January 2020 - PP News & Views
- Revenue Standards in ASPE Being Amended
- Report CPD by January Deadline
- More Resources on Cybersecurity Available
- Managing the Risks of Tax Services
- CRA Changing Authorization Process
In May 2019, the Accounting Standards Board issued an exposure draft to amend Section 3400 Revenue in Part II of the CPA Canada Handbook to address guidance on these topics:
- bill-and-hold arrangements;
- multiple-element arrangements;
- percentage of completion method;
- reporting revenue gross or net; and
- upfront non-refundable fees/payments.
Following their consultation and deliberation process, the Board has approved a number of amendments, including:
- clarification that the guidance related to determining the unit of account and whether to combine or segment contracts is applicable to all types of revenue transactions;
- decision trees for the identification of units of account and allocation of revenue;
- revision to the guidance for measuring the degree of completion based on the ratio of costs incurred to total estimated costs to allow the cost of uninstalled materials not specially produced or fabricated for the project delivered to the job site to be included in the costs incurred to date; and
- several illustrative examples.
The changes are effective for fiscal years beginning on or after January 1, 2021. We encourage practitioners to monitor the Revenue project page on the FRAS Canada website for more information.
We remind all members that continuing professional development (CPD) is reported on a calendar year basis and you have until January 31, 2020 to report for 2019. Reporting is done online via the secure member portal – click on “Login” on the upper right corner at the homepage of our website.
The topic of cybersecurity continues to be of interest to CPA members as the threats apply to individuals, businesses, and governments. CPA Canada has expanded its offering of free webinars to help members become more aware of the risks and to address them.
- Managing Cybersecurity Risk: How to Get Started for an overview of the top cybersecurity risks Canadian organizations are facing today and practical steps you can take to protect your organization from a cybersecurity breach;
- Not-For-Profit Board Oversight of Cybersecurity for guidance in overseeing cybersecurity risk in not-for-profit organizations; and
- Cybersecurity Practices and Reporting Trends for disclosures of cybersecurity-related risks and incidents.
Many practitioners believe that as long as they stay away from audits, they will be immune to lawsuits. That’s not true: statistics from CPA Professional Liability Plan Inc. show that the highest volume and value of professional liability insurance claims for small and mid-sized firms are related to tax services.
Read this Risky Business: Managing Tax Practice Risks and How to Mitigate Them blog post by Bruce Ball, VP of Tax at CPA Canada for tips to avoid being on the wrong end of a lawsuit.
The Canada Revenue Agency is introducing new digital processes in February 2020 to simplify the way practitioners request online authorizations.
- A new e-authorization process for online access to individual tax accounts. As a representative, you’ll be able to request access using a web form through Represent a Client. Similar to the authorization process for business tax accounts, you will need to scan and submit a signature page that has been signed by the individual.
- The existing T1013 form for access to individual tax accounts will be discontinued. The T1013, RC59, and NR95 will be combined into one form called the AUT-01 Authorize a Representative for Access by Phone and Mail. This form will only be used to request offline access to individual and business tax accounts.
Do not submit the AUT-01 form if you have an existing authorization for online access. All AUT-01 submitted to the CRA will be processed as new requests and will override previous T1013 submissions. This means representatives will lose their online access if they submit an AUT-01 form (with the exception of non‑residents, as there are no online services for non-residents).
- If you use T1 or T2 software, instead of Represent a Client, to e-submit a request for online access to individual and business tax accounts, a new signature page will be generated. This new page must be signed by the client and retained by the representative for six years.
There is no requirement to submit a copy of this signature page, unless requested by the CRA.
- Removal of some restrictions for e-submitting an authorization using T1 or T2 software.
- Discontinuation of barcodes for authorization requests.
- Existing authorizations for individual tax accounts of deceased persons will no longer be cancelled. This will avoid having to re-authorize the same representative after the client’s date of death.
Practitioners should note that these changes will take effect on February 10, 2020 and continue to use the existing Representative authorization processes until that date.