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Accounting Standards for Private Enterprises
Get the clear financial picture you need with the accounting standards team at Grant Thornton LLP. Our experts have extensive experience with private enterprises of all sizes in all industries, an in-depth knowledge of today’s accounting standards, and are directly involved in the standard-setting process.
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Accounting Standards for Not-for-Profit Organizations
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Research & development, government incentives
Are you developing innovative processes or products, undertaking experimentation or solving technological problems? If so, you may qualify to claim SR&ED tax credits. This Canadian federal government initiative is designed to encourage and support innovation in Canada. Our R&D professionals are a highly-trained, diverse team of practitioners that are engineers, scientists and specialized accountants.
Keeping track of changes and developments in GST/HST, Quebec sales tax and other provincial sales taxes across Canada, can be a full-time job. The consequences for failing to adequately manage your organization’s sales tax obligations can be significant - from assessments, to forgone recoveries and cash flow implications, to customer or reputational risk.
Global mobility services
In today’s competitive and global marketplace, your employee mobility strategy is a critical factor for success. International opportunities are key to attracting top talent and instilling a global mindset across your organization. Your people truly are your most valuable asset, and as your expatriate workforce continues to grow, a seamless global mobility program is essential to achieving your overall business goals.
US corporate tax
The United States has a very complex and regulated tax environment, that may undergo significant changes. Cross-border tax issues could become even more challenging for Canadian businesses looking for growth and prosperity in the biggest economy in the world.
US personal tax
Whether your business is only beginning to sell to US customers, or US customers represent the core of your business, anticipating and dealing knowledgeably with the US tax environment is critical to your bottom line. Our full-service US corporate tax group can help in all tax aspects of doing business in the US. Given high US corporate tax rates, don't be surprised by a US tax liability only to find out that there were planning opportunities available to reduce it.
While there is great opportunity for businesses looking to expand globally, organizations are under increasing tax scrutiny. Regardless of your company’s size and level of international involvement—whether you’re working abroad, investing, buying and selling, borrowing or manufacturing—doing business beyond Canada’s borders comes with its fair share of tax risks.
Transfer pricing is a complex area of corporate taxation that is concerned with the intra-group pricing of goods, services, intangibles, and financial instruments. Transfer pricing has become a critical governance issue for companies, tax authorities and policy makers, and represents a principal risk area for multinationals.
Succession & estate planning
Like many private business owners today, you’ve spent your career building and running your business successfully. Now you’re faced with deciding on a successor—a successor who may or may not want your direct involvement and share your vision.
Tax Reporting & Advisory
The financial and tax reporting obligations of public markets and global tax authorities take significant resources and investment to manage. This requires calculating global tax provision estimates under US GAAP, IFRS, and other frameworks, and reconciling this reporting with tax compliance obligations.
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Builders And Developers
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Your company plays a key role in the success of landlords, investors and owners, but who is doing the same for you?
There’s no business quite like mining. It’s volatile, risky and complex – but the potential pay-off is huge. You’re not afraid of a challenge: the key is finding the right balance between risk and reward. Whether you’re a junior prospector, a senior producer, or somewhere in between, we’ll work with you to explore, discover and extract value at every stage of the mining process.
Oil & gas
The oil and gas industry is facing many complex challenges, beyond the price of oil. These include environmental issues, access to markets, growing competition from alternative energy sources and international markets, and a rapidly changing regulatory landscape, to name but a few.
As the International Sustainability Standards Board (ISSB) continues toward setting a global baseline for sustainability reporting, the IFRS Foundation has provided the following update on the progress toward their objectives.
The update incorporates technical progress as the ISSB considers the feedback it received on the draft IFRS Sustainability Disclosure Standards, including headway towards interoperability. They also share the latest on institutional progress in establishing the ISSB, and insights into key announcements from COP27 towards the implementation of IFRS Sustainability Disclosure Standards in Q2 2023.
Technical progress: Developing Standards on General Sustainability-related Disclosures and Climate-related Disclosures
The ISSB received over 1,400 responses from key stakeholders around the world to its consultation on draft Standards. It’s looking to complete discussions on this feedback to enable final Standards to be issued as early as possible.
To date, the ISSB has discussed the following based on feedback received:
On information needs of investors: Feedback said some of the language that had been used in the draft Standards to describe what information is material to investors was not easily understood and could cause confusion when preparing disclosures. Feedback highlighted that the terms ‘enterprise value’ and ‘significant,’ which had been used within the objective and assessment of materiality were not clear in their meaning. As such, the ISSB is looking at better ways to communicate how it describes which sustainability risks and opportunities must be reported on, without changing the intent. To this end, the ISSB will use the same definition of material as is used in IFRS Accounting Standards (e.g., information so important that its absence or misstatement could be reasonably expected to influence investor decisions). It’ll also consider how to use existing materials to better articulate the scope of information that is required to be provided, including considering using concepts of capital from the Integrated Reporting Framework.
