NON-CONSOLIDATED FINANCIAL STATEMENTS

For entities that already apply the accounting standards for private enterprises in Part II of the

CPA Canada Handbook Accounting (ASPE)

• Comments on the independent auditor’s report
• Independent auditors report
• Comments on the independent practitioners review engagement report
• Independent practitioners review engagement report
• Non-consolidated income statement
• Non-consolidated statement of retained earnings (deficit)
• Non-consolidated balance sheet
• Non-consolidated cash flow statement
• Notes to the non-consolidated financial statements

This model financial statement does not relate to the other models presented in the other sections
of this material.

This model takes account of ASPE issued up to June 2021 (No. II.26), which are mandatorily
effective for periods beginning on or after January 1, 2021. This model takes account of the initial
application of the amendments to FINANCIAL INSTRUMENTS, Section 3856.

Section 6 of the Additional Examples of Notes and Financial Statement Presentation provides
examples of notes specific to the COVID-19 pandemic.

Comments on the independent auditor’s report

The following illustrative independent auditors report is intended for entities that already apply
ASPE.

• The non-consolidated financial statements are prepared for the period ended
  December 31, 20X1.
• The company prepares non-consolidated financial statements only, and these are its
  general purpose financial statements.
• The non-consolidated financial statements for the periods ended December 31, 20X0 and
  20X1 were audited by the same auditor. An independent auditors report was issued for the
  non-consolidated financial statements for the period ended December 31, 20X0, and this
  report did not contain a qualified opinion.
• The report refers to the current period only.(1)
• The audit was conducted in accordance with Canadian generally accepted auditing
  standards.
• The entity does not disclose other information, as defined in CAS 720, The Auditor’s
  Responsibilities Relating to Other Information.
• The auditor concluded that the engagement was an audit of group financial statements
  under CAS 600, Special Considerations Audits of Group Financial Statements (Including
  the Work of Component Auditors) due to the presence of components accounted for using
  the equity method.

The auditor’s opinion on the non-consolidated financial statements refers to the current
period only, and the comparative information provided is presented as corresponding
figures.
Detailed explanations of the approaches respecting comparative

Independent auditor’s report

[Appropriate addressee]

Opinion
(1) We have audited the accompanying non-consolidated financial statements of Example Holding Limited, which
comprise the non-consolidated balance sheet as at December 31, 20X1, and the non-consolidated statements
of income, deficit and cash flows for the year then ended, and notes to the non-consolidated financial statements,
including a summary of significant accounting policies.

In our opinion, the accompanying non-consolidated financial statements present fairly, in all material respects,

the non-consolidated financial position of the Company as at December 31, 20X1, and the results of its non-
consolidated operations and its non-consolidated cash flows for the year then ended in accordance with

Canadian accounting standards for private enterprises.

Basis for Opinion

We conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities

under those standards are further described in the Auditors Responsibilities for the Audit of the Non-
Consolidated Financial Statements section of our report. We are independent of the Company in accordance

with the ethical requirements that are relevant to our audit of the non-consolidated financial statements in
Canada, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We
believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Responsibilities of Management and Those Charged with Governance for the Non-consolidated Financial
Statements

Management is responsible for the preparation and fair presentation of the non-consolidated financial statements

in accordance with Canadian accounting standards for private enterprises, and for such internal control as
management determines is necessary to enable the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.

In preparing the non-consolidated financial statements, management is responsible for assessing the Companys
ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless management either intends to liquidate the Company or to cease
operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Companys financial reporting process.
Auditors Responsibilities for the Audit of the Non-consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the non-consolidated financial statements as
a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with Canadian generally accepted auditing standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users
taken on the basis of these non-consolidated financial statements. As part of an audit in accordance with
Canadian generally accepted auditing standards, we exercise professional judgment and maintain professional
skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the non-consolidated financial statements, whether
  due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
  evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a
  material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
  collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
  appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of
  the Companys internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates
  and related disclosures made by management.
• Conclude on the appropriateness of managements use of the going concern basis of accounting and, based
  on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that
  may cast significant doubt on the Companys ability to continue as a going concern. If we conclude that a
  material uncertainty exists, we are required to draw attention in our auditors report to the related disclosures
  in the non-consolidated financial statements or, if such disclosures are inadequate, to modify our opinion.
  Our conclusions are based on the audit evidence obtained up to the date of our auditors report. However,
  future events or conditions may cause the Company to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the non-consolidated financial statements,
  including the disclosures, and whether the non-consolidated financial statements represent the underlying
  transactions and events in a manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the companies or business
  activities within the Group to express an opinion on the non-consolidated financial statements. We are
  responsible for the direction, supervision and performance of the group audit. We remain solely responsible
  for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.

