1 May 2009 Roundtable, 2009-0316371C6 - CLHIA 2009 - IFRS

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.

Principal Issues: What is the status of the CRA review if IFRS?

Position: See below.

Reasons: NA

CLHIA ROUNDTABLE - MAY 2009

Question #1

Update of CRA Activities and Priorities

Question

International Financial Reporting Standards ("IFRS") will apply to the financial statements of publicly accountable entities for fiscal years beginning on or after January 1, 2011. At the 2008 Canadian Tax Foundation Annual Conference CRA Roundtable, the CRA indicated that one of the Income Tax Technical News ("ITTN") bulletins that the CRA will be issuing in the future will deal with IFRS. When can this ITTN be expected?

CRA Response

The ITTN will address general filing requirements and the anticipated impact of IFRS on the determination of taxable income. We are continuing to work with internal and external stakeholders to determine the extent of the impact of IFRS on corporation tax. We expect to issue the ITTN later in the year.

Question

What is CRA doing to prepare for the adoption of IFRS in Canada generally, and, more particularly, with respect to insurers?

CRA Response

CRA established an IFRS Project Team in the fall 2008 to ensure that CRA is ready for the introduction of IFRS in 2011. Their mandate is, amongst other things, to perform an in-depth analysis of all IFRS provisions to analyze the impact of IFRS on tax reporting and on CRA processes, work in partnership with other areas in CRA including the establishment of internal cross-functional working groups and identify the training needs of CRA auditors related to IFRS and to coordinate the development of training products.

In-depth analysis of all IFRS provisions will be conducted by the project team over the next few months.

Cross-functional working groups have been initiated by the project team to determine the impact of IFRS on GST/HST and taxable income:

==> T2 Corporation Return and General Index of Financial Information (GIFI);
==> Instalment Payments;
==> Business Combinations;
==> International Transactions;
==> Domestic Issues;
==> Specialized Industries including Resource, Banking and Insurance.

A Training Framework has been developed to ensure CRA staff are prepared for IFRS. Awareness training for CRA auditors regarding upcoming accounting changes is already underway by various means such as presentations at internal conferences, IFRS information bulletins to field staff. Formal IFRS accounting awareness training will be provided to CRA staff starting in the fall of 2009.

Further training will be developed for CRA staff once CRA has developed tax positions on identified issues

An IFRS corner on the CRA website is currently under construction in order to provide ongoing IFRS information to the public.

Industry Specialist Services (ISS) will be taking the lead in preparing CRA for the adoption of IFRS with respect to insurers. On March 20, 2009, the CLHIA submitted a detailed analysis of the tax impact of IFRS on life insurers. ISS is currently reviewing this submission on a priority basis. ISS will be working in conjunction with the Department of Finance, Rulings and the CLHIA to resolve major issues raised by either amendments to the Income Tax Act or development of CRA administrative positions.

ISS will also be taking the lead in providing training to prepare CRA's insurance company auditors for the adoption of IFRS. An initial awareness session was held at ISS's National Insurance Conference in November 2008. More detailed IFRS training segments will be added to regular technical sessions as new legislation and policies are developed for insurers.

2009-031637
Alison Campbell
May 1, 2009