Please note that this update applies to entities who currently issue Audited or Reviewed Financial Statements in accordance with ASPE.
There are amendments to Section 3856 – Financial Instruments that come into effect for year-ends starting on or after January 1, 2020.Are you informed about how these changes will impact your financial statements?The changes relate specifically to Redeemable Or Mandatorily Redeemable Shares (ROMRS) issued in a tax planning arrangement. New criteria have been set forth to determine if these shares are to be presented as equity vs a liability item. This will significantly impact the understanding of the financial statements by the user as well as any covenants or ratios that are currently in place.It’s important to analyze your entity’s current share structure to assess how your financial statements will be impacted by the amendments. Any current tax planning should also proactively take these amendments into consideration to avoid any surprises.Please feel free to contact us if you need our help or want a better understanding of the changes.