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2012 annual financial reporting document review guide

An all-in-one disclosure assessment tool


2012 was a year that continued to be dominated by uncertainty in the global economic and capital markets. Throughout the year, organizations and their boards continued to face an environment of rapid change and considerable uncertainty. During such turbulent times, it may sometimes be difficult for directors and management to analyze all of the regulatory standards and guidance issued and to develop an action plan to ensure that they fulfill all of their responsibilities. To this end, Deloitte has prepared a comprehensive assessment package to help you determine whether or not your organizations financial statements and other financial filings meet the continuous disclosure obligations as established by the Canadian Securities Administrators (CSA). Correspondingly, using these tools to analyze your organizations financial filings may assist you in performing your due diligence responsibilities. The assessment package is comprised of four parts: 1. Deloittes standard-setting activities digest This document will allow you to ensure that all of the relevant financial reporting standards adopted in Canada and effective from 2012 onwards have been properly considered by your organization. 2. Review of the 2012 financial statements. This document will allow you to specifically address the impact of new accounting developments during your review of your organizations financial statements. A series of suggested questions has been included to assist you in ascertaining whether the standards were appropriately applied and whether all of the options/alternatives available, as well as the impact on the financial statements, were considered prior to the selection of an accounting treatment. This document will also allow you to specifically consider the impact of the adoption of a new financial reporting framework on the financial statements. For those few entities still applying Canadian generally accepted accounting principles (GAAP), this document will help you to ensure you properly address the potential impact of adopting a new framework in the near future. 3. MD&A evaluation An assessment tool to evaluate your organizations Managements Discussion & Analysis (MD&A). The requirements, as set out in National Instrument 51-102, Continuous Disclosure Obligations, are included, along with an area for you to include commentary specific to your organization. 4. AIF evaluation An assessment tool to evaluate your organizations Annual Information Form (AIF). The requirements, as set out in National Instrument 51-102, Continuous Disclosure Obligations, are included, along with an area for you to include commentary specific to your organization.

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5. Statement of Executive Compensation evaluation An assessment tool to evaluate your organizations Statement of Executive Compensation. The requirements, as set out in National Instrument 51-102, Continuous Disclosure Obligations, are included, along with an area for you to include commentary specific to your organization. The information which follows provides an overview of the assessment tools described above. The full assessment package may be accessed through our Centre for Corporate Governance (www.corpgov.deloitte.ca/self-assessments).

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Deloittes standard-setting activities digest


International financial reporting standards (Part 1)
Final standard Amendments to IAS 1, Presentation of Financial Statements: Other Comprehensive Income Entities are required to group together items within Other Comprehensive Income that may be reclassified to the profit or loss section of the income statement and to separately group together items that will not be reclassified to the profit or loss section of the income statement. Amendments to IAS 19, Post-employment Benefits Amendments will: Eliminate the option to defer the recognition of gains and losses, known as the corridor method or the deferral and amortization approach Streamline the presentation of changes in assets and liabilities arising from defined benefit plans, including requiring re-measurements to be presented in OCI Enhance the disclosure requirements for defined benefit plans, providing better information about the characteristics of defined benefit plans and the risks that entities are exposed to through participation in those plans. Amendments to IFRS 1, First-time Adoption of International Financial Reporting Standards, with respect to Loans Received from Governments at below market rate of interest The amendments give first-time adopters of IFRSs relief from full retrospective application of IFRSs when accounting for these loans on transition. Amendments to IFRS 7, Financial Instruments: Disclosures and IAS 32, Financial Instruments: Presentation in respect of Offsetting IFRS 7: Amendments relate to offsetting financial assets and financial liabilities. Disclosure required to help users assess the effect or potential effect of offsetting arrangements on a company's financial position. IAS 32: Amendments address inconsistencies in current practice when applying the requirements. January 1 2013. Early adoption is permitted. Effective date July 1, 2012 Addressed? Comments

January 1, 2013 (early application permitted)

IFRS 7 amendments January 1, 2013, including interim periods within the annual periods IAS 32 amendments January 1, 2014

