Technical Bulletin - January 2013

Introduction

This technical bulletin covers the various accounting and assurance developments from November 2012 to December 2012.

Acknowledgement: The content of the Technical Bulletin has for the most part been summarized or reproduced from the CICA accounting/assurance revisions releases and publications, IASB, IAASB, IFRIC, AcSB, PSAB, AASB press releases, updates, publications and meeting summaries and other publications referenced within the bulletin.

Summary of acronyms used in this bulletin is included at the end.

To discuss implementation or interpretation issues with respect to these or any other accounting or assurance matters, please contact your local Collins Barrow service provider.

Contact Information:

• Internet: www.collinsbarrow.com
• Email: info@collinsbarrow.com

Collins Barrow regularly publishes Technical Bulletin for the general interest of its clients and friends to highlight the continually changing accounting and assurance standards, and the interpretations thereof, in Canada. Since this is not intended to be a complete reproduction or summarization of the standard or document reviewed, we recommend that you refer to the original document(s) discussed in this Bulletin and/or discuss the matter with your professional advisor before acting upon any of the matters discussed herein.

1. Accounting

International Financial Reporting Standards

Pronouncements coming into effect for annual periods beginning on or after January 1, 2013:

IFRS 10 - Consolidated Financial Statements

This new standard establishes principles for the presentation and preparation of consolidated financial statements when an entity controls one or more other entities. A new definition of ‘control’ has been established. IFRS 10 replaces the consolidation requirements in SIC-12 Consolidation—Special Purpose Entities and IAS 27 Consolidated and Separate Financial Statements.

IFRS 11 - Joint Arrangements

This new standard establishes the principles for joint arrangements by focusing on the rights and obligations of the arrangement, rather than its legal form. IFRS 11 requires a venturer to classify its interest in a joint arrangement as a joint venture or joint operation. Joint ventures will be accounted for using the equity method whereas for a joint operation the venture will be accounted for using the proportionate consolidation method.

IFRS 12 - Disclosure of Interests in Other Entities

This new standard lists the disclosure requirements for all forms of interests in other entities, including subsidiaries, joint arrangements, associates and unconsolidated structured entities. 

Transition Guidance - Amendments to IFRS 10, IFRS 11 and IFRS 12

Amendments clarify the transition guidance in IFRS 10 Consolidated Financial Statements and also provide additional transition relief in IFRS 10, IFRS 11 Joint Arrangements and IFRS 12 Disclosure of Interests in Other Entities, limiting the requirement to provide adjusted comparative information to only the preceding comparative period. Furthermore, for disclosures related to unconsolidated structured entities, the amendments will remove the requirement to present comparative information for periods before IFRS 12 is first applied.

IFRS 1 First-time Adoption of International Financial Reporting Standards

Amendment provides relief for first-time adopters from the retrospective application of IFRSs when accounting for loans received from governments at a below-market rate of interest.

IFRS 7 Financial Instruments: Disclosures

Amendment provides additional information about offsetting of financial assets and financial liabilities.

IFRIC 20 Stripping Costs in the Production Phase of a Surface Mine

This new interpretation applies to all types of natural resources that are extracted using the surface mining activity process. IFRIC 20 permits capitalization of stripping costs if all of the three criteria are met: probability of economic benefit, identifiability of ore body and measurability of stripping costs. IFRIC 20 provides a more detailed cost allocation guidance based on a relevant production measure that allows allocation between inventory produced and the stripping activity asset. IFRIC 20 may represent a change in accounting practice for some Canadian mining entities.

IFRS 13 Fair Value Measurement

This new standard defines fair value, sets out in a single standard a framework for measuring fair value and requires disclosures about fair value measurements. IFRS 13 applies when other IFRSs require or permit fair value measurements.

IAS 19 Employee Benefits

Amended standard eliminates options to defer the recognition of gains and losses in defined benefit plans, requires remeasurement of a defined benefit plan’s assets and liabilities to be presented in other comprehensive income and increases the disclosure.

