Briefly:

Canadian publicly traded companies have only seven months to convert their accounting practices to International Financial Reporting Standards (IFRS), and yet half of them are less than 60% of the way through the process, according to a survey sponsored by PricewaterhouseCoopers (PwC).

The new reporting regime comes into effect January 1, 2011, and will require companies to explain possible changes in earnings per share and increases in pension liabilities.

The PwC survey found 28% of companies expect a decline in reported net income, 22% expect earnings per share to fall and 28% expect an increase in pension liabilities in the first year of adoption.

“Under IFRS, greater volatility in financial statements is expected,” says Diane Kazarian, PwC Canada’s national IFRS leader. “Clearly, this will have to be a communications priority in the coming months for CFOs and investor relations executives.”

The survey found IFRS preparedness was highest among larger public companies and those in regulated sectors. Utility companies were furthest ahead, with 73% saying they had completed more than 60% of the process. Insurers were the second “most complete” with 63% of companies saying they were at least 60% finished the process.

“The size of the company usually plays a big role in terms of expertise and available resources,” Kazarian explains. “Chief financial officers in smaller companies often have fewer personnel who are specifically dedicated to the conversion. Larger companies also started earlier due to the complexities of the transition process for them.”

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Sentry Select to merge funds

Sentry Select Capital has received securityholder approval to terminate five funds, merging their assets into three similar mandates. The mergers are expected to take place on or about June 4, 2010 and remain subject to regulatory approval.

Sentry Select Balanced Class and Sentry Select Canadian Energy Growth Class will be merged into the Sentry Select Canadian Income Class, while the Sentry Select Canadian Energy Growth Fund will be merged with the Sentry Select Energy Income Fund. The Sentry Select Balanced Fund and Sentry Select Dividend Growers Fund will be merged into the Sentry Select Canadian Income Fund.

Sentry Select also announced that securityholders of Sentry Select Small Cap Income Fund and Sentry Select Lazard Global Infrastructure Fund have approved proposed amendments to the investment objectives of the funds, effective May 28, 2010.

The Small Cap Fund will no longer focus on income trusts and will broaden the investable universe.

The new investment objectives of the Infrastructure Fund will eliminate the link between the Canadian Consumer Price Index and the current investment objectives. The Infrastructure Fund will now permit monthly distributions, rather than quarterly.

(05/26/10)

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.