Category Segal LLP Insider Current News

Segal Celebrates: Stellar CFE Results

Our 2019 CFE writers pictured with Managing Partner, Dan Natale (R)

Segal is thrilled to announce the stellar results of our 2019 CFE writers. 

All seven of our writers were successful and we extend our sincere congratulations to them all!

Congratulations to the following on their achievement in passing the CFE:

  • Chuck Dai (University of Toronto)
  • Jeffrey Lui (Wilfrid Laurier University)
  • Jessica Wen (Wilfrid Laurier University)
  • Jonathan Couse (Wilfrid Laurier University)
  • Khushpreet Sran (Wilfrid Laurier University)
  • Tiffany Ng (Wilfrid Laurier University)
  • Victoria Liu (Brock University)

Our writers’ hard work and commitment has paid off, and we share in their excitement as we celebrate this key professional milestone!

All the best, from the Partners and team at Segal!

Successful CFE Writers

We are proud to celebrate those members of the Segal team who successfully completed the 2018 CFE exam!  After many years of study and a grueling 3-day exam, their hard work has paid off and we’re excited for their future.

Congratulations to:

  • Christopher Luk
  • Cheryl Vanderland
  • Chris Ball
  • Victoria Huang

Special recognition goes to Chris Ball who earned a place on the honour roll.  The CFE honour roll consists of the top one percent of CFE writers across Canada.

Congratulations again to our writers!

2018 Successful CFE Writers

Segal LLP A 2018 Best of the Best Firm

INSIDE Public Accounting (IPA) has named Segal LLP a Best of the Best Canadian Firm for the third consecutive year.  Segal is honoured to be one of only 5 Canadian CPA firms ranked as a 2018 Best of the Best firm based on a wide variety of financial and operational performance.

“We are honoured to once again be named a Best of the Best in Canada; it is a vote of confidence in our people and in Segal’s unwavering commitment to client service. Our vision and approach to providing high value and trusted service to our clients remains unchanged.  With our move to new offices at Yonge and York Mills we are now centrally located and in a better position to regularly meet with clients.” said Dan Natale, Managing Partner at Segal.

“Best of the Best firms excel by achieving the delicate balance of focus on culture, clients, team and financial results,” says Michael Platt, principal of the Platt Group and publisher of the accounting trade publication, INSIDE Public Accounting.

Quebec Sales Tax Registration

quebec

The recent Quebec Budget introduced significant revisions to the QST legislation to apply to the taxation of the digital economy and e-commerce in Quebec.

More specifically, effective January 1, 2019, non-residents of Canada will be required to register for QST and charge QST to specified Quebec consumers on sales of digital services and incorporeal moveable property.  This change will likely require non-resident media companies such as Netflix and iTunes to register for QST and charge QST to many Quebec consumers on subscriptions and other fees.

Further, effective September 1, 2019, residents of Canada but non-residents of Quebec will be required to register for QST and charge QST to specified Quebec consumers on sales of corporeal moveable property (such as goods), as well as sales of digital services and incorporeal moveable property.  As a result, a resident of Canada that is not resident in Quebec that sells goods to Quebec specified consumers through a website (or other means) may now be required to register for QST.  Pursuant to the current rules however, QST registration (and thus the collection of QST) may not have been required for such sales of goods by a non-resident of Quebec on the basis that the non-resident did not have a significant presence in Quebec.

The term “Quebec specified consumers” refers to a person who is not registered for QST purposes and whose usual place of residence is in Quebec.  Accordingly, suppliers that are only making sales to persons that are registered for QST purposes will not be required to register pursuant to the new rules.

Registration under the new rules will be pursuant to a different chapter of the QST legislation, with the result that any person registered pursuant to the new rules will not be entitled to claim any input tax refunds in respect to any QST paid in the course of their commercial activities.  Accordingly, any persons required to register pursuant to the new rules may wish to consider voluntarily registering pursuant to the ‘old rules’ to thus allow ITRs to be claimed.  However, registration and filing QST returns pursuant to the new rules will be streamlined and simplified.

