Housekeeping amendments to Form 1 to adopt IFRS reporting requirements for leases

19-0036
Type: Rules Notice> Notice of Approval
Rule connection:
Legacy DMR Rules
Distribute internally to:
Internal Audit
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Contact:

Dennis Dirksen
Manager, Financial & Operations Compliance
Telephone:
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On January 30, 2019, the Board of Directors (the Board) of the Investment Industry Regulatory Organization of Canada (IIROC) approved the housekeeping amendments to Form 1 regarding the adoption of International Financial Reporting Standards (IFRS) 16 Leases (the Housekeeping Amendments). The main purpose of the Housekeeping Amendments is to ensure Form 1 is prepared in accordance with IFRS1 and the changes do not impact Dealer Members’ risk adjusted capital regarding non-refundable leasehold inducements.

Summary of the nature and purpose of the amendments

The changes to Form 1 are as follows:

  • removed line 65 "Non-refundable leasehold inducements" from Statement A, and renumbered the subsequent lines accordingly
  • removed notes to line 59 and line 65 from the Notes and Instructions to Statement A, and renumbered the Statement A line references
  • removed the reference to line "A-65" in Statement B, line 2, and renumbered affected Statement A line references
  • removed line 7 “Less:  Non-refundable leasehold inducements” from Statement C, and renumbered the subsequent lines and references to them accordingly
  • renumbered affected Statement A line references in Statement C
  • removed the words “non-current portion of lease liabilities - leasehold inducements,” in the note to Line 5 in the Notes and Instructions to Statement C
  • replaced the note reference to “Line 5” with “Lines 5, 6, 7 and 8” in the Notes and Instructions to Statement C because this note also covers these non-current liabilities lines
  • renumbered affected Statement C line references in the Notes and Instructions to Statement C
  • renumbered affected Statement C line references in Statement D
  • renumbered an affected Statement C line reference in Schedule 6A
  • renumbered an affected Statement C line reference in Schedule 13
  • renumbered an affected Statement C line reference in Schedule 13A
  • renumbered affected Statement A line reference in Statement E, line 41
  • renumbered affected Statement A line references in Statement F, lines 3, 6 and 13
  • replaced the reference to "Statement A, Line 65" with "Statement B, Line 2" in note 2(b) of the Notes and Instructions to Schedule 14, and renumbered affected Statement A line references.

We have classified our amendments to Form 1 as “housekeeping” because:

  • they are necessary to ensure IIROC Rules comply with applicable securities legislation, statutory and legal requirements as they allow Statement A of Form 1 to comply with IFRS 16
  • they do not impact risk adjusted capital regarding non-refundable leasehold inducements
  • there is no material impact on investors, issuers, Dealer Members or the capital markets in an province or territory of Canada.

Implementation

IFRS 16 is effective for annual reporting periods beginning on or after January 1, 2019. Dealer Members will implement IFRS 16 at different times during calendar year 2019 depending on their year-end. In addition, Form 1 Statement A must report the current and prior year balances. Therefore, some Dealer Members may require the use of line A65 until November 30, 2020. Currently, the Securities Industry Regulatory Financial Filings (SIRFF) system populates line B2 “Add: Non-refundable leasehold inducements”, from line A65.

Effective March 5, 2019 the only housekeeping amendment will be to Statement B of Form 1 to remove the reference to line A65 as set out in Appendices A and B. Dealer Members must populate line B2 manually as some may report non-refundable leasehold inducements (also referred to as non-refundable leasehold incentives in IFRS 16) on line A30, depending on their transition to IFRS 16.

The remaining Housekeeping Amendments as set out in Appendices C and D will take effect on December 1, 2020.

Appendices

Appendix A -       Blackline comparison of the housekeeping amendment to Statement B to current Statement B of Form 1

Appendix B -       Clean copy of the housekeeping amendment to Statement B of Form 1

Appendix C -       Blackline comparison of the housekeeping amendments to current Form 1

Appendix D -      Clean copy of the housekeeping amendments to Form 1.

  • 1. Form 1 is a special purpose report that includes financial statements and schedules, and is to be prepared in accordance with IFRS, except as prescribed by IIROC. The IIROC prescribed IFRS departures and accounting treatment are set out in General Notes and Definitions to Form 1.