This document discusses the implications of Canada's transition from Canadian GAAP to IFRS for independent broker dealers. The transition will take effect for fiscal years beginning on or after January 1, 2011. It will require broker dealers to provide comparative financial statements under the new IFRS standards. The transition involves changes beyond just accounting, including implications for systems, human resources, finance, controllership, and operations. Key success factors include senior level support, effective project planning, training, resources, analysis of differences between standards, and timely implementation. Mathews Michaels offers services to help organizations assess the impact, develop a project plan, establish change management processes, provide industry guidance on accounting policies, execute the transition project, and provide an

1. April 15, 2009
IFRS and Independent Broker Dealers
Prepared by: John Chick, C.A.

2. Outline
Background
Implications to Broker Dealers
Scope of Changes
Key Success Factors
Key Considerations
What Mathews Michaels Provides

3. Background
 Canadian GAAP is moving to IFRS (International Financial Reporting
Standards)
 Effective date of transition will be 1/Jan/2011 (i.e. standards in place at that
date)
 Applies to all Publicly Accountable Enterprises (i.e. public companies plus
certain private companies and public entities which are subject to regulation
or public scrutiny)
 Optional for private profit-oriented enterprises (who may want to adopt to
maintain a comparable, competitive market position)
 SEC will accept financial statements prepared in accordance with IFRS
 U.S. is planning to transition FASB to IFRS
 IFRS is a concepts-based vs. rules-based set of accounting principles

4. Implications for Investment Dealers
 Likely will need to adopt IFRS for fiscal years starting on or after 1/Jan/2011
(e.g. 31/Dec/2011 year ends)
 Applies to first interim financial statements (e.g. 31/Mar/2011)
 Must provide full comparative financial information prepared under same
basis of accounting (e.g. 2010, which must also be reported under existing
Canadian GAAP)
 Must explain significant upcoming changes in accounting principles (i.e.
note disclosure will be required starting at least in 2009)
 Likely have clients who will need to adopt IFRS
 May need to provide more than one type of client accounting & reporting to
meet differing client needs

5. Scope of Changes
 This is not just an accounting exercise
 There are likely to be implications to other areas for example:
 Systems – new data requirements
 Human Resources – employee long term incentive plans
 Finance – debt covenant and taxation planning
 Controllership – financial reporting and budget
process
 Operations – policies and procedures
 Investor Relations– KPI’s and dividend policy

6. Key Success Factors
 Support at senior levels of organization
 Structured and effective project planning
 Appropriate education and training
 Sufficient key resources
 Complete and detailed analysis
 Avoid mistake of simplistic conclusions
 Many key differences are buried in the details of both Canadian GAAP and
IFRS
 Need to identify and understand differences before quantifying implications
and making decisions regarding choice of accounting principle
 Timely implementation
 Regular, focused and effective communication

7. Key Concerns
 “The Devil is in the Details”
 This change will not be suitable for a “One Size Fits All” process
 IFRS 1 provides a number of exemptions and limits certain choices for first-
time adopters of IFRS
 Crucial to understand the implications of these before making final decisions
regarding choice of accounting principles provided under remainder of IFRS
 Should ensure choice of accounting principles provides proper balance
between cost/benefit of effort and best practices

8. What Mathews Michaels Provides
 Assess the Canadian GAAP to IFRS impact for your organization
 Provide a detailed project plan and identify the resource requirements to
successfully get you to end of job
 Establish the Change Management processes to oversee the project and
communication with all stakeholders
 Work with you on key accounting policies areas and provide opinion on
industry approach
 Execute project using our measurable project criteria that we will evaluate
on an ongoing basis
 Provide an in house IFRS manual for your organization
 If you’re not already working on it, the time to start is NOW

9. For more information on offerings and marketing materials feel free to access our
website
www.mathewsmichales.com
Thank You

10. For more information on offerings and marketing materials feel free to access our
website
www.mathewsmichales.com
Thank You