ANNE X II
Reconciliation of
Canadian GAAP to IFRS
Reconciliation of Equity Reported Under Canadian GAAP to IFRS
(in millions of dollars)
Equity of Canada Under Canadian GAAP
Financial Instruments
Derecognition
Related Party Transactions
Employee Benefits
Actuarial Gains and Losses
Past Service Costs
Transitional Asset
Other
Investment Property
Revenue Recognition
Income Taxes
Equity of Canada Under IFRS
96
Canada Mortgage and Housing Corporation
31 December
2010
1 January
2010
11,435
9,263
(a) (i)
(a) (ii)
(988)
30
(531)
2
(b) (i)
(b) (ii)
(b) (iii)
(b) (iv)
(c)
(d)
(e)
(328)
(20)
(12)
81
51
257
(246)
(29)
15
(4)
69
49
150
(929)
10,506
(525)
8,738
Notes
Annex II Reconciliation of Canadian GAAP to IFRS
Reconciliation of Net Income Reported Under Canadian GAAP to IFRS
Notes
(in millions of dollars)
Net Income Under Canadian GAAP
Differences Increasing (Decreasing) Previously Reported Net Income:
Financial Instruments
Derecognition
Related Party Transactions
Year ended
31 December
2010
1,768
Employee Benefits
Actuarial Gains and Losses
Past Service Costs
Transitional Asset
Other
Investment Property
Revenue Recognition
Income Taxes
(a) (i)
(a) (ii)
(455)
28
(b) (i)
(b) (ii)
(b) (iii)
14
9
(27)
4
12
2
106
(c)
(d)
(e)
(307)
1,461
Net Income under IFRS
Reconciliation of Comprehensive Income Reported Under Canadian GAAP to IFRS
Notes
(in millions of dollars)
Comprehensive Income Under Canadian GAAP
Differences Increasing (Decreasing) Previously Reported
Net Income
Differences Increasing (Decreasing) Previously Reported
Other Comprehensive Income:
Employee Benefits - Actuarial Gains and Losses
Year ended
31 December
2010
2,171
(307)
(b) (i)
(96)
(403)
1,768
Comprehensive Income under IFRS
Differences between Canadian GAAP
and IFRS Accounting Policies
(a) Financial Instruments
The reconciling items in the preceding tables represent
the significant differences between CMHC’s previous
accounting policies under Canadian GAAP and its
current accounting policies under IFRS. The policy
differences are explained in the following narratives.
The explanations are not a complete summary of all
the differences between Canadian GAAP and IFRS.
Under GAAP, the NHA MBS were considered to have
been transferred to the purchaser and therefore were
“derecognized” on the tranferors’ books. Under IFRS,
title is not deemed to have passed and therefore the
NHA MBS are moved back onto the seller’s Balance
Sheet. CMHC, as a buyer of NHA MBS through the
CMB and IMPP program, will no longer be able to
(i) Derecognition
Canada Mortgage and Housing Corporation
97
201 2 - 2 0 1 6 S u m m a r y o f t h e C o r p o r a t e P l a n
record the NHA MBS as a security but rather as
financing secured by NHA MBS and reinvestment
assets as collateral.
As a result, the following changes occurred:
n
As a result, the following changes occurred:
n
n
Net Income for the period ending
31 December 2010 decreased by $339 million; and
Retained Earnings at 1 January 2010 decreased by
$395 million (31 December 2010 - $736 million),
the net of tax impact of the differences for Financial
Instruments – Derecognition.
(ii) Related Party Transactions
Under GAAP, Borrowings from the Government of
Canada classified as Other Financial Liabilities were
recognized as related party transactions and recorded
at the amount of consideration received as established
and agreed to with the government. Under IFRS, the
concept of related parties does not exist. Therefore, the
Borrowings from the Government of Canada classified
as Other Financial Liabilities must be recognized at
fair value.
n
Under GAAP, Past Service Costs were amortized to
Net Income on a straight-line basis over the expected
average remaining service period of active employees
under the plans. Under IFRS, Past Service Costs are
recognized in Net Income on a straight-line basis over
the average period until the benefits become vested. If
the benefits are already vested upon any changes to a
defined benefit plan, Past Service Costs are recognized
in Net Income immediately.
