit trends Michael Hoffman U.S. tax reform James Rowling Short-term energy market update Robert Doran International ), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. 3

4 Financial reporting and assurance updates Trevor Hammond Partner, Audit International ), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. 4

5 Financial reporting and assurance updates Changes to Bank of Canada FX rates Bank of Canada (BoC) has discontinued publishing noon and closing exchange rates, as well as stopped publishing any rates for certain currencies Effective Mar 1, 2017, BoC began publishing a single indicative rate per currency pair each day. This rate is calculated using a methodology that will reflect average exchange rate observable throughout the Canadian business day The period March 1, 2017 to April 28, 2017 was a transitional period, in which the new and existing foreign exchange rates were published concurrently Post-April 28, 2017, entities will need to: Assess their source of exchange rate data; Assess the reasonableness of exchange rates used to translate foreign currency transactions and foreign currency operations, and ensure rates are in accordance with their accounting policy; Consider other impacts and adjustments that may be required, such as amendments to business processes, IT systems, and legal contract International ), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. 5

6 Financial Reporting and Assurance Updates Bank of Canada fx rates continued: Bloomberg and Reuters publish closing rates that are appropriate closing rates under IFRS Links for free appropriate Reuters rates: Daily exchange rates (close) Monthly average rates Updating disclosures on status of adoption of new accounting standards IFRS 9 (Financial Instruments) Effective January 1, 2018 IFRS 15 (Revenue) Effective January 1, 2018 IFRS 16 (Leases) Effective January 1, 2019 Regulator and investor expectation is that financial statements will continue to enhance user understanding of the implication of the transition prior to the actual transition taking place International ), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. 6

7 Financial Reporting and Assurance Updates PCAOB new audit reporting standard issued on June 1, 2017 Implications for audits of fiscal year ends on or after 12/15/2017 Required disclosure of auditor tenure Required statement of auditor independence Other relatively minor enhancements to the report Implications for audits of fiscal year ends on or after June 30, 2019 or December 15, 2020 (depending on size of filer) Required disclosure of critical audit matters ( CAM ) A CAM is a matter that was required to be communicated to the audit committee and relates to material accounts or disclosures that involved especially challenging, subjective, or complex auditor judgment Disclosures of CAMs in the audit report require: Specific identification of the matter; Description of the principal consideration that led the auditor to determine that the matter was a CAM; Description of how the CAM was addressed in the audit; and, Reference to the relevant financial statement accounts or disclosures International ), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. 7

8 IFRS standards update Reinier Deurwaarder Partner, Audit International ), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. 8

9 IFRS 15 Disclosures Objective: Help users understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers Contracts with customers Disaggregation of revenue Changes in contract assets, liabilities and costs Performance obligations Significant judgments and changes in judgments Determining the timing of satisfaction of performance obligations Determining the transaction price Determining amounts allocated to performance obligations Assets recognized from the costs to obtain or fulfil a contract Includes disclosure of the aggregate amount of the transaction price allocated to POs that are unsatisfied at the reporting date International ), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. 9

10 IFRS 9 Action Points Determine losses in AR from future economic conditions Draft updated Accounting Policies Identify non-substantial modifications International ), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. 10

11 Transfer pricing update and audit trends Michael Hoffman Partner, Tax International ), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. 11

12 Transfer pricing update Country-by-country (CbCR) reporting Deadline is fast approaching! While requirements appear straightforward, there are complexities with data collection and interpretation Still evolving more OECD Guidance is imminent Be aware of some country-specific requirements (e.g. notification) New focus for transfer pricing documentation Master file more disclosure to tax authorities about the overall business/value chain and each entity s contributions Local file address country-specific documentation of related-party transactions May have requirements to file master file and/or local file with tax authority Thresholds for requiring master file are not the same as CbCR thresholds International ), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. 12

13 Transfer pricing audit trends Transfer pricing is a primary focus of CRA and other tax authorities with a focus on base erosion and profit shifting (BEPS) issues Loans and guarantees, including domestic loan transactions Energy trading Development and use of intangibles Restructuring and buy-out payments IRS focus on specific issues such as limited risk distributors Get it right the first time Transfer pricing penalties Canada applied 56% of time in 2016 Proposed changes to the voluntary disclosure program large corporations losing eligibility Consider transfer pricing certainty through advance pricing arrangements International ), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. 13

14 U.S. tax reform James Rowling Partner, Tax International ), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. 14

15 US tax reform Where we were at Q1 Moving the Corporate Tax from, Income Tax to a Consumption Tax Territorial tax regime House blueprint Border adjustment mechanism Revenue neutral Transition International ), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. 15

16 US tax reform Developments for Q2 April 26, 2017 Trump Administration announcement Plan core principles May 23, 2017 The Trump Budget FY 2018 Consistent with campaign plan June 20, 2017 House Speaker Ryan s Tax reform speech Reaffirmation of some blue print agenda items International ), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. 16

17 US tax reform Other considerations Conformity to federal base State tax implications Differential effect across states Transition and timing International ), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. 17

18 Short-term energy market update Robert Doran Partner, Deal Advisory International ), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. 18

19 Short-term energy market update CERAWeek (Houston, March 5 9, 2017) Conference insights Text Text Text Text Global Petroleum Show and NextShale (Calgary, June 13-15, 2017) International ), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. 19

20 Questions? Download today s presentation kpmg.ca/quarterlyupdate International ), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. 20

21 For more information Publications KPMG s Global IFRS Institute KPMG's Global IFRS Institute provides information and resources to help Board and Audit Committee members, executives, management, stakeholders and government representatives gain insight and access thought leadership about the evolving global financial reporting framework OECD BEPS Action Plan Moving from talk to action This series explores recent trends, new challenges and opportunities and offers insights into how tax leaders of multinational organizations are responding and includes a summary on Canada BEPS BEPS Action Item 13 (Updated weekly) TaxNewsFlash - Canada Keeping you in the know with all of the latest tax developments pertaining to Canada and its industry sectors Outlook for U.S Tax Reform Bookmark this webpage for KPMG s ongoing insights including on-demand webcasts, videos and a number of informative articles International ), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. 21

22 Thank you 2017 KPMG LLP, a Canadian 2017 KPMG limited LLP, liability a Canadian partnership limited and liability a member partnership firm of and the KPMG a member network firm of independent the KPMG network member of firms independent affiliated member with KPMG firms International affiliated with Cooperative KPMG International ( KPMG International ), a Swiss Cooperative entity. All rights ( KPMG reserved. International ), The KPMG a Swiss name entity. and logo All are rights registered reserved. trademarks The KPMG or name trademarks and logo of KPMG are registered International. trademarks or trademarks of KPMG International. 22

23 Heading Detail Heading Detail Heading Detail Heading Detail kpmg.ca 2017 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ( KPMG International ), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.