IFRS Impact on Canadian Tire
Tangible assets
Definition:
✓ Formerly referred to as fixed assets or property, plant and equipment, and in this context, also
includes capitalized interest on borrowing costs, investment properties, leases and
impairments.
IFRS considerations:
Accounting/Cost:
Capitalized interest on all major projects is mandatory under IFRS
No significant impact on financial statements due to current Company accounting policy of
capitalizing interest on most major real estate projects
Option to value investment properties at cost or fair value - the Company will use cost model
✓ Option to value fixed assets at fair value on asset by asset basis for the opening IFRS B/S and
on an asset class by asset class basis going forward - the Company will use cost model
Certain operating leases will be brought on-balance sheet - approx $125MM
Impairment testing performed at cash generating unit (CGU) level using discounting of cash
flows and impairments are reversible
Classification:
✓
Some rental properties must be classified as investment properties as they are held primarily to
earn rental income
Fixed assets must be broken down into components that have different useful lives (subject to
materiality) and depreciated separately
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