On GHG emissions: The ISSB has heard that companies and investors cannot fully understand transition risks without the disclosure of absolute gross scope 1, 2, and 3 GHG emissions, as proposed in the draft IFRS S2. It has also heard concerns about challenges in how to measure this. As such, the ISSB has confirmed that, when material, companies will be required to disclose Scope 1, 2, and 3 emissions. However, to address the challenges raised, the ISSB will discuss potential Scope 3 reliefs, including discussing ‘safe harbour’ provisions with regulators to address concerns about the risk of liability associated with disclosing this information and guidance on how to measure and estimate GHG emissions in a scalable manner.
On scenario analysis: The ISSB confirmed that companies are required to use climate-related scenario analysis to report on climate resilience and to explain whether and how this was used to identify climate-related risks and opportunities. Feedback through the consultation indicated questions around what is meant by the term ‘climate-related scenario analysis, so the ISSB also agreed to provide guidance to preparers including making use of materials developed by the Task Force for Climate-Related Financial Disclosures (TCFD) to provide guidance on how to undertake scenario analysis, so as to enable and support the delivery of high-quality disclosures. The way in which climate-related scenario analysis must be undertaken will also be scaled based on what a company is able to do—the criteria to determine this will be discussed by the ISSB at a later meeting.
On industry-based disclosure: Investors said they find industry-specific disclosures decision-useful, but there was some feedback that further consideration may be needed to ensure that the industry-based climate disclosures that were proposed will provide relevant information internationally and that time is needed to consider potential implementation challenges. Therefore, while companies will be required to provide industry-specific climate disclosures, for now Appendix B of IFRS S2 will be non-mandatory guidance, illustrating examples of appropriate disclosures, as the ISSB takes time to ensure disclosures are relevant across jurisdictions, with a view to making them mandatory in the future following further consultation.
On timing of reporting: Feedback indicated support for the requirement to publish sustainability-related information and financial statements at the same time, but that there are implementation challenges around delivering this in the near term. The ISSB therefore decided to keep the requirement to publish this information at the same time—something the ISSB and stakeholders through the consultation see as critical for giving investors a complete picture—but will allow companies to report its annual sustainability-related financial disclosures at the same time as its H1/Q2 earnings reporting for a short period of time as a transition relief. The length of the relief will be decided at a future meeting of the ISSB.
Progress towards interoperability
The ISSB has always been clear that interoperability and a ‘building block approach’ are key to delivering a truly global baseline of sustainability-related disclosures for capital markets.
Through the Jurisdictional Working Group and the upcoming Sustainability Standards Advisory Forum, as well as bilateral discussions, the ISSB is prioritizing work to facilitate compatibility between the baseline and these ‘building blocks.’ The ISSB also regularly consults with the International Organization of Securities Commission (IOSCO) in preparation for potential IOSCO endorsement of its Standards.
In progressing the development of the IFRS Sustainability Disclosure Standards, the ISSB has prioritized agreeing clarifications and amendments that support and further progress towards interoperability. This includes confirming use of the TCFD architecture as the basis for its Standards and modifying some disclosures and language in relation to transition plans.
The ISSB is also working with the European Commission and the European Financial Reporting Advisory Group towards a shared objective to agree as soon as practicable a framework for maximising interoperability of their standards and aligning on key climate disclosures.
While the ISSB’s mandate is to meet the needs of investors and the European Union (EU) has a focus on meeting broader information needs, there is a common interest in meeting the information needs of investors and other providers of capital. That intersection forms the basis of—and need for—interoperability of the ISSB and EUs’ bodies of sustainability-reporting standards, which is what the ISSB is working towards.
The ISSB is clear that alignment of disclosure requirements is essential for global comparability of sustainability disclosures and for preventing unnecessary duplications in reporting for companies.
Announcements at COP27
At COP27, the ISSB announced further steps in its delivery of the architecture needed for a global baseline, as well as partnerships that will help jurisdictions prepare for its implementation.
Recognizing that the IFRS Foundation’s responsibilities do not stop at standard setting, the ISSB launched its new Partnership Framework, with around 30 partner organizations, designed to support preparers, investors, and other capital market stakeholders as they prepare to use IFRS Sustainability Disclosure Standards.
And in a continued alignment with key initiatives, crucial to reducing market fragmentation, CDP and the ISSB announced that CDP will incorporate the IFRS S2 Climate-related Disclosure requirements into its global environmental disclosure platform. The announcement means that CDP’s 17,000+ voluntary users will disclose data structured to IFRS S2 in the 2024 disclosure cycle.
A year has passed since the establishment of the ISSB at COP26 was announced and now its fully operational and committed to issuing its first two Standards in 2023.
The ISSB has set out its priorities for furthering this progress, including supporting adoption and application, developing a digital taxonomy, improving the international applicability of the SASB Standards, driving connectivity with the International Accounting Standards Board (IASB), and interoperability with others (including GRI), as well as consulting on new areas of work in the first half of 2023.
If you’d like support with navigating these updates, reach out to our trusted advisors today.
Source: Grant Thornton International Ltd.
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