Annual Improvements 2009-2011 Cycle

Annual improvements process is comprised of minor revisions, clarifications or corrections to the standards, by compiling amendments to a number of standards into one exposure draft (ED) rather than issuing a separate ED for each issue. Issuance of new standards is not included in the annual improvement process.

IFRS 1 First-time Adoption of International Financial Reporting Standards	guidance added to permit the repeat application of IFRS 1 and clarification added on the borrowing costs exemption relating to costs capitalized on qualifying assets before the transition to IFRSs
IAS 1 Presentation of Financial Statements	requirements for providing comparative information in financial statements are clarified
IAS 16 Property, Plant and Equipment	classification requirement for servicing equipment clarified
IAS 32 Financial Instruments: Presentation	income tax consequences of distributions to holders of an equity instrument and of transaction costs of an equity transaction clarified
IAS 34 Interim Financial Reporting	requirements on segment information for total assets and liabilities for each reportable segment clarified

Exposure Drafts

Annual Improvements to IFRS (2011-2013 Cycle)

Annual improvements process is comprised of minor revisions, clarifications or corrections to the standards, by compiling amendments to a number of standards into one exposure draft (ED) rather than issuing a separate ED for each issue. Issuance of new standards is not included in the annual improvement process.

IFRS 1 First-time Adoption of International Financial Reporting Standards	meaning of effective IFRSs
IFRS 3 Business Combinations	scope exceptions for joint ventures
IFRS 13 Fair Value Measurement	scope of paragraph 52 (portfolio exception)
IAS 40 Investment Property	clarifying the interrelationship of IFRS 3 and IAS 40 when classifying property as investment property or owner-occupied property

Comment period ends on February 18, 2013.

Incorporating IFRSs into Canadian GAAP (Proposed amendments to the Preface to the CICA Handbook – Accounting and the Introduction to Part I)

As mentioned in the November issue of the Bulletin, AcSB issued commentary in October 2012 to address the question of when IFRSs become effective in Canada, the answer to which is less straightforward than expected.  The issue was raised by the IFRS discussion group and included the following matters:

•  When Canadian entities may begin taking advantage of the early adoption option, and
•  When Canadian entities must apply the disclosure requirement relating to issued but not yet effective IFRSs.

The proposed amendments clarify the authority for financial reporting requirements in Canada and the basis for adopting IFRSs into Canadian GAAP.  Comment period ends on February 28, 2013.

Equity Method: Share of Other Net Asset Changes (Proposed amendments to IAS 28: Investments in Associates and Joint Ventures)

The objective of this ED published by the IASB is to provide additional guidance to IAS 28 on the application of the equity method, a method of accounting whereby the investment is initially recognised at cost and subsequently adjusted to reflect the change in the investor’s share of the investee’s net assets.  The amendment specifies that an investor should recognise, in the investor’s equity, its share of the changes in the net assets of the investee that are not recognised in profit or loss or other comprehensive income (OCI) of the investee, and that are not distributions received (‘other net asset changes’).  Comment period ends on March 22, 2013.

Classification and Measurement: Limited Amendments to IFRS 9 (2010) (Proposed amendments to IFRS 9 (2010))

This ED published by the IASB in November 2012 clarifies the existing classification and measurement requirements and proposes the introduction of a fair value through other comprehensive income (FVOCI) measurement category for particular financial assets that contain contractual cash flows that are solely payments of principal and interest. Comment period ends on March 28, 2013. 

Clarification of Acceptable Methods of Depreciation and Amortisation (Proposed amendment to IAS 16 and IAS 38)

IAS 16 and IAS 38 both establish the principle for the basis of depreciation and amortisation as being the expected pattern of consumption of the future economic benefits of an asset. The objective of the ED issued by the IASB in December 2012 is to ensure that preparers do not use revenue-based methods to calculate charges for the depreciation or amortisation of items of property, plant and equipment or intangible assets. This is because a revenue-based method reflects a pattern of economic benefits being generated from the asset, rather than the expected pattern of consumption of the future economic benefits embodied in the asset.  Comment period ends on April 2, 2013. 