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Final standard Amendments to IFRS 10, Consolidated Financial Statements, IFRS 11, Joint Arrangements, and IFRS 12, Disclosure of Interests in Other Entities: Transition Guidance The amendments clarify the transition guidance in IFRS 10 and provide additional transition relief in IFRS 10, 11 and 12, limiting the requirement to provide adjusted comparative information to only the preceding comparative period. For disclosures related to unconsolidated structured entities, there is no requirement to present comparative information for periods before IFRS 12 is first applied. Adoption of IFRSs by Entities with Rate-regulated Activities The mandatory date for first-time adoption of IFRS by entities with rate-regulated activities is interim and annual financial statements relating to annual periods beginning on or after January 1, 2012. Adoption of IFRSs by Investment Companies The deferral of the mandatory IFRS changeover date has been extended by one year for these entities. Annual Improvements to IFRSs: 2009-2011 Cycle The amendments affect IFRS 1, IAS 1, IAS 16, IAS 32 and IAS 34 and are largely of the nature of clarifications or removals of unintended inconsistencies between IFRSs. The amendments to IAS 1 reduce the amount of information from previous reporting periods which is required to be repeated in the event of: a change in accounting policy reclassification or restatement by limiting the requirement to present an additional statement of financial position to circumstances when the statement is materially affected and by clarifying that related notes to an additional statement of financial position are not required. IFRS 9, Financial Instruments This new standard replaces the requirements in IAS 39, Financial Instruments: Recognition and Measurement. The amendments provide relief from the requirement to restate comparative financial statements for the effect of applying IFRS 9. Additional transition disclosures will be required to help investors understand the effect that the initial application of IFRS 9 has on the classification and measurement of financial instruments. IFRS 10, Consolidated Financial Statements IFRS 10 replaces the consolidation requirements in IAS 27, Consolidated and Separate Financial Statements, and SIC12 Consolidation Special Purpose Entities. IFRS 10 identifies the concept of control as the determining factor in whether an entity should be included within the consolidated financial statements of the parent company and provides guidance to determine if control exists.

Effective date January 1, 2013

Addressed?

Comments

January 1, 2014 (early application permitted)

January 1, 2014 (early application permitted) January, 1 2013 (earlier application permitted, retrospective application required)

January 1, 2015 (early application continues to be permitted).

January 1, 2013 (early application permitted, provided IFRS 11, IFRS 12 and the related amendments to IAS 27 and 28 are adopted at the same time)

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Final standard IFRS 11, Joint Arrangements IFRS 11 supersedes IAS 31, Interests in Joint Ventures, and SIC-13, Jointly Controlled Entities Non-Monetary Contributions by Venturer. IFRS 11 requires a party to a joint arrangement to determine the type of joint arrangement in which it is involved by assessing its rights and obligations arising from the arrangement. To account for interests in jointly controlled entities, the equity method is required. IFRS 12, Disclosure of Interests in Other Entities IFRS 12 is a new and comprehensive standard on disclosure requirements for all forms of interests in other entities, including subsidiaries, joint arrangements, associates and unconsolidated structured entities.

Effective date January 1, 2013 (early application permitted, provided IFRS 10, IFRS 12 and the amendments to IAS 27 and 28 are adopted at the same time) January 1, 2013 (early application permitted, provided IFRS 10, IFRS 11 and the related amendments to IAS 27 and 28 are adopted at the same time) January 1, 2013 (early application permitted)

Addressed?

