Final: IFRS-Related Amendments to Securities Rules and Policies
Final: IFRS-Related Amendments to Securities Rules and Policies
IFRS-RELATED AMENDMENTS TO
SECURITIES RULES AND POLICIES
(Final)
IFRS-RELATED AMENDMENTS TO SECURITIES RULES AND POLICIES
(Final)
IFRS-RELATED AMENDMENTS TO NATIONAL INSTRUMENT 52-107 ACCEPTABLE ACCOUNTING PRINCIPLES AND AUDITING STANDARDS AND CERTAIN OTHER INSTRUMENTS
National Instrument 52-107 Acceptable Accounting Principles and Auditing Standards
Companion Policy 52-107CP Acceptable Accounting Principles and Auditing Standards
Amendments to National Instrument 14-101 Definitions
Consequential Amendments to National Instruments and Multilateral Instruments
Consequential Amendments to National Policies and to Companion Policy 11-102CP Passport System
Consequential Ontario Amendments
IFRS-RELATED AMENDMENTS TO CONTINUOUS DISCLOSURE RULES
Amendment Instrument for National Instrument 51-102 Continuous Disclosure Obligations
Amendments to Companion Policy 51-102CP Continuous Disclosure Obligations
Amendment Instrument for National Instrument 71-102 Continuous Disclosure and Other Exemptions Relating to Foreign Issuers
Amendments to Companion Policy 71-102CP Continuous Disclosure and Other Exemptions Relating to Foreign Issuers
Amendment Instrument for Ontario Securities Commission Rule 51-801 Implementing National Instrument 51-102 Continuous Disclosure Obligations
Amendment Instrument for Ontario Securities Commission Rule 71-802 Implementing National Instrument 71-102 Continuous Disclosure and Other Exemptions Relating to Foreign Issuers
IFRS-RELATED AMENDMENTS TO PROSPECTUS RULES
Amendment Instrument for National Instrument 41-101 General Prospectus Requirements
Amendments to Companion Policy 41-101CP Companion Policy to National Instrument 41-101 General Prospectus Requirements
Amendment Instrument for National Instrument 44-101 Short Form Prospectus Distributions
Amendments to Companion Policy 44-101CP to National Instrument 44-101 Short Form Prospectus Distributions
Amendment Instrument for National Instrument 44-102 Shelf Distributions
IFRS-RELATED AMENDMENTS TO CERTIFICATION RULE
Amendment Instrument for National Instrument 52-109 Certification of Disclosure in Issuers' Annual and Interim Filings
Amendments to Companion Policy 52-109CP to National Instrument 52-109 Certification of Disclosure in Issuers' Annual and Interim Filings
IFRS-RELATED AMENDMENTS TO REGISTRATION MATERIALS
Amendments to National Instrument 31-103 Registration Requirements and Exemptions
Amendments to Companion Policy 31-103CP Registration Requirements and Exemptions
Amendments to National Instrument 33-109 Registration Information
IFRS-RELATED AMENDMENTS TO NATIONAL INSTRUMENT 45-106 PROSPECTUS AND REGISTRATION EXEMPTIONS AND COMPANION POLICY 45-106CP PROSPECTUS AND REGISTRATION EXEMPTIONS
Amendments to National Instrument 45-106 Prospectus and Registration Exemptions
Amendments to Companion Policy 45-106CP Prospectus and Registration Exemptions
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National Instrument 52-107 Acceptable Accounting Principles and Auditing Standards
National Instrument 52-107
Acceptable Accounting Principles and Auditing Standards
PART 1: DEFINITIONS AND INTERPRETATION
1.1 Definitions -- In this Instrument:
"accounting principles" means a body of principles relating to accounting that are generally accepted in a jurisdiction of Canada or a foreign jurisdiction and includes, without limitation, IFRS, Canadian GAAP and U.S. GAAP;
"acquisition statements" means financial statements of an acquired business or a business to be acquired, or an operating statement for an oil and gas property that is an acquired business or a business to be acquired, that are
(a) required to be filed under National Instrument 51-102 Continuous Disclosure Obligations,
(b) included in a prospectus pursuant to Item 35 of Form 41-101F1 Information Required in a Prospectus,
(c) required to be included in a prospectus under National Instrument 44-101 Short Form Prospectus Distributions, or
(d) except in Ontario, included in an offering memorandum required under National Instrument 45-106 Prospectus and Registration Exemptions;
"auditing standards" means a body of standards relating to auditing that are generally accepted in a jurisdiction of Canada or a foreign jurisdiction and includes, without limitation, Canadian GAAS, International Standards on Auditing, U.S. AICPA GAAS and U.S. PCAOB GAAS;
"business acquisition report" means a completed Form 51-102F4 Business Acquisition Report;
"convertible security" means a security of an issuer that is convertible into, or carries the right of the holder to acquire, or of the issuer to cause the acquisition of, a security of the same issuer;
"credit support issuer" means an issuer of securities for which a credit supporter has provided a guarantee or alternative credit support;
"credit supporter" means a person or company that provides a guarantee or alternative credit support for any of the payments to be made by an issuer of securities as stipulated in the terms of the securities or in an agreement governing rights of, or granting rights to, holders of the securities;
"designated foreign issuer" means a foreign issuer
(a) that does not have a class of securities registered under section 12 of the 1934 Act and is not required to file reports under section 15(d) of the 1934 Act,
(b) that is subject to foreign disclosure requirements in a designated foreign jurisdiction, and
(c) for which the total number of equity securities beneficially owned by residents of Canada does not exceed 10%, on a fully-diluted basis, of the total number of equity securities of the issuer, calculated in accordance with sections 1.2 and 1.3;
"designated foreign jurisdiction" means Australia, France, Germany, Hong Kong, Italy, Japan, Mexico, the Netherlands, New Zealand, Singapore, South Africa, Spain, Sweden, Switzerland or the United Kingdom of Great Britain and Northern Ireland;
"exchangeable security" means a security of an issuer that is exchangeable for, or carries the right of the holder to acquire, or of the issuer to cause the acquisition of, a security of another issuer;
"exchange-traded security" means a security that is listed on a recognized exchange or is quoted on a recognized quotation and trade reporting system or is listed on an exchange or quoted on a quotation and trade reporting system that is recognized for the purposes of National Instrument 21-101 Marketplace Operation and National Instrument 23-101 Trading Rules;
"executive officer" means, for an issuer, an individual who is
(a) a chair, vice-chair or president;
(b) a vice-president in charge of a principal business unit, division or function including sales, finance or production; or
(c) performing a policy-making function in respect of the issuer;
"financial statements" includes interim financial reports;
"foreign disclosure requirements" means the requirements to which a foreign issuer is subject concerning disclosure made to the public, to securityholders of the issuer or to a foreign regulatory authority
(a) relating to the foreign issuer and the trading in its securities, and
(b) that is made publicly available in the foreign jurisdiction under
(i) the securities laws of the foreign jurisdiction in which the principal trading market of the foreign issuer is located, or
(ii) the rules of the marketplace that is the principal trading market of the foreign issuer;
"foreign issuer" means an issuer that is incorporated or organized under the laws of a foreign jurisdiction, unless
(a) outstanding voting securities of the issuer carrying more than 50% of the votes for the election of directors are beneficially owned by residents of Canada, and
(b) any of the following apply:
(i) the majority of the executive officers or directors of the issuer are residents of Canada;
(ii) more than 50% of the consolidated assets of the issuer are located in Canada; or
(iii) the business of the issuer is administered principally in Canada;
"foreign registrant" means a registrant that is incorporated or organized under the laws of a foreign jurisdiction, unless
(a) outstanding voting securities of the registrant carrying more than 50% of the votes for the election of directors are beneficially owned by residents of Canada, and
(b) any of the following apply:
(i) the majority of the executive officers or directors of the registrant are residents of Canada;
(ii) more than 50% of the consolidated assets of the registrant are located in Canada; or
(iii) the business of the registrant is administered principally in Canada;
"foreign regulatory authority" means a securities commission, exchange or other securities market regulatory authority in a designated foreign jurisdiction;
"IAS 27" means International Accounting Standard 27 Consolidated and Separate Financial Statements, as amended from time to time;
"IAS 34" means International Accounting Standard 34 Interim Financial Reporting, as amended from time to time;
"inter-dealer bond broker" means a person or company that is approved by the Investment Industry Regulatory Organization of Canada under its Rule No. 36 Inter-Dealer Bond Brokerage Systems, as amended, and is subject to its Rule No. 36 and its Rule 2100 Inter-Dealer Bond Brokerage Systems, as amended from time to time;
"IPO venture issuer" has the same meaning as in section 1.1 of National Instrument 41-101 General Prospectus Requirements;
"issuer's GAAP" means the accounting principles used to prepare an issuer's financial statements, as permitted by this Instrument;
"marketplace" means
(a) an exchange,
(b) a quotation and trade reporting system,
(c) a person or company not included in paragraph (a) or (b) that
(i) constitutes, maintains or provides a market or facility for bringing together buyers and sellers of securities,
(ii) brings together the orders for securities of multiple buyers and sellers, and
(iii) uses established, non-discretionary methods under which the orders interact with each other, and the buyers and sellers entering the orders agree to the terms of a trade, or
(d) a dealer that executes a trade of an exchange-traded security outside of a marketplace,
but does not include an inter-dealer bond broker;
"multiple convertible security" means a security of an issuer that is convertible into, or exchangeable for, or carries the right of the holder to acquire, or of the issuer to cause the acquisition of, a convertible security, an exchangeable security or another multiple convertible security;
"principal trading market" means the published market on which the largest trading volume in the equity securities of the issuer occurred during the issuer's most recently completed financial year that ended before the date the determination is being made;
"published market" means, for a class of securities, a marketplace on which the securities have traded that discloses, regularly in a publication of general and regular paid circulation or in a form that is broadly distributed by electronic means, the prices at which those securities have traded;
"recognized exchange" means
(a) in Ontario, an exchange recognized by the securities regulatory authority to carry on business as a stock exchange,
(b) in Québec, a person or company authorized by the securities regulatory authority to carry on business as an exchange, and
(c) in every other jurisdiction of Canada, an exchange recognized by the securities regulatory authority as an exchange, self-regulatory organization or self-regulatory body;
"recognized quotation and trade reporting system" means
(a) in every jurisdiction of Canada other than British Columbia, a quotation and trade reporting system recognized by the securities regulatory authority under securities legislation to carry on business as a quotation and trade reporting system, and
(b) in British Columbia, a quotation and trade reporting system recognized by the securities regulatory authority under securities legislation as a quotation and trade reporting system or as an exchange;
"SEC issuer" means an issuer that
(a) has a class of securities registered under section 12 of the 1934 Act or is required to file reports under section 15(d) of the 1934 Act, and
(b) is not registered or required to be registered as an investment company under the Investment Company Act of 1940 of the United States of America, as amended from time to time;
"SEC foreign issuer" means a foreign issuer that is also an SEC issuer;
"underlying security" means a security issued or transferred, or to be issued or transferred, in accordance with the terms of a convertible security, an exchangeable security or a multiple convertible security;
"U.S. GAAP" means generally accepted accounting principles in the United States of America that the SEC has identified as having substantial authoritative support, as supplemented by Regulation S-X under the 1934 Act, as amended from time to time;
"U.S. AICPA GAAS" means auditing standards of the American Institute of Certified Public Accountants, as amended from time to time;
"U.S. PCAOB GAAS" means auditing standards of the Public Company Accounting Oversight Board (United States of America), as amended from time to time;
"venture issuer",
(a) in the case of acquisition statements required by National Instrument 51-102 Continuous Disclosure Obligations, has the same meaning as in subsection 1.1(1) of that Instrument, and
(b) in the case of acquisition statements referred to in paragraph (b), (c) or (d) of the definition of "acquisition statements", has the same meaning as in section 1.1 of National Instrument 41-101 General Prospectus Requirements.
1.2 Determination of Canadian Shareholders for Calculation of Designated Foreign Issuer and Foreign Issuer --
(1) For the purposes of paragraph (c) of the definition of "designated foreign issuer" in section 1.1 and for the purposes of paragraphs 3.9(1)(c) and 4.9(c), a reference to equity securities beneficially owned by residents of Canada includes
(a) any underlying securities that are equity securities of the foreign issuer, and
(b) the equity securities of the foreign issuer represented by an American depositary receipt or an American depositary share issued by a depositary holding equity securities of the foreign issuer.
