TD Bank 2009 Annual Report Download - page 90

TD BANK FINANCIAL GROUP ANNUAL REPORT 2009 MANAGEMENT’S DISCUSSION AND ANALYSIS86
GOODWILL, INTANGIBLE ASSETS, AND FINANCIAL
STATEMENT CONCEPTS
Effective November 1, 2008, the Bank adopted CICA Handbook
Section 3064, Goodwill and Intangible Assets, which clarifies that
costs can be deferred only when they relate to an item that meets
the definition of an asset, and as a result, start-up costs must be
expensed as incurred. CICA Handbook Section 1000, Financial State-
ment Concepts, was also amended to provide consistency with the
new standard. The adoption of these standards did not have a material
impact on the financial position, cash flows, or earnings of the Bank.
CREDIT RISK AND FAIR VALUE
Effective November 1, 2008, the Bank adopted the CICA Emerging
Issues Committee (EIC) Abstract 173, Credit Risk and the Fair Value of
Financial Assets and Financial Liabilities. The abstract clarifies how
the Bank’s own credit risk and the credit risk of the counterparty
should be taken into account in determining the fair value of financial
assets and financial liabilities, including derivatives. The new guidance
did not have a material impact on the financial position, cash flows, or
earnings of the Bank.
U.S. GAAP
For the changes in accounting policies during the current year related
to U.S. GAAP, please see the Reconciliation of Canadian and U.S.
Generally Accepted Accounting Principles contained in the Bank’s 2009
Annual Report on Form 40-F filed with the U.S. SEC and available on
the Bank’s website at http://www.td.com/investor/index.jsp and at the
SEC’s website (http://www.sec.gov).
ACCOUNTING STANDARDS AND POLICIES
Future Accounting and
Reporting Changes
The Bank expects to adopt the following accounting standards in the
future. See Note 1 to the Bank’s Consolidated Financial Statements
for more details of future accounting and reporting changes.
Conversion to International Financial Reporting Standards
in Fiscal 2012
The AcSB confirmed that Canadian GAAP for publicly accountable
entities will converge with International Financial Reporting Standards
(IFRS). For the Bank, IFRS will be effective for the interim and annual
periods beginning in the first quarter of 2012. The fiscal 2012
Consolidated Financial Statements will include comparative fiscal
2011 financial results under IFRS.
The International Accounting Standards Board (IASB) issues interna-
tional accounting standards (IFRS). IFRS uses a conceptual framework
similar to Canadian GAAP, but there are some differences related to
items such as recognition, measurement and disclosures. Currently,
the IASB has several projects to review and amend existing IFRS, with
the completion date of their projects expected in 2010 and 2011. The
Bank is closely monitoring these changes as many of these accounting
standards are critical to the Bank. It is difficult to fully predict the impact
to the Bank’s Consolidated Financial Statements since accounting
standards and their interpretations are changing.
The Bank’s IFRS conversion project is progressing well. The Bank
continues to dedicate significant resources to this project. A detailed
analysis of the differences between IFRS and the Bank’s accounting
policies as well as an assessment of the impact of various alternatives is
underway. Training is being provided to key employees and the impact
of the transition on our business practices, information technology, and
internal controls over financial reporting is being closely monitored.
U.S. GAAP
For the future accounting changes related to U.S. GAAP, please see
the Reconciliation of Canadian and U.S. Generally Accepted Accounting
Principles contained in the Bank’s 2009 Annual Report on Form 40-F
filed with the U.S. SEC and available on the Bank’s website at
http://www.td.com/investor/index.jsp and at the SEC’s website
(http://www.sec.gov).
ACCOUNTING STANDARDS AND POLICIES
Controls and Procedures
DISCLOSURE CONTROLS AND PROCEDURES
An evaluation was performed under the supervision and with the
participation of the Bank’s management, including the Chief Executive
Officer and Chief Financial Officer, of the effectiveness of the Bank’s
disclosure controls and procedures, as defined in the rules of the SEC
and Canadian Securities Administrators, as of October 31, 2009.
Based on that evaluation, the Bank’s management, including the
Chief Executive Officer and Chief Financial Officer, concluded that
the Bank’s disclosure controls and procedures were effective as of
October 31, 2009.
MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER
FINANCIAL REPORTING
The Bank’s management is responsible for establishing and maintain-
ing adequate internal control over financial reporting for the Bank. The
Bank’s internal control over financial reporting includes those policies
and procedures that (1) pertain to the maintenance of records, that, in
reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the Bank; (2) provide reasonable assurance
that transactions are recorded as necessary to permit preparation of
financial statements in accordance with generally accepted accounting
principles, and that receipts and expenditures of the Bank are being
made only in accordance with authorizations of the Bank’s management
and directors; and (3) provide reasonable assurance regarding prevention
or timely detection of unauthorized acquisition, use or disposition of the
Bank’s assets that could have a material effect on the financial statements.
The Bank’s management has used the criteria established in Internal
Control – Integrated Framework issued by the Committee of Sponsor-
ing Organizations of the Treadway Commission to assess, with the
participation of the Chief Executive Officer and Chief Financial Officer,
the effectiveness of the Bank’s internal control over financial reporting.
Based on this assessment, management has concluded that as at
October 31, 2009, the Bank’s internal control over financial reporting
was effective based on the applicable criteria. The effectiveness of
the Bank’s internal control over financial reporting has been audited
by the independent auditors, Ernst & Young LLP, a registered public
accounting firm that has also audited the Consolidated Financial State-
ments of the Bank as of and for the year ended October 31, 2009.
Their report, on page 2 of the Consolidated Financial Statements
expresses an unqualified opinion on the effectiveness of the Bank’s
internal control over financial reporting as of October 31, 2009.
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
During the year and quarter ended October 31, 2009, there have been
no changes in the Bank’s policies and procedures and other processes
that comprise its internal control over financial reporting, that have
materially affected, or are reasonably likely to materially affect, the
Bank’s internal control over financial reporting.