Acquisition of an Interest in a Joint Operation (Proposed amendment to IFRS 11)

The ED issued by the IASB in December 2012 proposes to add new guidance to IFRS 11 on accounting for the acquisition of an interest in a joint operation in which the activity of the joint operation constitutes a business, as defined in IFRS 3 Business Combinations.  The IASB proposes that acquirers of such interests shall apply the relevant principles on business combination accounting in IFRS 3 and other Standards, and disclose the relevant information specified in these Standards for business combinations.  The proposed amendment applies to the acquisition of an interest in an existing joint operation and to the acquisition of an interest in a joint operation on its formation.  However, the amendment does not apply if the formation of the joint operation coincides with the formation of the business.  Comment period ends on April 23, 2013. 

Sale or Contribution of Assets between an Investor and its Associate or Joint Venture (Proposed amendments to IFRS10 and IAS28)

The ED issued by the IASB in December 2012 addresses the inconsistency in dealing with the sale or contribution of a subsidiary between IFRS 10 and IAS 28 (2011).  The proposed amendment will require that a full gain or loss would be recognised on the loss of control of a business (whether it is housed in a subsidiary or not), including cases in which the investor retains joint control of, or significant influence over, the investee.  Comment period ends on April 23, 2013. 

Reverse Take-Overs and IFRS

(IFRS 3 Business Combinations and IFRS 2 Share-based Payment — accounting for reverse acquisitions that do not constitute a business)

Reproduced from IFRIC update newsletter (November 2012)

The Interpretations Committee received requests for guidance on how to account for transactions in which the former shareholders of a non-listed operating entity become the majority shareholders of the combined entity by exchanging their shares for new shares of a listed non-operating entity. However, the transaction is structured such that the listed non-operating entity acquires the entire share capital of the non-listed operating entity.

The Interpretations Committee observed that the transactions analysed have some features of a reverse acquisition under IFRS 3 because the former shareholders of the legal subsidiary obtain control of the legal parent. Consequently, it is appropriate to apply by analogy, in accordance with paragraphs 10–12 of IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors, the guidance in paragraphs B19–B27 of IFRS 3 for reverse acquisitions. Application of the reverse acquisitions guidance by analogy results in the non-listed operating entity being identified as the accounting acquirer, and the listed non-operating entity being identified as the accounting acquiree. The Interpretations Committee noted that in applying the reverse acquisition guidance in paragraph B20 of IFRS 3 by analogy, the accounting acquirer is deemed to have issued shares to obtain control of the acquiree.

The Interpretations Committee also noted that on the basis of the guidance in paragraph B7 of IFRS 3, the listed non-operating entity is not a business. Consequently, the transactions analysed are not business combinations and are therefore not within the scope of IFRS 3. Because the transactions analysed are not within the scope of IFRS 3, the Interpretations Committee noted that they are therefore share-based payment transactions that should be accounted for in accordance with IFRS 2. The Interpretations Committee observed that on the basis of the guidance in paragraph 13A of IFRS 2, any difference in the fair value of the shares deemed to have been issued by the accounting acquirer and the fair value of the accounting acquiree’s identifiable net assets represents a service received by the accounting acquirer. This service received is that of a stock exchange listing for its shares. The Interpretations Committee observed that a stock exchange listing does not meet the definition of an intangible asset under IAS 38, Intangible Assets. Consequently, in accordance with the guidance in paragraph 8 of IFRS 2, the cost of the service received is recognised as an expense.

On the basis of the analysis above, the Interpretations Committee determined that, in the light of the existing IFRS requirements, an interpretation or an amendment to IFRSs was not necessary and consequently decided not to add this issue to its agenda. As a result of this, the Interpretations Committee does not expect diversity in practice to continue.