(2) For the purposes of paragraph (a) of the definition of "foreign issuer" in section 1.1, securities represented by American depositary receipts or American depositary shares issued by a depositary holding voting securities of the foreign issuer must be included as outstanding in determining both the number of votes attached to securities beneficially owned by residents of Canada and the number of votes attached to all of the issuer's outstanding voting securities.
1.3 Timing for Calculation of Designated Foreign Issuer, Foreign Issuer and Foreign Registrant -- For the purposes of paragraph (c) of the definition of "designated foreign issuer" in section 1.1, paragraph (a) of the definition of "foreign issuer" in section 1.1, and paragraph (a) of the definition of "foreign registrant" in section 1.1, the calculation is made
(a) if the issuer has not completed one financial year, on the earlier of
(i) the date that is 90 days before the date of its prospectus, and
(ii) the date that it became a reporting issuer; and
(b) for all other issuers and for registrants, on the first day of the most recent financial year or interim period for which financial performance is presented in the financial statements or interim financial information filed or delivered or included in a prospectus.
1.4 Interpretation --
(1) For the purposes of this Instrument, a reference to "prospectus" includes a preliminary prospectus, a prospectus, an amendment to a preliminary prospectus and an amendment to a prospectus.
(2) For the purposes of this Instrument, a reference to information being "included in" another document means information reproduced in the document or incorporated into the document by reference.
PART 2: APPLICATION
2.1 Application --
(1) This Instrument does not apply to investment funds.
(2) This Instrument applies to
(a) all financial statements and interim financial information delivered by registrants to the securities regulatory authority or regulator under National Instrument 31-103 Registration Requirements and Exemptions,
(b) all financial statements filed, or included in a document that is filed, by an issuer under National Instrument 51-102 Continuous Disclosure Obligations or National Instrument 71-102 Continuous Disclosure and Other Exemptions Relating to Foreign Issuers,
(c) all financial statements included in
(i) a prospectus, a take-over bid circular or any other document that is filed by or in connection with an issuer, or
(ii) except in Ontario, an offering memorandum required to be delivered by an issuer under National Instrument 45-106 Prospectus and Registration Exemptions,
(d) any operating statement for an oil and gas property that is an acquired business or a business to be acquired, that is
(i) filed by an issuer under National Instrument 51-102 Continuous Disclosure Obligations,
(ii) included in a prospectus, take-over bid circular or any other document that is filed by or in connection with an issuer, or
(iii) except in Ontario, included in an offering memorandum required to be delivered by an issuer under National Instrument 45-106 Prospectus and Registration Exemptions,
(e) any other financial statements filed, or included in a document that is filed, by a reporting issuer,
(f) summary financial information for a credit supporter or credit support issuer that is
(i) filed under National Instrument 51-102 Continuous Disclosure Obligations,
(ii) included in a prospectus, take-over bid circular or any other document that is filed by or in connection with an issuer, or
(iii) except in Ontario, included in an offering memorandum required to be delivered by an issuer under National Instrument 45-106 Prospectus and Registration Exemptions,
(g) summarized financial information of an acquired business or business to be acquired that is, or will be, an investment accounted for by the issuer using the equity method, that is
(i) filed by an issuer under National Instrument 51-102 Continuous Disclosure Obligations,
(ii) included in a prospectus, take-over bid circular or any other document that is filed by or in connection with an issuer, or
(iii) except in Ontario, included in an offering memorandum required to be delivered by an issuer under National Instrument 45-106 Prospectus and Registration Exemptions, and
(h) pro forma financial statements
(i) filed, or included in a document that is filed, by an issuer under National Instrument 51-102 Continuous Disclosure Obligations or National Instrument 71-102 Continuous Disclosure and Other Exemptions Relating to Foreign Issuers,
(ii) included in a prospectus, take-over bid circular or any other document that is filed by or in connection with an issuer, or
(iii) otherwise filed, or included in a document that is filed, by a reporting issuer.
PART 3: RULES APPLYING TO FINANCIAL YEARS BEGINNING ON OR AFTER JANUARY 1, 2011
3.1 Definitions and Application --
(1) In this Part:
"publicly accountable enterprise" means a publicly accountable enterprise as defined in the Handbook;
"private enterprise" means a private enterprise as defined in the Handbook.
(2) This Part applies to financial statements, financial information, operating statements and pro forma financial statements for periods relating to financial years beginning on or after January 1, 2011.
3.2 Acceptable Accounting Principles -- General Requirements --
(1) Financial statements referred to in paragraphs 2.1(2)(b), (c) and (e), other than acquisition statements, must
(a) be prepared in accordance with Canadian GAAP applicable to publicly accountable enterprises, and
(b) disclose
(i) in the case of annual financial statements, an unreserved statement of compliance with IFRS, and
(ii) in the case of an interim financial report, an unreserved statement of compliance with IAS 34.
(2) Despite subsection (1), in the case of an interim financial report that is not required under securities legislation to provide comparative interim financial information,
(a) the statement of financial position, statement of comprehensive income, statement of changes in equity, statement of cash flows and explanatory notes must be prepared in accordance with IAS 34 other than the requirement in IAS 34 to include comparative financial information; and
(b) the interim financial report must disclose that
(i) it does not comply with IAS 34 because it does not include comparative interim financial information, and
(ii) the statement of financial position, statement of comprehensive income, statement of changes in equity, statement of cash flows and explanatory notes have been prepared in accordance with IAS 34 other than the requirement in IAS 34 to include comparative financial information.
(3) Financial statements and interim financial information referred to in paragraph 2.1(2)(a) must
(a) be prepared in accordance with Canadian GAAP applicable to publicly accountable enterprises, except that any investments in subsidiaries, jointly controlled entities and associates must be accounted for as specified for separate financial statements in IAS 27, and
(b) in the case of annual financial statements,
(i) include the following statement:
These financial statements are prepared in accordance with the financial reporting framework specified in [insert "paragraph 3.2(3)(a) ", "subsection 3.2(4)" or "section 3.15" as applicable] of National Instrument 52-107 Acceptable Accounting Principles and Auditing Standards for financial statements delivered by registrants.
and
(ii) describe the financial reporting framework used to prepare the financial statements.
(4) Despite paragraph (3)(a), financial statements and interim financial information referred to in paragraph 2.1(2)(a) for periods relating to a financial year beginning in 2011 may be prepared in accordance with Canadian GAAP applicable to publicly accountable enterprises, except that
(a) any investments in subsidiaries, jointly controlled entities and associates must be accounted for as specified for separate financial statements in IAS 27,
(b) comparative information relating to the preceding financial year must be excluded, and
(c) the first day of the financial year to which the financial statements or interim financial information relates must be used as the date of transition to the financial reporting framework.
(5) Financial statements must be prepared in accordance with the same accounting principles for all periods presented in the financial statements.
(6) Financial information referred to in paragraphs 2.1(2)(f) and (g) must
(a) present the line items for summary financial information or summarized financial information required by National Instrument 45-106 Prospectus and Registration Exemptions or National Instrument 51-102 Continuous Disclosure Obligations, as the case may be, and
(b) in the case of summarized financial information of an acquired business or business to be acquired that is, or will be, an investment accounted for by the issuer using the equity method,
(i) be prepared using accounting policies that
(A) are permitted by one of Canadian GAAP applicable to publicly accountable enterprises, IFRS, U.S. GAAP or Canadian GAAP applicable to private enterprises, and
(B) would apply to the information if the information were presented as part of a complete set of financial statements,
(ii) include the following statement:
This information is prepared in accordance with the financial reporting framework specified in subsection 3.2(6) of National Instrument 52-107 Acceptable Accounting Principles and Auditing Standards for summarized financial information of a business accounted for using the equity method.
and
(iii) describe the accounting policies used to prepare the information.
3.3 Acceptable Auditing Standards -- General Requirements --
(1) Financial statements, other than acquisition statements, that are required by securities legislation to be audited must
(a) be audited in accordance with Canadian GAAS and be accompanied by an auditor's report that
(i) expresses an unmodified opinion,
(ii) identifies all financial periods presented for which the auditor has issued an auditor's report,
(iii) is in the form specified by Canadian GAAS for an audit of financial statements prepared in accordance with a fair presentation framework, and
(iv) refers to IFRS as the applicable fair presentation framework if the financial statements are prepared in accordance with Canadian GAAP applicable to publicly accountable enterprises, and
(b) if the issuer or registrant has changed its auditor and one or more of the comparative periods presented in the financial statements were audited by a predecessor auditor, be accompanied by the predecessor auditor's reports on the comparative periods.
(2) Paragraph (1)(b) does not apply to financial statements referred to in paragraphs 2.1(2)(a) and (b) if the auditor's report described in paragraph (1)(a) refers to the predecessor auditor's reports on the comparative periods.
3.4 Acceptable Auditors -- An auditor's report filed by an issuer or delivered by a registrant must be prepared and signed by a person or company that is authorized to sign an auditor's report under the laws of a jurisdiction of Canada or a foreign jurisdiction, and that meets the professional standards of that jurisdiction.
3.5 Presentation and Functional Currencies --
(1) The presentation currency must be prominently displayed in financial statements.
(2) Financial statements must disclose the functional currency if it is different than the presentation currency.
3.6 Credit Supporters --
(1) Unless subsection 3.2(1) applies, if a credit support issuer files, or includes in a prospectus, financial statements of a credit supporter, the credit supporter's financial statements must
(a) be prepared in accordance with the accounting principles and audited in accordance with the auditing standards that would apply under this Instrument if the credit supporter were to file financial statements referred to in paragraph 2.1(2)(b), and
(b) identify the accounting principles used to prepare the financial statements.
(2) If a credit support issuer files, or includes in a prospectus, summary financial information for the credit supporter or credit support issuer,
(a) the summary financial information must, in addition to satisfying other requirements in this Instrument
(i) prominently display the presentation currency, and
(ii) disclose the functional currency if it is different from the presentation currency, and
(b) the amounts presented in the summary financial information must be derived from financial statements of the credit supporter or credit support issuer that, if required by securities legislation to be audited, are audited in accordance with the auditing standards that would apply under this Instrument if the credit supporter or credit support issuer, as the case may be, were to file financial statements referred to in paragraph 2.1(2)(b).
3.7 Acceptable Accounting Principles for SEC Issuers --
(1) Despite subsection 3.2(1), an SEC issuer's financial statements referred to in paragraphs 2.1(2)(b), (c) and (e) and financial information referred to in paragraphs 2.1(2)(f) and (g) that are filed with or delivered to a securities regulatory authority or regulator, other than acquisition statements, may be prepared in accordance with U.S. GAAP.
(2) The notes to the financial statements referred to in subsection (1) must identify the accounting principles used to prepare the financial statements.
3.8 Acceptable Auditing Standards for SEC Issuers --
(1) Despite subsection 3.3(1), an SEC issuer's financial statements referred to in paragraphs 2.1(2)(b), (c) and (e) and financial information referred to in paragraphs 2.1(2)(f) and (g) that are filed with or delivered to a securities regulatory authority or regulator, other than acquisition statements, and that are required by securities legislation to be audited, may be audited in accordance with U.S. PCAOB GAAS if the financial statements are accompanied by
(a) an auditor's report prepared in accordance with U.S. PCAOB GAAS that
(i) expresses an unqualified opinion,
(ii) identifies all financial periods presented for which the auditor has issued an auditor's report, and
(iii) identifies the auditing standards used to conduct the audit and the accounting principles used to prepare the financial statements, and
(b) the predecessor auditor's reports on the comparative periods, if the issuer has changed its auditor and one or more of the comparative periods presented in the financial statements were audited by the predecessor auditor.
(2) Paragraph (1)(b) does not apply to financial statements referred to in paragraph 2.1(2)(b) if the auditor's report described in paragraph (1)(a) refers to the predecessor auditor's reports on the comparative periods.
3.9 Acceptable Accounting Principles for Foreign Issuers --
(1) Despite subsection 3.2(1), a foreign issuer's financial statements referred to in paragraphs 2.1(2)(b), (c) and (e) that are filed with or delivered to a securities regulatory authority or regulator, other than acquisition statements, may be prepared in accordance with
(a) IFRS,
(b) U.S. GAAP, if the issuer is an SEC foreign issuer,
(c) accounting principles that meet the disclosure requirements for foreign private issuers, as that term is defined for the purposes of the 1934 Act, if
(i) the issuer is an SEC foreign issuer,
(ii) on the last day of the most recently completed financial year the total number of equity securities of the issuer beneficially owned by residents of Canada does not exceed 10%, on a fully-diluted basis, of the total number of equity securities of the issuer, and
(iii) the financial statements include any reconciliation to U.S. GAAP required by the SEC, or
(d) accounting principles that meet the foreign disclosure requirements of the designated foreign jurisdiction to which the issuer is subject, if the issuer is a designated foreign issuer.