Comments

IFRS 13, Fair Value Measurement IFRS 13 defines, sets out in a single IFRS a framework for measuring and requires disclosures about fair value measurements. It does not determine when an asset, a liability or an entitys own equity instrument is measured at fair value. The measurement and disclosure requirements of IFRS 13 apply when another IFRS requires or permits the item to be measured at fair value (with limited exceptions). IAS 12 (amendments), Deferred Tax: Recovery of Underlying Assets and SIC-21 (amendments), Income TaxesRecovery of Revalued Non-Depreciable Assets The amendment introduces a rebuttable presumption that an investment property measured using the fair value model is recovered entirely through sale unless the investment property is depreciable and is held within a business model whose objective is to consume substantially all of the economic benefits over time. As a result of the amendments, SIC-21 would no longer apply to investment properties carried at fair value. IFRIC 20, Stripping Costs in the Production Phase of a Surface Mine IFRIC 20 requires that costs associated with a stripping campaign be accounted for as an additional component of an existing asset if certain criteria are met, and that this stripping component shall be depreciated, over the expected useful life of the specific section of the ore body that becomes directly accessible as a result of the stripping campaign. The units of production method should be applied. Investment Entities (Amendments to IFRS 10, IFRS 12 and IAS 27) Provides an exception to the consolidation requirements in IFRS 10 and require investment entities to measure particular subsidiaries at fair value through profit or loss, not consolidation. Also sets out disclosure requirements for investment entities.

January 1, 2012 (early application permitted)

January 1, 2013 (earlier application permitted)

January 1, 2014 Early adoption permitted.

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Private enterprises standards (Part II)


Final standard 2012 Annual Improvements The AcSB approved certain amendments to its accounting standards for private enterprises. They include changes to (i) Section 1520, Income Statement; (ii) Section 1582, Business Combinations; (iii) Section 1590, Subsidiaries; (iv) Section 1651, Foreign Currency Translation; and (v) Section 3051, Investments. Section 1500 (amendments) Employee Future Benefits The AcSB has amended paragraph 1500.14 to permit an entity that accounts for its defined benefit plans using the deferral and amortization approach to carry forward at the date of transition to accounting standards for private enterprises any unrecognized actuarial gains and losses and past service costs that were determined previously. Effective date January 1, 2013 (early application permitted) Addressed? Comments

Coincides with the effective date of Part II

Pension plans standards (Part IV)


Final standards Fair Value Measurement A pension plan applies IFRS 13, Fair Value Measurement, in Part I to annual periods beginning on or after January 1, 2013. Further, the fair value disclosures in paragraphs 27-27B of IFRS 7, Financial Instruments: Disclosures,will continue to be required for pension plans that have adopted the measurement requirements of IFRS 13. Section 4600, Pension Plans The amendment clarifies that benefit plans that provide benefits to employees during their active service are within the scope of Section 4600. Effective date Prospectively from January 1, 2013 (early adoption is permitted) Addressed? Comments

January 1, 2012 (earlier adoption permitted)

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Public sector accounting standards


Final standards Amendments to the Transition Provisions of Section PS 2601, Foreign Currency Translation, and Section PS 3450, Financial Instruments The PSAB approved amendments to the transition provisions of Section PS 2601and Section PS 3450. The measurement provisions of the new Sections are to be applied prospectively. Consequential Amendments Resulting from the Issue of Section PS 3450, Financial Instruments, including a new Section PS 3041, Portfolio Investments The amendments include a new Section PS 3041 and the withdrawal of Section PS 3030, Temporary Investments, and Section PS 3040, Portfolio Investments. An ED was approved proposing amendments to certain paragraphs in Section PS 3450, which ensure that the reporting of income on externally restricted financial instruments aligns with the requirements in Section PS 3100, Restricted Assets and Revenues. Introduction to Public Sector Accounting Standards Government Not-for-Profit Organizations For purposes of their financial reporting, government not-forprofit organizations should adhere to the standards for notfor-profit organizations in the CICA PSA Handbook or the standards in the CICA PSA Handbook without Sections PS 4200 to PS 4270. Section PS 1201, Financial Statement Presentation The new Section PS 1201 replaces existing Section PS 1200 and includes a new statement of remeasurement gains and losses. The new statement will report: unrealized gains and losses associated with financial instruments in the fair value category exchange gains and losses associated with monetary assets and monetary liabilities denominated in a foreign currency that have not been settled amounts reclassified to the statement of operations upon derecognition or settlement; and other comprehensive income reported when a public sector entity includes the results of its government business enterprises and government business partnerships in the summary financial statements. Section PS 2601, Foreign Currency Translation The new Section PS 2601 replaces existing Section PS 2600, Foreign Currency Translation. Major changes from Section PS 2600 include: elimination of deferral and amortization of unrealized gains and losses arising from foreign currency translation before settlement withdrawal of hedge accounting as it is unnecessary under the new treatment of unrealized gains and losses separating realized and unrealized foreign exchange gains and losses and reporting them in different statements. Government organizations: April 1, 2012 Governments: April 1, 2015 Effective date Fiscal years beginning on or after April 1, 2012 for government organizations, and April 1, 2015 for governments Fiscal years beginning on or after April 1, 2012 for government organizations, and April 1, 2015 for governments Addressed? Comments