As a result, the following changes occurred:
n
n
Net Income for the period ending
31 December 2010 increased by $21 million; and
Retained Earnings at 1 January 2010 decreased by
$1 million (31 December 2010 - $23 million), the
net of tax impact of the differences for Financial
Instruments – Related Party Transactions.
(b) Employee Benefits
(i) Actuarial Gains and Losses
Under GAAP, excesses of Net Actuarial Gains and
Losses over 10% of the greater of the benefit obligation
and the fair value of the plan assets were amortized to
Net Income on a straight-line basis over the expected
average remaining service period of active employees
under the plans. Under IFRS, Actuarial Gains and
Losses must be recognized in Other Comprehensive
Income as incurred.
98
Canada Mortgage and Housing Corporation
Retained Earnings decreased at 1 January 2010 by
$206 million (31 December 2010 - $293 million),
the net of tax impact of the differences for
Employee Benefits - Actuarial Gains and Losses.
(ii) Past Service Costs
As a result, the following changes occurred:
n
Net Income for the period ending
31 December 2010 increased by $10 million; and Other
Comprehensive Income decreased by $96 million
n
Net Income for the period ending
31 December 2010 increased by $7 million; and
Retained Earnings decreased at 1 January 2010 by
$22 million (31 December 2010 - $15 million), the
net of tax impact of the differences for Employee
Benefits – Past Service Costs.
(iii) Transitional Asset and Obligation
Under GAAP, a Transitional Asset (Obligation) was
set up when CMHC first applied CICA Section 3461,
Employee Future Benefits and amortized to Net Income
on a straight-line basis over the expected average
remaining service period of active employees under the
plans. Under IFRS, this Transitional Asset (Obligation)
had to be eliminated.
As a result, the following changes occurred:
n
Net Income for the period ending
31 December 2010 decreased by $21 million; and
Annex II Reconciliation of Canadian GAAP to IFRS
n
Retained Earnings increased at 1 January 2010 by
$11 million (decreased 31 December 2010 - $9
million), the net of tax impact of the differences
for Employee Benefits – Transitional Asset
and Obligation.
(iv) Other
Under IFRS an additional liability for certain shortterm employee benefits was recognized resulting in
the following:
n
n
Net Income for the period ending
31 December 2010 increased by $4 million.
Retained Earnings decreased at 1 January 2010 by
$4 million (31 December 2010 - $0 million), the
net of tax impact of this difference.
related to the issuance and ongoing administration
of Timely Payment Guarantees are recognized in
Operating Expenses as incurred.
As a result, the following changes occurred:
n
n
Net Income for the period ending
31 December 2010 increased by $2 million; and
Retained Earnings increased at 1 January 2010
by $36 million (31 December 2010 - $38 million),
the net of tax impact of the differences for
Revenue Recognition.
(E) Income Taxes
Differences for income taxes include the effect of
recording the deferred tax effect of differences
between Canadian GAAP and IFRS.
(c) Investment Property
Under GAAP, Investment Property was measured at
cost less accumulated amortization and any impairment
losses. Under IFRS, Investment Property must be
measured at fair value.
As a result, the following changes occurred:
n
n
Net Income for the period ending
31 December 2010 increased by $9 million; and
Retained Earnings increased at 1 January 2010
by $52 million (31 December 2010 - $61 million),
the net of tax impact of the differences for
Investment Property.
(d) Revenue Recognition
Under GAAP, Securitization Application and
Compensatory fees were deferred and recognized
as Revenues over the term of the security issue on
a straight-line basis and costs directly related to
the issuance and ongoing administration of Timely
Payment Guarantees were deferred and recognized as
Operating Expenses over the term of the security issue.
Under IFRS, Application and Compensatory fees are
recognized as revenue immediately and costs directly
Canada Mortgage and Housing Corporation
99