(2) The notes to the financial statements must identify the accounting principles used to prepare the financial statements.
3.10 Acceptable Auditing Standards for Foreign Issuers --
(1) Despite subsection 3.3(1), a foreign issuer's financial statements referred to in paragraphs 2.1(2)(b), (c) and (e) that are filed with or delivered to a securities regulatory authority or regulator, other than acquisition statements, that are required by securities legislation to be audited may be audited in accordance with
(a) International Standards on Auditing if the financial statements are accompanied by
(i) an auditor's report that
(A) expresses an unmodified opinion,
(B) identifies all financial periods presented for which the auditor has issued the auditor's report,
(C) identifies the auditing standards used to conduct the audit and the accounting principles used to prepare the financial statements, and
(D) is prepared in accordance with the same auditing standards used to conduct the audit, and
(ii) the predecessor auditor's reports on the comparative periods, if the issuer has changed its auditor and one or more of the comparative periods presented in the financial statements were audited by the predecessor auditor,
(b) U.S. PCAOB GAAS if the financial statements are accompanied by
(i) an auditor's report that
(A) expresses an unqualified opinion,
(B) identifies all financial periods presented for which the auditor has issued the auditor's report,
(C) identifies the auditing standards used to conduct the audit and the accounting principles used to prepare the financial statements, and
(D) is prepared in accordance with the same auditing standards used to conduct the audit, and
(ii) the predecessor auditor's reports on the comparative periods, if the issuer has changed its auditor and one or more of the comparative periods presented in the financial statements were audited by the predecessor auditor, or
(c) auditing standards that meet the foreign disclosure requirements of the designated foreign jurisdiction to which the issuer is subject if
(i) the issuer is a designated foreign issuer,
(ii) the financial statements are accompanied by an auditor's report prepared in accordance with the same auditing standards used to conduct the audit, and
(iii) the auditor's report identifies the auditing standards used to conduct the audit and the accounting principles used to prepare the financial statements.
(2) Subparagraph (1)(a)(ii) or (b)(ii) does not apply to financial statements referred to in paragraph 2.1(2)(b) if the auditor's report described in subparagraph (1)(a)(i) or (b)(i), as the case may be, refers to the predecessor auditor's reports on the comparative periods.
3.11 Acceptable Accounting Principles for Acquisition Statements --
(1) Acquisition statements must be prepared in accordance with one of the following accounting principles:
(a) Canadian GAAP applicable to publicly accountable enterprises;
(b) IFRS;
(c) U.S. GAAP;
(d) accounting principles that meet the disclosure requirements for foreign private issuers, as that term is defined for the purposes of the 1934 Act, if
(i) the issuer or the acquired business or business to be acquired is an SEC foreign issuer,
(ii) on the last day of the most recently completed financial year the total number of equity securities of the SEC foreign issuer beneficially owned by residents of Canada does not exceed 10%, on a fully-diluted basis, of the total number of equity securities of the SEC foreign issuer, and
(iii) the financial statements include any reconciliation to U.S. GAAP required by the SEC;
(e) accounting principles that meet the foreign disclosure requirements of the designated foreign jurisdiction to which the issuer or the acquired business or business to be acquired is subject, if
(i) the issuer or business is a designated foreign issuer, and
(ii) in the case where the issuer's GAAP differs from the accounting principles used to prepare the acquisition statements, for the most recently completed financial year and interim period presented, the notes to the acquisition statements:
(A) describe the material differences between the issuer's GAAP and the accounting principles used to prepare the acquisition statements that relate to recognition, measurement and presentation, and
(B) quantify the effect of each difference referred to in clause (A) and include a tabular reconciliation between profit or loss reported in the acquisition statements and profit or loss computed in accordance with the issuer's GAAP;
(f) Canadian GAAP applicable to private enterprises if
(i) the acquisition statements consolidate any subsidiaries and account for significantly influenced investees and joint ventures using the equity method,
(ii) financial statements for the acquired business or business to be acquired were not previously prepared in accordance with one of the accounting principles specified in paragraphs (a) to (e) for the periods presented in the acquisition statements,
(iii) the acquisition statements are accompanied by a notice stating:
These financial statements are prepared in accordance with Canadian GAAP applicable to private enterprises, which are Canadian accounting standards for private enterprises in Part II of the Handbook.
The recognition, measurement and disclosure requirements of Canadian GAAP applicable to private enterprises differ from those of Canadian GAAP applicable to publicly accountable enterprises, which are International Financial Reporting Standards incorporated into the Handbook.
The pro forma financial statements included in the document include adjustments relating to the [insert "acquired business" or "business to be acquired" as applicable] and present pro forma information prepared using principles that are consistent with the accounting principles used by the issuer.
and
(iv) in the case of acquisition statements included in a document filed by an issuer that is not a venture issuer, and is not an IPO venture issuer, for all financial years and the most recently completed interim period presented, the notes to the acquisition statements
(A) describe the material differences between the issuer's GAAP and the accounting principles used to prepare the acquisition statements that relate to recognition, measurement and presentation,
(B) quantify the effect of each difference referred to in clause (A), and include a tabular reconciliation between profit or loss reported in the acquisition statements and profit or loss computed in accordance with the issuer's GAAP, and
(C) for each difference referred to in clause (A) that relates to measurement, disclose and discuss the material inputs or assumptions underlying the measurement of the relevant amount computed in accordance with the issuer's GAAP, consistent with the disclosure requirements of the issuer's GAAP.
(2) Acquisition statements must be prepared in accordance with the same accounting principles for all periods presented.
(3) Acquisition statements to which paragraph (1)(a) applies must disclose
(a) in the case of annual financial statements, an unreserved statement of compliance with IFRS, and
(b) in the case of interim financial reports, an unreserved statement of compliance with IAS 34.
(4) Unless paragraph (1)(a) applies, the notes to the acquisition statements must identify the accounting principles used to prepare the acquisition statements.
(5) Despite subsections (1), (2) and (4), if acquisition statements are an operating statement for an oil and gas property that is an acquired business or business to be acquired
(a) the operating statement must include at least the following line items:
(i) gross revenue;
(ii) royalty expenses;
(iii) production costs;
(iv) operating income;
(b) the line items in the operating statement must be prepared using accounting policies that
(i) are permitted by one of Canadian GAAP applicable to publicly accountable enterprises, IFRS, U.S. GAAP or Canadian GAAP applicable to private enterprises, and
(ii) would apply to those line items if those line items were presented as part of a complete set of financial statements, and
(c) the operating statement must
(i) include the following statement:
This operating statement is prepared in accordance with the financial reporting framework specified in subsection 3.11(5) of National Instrument 52-107 Acceptable Accounting Principles and Auditing Standards for an operating statement.
and
(ii) describe the accounting policies used to prepare the operating statement.
(6) Despite subsections (1), (2) and (4), if the acquisition statements are based on information from the financial records of another entity whose operations included the acquired business or the business to be acquired and there are no separate financial records for the acquired business or the business to be acquired,
(a) the acquisition statements must be prepared in accordance with one of Canadian GAAP applicable to publicly accountable enterprises, IFRS, U.S. GAAP or Canadian GAAP applicable to private enterprises and, in addition, must include
(i) all assets and liabilities directly attributable to the acquired business or business to be acquired,
(ii) all revenue and expenses directly attributable to the acquired business or business to be acquired,
(iii) if there are expenses for the acquired business or business to be acquired that are common expenses shared with the other entity, a portion of those expenses allocated on a reasonable basis to the acquired business or business to be acquired, and
(iv) income and capital taxes calculated as if the entity had been a separate legal entity and had filed a separate tax return for the period presented,
(b) the acquisition statements must include the following statement:
The financial statements are prepared in accordance with a financial reporting framework specified in subsection 3.11(6) of National Instrument 52-107 Acceptable Accounting Principles and Auditing Standards for carve-out financial statements.
(c) the acquisition statements must describe the financial reporting framework used to prepare the acquisition statements, including the method of allocation for each significant line item, and
(d) in the case of acquisition statements prepared in accordance with Canadian GAAP applicable to private enterprises
(i) the acquisition statements must consolidate any subsidiaries and account for significantly influenced investees and joint ventures using the equity method,
(ii) the acquisition statements must be accompanied by a notice stating:
These financial statements are prepared in accordance with Canadian GAAP applicable to private enterprises, which are Canadian accounting standards for private enterprises in Part II of the Handbook.
The recognition, measurement and disclosure requirements of Canadian GAAP applicable to private enterprises differ from those of Canadian GAAP applicable to publicly accountable enterprises, which are International Financial Reporting Standards incorporated into the Handbook.
The pro forma financial statements included in the document include adjustments relating to the [insert "acquired business" or "business to be acquired" as applicable] and present pro forma information prepared using principles that are consistent with the accounting principles used by the issuer.
and
(iii) in the case of acquisition statements included in a document filed by an issuer that is not a venture issuer, and is not an IPO venture issuer, for all financial years and the most recently completed interim period presented, the notes to the acquisition statements must
(A) describe the material differences between the issuer's GAAP and the accounting principles used to prepare the acquisition statements that relate to recognition, measurement and presentation,
(B) quantify the effect of each difference referred to in clause (A), and include a tabular reconciliation between profit or loss reported in the acquisition statements and profit or loss computed in accordance with the issuer's GAAP, and
(C) for each difference referred to in clause (A) that relates to measurement, disclose and discuss the material inputs or assumptions underlying the measurement of the relevant amount computed in accordance with the issuer's GAAP, consistent with the disclosure requirements of the issuer's GAAP.
3.12 Acceptable Auditing Standards for Acquisition Statements --
(1) Acquisition statements that are required by securities legislation to be audited must be accompanied by an auditor's report and audited in accordance with one of the following auditing standards:
(a) Canadian GAAS;
(b) International Standards on Auditing;
(c) U.S. PCAOB GAAS;
(d) U.S. AICPA GAAS, if the acquired business or business to be acquired is not an SEC issuer;
(e) auditing standards that meet the foreign disclosure requirements of the designated foreign jurisdiction to which the issuer is subject, if the issuer is a designated foreign issuer.
(2) The auditor's report must,
(a) if paragraph (1)(a) or (b) applies, express an unmodified opinion,
(b) if paragraph (1)(c) or (d) applies, express an unqualified opinion,
(c) unless paragraph (1)(e) applies, identify all financial periods presented for which the auditor's report applies,
(d) identify the auditing standards used to conduct the audit,
(e) identify the accounting principles used or, if subsection 3.11(5) or (6) applies, the financial reporting framework used, to prepare the acquisition statements, unless the auditor's report accompanies acquisition statements prepared in accordance with Canadian GAAP applicable to publicly accountable enterprises and audited in accordance with Canadian GAAS, and
(f) if paragraph (1) (a) or (b) applies and subsection 3.11(5) does not,
(i) be in the form specified by the standards referred to in paragraph (1)(a) or (b), as applicable, for an audit of financial statements prepared in accordance with a fair presentation framework, and
(ii) refer to IFRS as the applicable fair presentation framework if the financial statements are prepared in accordance with Canadian GAAP applicable to publicly accountable enterprises.
(3) Despite paragraphs (2)(a) and (b), an auditor's report that accompanies acquisition statements may express a qualification of opinion relating to inventory if
(a) the issuer includes in the business acquisition report, prospectus or other document containing the acquisition statements, a statement of financial position for the acquired business or business to be acquired that is for a date that is subsequent to the date to which the qualification relates, and
(b) the statement of financial position referred to in paragraph (a) is accompanied by an auditor's report that does not express a qualification of opinion relating to closing inventory.
3.13 Financial Information for Acquisitions Accounted for by the Issuer Using the Equity Method --
(1) If an issuer files, or includes in a prospectus, summarized financial information of an acquired business or business to be acquired that is, or will be, an investment accounted for by the issuer using the equity method, the financial information must
(a) meet the requirements in subsections 3.11(1), (2) and (4) if the term "acquisition statements" in those subsections is read as "summarized financial information", and
(b) disclose the presentation currency for the financial information, and disclose the functional currency if it is different than the presentation currency.
