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Sept. 2008

Clients meet new regulatory reporting requirements with help of CIBC Mellon

Late last year, the Canadian Institute of Chartered Accountants (CICA) announced a change in transaction cost accounting requirements for Canadian pension plans.

 

In the past, transaction costs were accounted for within the initial measurement of the value of an asset. Now, transaction costs are considered an expense that should be itemized separately in the statement of changes in net assets of each plan's annual report. This means that transaction costs incurred by Canadian pension plans are no longer considered part of the fair value of an investment.

 

This new accounting requirement is effective for all annual reporting periods ending on or after Dec. 31, 2007, but does not require restatement of prior periods.

 

To help our clients meet these new standards, CIBC Mellon proactively developed a flexible solution that provides clients with an electronic report, offering the underlying adjustments required to prepare their plan's annual financial statement. The report includes a statement of journal entries to reflect adjustments between reserves and expenses, and provides an explanation of the calculation methodology. This methodology is recognized industry-wide and is accepted by Canada's leading accounting firms. Reports providing details on the cost of purchases and transaction cost data within the journal statement are available in softcopy upon request.

 

By Arthur Wang, business analyst, business project group

 

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