This tentative decision will be reconsidered at the Interpretations Committee meeting in March 2013.  Accordingly, the Committee is open to comments with respect to its tentative decision, the deadline for which is January 22, 2013.

For further details on this and other decisions reached at the November 2012 meeting, refer to:

http://www.ifrs.org/Meetings/Pages/IFRSInterNov012.aspx

Measuring the Fair Value of Unquoted Equity Instruments within the Scope of IFRS 9

IFRS Foundation Education Initiative is developing educational material on fair value measurement, upon the request from the IASB.  The various principles of IFRS 13 will be addressed in individual chapters, which will be published as they are finalized.  The current publication is a chapter that illustrates the application of IFRS 13 principles in measuring the fair value of individual unquoted equity instruments that constitute a non-controlling interest in a private company (i.e. the investee) within the scope of IFRS 9 Financial Instruments.  This material does not prescribe the use of a specific valuation technique, but instead encourages the use of professional judgement and the consideration of all facts and circumstances surrounding the measurement.  This guidance reinforces the premise that an entity can comply with the measurement objectives of IFRS 13 even when limited information is available. 

The complete chapter is available through the following link:

http://www.ifrs.org/Use-around-the-world/Education/FVM/Documents/EducationFairvaluemeasurement.pdf

CICA Reporting Alerts

CICA issues Reporting Alerts which are aimed at assisting smaller public companies in determining the impact of new and revised standards on their business.  Reporting Alerts provide a summary of the standard, highlight significant items, summarize key changes and address common questions. 

The following Alerts have been published:

Issue 001; November 2011	To consolidate, or not to consolidate, that is the question (IFRS 10)
Issue 002;  June 2012	Joint ventures redefined (IFRS 11)
Issue 003;  June 2012	Helping users understand your interest in other entities (IFRS 12)
Issue 004;  June 2012	One-stop shopping for fair value measurement (what is fair value and how is it calculated) (IFRS 13)
Issue 005;  June 2012	IFRIC 20: Accounting for stripping costs in the production phase of a surface mine
Issue 006;  June 2012	Round-up alert – high level summary of amendments and new standards for which a separate alert has not been prepared
Issue 007;   July 2012	Easier than you may have feared – Amendments to IFRS 10, IFRS 11 and IFRS 12
Issue 008; August 2012	Annual Improvements Alert – addresses the following topics: Starting again for the first time (IFRS 1) Clarification on capitalization (IFRS 1) Controlling the comparatives (IAS 1) Sparing us the spare parts (IAS 16) Now a less taxing read (IAS 32) Aligning with the annuals (IAS 34)

These Alerts are accessible on:

http://www.cica.ca/applying-the-standards/ifrs/ifrs-resources/implementing-ifrs/item54240.aspx

Pronouncements Not Yet Effective

Effective for annual periods beginning on or after January 1, 2014:

Entities with rate-regulated activities

Mandatory date for first-time adoption of IFRS by entities with rate-regulated activities - fiscal years beginning on or after January 1, 2014.

Investment Companies and Segregated Accounts of Life Insurance Enterprises

Mandatory date for first-time adoption of IFRS by investment companies and segregated accounts of life insurance enterprises - fiscal years beginning on or after January 1, 2014.

IAS 32 Financial Instruments: Presentation

Offsetting Financial Assets and Financial Liabilities (Amendments to IAS 32): amendment addresses inconsistencies identified in applying some of the offsetting criteria.

Effective for annual periods beginning on or after January 1, 2015:

IFRS 9 Financial Instruments

This new standard replaces the requirements in IAS 39 Financial Instruments: Recognition and Measurement for classification and measurement of financial assets.

IFRS 9 Financial Instruments and IFRS 7 Financial Instruments: Disclosures

Mandatory Effective Date and Transition Disclosures (Amendments to IFRS 9 and IFRS 7): amendment defers the effective date of IFRS 9 and provides additional disclosures about its initial adoption.