(2) If the financial information referred to in subsection (1) is required by securities legislation to be audited or derived from audited financial statements, the financial information must
(a) either
(i) meet the requirements in section 3.12 if the term "acquisition statements" in that section is read as "summarized financial information", or
(ii) be derived from financial statements that meet the requirements in section 3.12 if the term "acquisition statements" in that section is read as "financial statements from which is derived summarized financial information", and
(b) be audited, or derived from financial statements that are audited, by a person or company that is authorized to sign an auditor's report under the laws of a jurisdiction of Canada or a foreign jurisdiction, and that meets the professional standards of that jurisdiction.
3.14 Acceptable Accounting Policies for Pro Forma Financial Statements --
(1) An issuer's pro forma financial statements must be prepared using accounting policies that
(a) are permitted by the issuer's GAAP, and
(b) would apply to the information presented in the pro forma financial statements if that information were included in the issuer's financial statements for the same period as that of the pro forma financial statements.
(2) Despite subsection (1), if an issuer's financial statements include, or are accompanied by, a reconciliation to U.S. GAAP, the issuer's pro forma financial statements for the same period as the issuer's financial statements may be prepared using accounting policies that
(a) are permitted by U.S. GAAP, and
(b) would apply to the information presented in the pro forma financial statements if that information were included in the reconciliation.
(3) Despite subsection (1), if the accounting principles used to prepare an issuer's most recent annual financial statements differ from the accounting principles used to prepare the issuer's interim financial report for a subsequent period, the issuer may prepare a pro forma income statement for the same period as that of its most recent annual financial statements using accounting policies that
(a) are permitted by the accounting principles that were used to prepare the issuer's interim financial report, and
(b) would apply to the information presented in the pro forma income statement if that information were included in the issuer's interim financial report.
3.15 Acceptable Accounting Principles for Foreign Registrants -- Despite paragraph 3.2 (3)(a), financial statements and interim financial information delivered by a foreign registrant may be prepared in accordance with
(a) IFRS, except that any investments in subsidiaries, jointly controlled entities and associates must be accounted for as specified for separate financial statements in IAS 27,
(b) U.S. GAAP, except that any investments in subsidiaries, jointly controlled entities and associates must be accounted for as specified for separate financial statements in IAS 27, or
(c) accounting principles that meet the disclosure requirements of a foreign regulatory authority to which the registrant is subject, if it is a foreign registrant incorporated or organized under the laws of that designated foreign jurisdiction.
3.16 Acceptable Auditing Standards for Foreign Registrants --
(1) Despite subsection 3.3(1), financial statements referred to in paragraph 2.1(2)(a) that are delivered by a foreign registrant and required by securities legislation to be audited may be audited in accordance with
(a) International Standards on Auditing if the financial statements are accompanied by
(i) an auditor's report that
(A) expresses an unmodified opinion,
(B) identifies all financial periods presented for which the auditor has issued the auditor's report,
(C) identifies the auditing standards used to conduct the audit and the accounting principles used to prepare the financial statements, and
(D) is prepared in accordance with the same auditing standards used to conduct the audit, and
(ii) the predecessor auditor's reports on the comparative periods, if the foreign registrant has changed its auditor and one or more of the comparative periods presented in the financial statements were audited by the predecessor auditor,
(b) U.S. PCAOB GAAS or U.S. AICPA GAAS if the financial statements are accompanied by
(i) an auditor's report that
(A) expresses an unqualified opinion,
(B) identifies all financial periods presented for which the auditor has issued the auditor's report,
(C) identifies the auditing standards used to conduct the audit and the accounting principles used to prepare the financial statements, and
(D) is prepared in accordance with the same auditing standards used to conduct the audit, and
(ii) the predecessor auditor's reports on the comparative periods, if the foreign registrant has changed its auditor and one or more of the comparative periods presented in the financial statements were audited by the predecessor auditor, or
(c) auditing standards that meet the foreign disclosure requirements of the designated foreign jurisdiction to which the registrant is subject if
(i) it is a foreign registrant incorporated or organized under the laws of that designated foreign jurisdiction,
(ii) the financial statements are accompanied by an auditor's report prepared in accordance with the same auditing standards used to conduct the audit, and
(iii) the auditor's report identifies the accounting principles used to prepare the financial statements.
(2) Subparagraph (1)(a)(ii) or (b)(ii) does not apply if the auditor's report described in subparagraph (1)(a)(i) or (b)(i), as the case may be, refers to the predecessor auditor's reports on the comparative periods.
PART 4: RULES APPLYING TO FINANCIAL YEARS BEGINNING BEFORE JANUARY 1, 2011
4.1 Definitions and Application --
(1) In this Part:
"Canadian GAAP - Part V" means generally accepted accounting principles determined with reference to Part V of the Handbook applicable to public enterprises;
"public enterprise" means a public enterprise as defined in Part V of the Handbook.
(2) This Part applies to financial statements, financial information, operating statements and pro forma financial statements for periods relating to financial years beginning before January 1, 2011.
4.2 Acceptable Accounting Principles -- General Requirements --
(1) Financial statements, other than financial statements delivered by registrants and acquisition statements, must be prepared in accordance with Canadian GAAP -- Part V.
(2) Financial statements and interim financial information delivered by a registrant to the securities regulatory authority, must be prepared in accordance with Canadian GAAP -- Part V except that the financial statements and interim financial information must be prepared on a non-consolidated basis.
(3) Financial statements must be prepared in accordance with the same accounting principles for all periods presented in the financial statements.
(4) The notes to the financial statements must identify the accounting principles used to prepare the financial statements.
4.3 Acceptable Auditing Standards -- General Requirements -- Financial statements, other than acquisition statements, that are required by securities legislation to be audited must be audited in accordance with Canadian GAAS and be accompanied by an auditor's report that
(a) expresses an unmodified opinion,
(b) identifies all financial periods presented for which the auditor has issued an auditor's report,
(c) refers to the predecessor auditor's reports on the comparative periods, if the issuer or registrant has changed its auditor and one or more of the comparative periods presented in the financial statements were audited by the predecessor auditor, and
(d) identifies the accounting principles used to prepare the financial statements.
4.4 Acceptable Auditors -- An auditor's report filed by an issuer or delivered by a registrant must be prepared and signed by a person or company that is authorized to sign an auditor's report under the laws of a jurisdiction of Canada or a foreign jurisdiction, and that meets the professional standards of that jurisdiction.
4.5 Measurement and Reporting Currencies --
(1) The reporting currency must be disclosed on the face page of the financial statements or in the notes to the financial statements unless the financial statements are prepared in accordance with Canadian GAAP -- Part V and the reporting currency is the Canadian dollar.
(2) The notes to the financial statements must disclose the measurement currency if it is different than the reporting currency.
4.6 Credit Supporters --
(1) Unless subsection 4.2(1) applies, if a credit support issuer files, or includes in a prospectus, financial statements of a credit supporter, the credit supporter's financial statements must
(a) be prepared in accordance with the accounting principles and audited in accordance with the auditing standards that apply under this Instrument if the credit supporter were to file financial statements referred to in paragraph 2.1(2)(b),
(b) identify the accounting principles used to prepare the financial statements, and
(c) disclose the reporting currency for the financial statements, and disclose the measurement currency if it is different than the reporting currency.
(2) If a credit support issuer files, or includes in a prospectus, summary financial information for the credit supporter or credit support issuer,
(a) the summary financial information must
(i) be prepared in accordance with the accounting principles that this Instrument requires to be used in preparing financial statements if the credit supporter or credit support issuer, as the case may be, were to file financial statements referred to in paragraph 2.1(2)(b),
(ii) identify the accounting principles used to prepare the summary financial information, and
(iii) disclose the reporting currency for the financial information, and disclose the measurement currency if it is different than the reporting currency, and
(b) the amounts presented in the summary financial information must be derived from financial statements of the credit supporter or credit support issuer that, if required by securities legislation to be audited, are audited in accordance with the auditing standards that apply under this Instrument if the credit supporter or credit support issuer, as the case may be, were to file financial statements referred to in paragraph 2.1(2)(b).
4.7 Acceptable Accounting Principles for SEC Issuers --
(1) Despite subsections 4.2(1) and (3), financial statements of an SEC issuer that are filed with or delivered to a securities regulatory authority or regulator, other than acquisition statements, may be prepared in accordance with U.S. GAAP provided that, if the SEC issuer previously filed or included in a prospectus financial statements prepared in accordance with Canadian GAAP -- Part V, the SEC issuer complies with the following:
(a) the notes to the first two sets of the issuer's annual financial statements after the change from Canadian GAAP -- Part V to U.S. GAAP and the notes to the issuer's interim financial statements for interim periods during those two years
(i) explain the material differences between Canadian GAAP -- Part V and U.S. GAAP that relate to recognition, measurement and presentation,
(ii) quantify the effect of material differences between Canadian GAAP -- Part V and U.S. GAAP that relate to recognition, measurement and presentation, including a tabular reconciliation between net income reported in the financial statements and net income computed in accordance with Canadian GAAP -- Part V, and
(iii) provide disclosure consistent with disclosure requirements of Canadian GAAP -- Part V to the extent not already reflected in the financial statements;
(b) financial information for any comparative periods that were previously reported in accordance with Canadian GAAP -- Part V are presented
(i) as previously reported in accordance with Canadian GAAP -- Part V,
(ii) as restated and presented in accordance with U.S. GAAP, and
(iii) supported by an accompanying note that
(A) explains the material differences between Canadian GAAP -- Part V and U.S. GAAP that relate to recognition, measurement and presentation, and
(B) quantifies the effect of material differences between Canadian GAAP -- Part V and U.S. GAAP that relate to recognition, measurement and presentation, including a tabular reconciliation between net income as previously reported in the financial statements in accordance with Canadian GAAP -- Part V and net income as restated and presented in accordance with U.S. GAAP, and
(c) if the SEC issuer has filed financial statements prepared in accordance with Canadian GAAP -- Part V for one or more interim periods of the current year, those interim financial statements are restated in accordance with U.S. GAAP and comply with paragraphs (a) and (b).
(2) The comparative information specified in subparagraph (1)(b)(i) may be presented on the face of the balance sheet and statements of income and cash flow or in the note to the financial statements required by subparagraph (1)(b)(iii).
4.8 Acceptable Auditing Standards for SEC Issuers -- Despite section 4.3, financial statements of an SEC issuer that are filed with or delivered to the securities regulatory authority or regulator, other than acquisition statements, and that are required by securities legislation to be audited, may be audited in accordance with U.S. PCAOB GAAS if the financial statements are accompanied by an auditor's report prepared in accordance with U.S. PCAOB GAAS that
(a) expresses an unqualified opinion,
(b) identifies all financial periods presented for which the auditor has issued an auditor's report,
(c) refers to the predecessor auditor's reports on the comparative periods, if the issuer has changed its auditor and one or more of the comparative periods presented in the financial statements were audited by the predecessor auditor, and
(d) identifies the accounting principles used to prepare the financial statements.
4.9 Acceptable Accounting Principles for Foreign Issuers -- Despite subsection 4.2(1), financial statements of a foreign issuer that are filed with or delivered to a securities regulatory authority or regulator, other than acquisition statements, may be prepared in accordance with one of the following accounting principles:
(a) U.S. GAAP, if the issuer is an SEC foreign issuer;
(b) IFRS;
(c) accounting principles that meet the disclosure requirements for foreign private issuers, as that term is defined for the purposes of the 1934 Act, if
(i) the issuer is an SEC foreign issuer,
(ii) on the last day of the most recently completed financial year the total number of equity securities of the issuer beneficially owned by residents of Canada does not exceed 10%, on a fully-diluted basis, of the total number of equity securities of the issuer, and
(iii) the financial statements include any reconciliation to U.S. GAAP required by the SEC;
(d) accounting principles that meet the foreign disclosure requirements of the designated foreign jurisdiction to which the issuer is subject, if the issuer is a designated foreign issuer;
(e) accounting principles that cover substantially the same core subject matter as Canadian GAAP -- Part V, including recognition and measurement principles and disclosure requirements, if the notes to the financial statements
(i) explain the material differences between Canadian GAAP -- Part V and the accounting principles used that relate to recognition, measurement and presentation,
(ii) quantify the effect of material differences between Canadian GAAP -- Part V and the accounting principles used that relate to recognition, measurement and presentation, including a tabular reconciliation between net income reported in the issuer's financial statements and net income computed in accordance with Canadian GAAP -- Part V, and
(iii) provide disclosure consistent with Canadian GAAP -- Part V requirements to the extent not already reflected in the financial statements.
