The General Index of Financial Information categorizes financial line items by four-digit codes. With the exception of insurance companies, all corporations filing the T2 or T5013 forms must use this classification index when filing. By using the GIFI, you can file your financial information needing to submit your original statements, unless the Canada Revenue Agency requests them directly. Properly applying the GIFI codes ensures compliance with tax regulations, helps you verify balances, and reduces the risk of triggering a CRA business audit due to errors in your reporting.
Built Into Certified Tax Preparation Software
If you use a CRA-certified corporate or partnership tax software package, the GIFI is already built in to your software. The CRA provides an approved list of preparation software on its website. Additionally, some utility programs convert your statements to comply with GIFI coding when you export the data into your Canada corporate tax forms from other apps, such as business expense trackers.
GIFI Short Form
If you aren’t using tax preparation software, you must refer to the CRA forms, schedules, or guides to obtain the proper codes for each financial statement item. For a list of the most common items, you can reference Form T1178. If you’re filing for a corporation, but you aren’t using software to prepare your return and you have gross revenue and assets totaling less than $1,000,000 each, you must file Form T1178, as of Nov. 27, 2015. If you do not find the code you need on the short form, you can reference a comprehensive list on the CRAs RC4088 guide to the GIFI.
GIFI Schedules for Corporations and Partnerships
The GIFI schedules let you submit your opening and closing balance sheets and income statements, with spaces to enter the GIFI codes and amounts for each line item. Refer to Schedules T2SCH100 and T2SCH101 for reporting balance sheets and T2SCH125 for your income statement. If you operate a partnership, use T5013SCH100 for your balance sheet and T5013SCH125 for your income statement. These schedules also provide a helpful list of common codes for each statement. You must enter the same number of line items on the schedules as you have on your own financial statements and provide a GIFI code for each one, but you don’t need to include the information for individual accounts or subaccounts that feed into your financial statements.
Organize Your Records and Balance Your Books Using GIFI
Because the GIFI groups the codes into categories, including assets, liabilities and income, it offers a convenient way to organize your bookkeeping. Simply assign each accounting item the proper code, and sort them numerically to organize your books by category and subcategory. This also helps you determine whether your books balance properly by offering easy subtotaling, so you can verify your liabilities and equity or capital sections add up to assets and your income equals your revenue less expenses. GIFI codes streamline your bookkeeping and help you verify balances, and they ensure proper filing compliance at tax time, saving you from the hassle of audits and submitting additional documentation. Both short and comprehensive CRA forms and handy software GIFI tables make it easier than ever to use this index.