Information for Accountants

This section is to provide information to accountants who are preparing verification statements or financial statements for TICO registrants. The sections of the Regulation that relate to financial criteria are sections 22, 24 and 27 of Regulation 26/05.

Due Date

The year end verification statements or financial statements are due within three months after the registrant’s year end. Should a registrant fail to file by the due date, the Registrar may issue a proposal to revoke the registrant’s registration.

However, it is possible to request an extension by filling in the Request for Filing Extension Form and explaining the reason for the late filing.  Please note that the request must be filed prior to the registrant’s year-end due date and is subject to the approval of the Registrar. The form can be found here.

Type of Financial Information Required

Businesses with Ontario gross sales under $2 million in the prior fiscal year do not require assurance from an LPA. Instead, a verification statement can be internally prepared by the registrant. The verification statement can be found here. 

Businesses with gross Ontario sales greater than $2 million in the prior fiscal year can also file a verification statement, however the filing regulation is time limited and affects those businesses with year ends from December 1, 2020 to November 30, 2024, providing four full years of relief from filing financial statements.  

However, if during the period, a registrant is otherwise required to prepare an annual financial statement with a review engagement report or audit opinion for any purpose, the registrant shall provide this report to TICO.

If preferred by the registrant, it can choose to file financial statements instead of the verification statement. If the registrant decides to file financial statements, they must be accompanied by a Review Engagement Report or an Audit Report. The report must be prepared by a Licensed Public Accountant, a person licensed under the Public Accountancy Act, 2004. 

What Should the Verification Statements/Financial Statements include?

The verification statement is available in a PDF fillable form, requiring specific financial information, which can be obtained from the registrant’s financial records.  All fields on the form must be filled out, even if the balance is nil.  Therefore, data fields on the verification statement should not be left blank.    

For financial statement filing, the financial statements shall include a balance sheet, income statement, cashflow, disclosure of Ontario gross sales, customer deposit liability pursuant to section 27 of the Regulation, supplier prepayments (if applicable), and trust bank account balance.

Disclosure of Ontario gross sales

Ontario gross sales include all sales made by the registrant from their Ontario location (for Wholesalers, this includes all sales made to Ontario retailers) during the period being reported. This includes all travel sales invoiced to the customer, regardless of whether the customer funds are received directly by the registrants or via credit where the payment flows directly to the supplier.

Registrants who operate as wholesalers and have wholesale sales, which are sales to retail and/or wholesale agencies, are required to report Ontario gross sales to retail or wholesale agencies operating in Ontario only.  Sales to retail and wholesale agencies operating outside of Ontario should be excluded.   This exception only applies to registrants that have wholesale sales.  All retail sales (i.e., sales to end consumers) are considered Ontario gross sales.

The Ontario gross sales disclosed in the verification statement or financial statements are compared by TICO to the sales reported for the purpose of contributions made to the compensation fund.  Discrepancy in the sales reported will be addressed with the registrant. 

Ontario gross sales are required to be input on line #2 in the verification statement.  In the financial statements, Ontario gross sales can be disclosed on the income statement or in a note to the financial statements.

Disclosure of Trust Position

Disclosure of the customer deposit liability balance, supplier prepaid balance (if applicable) and the trust bank account balances must be reported on lines 11a, 6c, and 6b on the verification statement, respectively. On the financial statements, disclosure of these balances can either be stated as line items on the balance sheet or in the notes to the financial statements.  

If the disclosure is on the balance sheet the balance of funds held in trust should be disclosed separately from other cash or bank assets as well as any prepayments to suppliers that relate to the customer deposits. The customer deposits liability at the balance sheet date should be disclosed in the liability section. The customer deposits liability represents funds received not yet passed to suppliers (including gift certificates not yet redeemed or vouchers issued for which the registrant received and holds customer funds).

If the disclosure is made in the notes to the financial statements, the balance in the trust bank accounts should be disclosed along with the balance in customer deposits liability and any trust account related balance in supplier prepayments.  Even if there are no customer deposits on hand, a nil balance should be disclosed.