4.10 Acceptable Auditing Standards for Foreign Issuers -- Despite section 4.3, financial statements of a foreign issuer that are filed with or delivered to a securities regulatory authority or regulator, other than acquisition statements, that are required by securities legislation to be audited may, if the financial statements are accompanied by an auditor's report prepared in accordance with the same auditing standards used to conduct the audit and the auditor's report identifies the accounting principles used to prepare the financial statements, be audited in accordance with
(a) U.S. PCAOB GAAS, if the auditor's report
(i) expresses an unqualified opinion,
(ii) identifies all financial periods presented for which the auditor has issued an auditor's report, and
(iii) refers to the predecessor auditor's reports on the comparative periods, if the issuer has changed its auditor and one or more of the comparative periods presented in the financial statements were audited by the predecessor auditor,
(b) International Standards on Auditing, if the auditor's report is accompanied by a statement by the auditor that
(i) describes any material differences in the form and content of the auditor's report as compared to an auditor's report prepared in accordance with Canadian GAAS, and
(ii) indicates that an auditor's report prepared in accordance with Canadian GAAS would express an unmodified opinion, or
(c) auditing standards that meet the foreign disclosure requirements of the designated foreign jurisdiction to which the issuer is subject, if the issuer is a designated foreign issuer.
4.11 Acceptable Accounting Principles for Acquisition Statements --
(1) Acquisition statements must be prepared in accordance with one of the following accounting principles:
(a) Canadian GAAP -- Part V;
(b) U.S. GAAP;
(c) IFRS;
(d) accounting principles that meet the disclosure requirements for foreign private issuers, as that term is defined for the purposes of the 1934 Act, if
(i) the issuer or the acquired business or business to be acquired is an SEC foreign issuer,
(ii) on the last day of the most recently completed financial year the total number of equity securities of the SEC foreign issuer beneficially owned by residents of Canada does not exceed 10%, on a fully-diluted basis, of the total number of equity securities of the SEC foreign issuer, and
(iii) the financial statements include any reconciliation to U.S. GAAP required by the SEC;
(e) accounting principles that meet the foreign disclosure requirements of the designated foreign jurisdiction to which the issuer or the acquired business or business to be acquired is subject, if the issuer or business is a designated foreign issuer;
(f) accounting principles that cover substantially the same core subject matter as Canadian GAAP -- Part V, including recognition and measurement principles and disclosure requirements.
(2) Acquisition statements must be prepared in accordance with the same accounting principles for all periods presented.
(3) The notes to the acquisition statements must identify the accounting principles used to prepare the acquisition statements.
(4) If acquisition statements are prepared using accounting principles that are different from the issuer's GAAP, the acquisition statements for the most recently completed financial year and interim period that are required to be filed must be reconciled to the issuer's GAAP and the notes to the acquisition statements must
(a) explain the material differences between the issuer's GAAP and the accounting principles used to prepare the acquisition statements that relate to recognition, measurement, and presentation,
(b) quantify the effect of material differences between the issuer's GAAP and the accounting principles used to prepare the acquisition statements that relate to recognition, measurement and presentation, including a tabular reconciliation between net income reported in the acquisition statements and net income computed in accordance with the issuer's GAAP, and
(c) provide disclosure consistent with the issuer's GAAP to the extent not already reflected in the acquisition statements.
(5) Despite subsections (1) and (4), if the issuer is required to reconcile its financial statements to Canadian GAAP -- Part V, the acquisition statements for the most recently completed financial year and interim period that are required to be filed must be
(a) prepared in accordance with Canadian GAAP -- Part V, or
(b) reconciled to Canadian GAAP -- Part V and the notes to the acquisition statements must
(i) explain the material differences between Canadian GAAP -- Part V and the accounting principles used to prepare the acquisition statements that relate to recognition, measurement, and presentation,
(ii) quantify the effect of material differences between Canadian GAAP -- Part V and the accounting principles used to prepare the acquisition statements that relate to recognition, measurement and presentation, including a tabular reconciliation between net income reported in the acquisition statements and net income computed in accordance with Canadian GAAP -- Part V, and
(iii) provide disclosure consistent with disclosure requirements of Canadian GAAP -- Part V to the extent not already reflected in the acquisition statements.
4.12 Acceptable Auditing Standards for Acquisition Statements --
(1) Acquisition statements that are required by securities legislation to be audited must be audited in accordance with one of the following auditing standards:
(a) Canadian GAAS;
(b) U.S. PCAOB GAAS;
(c) U.S. AICPA GAAS, if the acquired business or business to be acquired is not an SEC issuer.
(2) Despite subsection (1), acquisition statements filed by or included in a prospectus of a foreign issuer may be audited in accordance with
(a) International Standards on Auditing, if the auditor's report is accompanied by a statement by the auditor that
(i) describes any material differences in the form and content of the auditor's report as compared to an auditor's report prepared in accordance with Canadian GAAS, and
(ii) indicates that an auditor's report prepared in accordance with Canadian GAAS would express an unmodified opinion, or
(b) auditing standards that meet the foreign disclosure requirements of the designated foreign jurisdiction to which the issuer is subject, if the issuer is a designated foreign issuer.
(3) Acquisition statements must be accompanied by an auditor's report prepared in accordance with the same auditing standards used to conduct the audit and the auditor's report must identify the accounting principles used to prepare the acquisition statements.
(4) If acquisition statements are audited in accordance with paragraph (1)(a), the auditor's report must express an unmodified opinion.
(5) If acquisition statements are audited in accordance with paragraph (1)(b) or (c), the auditor's report must express an unqualified opinion.
(6) Despite paragraph (2)(a) and subsections (4) and (5) an auditor's report that accompanies acquisition statements may express a qualification of opinion relating to inventory if
(a) the issuer includes in the business acquisition report, prospectus or other document containing the acquisition statements, a balance sheet for the acquired business or business to be acquired that is for a date that is subsequent to the date to which the qualification relates, and
(b) the balance sheet referred to in paragraph (a) is accompanied by an auditor's report that does not express a qualification of opinion relating to closing inventory.
4.13 Financial Information for Acquisitions Accounted for by the Issuer Using the Equity Method --
(1) If an issuer files, or includes in a prospectus, summarized financial information as to the assets, liabilities and results of operations of an acquired business or business to be acquired that is, or will be, an investment accounted for by the issuer using the equity method, the financial information must
(a) meet the requirements in section 4.11 if the term "acquisition statements" in that section is read as "summarized financial information", and
(b) disclose the reporting currency for the financial information, and disclose the measurement currency if it is different than the reporting currency.
(2) If the financial information referred to in subsection (1) is for any completed financial year, the financial information must
(a) either
(i) meet the requirements in section 4.12 if the term "acquisition statements" in that section is read as "summarized financial information", or
(ii) be derived from financial statements that meet the requirements in section 4.12 if the term "acquisition statements" in that section is read as "financial statements from which is derived summarized financial information", and
(b) be audited, or derived from financial statements that are audited, by a person or company that is authorized to sign an auditor's report under the laws of a jurisdiction of Canada or a foreign jurisdiction, and that meets the professional standards of that jurisdiction.
4.14 Acceptable Accounting Principles for Pro Forma Financial Statements --
(1) Pro forma financial statements must be prepared in accordance with the issuer's GAAP.
(2) Despite subsection (1), if an issuer's financial statements have been reconciled to Canadian GAAP -- Part V under subsection 4.7(1) or paragraph 4.9(e), the issuer's pro forma financial statements must be prepared in accordance with, or reconciled to, Canadian GAAP -- Part V.
(3) Despite subsection (1), if an issuer's financial statements have been prepared in accordance with the accounting principles referred to in paragraph 4.9(c) and those financial statements are reconciled to U.S. GAAP, the pro forma financial statements may be prepared in accordance with, or reconciled to, U.S. GAAP.
4.15 Acceptable Accounting Principles for Foreign Registrants --
(1) Despite subsection 4.2(2), and subject to subsection (2), financial statements delivered by a foreign registrant may be prepared in accordance with one of the following accounting principles:
(a) U.S. GAAP;
(b) IFRS;
(c) accounting principles that meet the disclosure requirements of a foreign regulatory authority to which the registrant is subject, if it is a foreign registrant incorporated or organized under the laws of that designated foreign jurisdiction;
(d) accounting principles that cover substantially the same core subject matter as Canadian GAAP -- Part V, including recognition and measurement principles and disclosure requirements, if the notes to the financial statements, interim balance sheets, or interim income statements
(i) explain the material differences between Canadian GAAP -- Part V and the accounting principles used that relate to recognition, measurement and presentation,
(ii) quantify the effect of material differences between Canadian GAAP -- Part V and the accounting principles used that relate to recognition, measurement, and presentation, and
(iii) provide disclosure consistent with disclosure requirements of Canadian GAAP -- Part V to the extent not already reflected in the financial statements, interim balance sheets or interim income statements.
(2) Financial statements, interim balance sheets, and interim income statements delivered by a foreign registrant prepared in accordance with accounting principles specified in paragraph (1)(a), (b) or (d) must be prepared on a non-consolidated basis.
4.16 Acceptable Auditing Standards for Foreign Registrants -- Despite section 4.3, financial statements delivered by a foreign registrant that are required by securities legislation to be audited may, if the financial statements are accompanied by an auditor's report prepared in accordance with the same auditing standards used to conduct the audit and the auditor's report identifies the accounting principles used to prepare the financial statements, be audited in accordance with
(a) U.S. PCAOB GAAS or U.S. AICPA GAAS if the auditor's report expresses an unqualified opinion,
(b) International Standards on Auditing, if the auditor's report is accompanied by a statement by the auditor that
(i) describes any material differences in the form and content of the auditor's report as compared to an auditor's report prepared in accordance with Canadian GAAS, and
(ii) indicates that an auditor's report prepared in accordance with Canadian GAAS would express an unmodified opinion, or
(c) auditing standards that meet the foreign disclosure requirements of the designated foreign jurisdiction to which the registrant is subject, if it is a foreign registrant incorporated or organized under the laws of that designated foreign jurisdiction.
PART 5: EXEMPTIONS
5.1 Exemptions --
(1) The regulator or securities regulatory authority may grant an exemption from this Instrument, in whole or in part, subject to such conditions or restrictions as may be imposed in the exemption.
(2) Despite subsection (1), in Ontario, only the regulator may grant an exemption.
(3) Except in Ontario, an exemption referred to in subsection (1) is granted under the statute referred to in Appendix B of National Instrument 14-101 Definitions opposite the name of the local jurisdiction.
5.2 Certain Exemptions Evidenced by Receipt --
(1) Subject to subsections (2) and (3), without limiting the manner in which an exemption may be evidenced, an exemption from this Instrument as it pertains to financial statements or auditor's reports included in a prospectus, may be evidenced by the issuance of a receipt for the prospectus or an amendment to the prospectus.
(2) A person or company must not rely on a receipt as evidence of an exemption unless the person or company
(a) sent to the regulator or securities regulatory authority, on or before the date the preliminary prospectus or the amendment to the preliminary prospectus or prospectus was filed, a letter or memorandum describing the matters relating to the exemption application, and indicating why consideration should be given to the granting of the exemption, or
(b) sent to the regulator or securities regulatory authority the letter or memorandum referred to in paragraph (a) after the date of the preliminary prospectus or the amendment to the preliminary prospectus or prospectus has been filed and receives a written acknowledgement from the securities regulatory authority or regulator that issuance of the receipt is evidence that the exemption is granted.
(3) A person or company must not rely on a receipt as evidence of an exemption if the regulator or securities regulatory authority has before, or concurrently with, the issuance of the receipt for the prospectus, sent notice to the person or company that the issuance of a receipt does not evidence the granting of the exemption.
(4) For the purpose of this section, a reference to a prospectus does not include a preliminary prospectus.
5.3 Financial Years ending between December 21 and 31, 2010 -- Despite subsections 3.1(2) and 4.1(2), Part 3 may be applied by an issuer or registrant to all financial statements, financial information, operating statements and pro forma financial statements for periods relating to a financial year that begins before January 1, 2011 if the immediately preceding financial year ends no earlier than December 21, 2010.
