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Consolidated financial statements - CIBC · PDF fileConsolidated financial statements Financial reporting responsibility The management of Canadian Imperial Bank of Commerce (CIBC)

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  • Consolidated financial statements

    Consolidated financial statements

    93 Financial reporting responsibility

    94 Independent auditors report of registered public accounting firm to shareholders

    96 Consolidated balance sheet

    97 Consolidated statement of income

    98 Consolidated statement of comprehensive income

    99 Consolidated statement of changes in equity

    100 Consolidated statement of cash flows

    101 Notes to the consolidated financial statements

    Details of the notes to the consolidated financial statements

    101 Note 1 Basis of preparation and summary of significantaccounting policies

    110 Note 2 Fair value measurement119 Note 3 Significant acquisitions and dispositions120 Note 4 Securities121 Note 5 Loans124 Note 6 Structured entities and derecognition of

    financial assets127 Note 7 Land, buildings and equipment128 Note 8 Goodwill, software and other intangible assets130 Note 9 Other assets130 Note 10 Deposits130 Note 11 Other liabilities131 Note 12 Derivative instruments135 Note 13 Designated accounting hedges136 Note 14 Subordinated indebtedness137 Note 15 Common and preferred share capital140 Note 16 Capital Trust securities

    141 Note 17 Interest rate sensitivity142 Note 18 Share-based payments144 Note 19 Post-employment benefits149 Note 20 Income taxes151 Note 21 Earnings per share151 Note 22 Commitments, guarantees and pledged assets153 Note 23 Contingent liabilities and provision157 Note 24 Concentration of credit risk158 Note 25 Related-party transactions159 Note 26 Investments in equity-accounted associates and

    joint ventures160 Note 27 Significant subsidiaries161 Note 28 Segmented and geographic information163 Note 29 Financial instruments disclosures164 Note 30 Offsetting financial assets and liabilities165 Note 31 Interest income and expense166 Note 32 Future accounting policy changes166 Note 33 Subsequent event

    92 CIBC 2016 ANNUAL REPORT

  • Consolidated financial statements

    Financial reporting responsibilityThe management of Canadian Imperial Bank of Commerce (CIBC) is responsible for the preparation, presentation, accuracy and reliability of the AnnualReport, which includes the consolidated financial statements and managements discussion and analysis (MD&A). The consolidated financial statementshave been prepared in accordance with Section 308(4) of the Bank Act (Canada), which requires that the financial statements be prepared in accordancewith International Financial Reporting Standards as issued by the International Accounting Standards Board. The MD&A has been prepared in accordancewith the requirements of applicable securities laws.

    The consolidated financial statements and MD&A, contain items that reflect the best estimates and judgments of the expected effects of currentevents and transactions with appropriate consideration to materiality. Financial information appearing throughout the Annual Report is consistent with theconsolidated financial statements.

    Management has developed and maintains effective systems, controls and procedures to ensure that information used internally and disclosedexternally is reliable and timely. During the past year, we have continued to improve, document and test the design and operating effectiveness of internalcontrol over financial reporting. The results of our work have been subjected to audit by the shareholders auditors. Management has assessed theeffectiveness of CIBCs internal control over financial reporting as at year end using the Internal Control Integrated Framework issued by the Committeeof Sponsoring Organizations of the Treadway Commission (2013 framework). Based upon this assessment, we have determined that internal control overfinancial reporting is effective in all material respects and CIBC is in compliance with the requirements set by the U.S. Securities and Exchange Commission(SEC) under the U.S. Sarbanes-Oxley Act (SOX).

    CIBCs Chief Executive Officer and Chief Financial Officer have certified CIBCs annual filings with the SEC under SOX and with the CanadianSecurities Administrators under Canadian securities laws.

    The Internal Audit department reviews and reports on the effectiveness of CIBCs internal control, risk management and governance systems andprocesses, including accounting and financial controls, in accordance with the audit plan approved by the Audit Committee. Our Chief Auditor hasunrestricted access to the Audit Committee.

    The Board of Directors oversees managements responsibilities for financial reporting through the Audit Committee, which is composed ofindependent directors. The Audit Committee reviews CIBCs interim and annual consolidated financial statements and MD&A and recommends them forapproval by the Board of Directors. Other key responsibilities of the Audit Committee include monitoring CIBCs system of internal control, and reviewingthe qualifications, independence and performance of the shareholders auditors and internal auditors.

    Ernst & Young LLP, the external auditors, obtain an understanding of CIBCs internal controls and procedures for financial reporting to plan andconduct such tests and other audit procedures as they consider necessary in the circumstances to express their opinions in the reports that follow. Ernst &Young LLP has unrestricted access to the Audit Committee to discuss their audit and related matters.

    The Office of the Superintendent of Financial Institutions (OSFI) Canada is mandated to protect the rights and interest of depositors and creditors ofCIBC. Accordingly, OSFI examines and enquires into the business and affairs of CIBC, as deemed necessary, to ensure that the provisions of the Bank Act(Canada) are being complied with and that CIBC is in sound financial condition.

    Victor G. Dodig Kevin GlassPresident and Chief Executive Officer Chief Financial Officer November 30, 2016

    CIBC 2016 ANNUAL REPORT 93

  • Consolidated financial statements

    Independent auditors report of registered public accounting firm toshareholdersReport on the consolidated financial statementsWe have audited the accompanying consolidated financial statements of Canadian Imperial Bank of Commerce (CIBC), which comprise the consolidatedbalance sheet as at October 31, 2016 and 2015 and the consolidated statements of income, comprehensive income, changes in equity and cash flows foreach of the years in the three-year period ended October 31, 2016, and a summary of significant accounting policies and other explanatory information.

    Managements responsibility for the consolidated financial statementsManagement is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with International FinancialReporting Standards as issued by the International Accounting Standards Board, and for such internal control as management determines is necessary toenable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

    Auditors responsibilityOur responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance withCanadian generally accepted auditing standards and the standards of the Public Company Accounting Oversight Board (United States). Those standardsrequire that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financialstatements are free from material misstatement.

    An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. Theprocedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement of the consolidated financialstatements, whether due to fraud or error. In making those risk assessments, the auditors consider internal control relevant to the entitys preparation andfair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances. An audit alsoincludes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements, evaluating theappropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overallpresentation of the consolidated financial statements.

    We believe that the audit evidence we have obtained in our audits is sufficient and appropriate to provide a basis for our audit opinion.

    OpinionIn our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of CIBC as at October 31, 2016 and 2015,and its financial performance and its cash flows for each of the years in the three-year period ended October 31, 2016, in accordance with InternationalFinancial Reporting Standards as issued by the International Accounting Standards Board.

    Other matterWe have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), CIBCs internal control overfinancial reporting as of October 31, 2016, based on the criteria established in Internal Control Integrated Framework issued by the Committee ofSponsoring Organizations of the Treadway Commission (2013 framework) and our report dated November 30, 2016 expressed an unqualified opinion onCIBCs internal control over financial reporting.

    Ernst & Young LLPChartered Professional AccountantsLicensed Public AccountantsToronto, CanadaNovember 30, 2016

    94 CIBC 2016 ANNUAL REPORT

  • Consolidated financial statements

    Independent auditors report of registered public accounting firm toshare

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