In addition to the above changes, digital platforms will also be required to be registered for QST where the platform provide services to a non-resident supplier that enables the platform to make supplies of incorporeal movable property or services to specified Quebec consumers where the platform controls the key elements of transactions (such as billing, terms and conditions, and delivery).  This will result in certain conduits or other parties that are not necessarily the vendor of the property or services being required to charge and collect QST on certain transactions.

Registration pursuant to the new rules will not be required where the total taxable supplies made to consumers are less than $30,000 in the 12 previous months.  Further, all QST returns filed by registrants pursuant to the new rules are required to be filed quarterly. Lastly, the new rules provide that QST may be paid in certain currencies, including USD and Euro, provided the registrant is paid in that currency.

Vern Vipul, LL.B., M.Tax

Senior Associate, Commodity Tax

Segal LLP

IFRS 16 – A new leasing standard

lease-caar

IFRS 16 is a new leasing standard which will be replacing the old leasing standard, IAS 17.  This new standard is effective for annual reporting periods beginning on or after January 1, 2019.

Under the old standard, IAS 17 the substance of the lease agreement determined whether the lease was an operating lease or a capital lease.  For example, a lease transferring ownership at the end of the lease term or a lease for a period representing a major part of the economic life of the asset etc. would both be treated like capital leases.   IFRS 16 differs fundamentally from this approach.

In a nutshell, IFRS 16 requires all leases (with limited exceptions) to be capitalized.  The only exceptions to capitalizing are for (i) short term leases (12 months or less with no purchase option) and (ii) low-value leases (The IASB has suggested this amount is approximately $5,000 USD).

The impact of this new standard will mostly be felt by lessees that have significant operating leases.  As an example a car that is leased.  Under IAS 17 this car lease, if it met the conditions not to capitalize, would only expense the lease payments in the year and disclosed in the commitments note future lease payments.  Under IFRS 16, the right-of-use of the car would now be recognized as an asset on the balance sheet, and the related lease would be recognized as a loan liability on the balance sheet.

The initial measurement of the lease liability would be based on the present value of the future cash payments under the lease.  The initial measurement of the lease asset would be based on the cost of the right-of-use of that asset.

Subsequent to initial recognition, leased assets would be depreciated, and are also subject to impairment testing.  Liabilities would be reduced by the principal portion of the lease payments made.

Clearly one of the major changes from the adoption of IFRS 16 will be the introduction of a potentially significant asset and liability to the balance sheet.  The new standard will also require a number of additional note disclosures.  But, in addition to these major presentation differences and additional note disclosures, it will be very important to understand the impact that these changes will have on financial ratios and other financial metrics.  Consider, this partial list of the possible effects of adopting IFRS 16:

  • Current ratio – decreases because current liabilities increase (we recognize the current portion of a lease liability) while current assets do not change.
  • Asset turnover (Sales/total assets) – decrease because total assets increase, and sales do not change.
  • EBITDA (profitability) – will increase because expenses that would have been deducted under IAS 17 (e.g. rent expense or other operating lease expenses) will now, because of capitalization of the lease under IFRS 16, now be in the form of interest and depreciation expenses which are specifically excluded from EBITDA.

The main goal of this very brief introduction to IFRS 16 was to hopefully convince those that report using IFRS (especially those with operating leases) of the potentially very significant effects of this changeover.  Even though 2019 seems far away, a change of this magnitude and complexity should be addressed well in advance.

Contributed by Trevor Reef, CPA, CA – Senior Manager, from Segal LLP. This piece was produced as a part of the quarterly Canadian Overview, a newsletter produced by the Canadian member firms of Moore Stephens North America.

This article is from the quarterly Canadian Overview, a newsletter produced by the Canadian member firms of Moore Stephens North America. These articles are meant to pursue our mission of being the best partner in your success by keeping you aware of the latest business news.