5.4 Rate-Regulated Activities --
(1) Despite subsections 3.1(2) and 4.1(2),
(a) Part 3 may be applied by a qualifying entity to all financial statements, financial information, operating statements and pro forma financial statements as if the expression "January 1, 2011" in subsection 3.1(2) were read as "January 1, 2012", and
(b) if the qualifying entity relies on paragraph (a) in respect of a period, Part 4 must be applied as if the expression "January 1, 2011" in subsection 4.1(2) were read as "January 1, 2012".
(2) For the purposes of subsection (1), a "qualifying entity" means a person or company that
(a) has activities subject to rate regulation, as defined in Part V of the Handbook, and
(b) is permitted under Canadian GAAP to apply Part V of the Handbook.
PART 6: REPEAL, TRANSITION AND EFFECTIVE DATE
6.1 Repeal -- National Instrument 52-107 Acceptable Accounting Principles, Auditing Standards and Reporting Currency, which came into force on March 30, 2004, is repealed.
6.2 Effective Date -- This Instrument comes into force on January 1, 2011.
6.3 Existing Exemptions -- A person or company that has obtained an exemption from National Instrument 52-107 Acceptable Accounting Principles, Auditing Standards and Reporting Currency, in whole or in part, is exempt from any substantially similar provision of this Instrument to the same extent and on the same conditions, if any, as contained in the exemption, unless the regulator or securities regulatory authority has revoked that exemption.
Companion Policy 52-107CP Acceptable Accounting Principles and Auditing Standards
COMPANION POLICY 52-107CP
ACCEPTABLE ACCOUNTING PRINCIPLES AND AUDITING STANDARDS
PART I: INTRODUCTION AND DEFINITIONS
1.1 Introduction and Purpose -- This Companion Policy provides information about how the securities regulatory authorities interpret or apply National Instrument 52-107 Acceptable Accounting Principles and Auditing Standards (the Instrument). The Instrument is linked closely with the application of other national instruments, including National Instrument 51-102 Continuous Disclosure Obligations (NI 51-102) and National Instrument 71-102 Continuous Disclosure and Other Exemptions Relating to Foreign Issuers (NI 71-102). These and other national instruments also contain a number of references to International Financial Reporting Standards (IFRS) and the requirements in the Handbook of the Canadian Institute of Chartered Accountants (the Handbook). Full definitions of IFRS and the Handbook are provided in National Instrument 14-101 Definitions.
The Instrument does not apply to investment funds. National Instrument 81-106 Investment Fund Continuous Disclosure applies to investment funds.
1.2 Multijurisdictional Disclosure System -- National Instrument 71-101 The Multijurisdictional Disclosure System (NI 71-101) permits certain U.S. incorporated issuers to satisfy Canadian disclosure filing obligations, including financial statements, by using disclosure documents prepared in accordance with U.S. federal securities laws. The Instrument does not replace or alter NI 71-101. There are instances in which NI 71-101 and the Instrument offer similar relief to a reporting issuer. There are other instances in which the relief differs. If both NI 71-101 and the Instrument are available to a reporting issuer, the issuer should consider both instruments. It may choose to rely on the less onerous instrument in a given situation.
1.3 Calculation of Voting Securities Owned by Residents of Canada -- The definition of "foreign issuer" is based upon the definition of foreign private issuer in Rule 405 of the 1933 Act and Rule 3b-4 of the 1934 Act. For the purposes of the definition of "foreign issuer", in determining the outstanding voting securities that are beneficially owned by residents of Canada, an issuer should
(a) use reasonable efforts to identify securities held by a broker, dealer, bank, trust company or nominee or any of them for the accounts of customers resident in Canada,
(b) count securities beneficially owned by residents of Canada as reported on reports of beneficial ownership, including insider reports and early warning reports, and
(c) assume that a customer is a resident of the jurisdiction or foreign jurisdiction in which the nominee has its principal place of business if, after reasonable inquiry, information regarding the jurisdiction or foreign jurisdiction of residence of the customer is unavailable.
This method of calculation differs from that in NI 71-101 which only requires a calculation based on the address of record. Some SEC foreign issuers may therefore qualify for exemptive relief under NI 71-101 but not under the Instrument.
1.4 Exemptions Evidenced by the Issuance of a Receipt -- Section 5.2 of the Instrument states that an exemption from any of the requirements of the Instrument pertaining to financial statements or auditor's reports included in a prospectus may be evidenced by the issuance of a receipt for that prospectus. Issuers should not assume that the relief evidenced by the receipt will also apply to financial statements or auditors' reports filed in satisfaction of continuous disclosure obligations or included in any other filing.
1.5 Filed or Delivered -- Financial statements that are filed in a jurisdiction will be made available for public inspection in that jurisdiction, subject to the provisions of securities legislation in the local jurisdiction regarding confidentiality of filed material. Material that is delivered to a regulator, but not filed, is not required under securities legislation to be made available for public inspection. However, the regulator may choose to make such material available for inspection by the public.
1.6 Other Legal Requirements -- Issuers and auditors should refer to National Instrument 52-108 Auditor Oversight for requirements relating to auditor oversight by the Canadian Public Accountability Board. In addition, issuers and registrants are reminded that they and their auditors may be subject to requirements under the laws and professional standards of a jurisdiction that address matters similar to those addressed by the Instrument, and which may impose additional or more onerous requirements. For example, applicable corporate law may prescribe the accounting principles or auditing standards required for financial statements. Similarly, applicable federal, provincial or state law may impose licensing requirements on an auditor practising public accounting in certain jurisdictions.
PART 2: APPLICATION -- ACCOUNTING PRINCIPLES
2.1 Application of Part 3 -- Part 3 of the Instrument generally applies to periods relating to financial years beginning on or after January 1, 2011. Part 3 refers to Canadian GAAP applicable to publicly accountable enterprises, which is IFRS incorporated into the Handbook, contained in Part I of the Handbook.
2.2 Application of Part 4 -- Part 4 of the Instrument generally applies to periods relating to financial years beginning before January 1, 2011. Part 4 refers to Canadian GAAP-Part V, which is generally accepted accounting principles determined with reference to Part V of the Handbook applicable to public enterprises. These are the pre-changeover accounting standards for public companies. Part V of the Handbook has differing requirements for public enterprises and non-public enterprises. The following are some of the significant differences in Canadian GAAP applicable to public enterprises compared to those applicable to non-public enterprises:
(a) financial statements for public enterprises cannot be prepared using the differential reporting options as set out in Part V of the Handbook;
(b) transition provisions applicable to enterprises other than public enterprises are not available; and
(c) financial statements must include any additional disclosure requirements applicable to public enterprises.
2.3 IFRS in English and French -- The Handbook provides IFRS in English and French. Both versions have equal status and effect under Canadian GAAP. Issuers, auditors, and other market participants may use either version to comply with the requirements in the Instrument.
2.4 Reference to accounting principles -- Section 3.2 of the Instrument requires certain financial statements to be prepared in accordance with Canadian GAAP applicable to publicly accountable enterprises. This section includes requirements for an unreserved statement of compliance with IFRS in annual financial statements, and an unreserved statement of compliance with International Accounting Standard 34 Interim Financial Reporting in interim financial reports. These provisions distinguish between the basis of preparation and disclosure requirements.
There are two options for referring to accounting principles in the applicable financial statements and, in the case of annual financial statements, accompanying auditor's reports referred to in section 3.3 of the Instrument:
(a) refer only to IFRS in the notes to the financial statements and in the auditor's report, or
(b) refer to both IFRS and Canadian GAAP in the notes to the financial statements and in the auditor's report.
2.5 IFRS as adopted by the IASB -- The definition of IFRS in National Instrument 14-101 Definitions refers to standards and interpretations adopted by the International Accounting Standards Board. The definition does not extend to national accounting standards that are modified or adapted from IFRS, sometimes referred to as a "jurisdictional" version of IFRS.
2.6 Presentation and functional currencies -- If financial statements comply with requirements contained in IFRS in International Accounting Standard 1 Presentation of Financial Statements and International Accounting Standard 21 The Effects of Changes in Foreign Exchange Rates relating to the disclosure of presentation currency and functional currency, then they will comply with section 3.5 of the Instrument.
2.7 Registrants' financial statements and interim financial information -- Subsections 3.2(3) and (4) and paragraphs 3.15(a) and (b) of the Instrument mandate accounting for any investments in subsidiaries, jointly controlled entities and associates as specified for separate financial statements in International Accounting Standard 27 Consolidated and Separate Financial Statements (IAS 27). Separate financial statements are sometimes referred to as non-consolidated financial statements. These requirements apply regardless of whether a registrant meets the criteria set out in IAS 27 for not presenting consolidated financial statements. Paragraph 3.2(3)(b) also requires a registrant's annual financial statements to describe the financial reporting framework used to prepare the financial statements. The description should refer to the requirement to account for any investments in subsidiaries, jointly controlled entities and associates as specified for separate financial statements in IAS 27, even if the registrant does not have these types of investments. In addition, if annual financial statements for a year beginning in 2011 are prepared using the financial reporting framework permitted by subsection 3.2(4), the description of the framework should explain the lack of comparatives and the date of transition, as specified in paragraphs 3.2(4)(b) and (c).
The financial reporting frameworks prescribed by subsections 3.2(3) and (4) are Canadian GAAP applicable to publicly accountable enterprises with specified differences. Although these frameworks differ in specified ways from IFRS, the exceptions and exemptions included as Appendices in IFRS 1 First-time Adoption of International Financial Reporting Standards (IFRS 1) would be relevant for determining an opening statement of financial position at the date of transition to the financial reporting framework prescribed in subsection 3.2(3) or (4).
Subparagraph 3.3(1)(a)(iii) requires an auditor's report in the form specified by Canadian GAAS for an audit of financial statements prepared in accordance with a fair presentation framework. The financial reporting frameworks prescribed by subsections 3.2(3) and (4) are fair presentation frameworks.
Subsection 3.2(4) of the Instrument allows a registrant to file financial statements and interim financial information for periods relating to a financial year beginning in 2011 that exclude comparative information relating to the preceding year and to use a date of transition to the financial reporting framework that is the first day of the financial year beginning in 2011. When such a registrant prepares the comparative information for financial statements and interim financial information for periods relating to a financial year beginning in 2012, the registrant should consider whether it must adjust the comparative information in order to comply with subsection 3.2(3). Adjustments may be necessary if a registrant changes one or more accounting policies for its year beginning in 2012 compared to its year beginning in 2011.
2.8 Use of different accounting principles -- Subsection 3.2(5) of the Instrument requires financial statements to be prepared in accordance with the same accounting principles for all periods presented in the financial statements.
An issuer that is required to file, or include in a document that is filed, financial statements for three years can, except in the situation discussed in section 2.9 of this Companion Policy, choose to present two sets of financial statements. For example, if the earliest of the three financial years relates to a financial year beginning before January 1, 2010, the issuer should provide one set of financial statements that presents information for the most recent two years using the accounting principles in Part 3 of the Instrument and one set of financial statements that either:
(a) presents information for a third and fourth year using the accounting principles in Part 4, or
(b) presents information for a second and third year using the accounting principles in Part 4.
Note that under option (a), a fourth year not otherwise required would be included to satisfy the requirement in the issuer's GAAP for comparative financial statements. Under option (b), information for a second year would be presented in both sets of financial statements. This second year would be included in the most recent set of financial statements using accounting principles in Part 3 of the Instrument and also in the earliest set of financial statements using accounting principles in Part 4 of the Instrument.
If the accounting principles used for the earliest of the three financial years and the most recent two years differ, but both are acceptable in Part 3 of the Instrument, presentation of information for the earliest year would be similar to the example described above.
2.9 Date of transition to IFRS if financial statements include a transition year of less than nine months -- Subsection 4.8(6) of NI 51-102 states that if a transition year is less than nine months in length, the reporting issuer must include comparative financial information for the transition year and old financial year in its financial statements for its new financial year. Similarly, subsection 32.2(4) in Form 41-101F1 states that if an issuer changed its financial year end during any of the financial years referred to in section 32.2 and the transition year is less than nine months, the transition year is deemed not to be a financial year for purposes of the requirement to provide financial statements for a specified number of financial years in section 32.2.
If an issuer's first set of annual financial statements with an unreserved statement of compliance with IFRS includes comparatives for both a transition year of less than nine months and the old financial year, the date of transition to IFRS should be the first day of the old financial year. Since subsection 3.2(5) of the Instrument requires financial statements to be prepared in accordance with the same accounting principles for all periods presented in the financial statements, a date of transition to IFRS using the first day of the transition year would not be appropriate.
