In this Update: Retractable or Mandatorily Redeemable Shares; ASPE Resources; Practice Inspection Report; Pricing Client Engagements
We are headed into the last month of the year and there are a number of things to think about to get ready for the new year. The more prepared we are, the smoother the work flow which allows us to concentrate on our clients which is always the priority. New accounting standards, upcoming changes in assurance standards and general quality matters all make preparation even more important. The topics below will help you be prepared for the coming months. Read on…
Retractable or Mandatorily Redeemable Shares Issued in a Tax Planning Arrangement
These amendments have been around for awhile but are finally in effect for the upcoming year. Amendments to Section 3856 Financial Instruments provide new conditions in order for retractable or mandatorily redeemable shares issued in a tax planning arrangement to be classified as equity as well as some changes to measurement, presentation and disclosure requirements. The amendments are effective for fiscal years beginning on or after January 1, 2020, that is the upcoming year. Not only do you have to think about new shares issued, there are several transition issues that you will have to address in financial statements. Make sure you spend the time to understand the amendments. The resource tool on this topic from CPA Canada along with the handbook section itself, will help you do that.
ASPE Resource Summary
Speaking of resource tools, CPA Canada publishes many resources and tools on a variety of topics throughout the year, all with the objective to assist practitioners. A recent publication is a summary of all ASPE guidance issued over the past year. It is a great publication to have on hand when you are dealing with specific issues. Topics include financial reporting alerts and ASPE briefings that provide implementation guidance on new and/or amendments to ASPE standards. In the document, there are hot links to the relevant resource so very easy to access. It also includes links to free webinars and other ASPE resources. Keep this publication on hand and access when needed.
Focus on Practice Inspection Report
The provincial bodies are the governing bodies of our self-regulating profession; they promote the highest standards of integrity and expertise to their members. Practice Inspections are a key component of the overall regulatory process. CPA Manitoba’s annual report, Focus on Practice Inspections was released this past October and is very similar to the reports issued in other provinces. The report provides a summary of findings in each of the areas of financial statement presentation, audit engagements, review engagements, special reports and quality control. Detailed common deficiencies are included in Appendix 3. The report also includes other matters for consideration in Appendices 1 and 2. The report is worth the read as it highlights key things to think about in the upcoming year. You may even want share this report with staff so they understand common deficiencies and are then able to address these in your client files. If you need to get ready for an upcoming practice inspection or implement an action plan in response to one, reach out for assistance. I can help you through the process.
How to Price Client Engagements and Increase Firm Profits
With all the upcoming changes, it can be a challenge on how to price engagements. Fees are important and discussions on such are not always easy but we cannot lose sight of the fact that while assisting our clients is of upmost priority, we should be paid fairly for the work that we do. A fantastic article from IFAC covers approaches to fee increases and value pricing. Included in the article strategies for increasing fees and provides food for thought on value pricing.
As we move into the last month of the year, please feel to reach out at any time to help you be prepared for the upcoming year. As one other year-end reminder, check on your CPD hours as December 31, is coming quicker than we think. Reporting deadlines are January 31, 2020. I am delivering in-house PD courses to several firms over the next few weeks but have some availability left in my schedule before the end of the year if needed. Over the coming months I will continue to keep you updated on new standards, including the recently approved CSRS 4200, as more details become known. There are so much to think about but I am always here to help provide you peace of mind and save you time.
Kirsten S. Albo, FCPA,FCA