Credit Unions

Transition issues for Canadian credit unions have been reduced as a result of the amendment to the Canadian GAAP standards on financial instruments in 2006, thereby bringing them closer to the applicable IFRS. However, additional differences between Canadian GAAP and IFRS still remain. The IFRS areas of significance for credit unions include:

Loan Loss Provisions – expected future losses can not be provisioned. Credit unions must apply an “incurred-loss” model in measuring loan impairments both individually and on a collective portfolio basis. As a result, general loan loss provision requirements are more stringent under IFRS. In the future, this is expected to cause additional income volatility.

Property, Plant and Equipment – components may need to be identified at a more detailed level and fair value versus cost measurement options need to be assessed.

Securitizations – it will be difficult to achieve off-balance sheet treatment for mortgage securitizations and credit card securitizations under IFRS.

To find out how MNP can help you make the transition to IFRS, please contact your local MNP advisor or call Jason Kingshott, CA, at 1.877.500.0792.