Accounting Standards for Private Enterprises

Pronouncements coming into effect for annual periods beginning on or after January 1, 2013:

2012 Annual Improvements

Annual improvements process is comprised of minor revisions, clarifications or corrections to the standards, by compiling amendments to a number of standards into one exposure draft (ED) rather than issuing a separate ED for each issue. Issuance of new standards is not included in the annual improvement process.

Income Statement, Section 1520	inconsistencies between Section 1520 and other standards in Part II of the Handbook are eliminated
Business Combinations, Section 1582	cost of issuing debt securities are to be recognized in accordance with Section 3856
Subsidiaries, Section 1590	acquisition costs for subsidiaries accounted for using the cost or equity methods are to be expensed, except for costs to issue debt or equity securities contingent consideration is to be measured at fair value at the date of acquisition and accounted for as part of the investment in the subsidiary
Foreign Currency Translation, Section 1651	inconsistency with Section 1602 is eliminated accounting for foreign exchange gains and losses accumulated in a separate component of shareholders’ equity for different scenarios involving a full or partial reduction in an entity’s interest in a foreign operation is clarified
Investments, Section 3051	gains and losses resulting from the dilution of an entity’s interest in an investee accounted for using the equity method are required to be recognized in income, which is consistent with the accounting for a gain or loss arising from the sale of a portion of an investment

2. Assurance

Exposure Draft

The Auditor’s Responsibilities Relating to Other Information in Documents Containing or Accompanying Audited Financial Statements and the Auditor’s Report Thereon

This ED was issued by the IAASB in November 2012, with comment period ending on March 14, 2013.  The corresponding Canadian ED was issued by the AASB in December 2012, with comments due by February 8, 2013.

Reproduced from AASB’s ED:

The scope of the current CAS 720 encompasses other information in a document containing audited financial statements and the auditor’s report thereon. The revised standard will continue to encompass the current scope and in addition, will encompass other information included in a document that:

•  is issued by the entity in connection with the initial release of the audited financial statements and the auditor’s report thereon;
•  accompanies the audited financial statements and the auditor’s report thereon; and
•  has a primary purpose of providing commentary to enhance the users’ understanding of the audited financial statements or the financial reporting process.

The following sets out the AASB’s views as to whether a continuous disclosure document would be within the scope of CAS 720 (Revised)

• The Management Discussion and Analysis (MD&A) would be within the scope of CAS 720 (Revised).
• The Annual Information Form (AIF) would be outside the scope of CAS 720 (Revised)
• Chief Executive Officer (CEO) and Chief Financial Officer (CFO) certifications would be within the scope of CAS 720 (Revised).
• In September 2012, the Canadian Securities Administrators issued a request for comment on proposed National Instrument (NI) 51-103, Ongoing Governance and Disclosure Requirements for Venture Issuers. Proposed NI 51-103 would consolidate disclosures of a venture issuer’s business, management, governance practices, audited annual financial statements, associated MD&A, and CEO/CFO certifications into a single document, the annual report. The proposed venture issuer’s annual report would be within the scope of CAS 720 (Revised) as it would contain the audited financial statements and the auditor’s report thereon.

AASB’s exposure draft also details the proposed changes in the objectives of the standard as well as the impact on the auditor’s work effort. 

Full text of the ED can be found on:

http://www.frascanada.ca/canadian-auditing-standards/documents-for-comment/item71350.pdf

Inspection Findings – Global Results

The International Forum of Independent Audit Regulators (IFIAR), where Canada is represented through CPAB, has released its first global survey of inspection findings.  One of the goals of the survey was to identify common inspection findings in public company audits.  The primary focus of the survey was on the results of inspections of the six largest international audit firm networks, nevertheless, the information summarized in the report is useful to various organizations aiming at improving audit quality.