2.10 Acceptable Accounting Principles -- Readers are likely to assume that financial information disclosed in a news release is prepared on a basis consistent with the accounting principles used to prepare the issuer's most recently filed financial statements. To avoid misleading readers, an issuer should alert readers if financial information in a news release is prepared using accounting principles that differ from those used to prepare an issuer's most recently filed financial statements or includes non-GAAP financial measures discussed in CSA Staff Notice 52-306 Non-GAAP Financial Measures.
2.11 Financial statements for a reverse takeover or capital pool company acquisition -- Subsection 8.1(2) of NI 51-102 states that Part 8 of that rule does not apply to a transaction that is a reverse takeover. Similarly, subsection 35.1(1) in Form 41-101F1 indicates that item 35 of that Form does not apply to a completed or proposed transaction that was or will be accounted for as a reverse takeover. Therefore, if a document includes financial statements for a reverse takeover acquirer, as defined in NI 51-102, for a period prior to completion of the reverse takeover, section 3.11 of the Instrument does not apply to the financial statements. Such financial statements must comply with section 3.2, 3.7, 3.9, 4.2, 4.7 or 4.9 of the Instrument as applicable.
Paragraph 32.1(b) of Form 41-101F1 indicates that financial statements of an issuer required under Item 32 of that Form include the financial statements of a business acquired or business proposed to be acquired by the issuer if a reasonable investor would regard the primary business of the issuer upon completion of the acquisition to be the acquired business or business proposed to be acquired. Consistent with this provision, if a capital pool company acquires or proposes to acquire a business, regardless of whether or not the transaction will be accounted for as a reverse takeover, financial statements for the acquired business or business proposed to be acquired must comply with section 3.2, 3.7, 3.9, 4.2, 4.7 or 4.9 of the Instrument as applicable.
2.12 Acquisition statements prepared using Canadian GAAP applicable to private enterprises -- Paragraph 3.11(1)(f) of the Instrument permits acquisition statements to be prepared using Canadian GAAP applicable to private enterprises, which is Canadian accounting standards for private enterprises in Part II of the Handbook.
2.13 Conditions for acquisition statements prepared using Canadian GAAP applicable to private enterprises -- Paragraph 3.11(1)(f) of the Instrument specifies certain conditions for the use of Canadian GAAP applicable to private enterprises. One of these conditions, in subparagraph 3.11(1)(f)(ii), is that financial statements for the business were not previously prepared in accordance with any of the accounting principles specified in paragraphs 3.11(1)(a) through (e) for the periods presented in the acquisition statements. Paragraph 3.11(1)(a) refers to Canadian GAAP applicable to publicly accountable enterprises, which is IFRS incorporated into the Handbook contained in Part I of the Handbook. The condition in subparagraph 3.11(1)(f)(ii) does not preclude Canadian GAAP - Part V, as defined in section 4.1 of the Instrument.
2.14 Acquisition statements prepared using Canadian GAAP applicable to private enterprises that include a reconciliation to the issuer's GAAP -- If acquisition statements included in a document filed by an issuer that is not a venture issuer and not an IPO venture issuer are prepared using Canadian GAAP applicable to private enterprises, the reconciliation requirement in subparagraph 3.11(1)(f)(iv) applies.
For each difference presented in the quantified reconciliation that relates to measurement, clause 3.11(1)(f)(iv)(C) requires disclosure and discussion of the material inputs or assumptions underlying the measurement of the relevant amount computed in accordance with the issuer's GAAP, consistent with the disclosure requirements of the issuer's GAAP. If the relevant amount was measured using a valuation technique, disclose the valuation technique, and disclose and discuss the inputs used. If changing one or more of the inputs to reasonably possible alternative assumptions would change the measurement significantly, a discussion of that fact and the effect of the changes on the measurement would facilitate readers' understanding of the measurement.
Clause 3.11(1)(f)(iv)(C) does not require disclosure and discussion of all the disclosure elements identified in the issuer's GAAP that relate to a difference presented in the reconciliation. As well, the clause does not require disclosure of information not required by the issuer's GAAP.
As an example of the disclosure required by clause 3.11(1)(f)(iv)(C), if the issuer's GAAP is IFRS and the relevant amount is share based payments measured using an option pricing model, disclose the option pricing model used and the inputs used in the model (i.e., weighted average share price, exercise price, expected volatility, option life, expected dividends, risk-free interest rate and any other inputs to the model). Also, discuss how expected volatility was determined and how any other features of the option grant (e.g., market condition) were incorporated into the measurement of the relevant amount.
If acquisition statements are carve-out statements prepared in accordance with Canadian GAAP for private enterprises, as discussed in section 2.18 of this Companion Policy, subparagraph 3.11(6)(d)(iii) requires reconciliation information for non-venture issuers similar to that required by subparagraph 3.11(1)(f)(iv). The above guidance on subparagraph 3.11(1)(f)(iv) also applies to subparagraph 3.11(6)(d)(iii).
2.15 Acquisition statements prepared using Canadian GAAP applicable to private enterprises that include a reconciliation to IFRS -- If the reconciliation requirement in subparagraph 3.11(1)(f)(iv) applies, and the issuer's GAAP requires the annual financial statements to include an explicit and unreserved statement of compliance with IFRS, the reconciliation information in annual and interim acquisition statements must address material differences between Canadian GAAP applicable to private enterprises and IFRS that relate to recognition, measurement and presentation.
Consistent with IFRS requirements, for the purpose of preparing the reconciliation information required by subparagraph 3.11(1)(f)(iv), the date of transition to IFRS would be the first day of the earliest period for which comparative information is presented in the annual acquisition statements. For example, if annual acquisition statements present information for the most recently completed financial year and the comparative year, the date of transition to IFRS would be the first day of the comparative year.
Also consistent with IFRS, for the purpose of preparing the reconciliation, IFRS 1 would be applied to determine the opening IFRS statement of financial position at the date of transition to IFRS. The exceptions and exemptions included as Appendices in IFRS 1 would be relevant for determining the entity's statement of financial position at the date of transition to IFRS.
The opening IFRS statement of financial position is the starting point for identifying material differences from Canadian GAAP applicable to private enterprises. Although an opening IFRS statement of financial position must be prepared in order to prepare the information required by subparagraph 3.11(1)(f)(iv), that subparagraph does not require disclosure of the opening IFRS statement of financial position. Similarly, that subparagraph does not require disclosure of differences relating to equity as at the date of transition to IFRS.
As discussed in section 2.14 of this Companion Policy, clause 3.11(1)(f)(iv)(C) does not require disclosure and discussion of all the disclosure elements identified in the issuer's GAAP that relate to a difference presented in the reconciliation. Therefore, it would be inappropriate to include an explicit and unreserved statement of compliance with IFRS in acquisition statements that include reconciliation information for material differences between Canadian GAAP applicable to private enterprises and IFRS.
2.16 Acquisition statements prepared using Canadian GAAP applicable to private enterprises that do not include a reconciliation to the issuer's GAAP -- If acquisition statements included in a document filed by a venture issuer or IPO venture issuer are prepared using Canadian GAAP applicable to private enterprises, the reconciliation requirements in subparagraph 3.11(1)(f)(iv) do not apply. However, subsection 3.14(1) requires pro forma financial statements to be prepared using accounting policies that are permitted by the issuer's GAAP and would apply to the information presented in the pro forma financial statements if that information were included in the issuer's financial statements for the same time. Companion Policy 51-102CP Continuous Disclosure Obligations provides further guidance on preparation of pro forma financial statements in this circumstance.
2.17 Acquisition statements that are an operating statement -- Subsection 3.11(5) requires the line items in an operating statement to be prepared in accordance with accounting policies that comply with the accounting policies permitted by one of Canadian GAAP applicable to publicly accountable enterprises, IFRS, U.S. GAAP, or Canadian GAAP applicable to private enterprises. For the purpose of preparing the operating statement, the exceptions and exemptions included as Appendices in IFRS 1 would be relevant for determining the opening statement of financial position at the date of transition to IFRS.
2.18 Acquisition statements that are carve-out financial statements -- Subsection 3.11(6) specifies the financial reporting framework required for acquisition statements that are based on information from the financial records of another entity whose operations included the acquired business or the business to be acquired, and there are no separate financial records for the business. Such financial statements are commonly referred to as "carve-out" financial statements. Subsection 3.11(6) requires carve-out financial statements to be prepared in accordance with one of Canadian GAAP applicable to publicly accountable enterprises, IFRS, U.S. GAAP, or Canadian GAAP applicable to private enterprises, and in each case include specified line items. For carve-out financial statements prepared in accordance with Canadian GAAP applicable to publicly accountable enterprises or IFRS, the exceptions and exemptions included as Appendices in IFRS 1 would be relevant for determining the opening statement of financial position at the date of transition to IFRS.
2.19 Preparation of pro forma financial statements when there is a change in accounting principles -- Subsection 3.14(1) requires pro forma financial statements to be prepared using accounting policies that are permitted by the issuer's GAAP and would apply to the information presented in the pro forma financial statements if that information were included in the issuer's financial statement for the same period as that of the pro forma financial statements. If the accounting principles used to prepare an issuer's most recent annual financial statements differ from the accounting principles used to prepare the issuer's interim financial report for a subsequent period, subsection 3.14(3) provides an issuer the option of preparing its annual pro forma income statement using accounting policies that are permitted by the accounting principles used to prepare the interim financial report and would apply to the information presented in the pro forma income statement if that information were included in the interim financial report. In this case, the annual pro forma income statement should include adjustments to the amounts reported in the issuer's most recent statement of comprehensive income in order to restate the amounts on the basis of the accounting principles used to prepare the issuer's interim financial report. The pro forma income statement should present such adjustments separate from other adjustments relating to significant acquisitions.
If an issuer does not use the option provided by subsection 3.14(3), in order to avoid confusion, it would be appropriate to present the issuer's annual and interim pro forma financial statements as separate sets of pro forma financial statements.
2.20 Reconciliation requirements for an SEC issuer -- If financial statements of an SEC issuer, other than acquisition statements, filed with or delivered to a securities regulatory authority or regulator are
(a) for a financial year beginning before January 1, 2011,
(b) prepared in accordance with U.S. GAAP, and
(c) the SEC issuer previously filed or included in a prospectus financial statements prepared in accordance with Canadian GAAP -- Part V,
then subsection 4.7(1) applies. Subsection 4.7(1) requires the notes of the first two sets of the SEC issuer's annual financial statements, and interim financial report during those first two years, to provide reconciling information between Canadian GAAP -- Part V and U.S. GAAP that complies with subparagraphs 4.7(1)(a)(i) to (iii).
If an SEC issuer's second set of annual financial statements after a change in accounting principles is for a financial year beginning after January 1, 2011, the reconciliation requirements in subsection 4.7(1) no longer apply. Financial statements for a financial year beginning after January 1, 2011 are required to be prepared in accordance with Part 3 of the Instrument, which does not include any reconciliation requirements when an SEC issuer changes its accounting principles.
PART 3: APPLICATION -- AUDITING STANDARDS
3.1 Auditor's Expertise -- The securities legislation in most jurisdictions prohibits a regulator or securities regulatory authority from issuing a receipt for a prospectus if it appears to the regulator or securities regulatory authority that a person or company who has prepared any part of the prospectus or is named as having prepared or certified a report used in connection with a prospectus is not acceptable.
3.2 Canadian Auditors for Canadian GAAP and GAAS Financial Statements -- A Canadian auditor is a person or company that is authorized to sign an auditor's report by the laws, and that meets the professional standards, of a jurisdiction of Canada. We would normally expect issuers and registrants incorporated or organized under the laws of Canada or a jurisdiction of Canada, and any other issuer or registrant that is not a foreign issuer nor a foreign registrant, to engage a Canadian auditor to audit the issuer's or registrant's financial statements if those statements are prepared in accordance with Canadian GAAP applicable to publicly accountable enterprises and will be audited in accordance with Canadian GAAS unless a valid business reason exists to use a non-Canadian auditor. A valid business reason would include a situation where the principal operations of the company and the essential books and records required for the audit are located outside of Canada.
3.3 Auditor Oversight -- In addition to the requirements in sections 3.4 and 4.4 of the Instrument, National Instrument 52-108 Auditor Oversight also contains certain requirements related to auditors and auditor reports.