January 1, 2012

Government organizations: April 1, 2012 Governments: April 1, 2015

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Final standards Section PS 3260, Liability for Contaminated Sites This new Section establishes recognition, measurement and disclosure standards for liabilities relating to contaminated sites of governments and those organizations applying the CICA Public Sector Accounting Handbook. Section PS 3410 (Revised), Government Transfers Establishes standards on how governments should account for and report government transfers to individuals, organizations and other governments from both a transferring government and a recipient government perspective. Section PS 3450, Financial Instruments Provides comprehensive guidance on the recognition, measurement, presentation and disclosure of financial instruments, including derivatives, by government organizations. Section PS 3510, Tax Revenue Establishes recognition, measurement, presentation and disclosure standards relating to tax revenue reported in financial statements. Section PS 4200 PS 4270, Government Not-for-profit Organizations The PSAB approved the inclusion of the PS 4200 to PS 4270 series of standards into the PSA Handbook for use by government organizations applying the standards for not-forprofit organizations.

Effective date April 1, 2014

Addressed?

Comments

April 1, 2012

Government organizations: April 1, 2012 Governments: April 1, 2015 April 1, 2012

January 1, 2012

Securities
Instruments, rules and policies CSA Staff Notice 52-306 (Revised), Non-GAAP Measures and Additional GAAP Measures An additional GAAP measure presented in financial statements under IFRS is: (i) a line item, heading or subtotal that is relevant to an understanding of the financial statements and is not a minimum line item mandated by IFRS, or (ii) a financial measure in the notes to financial statements that is relevant to an understanding of the financial statements and is a measure not presented elsewhere in the financial. CSA Multilateral Instrument 51-105, Issuers Quoted In the U.S. Over The-Counter Markets This instrument: (i) requires disclosure by issuers with a significant connection to a Canadian jurisdiction whose securities are quoted in the U.S. OTC markets; and (ii) discourages the manufacture and sale in a Canadian jurisdiction of U.S. OTC quoted shell companies that can be used for abusive purposes. OSC Staff Notice 52-720 Office of the Chief Accountant Financial Reporting Bulletin (February 2012) The objective of the bulletin is to provide information to market participants that may be useful in preparing financial reports during 2012. Issued February 17, 2012 Addressed? Comments

May 10, 2012

February 23, 2012

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Financial institutions requirements


Final Standards Capital Adequacy Deposit-Taking Institutions Advisory Enhanced Pillar 3 Disclosures under Basel II OSFI expects that the first quarter of fiscal 2012 disclosures should include full qualitative disclosures in Pillar 3 enhancements and revisions to complement the required quantitative disclosures. Capital Adequacy Deposit-Taking Institutions Advisory Pillar 3 Disclosure Requirements for Remuneration under Basel II OSFI expects all institutions to implement the remuneration disclosure requirements. At a minimum, the frequency of remuneration disclosures should be made on an annual basis and published as soon as practicable. Capital Adequacy Deposit-Taking Institutions Amendments to Capital Adequacy Requirements Guideline A and Guideline A-1 OSFI issued guidelines to include changes to Guidelines A and A-1 based on the Basel guidance, Enhancements to the Basel II framework, and Guideline for computing capital for incremental risk in the trading book, (both dated July 2009), and Revisions to the Basel II market risk framework updated as of 31 December 2010, (issued in February 2011). Capital Adequacy Deposit-Taking Institutions Capital Adequacy Assessment Process OSFI issued implementation guidance to clarify its expectations regarding the Internal Capital Adequacy Assessment Process and Stress Testing for the Standardized DTIs. Capital Adequacy Deposit-Taking Institutions Advisory Treatment of Non-qualifying Capital Instruments This Advisory clarifies OSFIs expectations with respect to rights of redemption under regulatory event clauses and applies to all DTIs under Basel III. Capital Adequacy Insurers Minimum Continuing Capital and Surplus Requirements for 2012 OSFI published revisions to Guideline A, Minimum Continuing Capital and Surplus Requirements, for life insurance companies and fraternal benefit societies. The changes primarily reflect more appropriate risk-based guidance. Effective date January 1, 2012 Addressed? Comments

