| IFRS 9: Financial Instruments In July 2014, the IASB issued the final version of IFRS 9 Financial Instruments ("IFRS 9"), which replaces IAS 39 Financial Instruments: Recognition and Measurement. This final version of IFRS 9 represents the completion of this project and it includes requirements for recognition and measurement, impairment, derecognition and general hedge accounting. This final Standard introduces a single, principles-based approach that amends both the categories and associated criteria for the classification and measurement of financial assets, which is driven by the entity's business model for the portfolio in which the assets are held and the contractual cash flows of these financial assets. This Standard also introduces an amended hedging model which aligns hedge accounting more closely with an entity's risk management activities and also includes a new financial asset impairment model which is based on expected losses rather than incurred losses. IFRS 9 (as issued in 2014) supersedes all prior versions of IFRS 9 and is mandatorily effective for annual periods beginning on or after January 1, 2018, with early application permitted. As with any new standard, it is important that companies take a proactive approach to implementation and compliance. Depending on a particular company's situation, IFRS 9 can be very complex, with a number of different facets to it. The mandatory effective date is not until 2018. However, some companies may want to early adopt. A prime reason for early adoption may be the more favourable hedge accounting rules. It's important to note that there are some strategic choices to make if early adoption is being considered. No matter what choices are made in this regard, it should also be noted that you cannot just take hedge accounting on its own. Other aspects of IFRS 9 need to be adopted at the same time. In addition, as under existing standards, achieving hedge accounting depends in appropriate designation and documentation of the hedge relationship from its inception. In this sense, IFRS 9 cannot be applied retrospectively to hedge accounting. It's a good idea for entities to get their IFRS 9 hedge documentation in place as far in advance of adoption as possible. Involving the independent auditor as soon as possible is also advised to avoid surprises at the time of audit. IFRS 15: Revenue from Contracts with Customers
In May 2014 the IASB and the FASB jointly issued a converged standard on the recognition of revenue from contracts with customers. This new standard supersedes existing standards and interpretations related to revenue and is mandatorily effect for annual periods beginning on or after January 1, 2017, with earlier application permitted. Effective dates and transition provisions are different for the standard adopted by the FASB. IFRS 15 establishes a comprehensive framework for revenue from contracts with customers, with a core principle that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard may have broad and substantial effects and therefore entities will need to begin considering early on, not only the financial reporting implications, but the extent to which changes may be required in processes, IT systems and internal controls. In order to ensure an effective and efficient transition process, it is imperative that directors remain engaged in this process. Have you considered asking management some key questions, to ensure that IFRS 15 remains a focus area, such as: | • | Has an implementation plan been developed? | | • | Do individuals outside of the financial reporting team need to be involved in implementation, if so, have they been identified? | | • | What's the expected timeline and additional cost of implementation? | | • | Have key stakeholders been informed and what are the potential impacts for them? | For additional considerations, be on the lookout for our upcoming publication that will focus on key questions and insights for directors related to IFRS 15. Helping CEOs drive value: The role of the Chief Operating Officer
The role of the chief operating officer (COO) can be a valuable addition to the executive team. For many organizations, the COO adds value in a number of ways, including leveraging and executing aspects of CEO workload, enabling efficient decision-making, providing unifying oversight of multiple lines of business, and developing a potential CEO successor. This Conference Board briefing examines the often misunderstood role of the COO. Several themes are explored, including the scope of the role; reasons why the role of the COO is used in some organizations and not in others; the benefits and challenges of the role of COO; key drivers of success for the role; and implications and risks associated with the role of the COO. CFO insights: Workplace redesign - Turning your environment into a productivity machine
Corporate real estate is undergoing a revolution. Companies are tearing down their walls, and the result is that shared spaces like "huddle zones" are crowding out individual workspace – including the corner office, in some cases. Such overhauls tend to yield big cost savings in the form of rent and construction costs. What many companies fail to take into account, however, is that physical space is just one component of today's workplace. Two other components, namely virtual interactions and management practices, also play critical roles in shaping how people work and how productive they can be. In this issue, we look at why it's important for companies to create a unified strategy across the three workplace elements and how CFOs can foster the practices that achieve it, based on research and case studies developed by the Deloitte LLP Center for the Edge. Audit Committee Brief: Internal audit: Moving beyond Sarbanes-Oxley Compliance
This issue of the Audit Committee Brief focuses on the evolving role of the internal audit function, and provides considerations of how audit committees can effectively work with management and internal audit to maximize the value of the function in the context of a company's specific circumstances. On the agenda: A tool to help you set your agenda
The October 9, 2014 session of the Deloitte's Directors' Series explored a broad range of issues on the topic of emerging risks. Our panel included directors from the public, private, and academic sectors. During the session, our panelists highlighted some vital points concerning disruptive technologies and emerging risks that boards should be thinking about. Boards are not expected to be experts in the area of emerging risks, however, to ensure they provide the necessary foresight and oversight regarding these matters, board members should ensure that they continuously acquire new information and new insights related to the organizations that they serve and that they ask questions to ensure that they have all of the necessary information required for them to explore and understand the issues and to make suggestions and decisions. The effective not-for-profit board: A value-driving force
This third edition discusses NPO governance within the current regulatory and stakeholder environment. It focuses on the board of directors, since it is the board that bears the ultimate responsibility for the stewardship of an organization. This handbook covers the meaning of good governance and the challenges specific to NPOs and some action steps to consider when addressing these. Disrupting the CHRO: Following in the CFO's footsteps
Much as CFOs evolved from their money-counter roots to become the CEO's strategic partner, chief human resource officers are on the cusp of a transformation as they focus on an asset that is critical for corporate growth, talent, the scarcity of which has now become among the biggest constraints on corporate growth. This publication explores how and why the CHRO must step up to the implications of the new world of work. Deloitte on disruption: Changing course in a disruptive world
The trouble with strategic risks is there's often no historical precedent to draw from to assess their potential nature and impact. Sometimes they're the product of a visible trend, but often they appear as a surprise. As hard as they are to identify or manage, they are extremely difficult to recover from. Another way strategic risks can be confusing? They're not just "something to mitigate." In fact, spotted early and handled well, strategic risks can be the basis for game-changing moves that reorder the field. That's why smart organizations will develop a system to deal with unexpected change. More effectively anticipating, adapting, making decisions and changing course can help organizations prevail in a disruptive world. And doing nothing could be the deadliest risk of all. Wealth generation: The importance of succession planning for family businesses
Our survey findings show that family businesses in Canada are increasingly recognizing the importance of good governance practices, including the need to plan for next gen succession. However, taking steps to formalize these plans and governance structures remains a challenge. The article includes highlights from the survey as well as insights shared by the business family leaders interviewed by Canadian Business. 20 questions Directors of not-for-profits should ask about social enterprise The term "social enterprise" encompasses a wide range of meanings but the basic requirement is that the organization, operation, activity or program must have a socially beneficial purpose that is achieved through commercial or business like-activities. Often, the intention is to generate sustainable revenue to avoid needing to rely entirely on traditional sources of philanthropic funding such as government grants and public donations. The CPA Canada publication gives directors a better understanding of the questions they face in establishing, running and, if required, ultimately exiting a social enterprise. | 
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Chantal Rassart, CPA, CA
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