[Auditor’s signature]
[Auditors address]
[Date of the auditors report]

Comments on the independent practitioners review engagement report

The following illustrative independent practitioners review engagement report is intended for
entities that already apply ASPE.

• The non-consolidated financial statements are prepared for the period ended
  December 31, 20X1.
• The company prepares non-consolidated financial statements only, and these are its
  general purpose financial statements.
• The non-consolidated financial statements for the periods ended December 31, 20X0 and
  20X1 were reviewed by the same practitioner. An independent practitioners review
  engagement report was issued for the non-consolidated financial statements for the period
  ended December 31, 20X0, and this report did not contain a qualified conclusion.
• The report refers to the current period only.
• The review engagement was conducted in accordance with Canadian generally accepted
  standards for review engagements.

CSRE 2400, Engagements to Review Historical Financial Statements, does not require
financial statements accompanied by review engagement reports to be marked as
unaudited. The document Engagements to Review Historical Financial Statements, Basis
for Conclusions indicates that the Auditing and Assurance Standards Board decided not to
include the requirement for the following reasons:

1. The financial statements are managements responsibility and it would be inappropriate
   to mandate that management label their financial statements.
2. A requirement to label each page of the financial statements as being unaudited would
   mean that if management refuses to do so the practitioner may need to qualify the report.
   However, qualifying a report on that basis would be difficult to explain since the financial
   reporting framework does not require management to label the level of assurance on its
   financial statements.

Other model reports are provided in the 2nd edition of the CPA Canada guide Reporting
Implications of CSRE 2400 (2018).1

The guide is updated periodically as further reporting
issues are identified. In each new version, the guide indicates its version date and highlights
the nature and extent of changes since the last version.

Independent practitioners review engagement report

[Appropriate addressee]

We have reviewed the accompanying non-consolidated financial statements of Example Holding Limited that
comprise the non-consolidated balance sheet as at December 31, 20X1, and the non-consolidated statements
of income, deficit and cash flows for the year then ended, and a summary of significant accounting policies and
other explanatory information.

Management’s Responsibility for the Non-consolidated Financial Statements

Management is responsible for the preparation and fair presentation of these non-consolidated financial
statements in accordance with Canadian accounting standards for private enterprises, and for such internal
control as management determines is necessary to enable the preparation of non-consolidated financial
statements that are free from material misstatement, whether due to fraud or error.

Practitioners Responsibility

Our responsibility is to express a conclusion on the accompanying non-consolidated financial statements based
on our review. We conducted our review in accordance with Canadian generally accepted standards for review
engagements, which require us to comply with relevant ethical requirements.

A review of non-consolidated financial statements in accordance with Canadian generally accepted standards
for review engagements is a limited assurance engagement. The practitioner performs procedures, primarily
consisting of making inquiries of management and others within the company, as appropriate, and applying
analytical procedures, and evaluates the evidence obtained.

The procedures performed in a review are substantially less in extent than, and vary in nature from, those
performed in an audit conducted in accordance with Canadian generally accepted auditing standards.
Accordingly, we do not express an audit opinion on these non-consolidated financial statements.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the non-consolidated
financial statements do not present fairly, in all material respects, the financial position of Example Holding
Limited as at December 31, 20X1, and the results of its operations and its cash flows for the year then ended in
accordance with Canadian accounting standards for private enterprises.

[Practitioners signature]
[Practitioners address]
[Date of the practitioners review engagement report]