2012 fiscal yearend

First quarter of 2012

First quarter of 2013

January 1, 2013

January 1, 2012

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Final Standards Prudential Requirements Insurers Memorandum to the Appointed Actuary (Life) for 2012 This years Memorandum includes the following changes from the 2011 Memorandum: 1. The ongoing low interest rates continue to be of concern. As a result, OSFI requires disclosure for scenarios of 1.5%, 2%, 2.5% and 3% for all future reinvestment assumptions. 2. For insurers who have included the costs and benefits of any hedge programs in the valuation, OSFI has requested additional information. 3. OSFI has modified its disclosure requirements on nonfixed income assets and asset liability management in the memorandum. OSFI encourages insurers to improve the clarity of these disclosures. The Appointed Actuary should ensure that the disclosure of methods, assumptions and the rationale for assumptions are clear in his/her report.

Effective date September 2012

Addressed?

Comments

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Annual financial statement review tool


Questions to ask
It is not possible to anticipate all of the questions that may be required to ensure a proper and full due diligence for accounting developments which arose throughout the year. Therefore, these questions provide the director with a starting point from which a full and complete due diligence of material issues may be conducted. The questions to be asked always depend on the materiality of the impact on your organizations public filings which are subject to board approval. Material items often require more due diligence by the board of directors. The following questions have been proposed assuming that each issue is material to the shareholder. The director must use judgment in determining to what extent each of the questions should be raised. The following questions should be considered by directors and management to ascertain whether the accounting standards were appropriately applied, and whether all of the options/alternatives available, as well as the impact on the financial statements were considered, prior to the selection of an accounting treatment.
New accounting policies Note to reader: review this section as well as the Conversion to a new financial reporting framework section below if your organization benefits from an IFRS adoption deferral (for example. rate-regulated entities and investment enterprises) and has not yet converted to either IFRS or U.S. GAAP or will adopt another framework in the near future. What, if any, changes in accounting policies, procedures or disclosures were required as a result of the recommendations made by the Canadian Accounting Standards Board (AcSB) or the International Accounting Standards Board (IASB)? What alternatives were considered and what was the impact of these alternatives on the financial statement results and/or disclosures? Why were the selected new accounting policies adopted over the available alternatives? What, if any, voluntary changes in accounting policies, procedures or disclosures were made this year that were not related to the issuance of new accounting recommendations made by the AcSB or the IASB? What was the rationale for any voluntary changes in accounting policies? For example, did your organization appropriately document that any voluntary change in accounting policy resulted in the financial statements providing reliable and more relevant information about the effects of transactions, other events or conditions on its financial position, financial performance or cash flows as required by Accounting Changes (CICA 1506) and accounting policies, changes in accounting estimates and errors (IAS 8)? What was the overall impact on the financial information of adopting the new recommendations? How has it been ensured that all of the disclosure and other requirements relating to the recommendations have been properly included in the notes to the financial statements? How was it decided whether to apply these changes prospectively or retrospectively and why? What were the required changes to prior years and interim periods financial statements as a result of applying the change retrospectively? Comments