Reproduced from the survey:

The survey results confirm that members are noting audit findings in numerous common areas (inspection themes) across the different jurisdictions.  The survey results indicate that the largest number of inspection findings in audits of public companies occurred in the following areas:

• Fair value measurements;
• Internal control testing; and
• Engagement quality control reviews 

Many members who responded to the survey also noted that a lack of auditors’ professional skepticism on audit engagements was a significant performance issue as well as a possible cause underlying many inspection findings.

With regard to members’ inspections of the audit firms’ own firm-wide quality control systems, the survey results highlighted concerns with policies and procedures in place to provide the firms with reasonable assurance that:

• Audit engagements are performed in accordance with professional standards and legal requirements;
• The firms have sufficient personnel with the technical competence, capabilities, and commitment to ethical principles necessary to perform audits; and
• The firms and its personnel are in compliance with independence and ethical requirements.

The full copy of the survey results can be found on: https://www.ifiar.org/Reports.aspx

Pronouncements Not Yet Effective

CAS 315 – Identifying and Assessing the Risks of Material Misstatement through Understanding the Entity and Its Environment

This standard replaces the existing CAS 315 and incorporates changes resulting from revisions to CAS 610.  Changes include more guidance on when to apply CAS 610 and matters that the auditor needs to consider when making inquiries and obtaining understanding of internal audit function.

CAS 610 - Using the Work of Internal Auditors

This standard replaces the existing CAS 610.  It establishes a strengthened judgment-based framework for use by the external auditor in deciding whether and, if so, to what extent, to use the work of the internal audit function.

CAS 315 and CAS 610 are effective for audits of financial statements for periods ending on or after December 15, 2013.

CSAE 3410 – Assurance Engagements on Greenhouse Gas Statements

This new standard deals with assurance engagements to report on an entity’s greenhouse gas statement, and was adopted from the ISAE 3410 issued by the IAASB.  This standard is effective for assurance reports covering periods ending on or after September 30, 2013.

Section 7150 - Auditor’s Consent to the Use of a Report of the Auditor Included in an Offering Document

Section 7150 replaces sections 7110 and 7115, and AuG-30.  Section 7150 sets out the auditor's responsibilities when a subsequent event is identified in circumstances when the audited financial statements were prepared in accordance with a financial reporting framework that does not allow dual dating.  In addition, the new standard requires only one consent letter to be provided by auditors in connection with certain offering documents filed with a Canadian securities regulator.  The new standard also sets out new wording for the auditor's consent, and is effective for consents issued on or after April 1, 2013.

3. Regulatory

Consultation Paper on Emerging Market Issuers

Reproduced from the Consultation Paper (Issued by TSX and TSXV – December 2012)

This Consultation Paper is part of the Exchanges’ review of the listing requirements applicable to Emerging Market Issuers.  Emerging Market Issuers are issuers with a significant connection to an emerging market jurisdiction, which is any jurisdiction outside of Canada, the United States, Western Europe, Australia and New Zealand. The principal purposes of this Consultation Paper are to:

• present the potential risks associated with listing Emerging Market Issuers that have been identified by the Exchanges;
• provide preliminary guidance to issuers and their advisors with respect to listing considerations applicable to Emerging Market Issuers; and
• solicit comments from market participants on matters related to listing Emerging Market Issuers, including possible new guidance or requirements that TSX or TSXV may implement.

TSXV is also soliciting comments and feedback on a proposed TSXV policy document, Listing of Emerging Market Issuers, which sets forth specific guidance and requirements applicable to the listing of Emerging Market Issuers on TSXV. TSXV is providing this guidance to improve transparency in respect of the TSXV’s practices and procedures that may apply to Emerging Market Issuers seeking a listing on the TSXV.

