June 2020 - PP News & Views

Effective Date of Accounting Standards Delayed

In light of the COVID pandemic, the Accounting Standards Board (AcSB) is deferring the effective date of the following amendments that would have come into effect for years beginning on or after January 1, 2020 by one year to January 1, 2021:

  • Amendments to Section 3051, Investments;
  • Amendments to Section 3465, Income Taxes; and
  • Amendments to Section 3856, Financial Instruments.

The AcSB is also deferring the effective date of the new Section 3041, Agriculture, and amendments to Section 3400, Revenue from years beginning on or after January 1, 2021 by one year to January 1, 2022.

Early adoption of each of these amendments and new Section 3041 continues to be permitted. Visit the FRAS Canada website for further details.

Preparing Your Practice for an Emergency

We know some practitioners believe they are too busy to plan for medical or other emergencies, but it’s because you have a busy practice that you need to make a plan. Such a plan will provide support to your family should you become disabled or die unexpectedly. You might have told your clients that only death and taxes are certain in life, and you help them minimize the latter. So help yourself by making a plan for the former and preparing for other emergencies.

We remind practitioners that the role of the Assisting Accountant is limited to helping your family return client records. Assisting Accountants are not required to finish up any work in progress or take over your practice. Furthermore, CPABC does not have any authority or resources to continue your practice or help your family sell it.

Below are some items to consider for your personal practitioner emergency planning checklist:

  1. Do you have a will and is it current? When your will was last updated, did you destroy all previous versions?
  2. Does your executor, spouse, or another individual know where the will is kept?
  3. Does your will contain a complete list of assets and essential contacts (legal, banking, professional, and insurance) to allow for the smooth administration and distribution of your estate?
  4. Does your will provide any direction to your executor on matters concerning your public practice?
  5. Have you made any prior arrangements for the transition of your clients to another practitioner? If yes, does your will make reference to the proposed purchase and sale agreement, identify the key contacts of the proposed successor, and specify the details with respect to the disposition process (valuation of your practice, determination of purchase price, terms of payment, etc.)?
  6. Does your will provide clear directions to your executor on winding up your practice? This would include, but not be limited to, required filings with the Canada Revenue Agency, converting your current professional liability insurance into a discovery policy, notifying CPABC, dealing with other insurance policies, subscriptions, firm employees, etc.
  7. In the event you become incapacitated, do you have someone designated as your Power of Attorney (POA) to make binding decisions on your behalf during this period?
  8. Does your POA know your intentions with respect to the continuation and eventual disposition of your practice? Specifically, at what point should your POA start the process of selling your practice?
  9. Where and what are the instructions with respect to the continuation and disposition of the practice in the event of incapacity?
  10. How are the following issues regarding your practice addressed in the instructions to your executor or POA?
    1. The status of any employee of the firm: you should provide some direction with respect to how employees should be treated as a result of any transition (current compensation arrangements, severance on termination, etc.).
    2. The passwords to your various online accounts: as the majority of critical client information is now electronic, having ready access to the passwords will make it easier to deal with practice or client issues.
    3. A communication for clients: you should draft a notice advising clients of the situation and how their files will be handled along with contact information. This communication might potentially help preserve the value of the practice. If clients know their concerns are being addressed and needs maintained, they are more likely to remain for the transition to the successor.
    4. Clear direction with respect to collection of accounts receivable and payment of firm expense.

The above list of suggestions is not intended to be comprehensive or applicable to every practitioner, so you should edit as appropriate. As important as it is to prepare a plan, it’s equally important to review and update it regularly.

We thank CPA Alberta for sharing their practitioner emergency planning checklist with BC members.

Free COVID-Related Webinars Available

CPABC has offered a number of free webinars to help members cope with the COVID-19 pandemic over the past few months and will continue to do so. We’ve also curated relevant offerings from CPA Canada and other trusted sources. Check out current and archived offerings on the COVID-19 Webinars page in our COVID Resources portal.

COVID Resources Updated

CPABC and CPA Canada have developed and curated many resources to help you navigate the COVID-19 pandemic. We are constantly revising the resource hubs on our websites to keep you up-to-date.

On the CPABC COVID-19 Updates and Resources portal, you will find guidance on financial reporting and assurance resources as well as details on the many provincial and federal government and tax programs.

On the CPA Canada COVID hub, you will find many resources related to financial reporting, audit implications, and practice management considerations.

In addition, CPA Canada has been working with CRA to provide clarity on administrative matters regarding the various federal government programs and updating members on its website.

Check out the web portals for all the resources the CPA profession is providing our members.

Provincial Practitioner Discussion Forum Open

Are you looking for a venue to discuss accounting or auditing issues related to COVID-19?

CPABC has created a Provincial Practitioner Discussion Forum for members to help each other deal with the impact of COVID-19 on financial reporting.

This forum is meeting periodically online during the epidemic to discuss guidance published by CPA Canada. The group held its first meeting in early May 2020 discussing the ASPE Alert on Subsequent events and other considerations related to COVID-19.

This forum is open to all licensed practitioners in BC. Interested members can sign up by emailing ProfessionalAdvisory@bccpa.ca.

Liaison Officer Program Available by Phone

The Canada Revenue Agency offers a free Liaison Officer service to owners of small businesses and self-employed individuals to help them understand their tax obligations. Due to the COVID-19 virus and to ensure the safety of Canadians, all in-person visits and seminars have been temporarily suspended. However, liaison officers are available by phone to talk about current tax relief measures that might help small businesses. Please visit the Liaison Officer service page on the CRA website to request the service.

Sign Up for Direct Deposit with the CRA

Are you helping clients apply for the Canada Emergency Wage Subsidy? Encourage them to sign up for direct deposit now to ensure their payments arrive sooner! To be eligible to enroll for CRA direct deposit for businesses, a business must have a valid 15 digit business number and a payroll account (RP).

The CRA has partnered with many Canadian financial institutions to offer a new service to Canadian employers that allows employers to register their business payroll accounts for direct deposit with the CRA directly through their bank portals. For more information, visit Canada.ca/cra-direct-deposit.

Apply for the CEWS

The CRA launched the Canada Emergency Wage Subsidy (CEWS) application process on April 27, 2020. Employers can apply for the CEWS through My Business Account or through the CRA’s online application portal, and their representatives can apply through Represent a Client. 

To apply:

  • Use the CEWS calculator function to prepare to apply and use the printable statement feature to enter required information into your application quickly and easily.
  • Sign up for My Business Account or Represent a Client.  You can watch this video for instructions on registering for My Business Account. Alternatively, you can apply via our web forms with your web access code.
  • Once fully registered for My Business Account, sign up for CRA email notifications. This will allow you to receive correspondence such as notice of assessments and most statements and letters electronically. You will also receive notifications when there is new mail to view, or when an important change is made to your account details, such as your address or banking information.