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New accounting policies How was it ensured that subsidiaries, interests in joint ventures and investments in associates have properly adopted accounting policy changes in their financial statements that were used for consolidation purposes? Did any of the required disclosure changes cause difficulty and why? Why do you believe your organizations set of adopted accounting policies presents fairly its financial position/condition, results of operations and cash flows? Were there any disagreements with the external auditors as to the appropriate accounting treatment to be applied and, if so, please describe them? What comments do the external auditors have in respect of your organizations answers to the above questions? Newly adopted financial reporting framework When compared to the current years balance sheet, does the opening balance sheet provide the same level of detail as required to provide consistent information to users? Do the reconciliations between the historical financial information and that reported under the new financial reporting framework properly explain the identified differences? Do the accounting practices clearly explain the policies adopted and significant judgments and estimates made by the organizations management? What alternatives were considered and what was the impact of these alternatives on the financial statement results and/or disclosures? Why were the selected new accounting policies adopted over the available alternatives? Why do you believe your organizations set of adopted accounting policies present fairly its financial position/condition, results of operations and cash flows? Where non-GAAP or additional GAAP measures are reported in the financial statements, does management explain in sufficient detail differences from the corresponding GAAP measures? Where financial information is provided for the first time, was sufficient comfort obtained by the organizations management to ensure reliability of the supporting data? How has it been ensured that all of the disclosure and other requirements relating to the new framework recommendations have been properly included in the notes to the financial statements? Did any of the required disclosure changes cause difficulty and why? Were there any disagreements with the external auditors as to the appropriate accounting treatment to be applied and, if so, please describe them? What comments do the external auditors have in respect of your organizations answers to the above questions?

Comments

Comments

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Conversion to a new financial reporting framework Has the conversion plan been reviewed and updated for current progress on a regular basis? Have any unforeseen obstacles been identified? Is a communication strategy in place for investors, analysts and other stakeholders to address reporting under the new financial reporting framework? What is the status of the following key elements of the conversion plan: Selection of all accounting policies (including first time adoption choices) Preparation of the opening balance sheet Restatement of Q1, Q2 and Q3 interim information Preparation of interim and annual financial statement drafts Should an agreed-upon level of assurance be obtained from the external auditors on your organizations opening balance sheet? Do your organizations year-end financial filings meet the standard-setter requirements with regards to communications regarding its conversion?

Comments

Where management believes that the adoption of a new accounting recommendation does not result in fair presentation, management must explain the alternative presentation in your organizations MD&A in order for the CEO and CFO to be able to properly certify the financial statements in conformity with Multilateral Instrument 52-109. In these circumstances it is very important that the board of directors conduct a thorough due diligence of the matter.

Next steps
Now that you have completed the analysis of your organizations 2012 financial statements, listed below are some suggested next steps in performing your due diligence.
Evaluate your results Discuss your findings with the other members of the board of directors, management and your external auditors. Establish your action plan Identify what needs to be done to ensure the financial statements are compliant, relevant and transparent. Review with your external auditors their quality assessment of the financial statements. Inquire as to the processes put in place to enable the CEO and CFO to fulfill their certification obligations for 2012. Ensure the audit committee minutes document your review process and conclusions regarding the financial statements and other financial filings. Ensure you understand the external auditors summary of unadjusted misstatements both quantitative misstatements and disclosure deficiencies, and the impact on controls. Comments

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Keep current with the new accounting and regulatory pronouncements affecting your financial reporting.
Please consider subscribing to the following Deloitte periodicals as sources of information that have been developed to help you to stay abreast of accounting and regulatory developments: Centre for Corporate Governance A web site specifically designed to help board members with their responsibilities. It provides the latest information on regulatory and legislative developments, accounting and financial reporting, board roles and responsibilities, and best practices. (www.CorpGov.Deloitte.ca) Deloitte Learning Academy The Deloitte Learning Academy offers a range of courses targeted to accounting professionals which can be selected a la carte, bundled into a specific learning program, or delivered as a full start-tofinish suite. Our current offerings include International Financial Reporting Standards (IFRS); Accounting Standards for Private Enterprises (ASPE); and Public Sector Standards (PSAS). (www.deloittelearningacademy.ca/welcomecanada) DeloitteLINK A weekly e-newsletter that helps you stay on top of standard-setting initiatives. Deloitte Update Our new live webcast series featuring our professionals discussing critical issues that affect your business. On the Agenda A periodic e-newsletter that advises directors about recent developments affecting their responsibilities, including the points of view of Deloitte specialists. Standard-setting Activities Index Provides you with monthly updates on recent developments in standard-setting from a comprehensive list of standard-setting organizations. Audit Committee Brief An e-newsletter of key U.S. regulatory, technical and professional developments in corporate governance and accounting.

