Technology Company Accounting
SR&ED context, stock compensation and growth-stage reporting for startups and technology companies.
For a technology company the accounting decisions that matter most are the ones a future investor or acquirer will test: SR&ED-supporting records kept contemporaneously, stock option accounting done at grant, and a cap table that reconciles to the books.
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Key facts
| SR&ED records | Must be contemporaneous — reconstructed timesheets are the usual reason a claim is reduced |
|---|---|
| Québec credits | Provincial R&D incentives run alongside the federal claim and have their own conditions |
| CCPC status | Foreign or public control breaks it; a financing round can end it unnoticed |
| Stock options | Accounted for from grant, not exercise |
| Authorities | Canada Revenue Agency and Revenu Québec |
Technology companies scale fast and need finance to keep up. A&S Financials supports Montréal startups and tech firms with growth-stage reporting, stock-compensation accounting, and the record-keeping that supports SR&ED and investor reporting. We help you build a finance foundation that stands up to due diligence.
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- Growth-stage financial reporting
- SR&ED-ready record keeping
- Stock-option and equity compensation
- Investor and board reporting
- Payroll and contractor management
- Corporate tax and GST/QST
SR&ED claims are won or lost in the records, not the write-up
The technical narrative matters, but what survives review is the contemporaneous evidence: time tracked to projects as the work happened, design documents, test results, failed approaches and the decisions that followed them. Reconstructing timesheets after year end is the single most common reason a claim is reduced. Tracking project time as part of ordinary operations costs almost nothing and is what makes the difference under review. Québec runs its own R&D incentives alongside the federal claim, with their own conditions and their own review. Qualifying federally does not guarantee the provincial credit, so both should be scoped together rather than treated as one filing.
A financing round can quietly cost you CCPC status
CCPC status carries the small business deduction, the enhanced SR&ED treatment available to CCPCs, and eligibility for the capital gains exemption on qualifying shares. It requires that the corporation not be controlled by non-residents or public corporations. Control is measured in fact as well as in law, so a shareholders' agreement, a funding arrangement or an option that gives a foreign investor effective control can break the status even where the share register still looks Canadian. This is worth reviewing before signing a term sheet rather than at the next year end, because the loss is generally not reversible for the year and can materially change the value of the R&D programme.
Frequently asked questions
What records do I need for SR&ED?
Does taking foreign investment affect my taxes?
How are employee stock options accounted for?
What will an acquirer's due diligence look at?
Speak with a Montréal CPA
Contact us to discuss your accounting and tax needs — in the language you prefer.