Comment period ends on February 28, 2013.  For the full text of the Consultation Paper, refer to: http://www.tmx.com/en/pdf/Joint-Consultation-Paper.pdf

Amendments to Shareholder Voting Communication Process

Amendments by the CSA to NI 54-101 and NI 51-102 are effective February 11, 2013, provided all necessary ministerial approvals are obtained.  Amendments will provide reporting issuers with a new notice-and-access mechanism to send proxy-related materials to registered holders and beneficial owners of securities.  Specifically, under the notice-and-access, a reporting issuer will now be able to deliver proxy-related materials by posting the relevant information circular on a website that is not SEDAR and sending a notice informing beneficial owners that the proxy-related materials have been posted, and explaining how to access them.  As well, the process by which beneficial owners are appointed as proxy holders in order to attend and vote at shareholder meetings has been simplified and enhanced disclosure of the beneficial owner voting process will be required in the information circular.

Refer to the following link for further details:

http://www.securities-administrators.ca/aboutcsa.aspx?id=1109

Considerations for New Capital Raising Prospectus Exemptions

OSC Staff Consultation Paper 45-710 was issued in December 2012, setting out concept ideas for new capital raising prospectus exemptions in Ontario with a goal of fostering greater access by start-ups and small and medium sized enterprises to capital markets while maintaining appropriate investor protection.  Currently, Ontario does not have all of the prospectus exemptions available in the rest of the country.  For instance, the offering memorandum (OM) exemption is not available in Ontario.  As well, the family, friends and business associates exemption available in Ontario is more limited then across the rest of Canada.

Initiatives considered include:

• crowdfunding and OM prospectus exemptions,
• prospectus exemptions based on sophistication and advice,
• additional information to be included in reports of exempt distribution.

The comment period ends on February 12, 2013.  Full text of the consultation paper can be found on:

http://www.osc.gov.on.ca/documents/en/Securities-Category4/sn_20121214_45-710_exempt-market-review.pdf

Amendments to the OM Exemption

Reproduced from the What’s New webpage of the ASC:

The ASC has issued ASC Blanket Order 45-512 Exemption from certain financial statement requirements of Form 45-106F2 Offering Memorandum for Non-Qualifying Issuers in December 2012, which provides an exemption from certain financial statement-related requirements that apply when relying on the offering memorandum prospectus exemption (OM exemption).  The comment period ends on February 20, 2013.

The blanket order provides relief from certain financial statement-related requirements and, of particular significance, the usual requirement under the OM exemption for an audit on annual financial statements.

However, those relying on the blanket order are subject to a number of conditions including a $500,000 maximum limit on how much they can raise under it and a limit of $2,000 from each investor over a 12 month period. Issuers relying on the blanket order can continue to rely on other prospectus exemptions, including the OM exemption. The blanket order is designed to help early stage and other small businesses raise funds while maintaining investor protection.

Full text of the notice can be accessed through:

http://www.albertasecurities.com/securitiesLaw/Regulatory%20Instruments/4/45-512/4392270-v9-CSA_Multilateral_Notice_45-311_re_OM_blanket_order.pdf

4. Practice Notes, Publications

Collins Barrow publications can be found on: http://www.collinsbarrow.com

CPA Canada Update

The national CPA organization has been established effective January 1, 2013 and will support provincial bodies that have unified, and all those that will unify, under the CPA banner. The initial members of CPA Canada are CICA and CMA Canada. Provincial bodies (and their members) will become members of CPA Canada as they complete their process to become a CPA body.

Refer to http://cpacanada.ca/ for the latest national and provincial developments.

ACRONYMS USED

• AASB – Auditing and Assurance Standards Board
• AcSB – Accounting Standards Board
• ASC – Alberta Securities Commission
• IAASB – International Auditing and Assurance Standards Board
• IASB – International Accounting Standards Board
• IFRIC – International Financial Reporting Interpretations Committee
• CICA – Canadian Institute of Chartered Accountants
• CMA – Certified Management Accountants
• CPA – Chartered Professional Accountants
• CSA – Canadian Securities Administrators
• OSC – Ontario Securities Commission
• PSAB – Public Sector Accounting Board