You may subscribe to our periodicals by completing this online form on our Web site: https://events.deloitte-canada.12hna.com/preferences/

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MD&A review tool


In performing your review of the MD&A, we suggest you consider the following steps as a guide (these questions have been developed for non-venture issuers. Venture issuers are not required to make disclosures regarding disclosure controls and procedures (DC&P) or internal control over financial reporting (ICFR)).
Procedure Understand any new or amended disclosure requirements issued by the CSA for the current year. Read the complete MD&A and ensure that: There is no contradiction with what you know. There are no significant omissions based on what you know. The discussion is well balanced between the positive and negative news. The discussion between GAAP/IFRS and non-GAAP/non-IFRS measures is balanced and meets regulatory requirements. The document is written in plain language. The document focuses on material information. The document improves your organizations overall financial disclosure by providing a balanced discussion of the results of operations and financial condition. The document helps investors understand what the financial statements show and do not show. The document discusses in further details material transactions giving rise to items such as contingent liabilities, defaults under debt, off-balance sheet financing arrangements, or other contractual obligations. The document discusses important trends and risks that have affected the financial statements, and trends and risks that are reasonably likely to affect them in the future. The document provides information about the quality, and potential variability, of your organizations earnings and cash flow, to assist investors in determining if past performance is indicative of future performance. The document explains how new regulatory and financial reporting requirements may affect your organization. The DC&P worked as designed and that the evaluation of their effectiveness is fairly described. The ICFR worked as designed, and the evaluation of their effectiveness is fairly described. The name of the framework used in the design of ICFR is disclosed. If any material weakness in the design or operation of ICFR was identified, and exists at the end of the annual reporting period, ensure that a description of the weakness is disclosed along with the impact of the weakness on the financial reporting and ICFR, and the current plans, or any actions already taken, to remediate the weakness. If there were any limitations imposed on the scope of design of either DC&P or ICFR to exclude controls, policies and procedures, this fact is disclosed. Any material changes in ICFR that have occurred since the last filing are disclosed.
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Comments

Procedure With regards to the annual certificates required to be filed as per National Instrument 52-109, review the certificates and ensure the following: They are filed in the exact wording prescribed by the required form The representations included are consistent with the disclosure in the MD&A Your IFRS transition plan is clearly disclosed. [For details as to specific disclosure requirements regarding the changeover to IFRS, review CSA Staff Notice 52-320 Disclosure of expected changes in accounting policies relating to changeover to IFRS.] Note: this applies only to those organizations who benefit from an IFRS adoption deferral (for example. rate-regulated entities and investment enterprises) and have not yet converted to either IFRS or U.S. GAAP. The impact of the transition to IFRS on ICFR and DC&P has been disclosed (i.e., any material change in ICFR that may occur due to the transition and the ongoing preparation of financial statements in accordance with IFRS must be disclosed). Note: this applies only to those organizations who benefit from an IFRS adoption deferral (for example. rate-regulated entities and investment enterprises) and have not yet converted to either IFRS or U.S. GAAP. Meet with management and discuss any findings arising from your review. You may want to hold discussions with your internal auditors as well. Review with your external auditors their assessment of the MD&A. Document your review.

Comments

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Annual Information Form (AIF) review tool


In performing your review of the AIF, we suggest you consider the following steps as a guide.
Procedure Read the full document and ensure that: There is no contradiction with what you know. There are no significant omissions based on what you know. The discussion is well balanced between the positive and negative news. The document describes your organization, its operations and prospects, risks and other external factors that impact it specifically. The document focuses on material information; and The document is written in plain language Meet with management and discuss any findings arising from your review. You may want to hold discussions with your internal auditors as well. Review with your external auditors their assessment of the AIF. Document your review. Comments

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Statement of Executive Compensation review tool


In performing your review of the Statement of Executive Compensation, we suggest you consider the following steps as a guide.
Procedure Read the full document and ensure that: There is no contradiction with what you know. There are no significant omissions based on what you know. The document clearly communicates the compensation the board of directors intended your organization to pay, make payable, award, grant, give or otherwise provide to each Named Executive Officer and director for the financial year. The disclosures made in the document will help investors understand how decisions about executive compensation are made. The document focuses on material information; and The document is written in plain-language. Meet with management and discuss any findings arising from your review. You may want to hold discussions with your internal auditors as well. Review with your external auditors their assessment of the Statement of Executive Compensation. Document your review. Comments

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Conclusion
If you have any questions or require clarification on any of the referenced matters please contact one of the professionals listed hereunder. Deloittes professionals have a broad range of expertise and are able to offer a range of solutions whether it be technical accounting, governance or technological skills that can be customized to meet your organizations specific compliance needs. Subject to appropriate independence safeguards and service pre-approval, Deloitte can assist you to ensure that your financial filings are in compliance in all respects. Let us help design a strategy that can turn the continuous disclosure obligations into value generators for your organization.
If you would like further information, please contact a Deloitte professional in your region. Vancouver Calgary Edmonton Saskatoon Regina Winnipeg Windsor London Kitchener Burlington Niagara Toronto Ottawa Montreal Quebec City Saint John Halifax St. Johns Olin Anton Bryan Pinney Sippy Chhina Bill Howden Marla Adams Cathy Warner David Sachvie Mark Morrison Paul Kensit Jim Pryce Steve Irvine Jamie Barron Mike Boucher Don Wilkinson Mark Whitmore Paul Stauch Alain Ct Eddie Leschiutta Jean Lamy Lloyd Foote Shannon MacDonald Brian Groves 604-640-3006 403-503-1401 403-503-1314 780-421-3636 306-343-4205 306-565-5230 204-944-3623 519-967-7713 519-640-4603 519-650-7779 905-315-6687 905-315-5747 905-323-6021 416-601-6263 416-874-3399 613-751-5420 514-393-5317 514-393-5132 418-624-5359 506-663-6605 902-721-5560 709-758-5225 oanton@deloitte.ca bpinney@deloitte.ca schhina@deloitte.ca bhowden@deloitte.ca madams@deloitte.ca cwarner@deloitte.ca dsachvie@deloitte.ca mmorrison@deloitte.ca pkensit@deloitte.ca jpryce@deloitte.ca sirvine@deloitte.ca jabarron@deloitte.ca miboucher@deloitte.ca dowilkinson@deloitte.ca mwhitmore@deloitte.ca pstauch@deloitte.ca acote@deloitte.ca eleschiutta@deloitte.ca jlamy@deloitte.ca lfoote@deloitte.ca smacdonald@deloitte.ca bgroves@deloitte.ca

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Disclaimer
This guide is limited in nature, and does not comprehend all matters relating to an organizations financial filings and its continuous disclosure obligations. We make no representation as to the sufficiency of this guide for your purposes. This guide should not be viewed as a substitute for other forms of analysis that directors and management should undertake in order to assess whether their financial reporting or corporate governance practices are adequate or appropriate for your purposes. The information in this guide is not intended to constitute legal, accounting, tax, investment, consulting, or other professional advice or services. Before making any decision or taking any action which might affect your personal finances or business, you should consult a qualified professional advisor. The guide, and the information contained herein is provided as is, and Deloitte makes no express or implied representations or warranties regarding this guide or the information. Your use of this guide and information is at your own risk. Deloitte will not be liable for any direct, indirect, incidental, consequential, punitive damages or other damages, whether in an action of contract, statute, tort (including, without limitation, negligence) or otherwise, relating to the use of this guide or information.

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