3.4 Modification of opinion -- Part 5 of the Instrument permits the regulator or securities regulatory authority to grant exemptive relief from the Instrument, including the requirement that an auditor's report express an unmodified opinion. A modification of opinion includes a qualification of opinion, an adverse opinion, and a disclaimer of opinion. However, staff will generally recommend that relief not be granted if the modification of opinion or other similar communication is:
(a) due to a departure from accounting principles permitted by the Instrument, or
(b) due to a limitation in the scope of the auditor's examination that
(i) results in the auditor being unable to form an opinion on the financial statements as a whole,
(ii) is imposed or could reasonably be eliminated by management, or
(iii) could reasonably be expected to be recurring.
3.5 Identification of the financial reporting framework used to prepare an operating statement or carve-out financial statements -- Paragraph 3.12(2)(e) requires an auditor's report to identify the financial reporting framework used to prepare an operating statement or carve-out financial statements as addressed in subsections 3.11(5) and (6). To comply with this requirement, the auditor's report may identify the applicable requirement in the Instrument, and refer the reader's attention to the note in the operating statement or carve-out financial statements that describes the financial reporting framework.
Amendments to National Instrument 14-101 Definitions
AMENDMENTS TO
NATIONAL INSTRUMENT 14-101 DEFINITIONS
1. National Instrument 14-101 Definitions is amended by this Instrument.
2. Subsection 1.1(3) is amended by
a. repealing the definition of "Canadian auditor's report"; and
b. adding the following definitions:
"IFRS" means the standards and interpretations adopted by the International Accounting Standards Board, as amended from time to time;
"International Standards on Auditing" means auditing standards set by the International Auditing and Assurance Standards Board, as amended from time to time;
3. This Instrument comes into force on January 1, 2011.
Consequential Amendments to National Instruments and Multilateral Instruments
CONSEQUENTIAL AMENDMENTS TO
NATIONAL INSTRUMENTS AND MULTILATERAL INSTRUMENTS
NATIONAL RULE AMENDMENTS
Amendments to National Instrument 13-101
System for Electronic Document Analysis and Retrieval (SEDAR)
1. National Instrument 13-101 System for Electronic Document Analysis and Retrieval (SEDAR) is amended by this Instrument.
2. Appendix A is amended by replacing "Interim Financial Statements", wherever the expression occurs, with "Interim Financial Statements/Report".
3. This Instrument only applies to periods relating to financial years beginning on or after January 1, 2011.
4. This Instrument comes into force on January 1, 2011.
Amendment to National Instrument 21-101 Marketplace Operation
1. National Instrument 21-101 Marketplace Operation is amended by this Instrument.
2. Item 4 of Exhibit D of Form 21-101F1 is amended by deleting "Such financial statements shall consist, at a minimum, of a balance sheet and an income statement prepared in accordance with, or if the affiliated entity is organized under the laws of a foreign jurisdiction, reconciled with Canadian GAAP.".
3. This Instrument only applies to periods relating to financial years beginning on or after January 1, 2011.
4. This Instrument comes into force on January 1, 2011.
Amendments to National Instrument 52-110 Audit Committees
1. National Instrument 52-110 Audit Committees is amended by this Instrument.
2. The definition of "accounting principles" in section 1.1 is amended by replacing "National Instrument 52-107 Acceptable Accounting Principles, Auditing Standards and Reporting Currency" with "National Instrument 52-107 Acceptable Accounting Principles and Auditing Standards".
3. Subsection 2.3(5) is amended by replacing "interim earnings" with "interim profit or loss".
4. Item 3(b) of Form 52-110FI is amended by replacing "reserves" with "provisions".
5. Item 3(b) of Form 52-110F2 is amended by replacing "reserves" with "provisions".
6. Sections 3, 4 and 5 of this Instrument only apply to periods relating to financial years beginning on or after January 1, 2011.
7. This Instrument comes into force on January 1, 2011.
Amendment to National Instrument 54-101
Communication with Beneficial Owners of Securities of a Reporting Issuer
1. National Instrument 54-101 Communication with Beneficial Owners of Securities of a Reporting Issuer is amended by this Instrument.
2. Part 2 of the Client Response Form in Form 54-101F1 is amended by replacing "interim financial statements" with "interim financial reports".
3. This Instrument only applies to periods relating to financial years beginning on or after January 1, 2011.
4. This Instrument comes into force on January 1, 2011.
ADDITIONAL AMENDMENTS APPROVED IN OTHER JURISDICTIONS
Amendments to Multilateral Instrument 11-102 Passport System
1. Multilateral Instrument 11-102 Passport System is amended by this Instrument.
2. Appendix D is amended by
a. replacing "Accounting principles, auditing standards and reporting currency requirements" under the column named "Provision" with "Accounting principles and auditing standards requirements"; and
b. replacing "s. 3.1 of NI 52-107", wherever it occurs, with "s. 3.2 of NI 52-107".
3. Appendix D is also amended by deleting "s. 2(1) of Regulation 1015 (General) and".
4. Except as provided by section 5, this Instrument comes into force on January 1, 2011.
5. Section 3 of this Instrument comes into force on the repeal of subsection 2(1) of Regulation 1015 (General) under the Securities Act (Ontario).
Amendments to Multilateral Instrument 62-104 Take-Over Bids and Issuer Bids
1. Multilateral Instrument 62-104 Take-Over Bids and Issuer Bids is amended by this Instrument.
2. Item 19 of Part 2 of Form 62-104F2 is amended by
a. replacing "interim financial statements are" with "interim financial report is"; and
b. replacing "interim financial statements will" with "interim financial report will".
3. Item 13 of Form 62-104F3 is amended by replacing "interim or annual financial statement" with "interim financial report or annual financial statements".
4. Item 11 of Form 62-104F4 is amended by replacing "interim or annual financial statement" with "interim financial report or annual financial statements".
5. This Instrument only applies to periods relating to financial years beginning on or after January 1, 2011.
6. This Instrument comes into force on January 1, 2011.
Consequential Amendments to National Policies and to Companion Policy 11-102CP Passport System
CONSEQUENTIAL AMENDMENTS TO NATIONAL POLICIES
AND TO COMPANION POLICY 11-102CP PASSPORT SYSTEM
NATIONAL POLICY AMENDMENTS
APPROVED BY ONTARIO SECURITIES COMMISSION
Amendments to National Policy 12-202 Revocation of a Compliance-related Cease Trade Order
1. National Policy 12-202 Revocation of a Compliance-related Cease Trade Order is amended by this Instrument.
2. Paragraph 3.1(1)(f) is replaced with the following:
(f) National Instrument 52-110 Audit Committees; and
3. Subsection 3.1(2) is amended by replacing "interim financial statements", wherever it occurs, with "interim financial reports".
4. Section 4.1 is amended by replacing "CSA Staff Notice 51-312 Harmonized Continuous Disclosure Requirements" with "CSA Staff Notice 51-312 (Revised) - Harmonized Continuous Disclosure Requirements".
5. Section 3 of this Instrument only applies to periods relating to financial years beginning on or after January 1, 2011.
6. This Instrument becomes effective on January 1, 2011.
Amendment to National Policy 12-203 Cease Trade Orders for Continuous Disclosure Defaults
1. National Policy 12-203 Cease Trade Orders for Continuous Disclosure Defaults is amended by this Instrument.
2. Paragraph (b) of the definition of "specified requirements" in Part 2 is amended by replacing "interim financial statements" with "an interim financial report".
3. This Instrument only applies to periods relating to financial years beginning on or after January 1, 2011.
4. This Instrument becomes effective on January 1, 2011.
ADDITIONAL POLICY AMENDMENTS
APPROVED IN OTHER JURISDICTIONS
Amendment to Companion Policy 11-102CP Passport System
1. Companion Policy 11-102CP Passport System is amended by this Instrument.
2. Paragraph (d) under the heading "All jurisdictions:" in Appendix A is replaced by the following:
(d) National Instrument 52-107 Acceptable Accounting Principles and Auditing Standards,
3. This Instrument becomes effective on January 1, 2011.
Consequential Ontario Amendments
CONSEQUENTIAL ONTARIO AMENDMENTS
Amendments to OSC Rule 13-502 Fees
1. OSC Rule 13-502 Fees is amended by this Instrument.
2. Section 1.1 is amended by
a. adding the following definition in alphabetical order:
"net assets" means total assets minus total liabilities, using the meanings ascribed to those terms under the accounting standards pursuant to which the entity's financial statements are prepared under Ontario securities law;
b. deleting "or "variable interest entity"" in the definition of "subsidiary entity".
3. Paragraph 2.6(1)(e) is amended by replacing "gross revenues", wherever it occurs, with "total revenues".
4. Subsection 2.8(1) is amended by
a. replacing the first reference to "balance sheet" with "statement of financial position";
b. replacing "long term debt" with "non-current borrowings";
c. replacing "capital leases" with "finance leases";
d. deleting "minority or";
e. replacing paragraph (g) as follows:
(g) items classified on the statement of financial position as non-current liabilities, and not otherwise referred to in this subsection;
f. deleting "shareholders'" in paragraph (h).
5. Appendix D is amended by replacing "interim financial statements" with "interim financial reports".
6. Form 13-502F2 is amended by
a. replacing "Long term debt" with "Non-current borrowings";
b. replacing "Capital leases" with "Finance leases";
c. replacing "Minority or non-controlling" with "Non-controlling";
d. replacing "balance sheet between current liabilities and shareholders' equity" with "statement of financial position as non-current liabilities"; and
e. replacing "forming part of shareholders' equity" with "forming part of equity".
7. Form 13-502F2A is amended by
a. replacing "Long term debt" with "Non-current borrowings";
b. replacing "Capital leases" with "Finance leases";
c. replacing "Minority or non-controlling" with "Non-controlling";
d. replacing "balance sheet between current liabilities and shareholders' equity" with "statement of financial position as non-current liabilities"; and
e. replacing "forming part of shareholders' equity" with "forming part of equity".
8. Form 13-502F4 is amend by replacing the first sentence of Note 1 by the following:
Gross revenue is defined as the sum of all revenues reported on the audited financial statements, except where unaudited financial statements are permitted in accordance with subsection 3.4(4) or (5) of the Rule.
9. Form 13-502F6 is amended by
a. replacing "net assets and gross revenues of the subsidiary entity for its last completed fiscal year represented more than 90 percent of the consolidated net assets and gross revenues" with "net assets and total revenues of the subsidiary entity for its last completed fiscal year represented more than 90 percent of the consolidated net assets and total revenues"; and
b. replacing the heading "Gross Revenues for last completed fiscal year" with "Total Revenues for last completed fiscal year".
10. This Instrument only applies to periods relating to financial years beginning on or after January 1, 2011.
11. This Instrument comes into force on January 1, 2011.
Amendments to OSC Companion Policy 13-502CP Fees
1. OSC Companion Policy 13-502CP Fees is amended by this Instrument.
2. Subsection 2.2(2) is amended by replacing "gross revenue" with "revenue".
3. Section 3.5 is replaced by the following:
3.5 Owners' Equity and Non-Current Borrowings -- A Class 2 reporting issuer calculates its capitalization on the basis of certain items reflected in its audited statement of financial position. Two such items are "share capital or owners' equity" and "non-current borrowings, including the current portion". The Commission notes that "owners' equity" is designed to describe the equivalent of share capital for non-corporate issuers, such as partnerships or trusts. "Non-current borrowings" is designed to describe the equivalent of long term debt or any other borrowing of funds beyond a period of twelve months.
3.6 Identification of Non-Current Liabilities - If a Class 2 reporting issuer does not present current and non-current liabilities as separate classifications on its statement of financial position, the reporting issuer will still need to classify these liabilities for purposes of its capitalization calculation. In these circumstances, non-current liabilities means total liabilities minus current liabilities, using the meanings ascribed to those terms under the accounting standards pursuant to which the entity's financial statements are prepared under Ontario securities law.
4. This Instrument only applies to periods relating to financial years beginning on or after January 1, 2011.
5. This Instrument becomes effective on January 1, 2011.
Amendment to OSC Rule 13-503 (Commodity Futures Act) Fees
1. OSC Rule 13-503 (Commodity Futures Act) Fees is amended by this Instrument.
2. Appendix C is amended by replacing "interim financial statements" with "interim financial reports".
3. Form 13-503F1 is amended by deleting "a gross basis as per" in Note 1 of Part II.
4. This Instrument only applies to periods relating to financial years beginning on or after January 1, 2011.
5. This Instrument comes into force on January 1, 2011.
Amendments to OSC Policy 51-601 Reporting Issuer Defaults
1. OSC Policy 51-601 Reporting Issuer Defaults is amended by this Instrument.
2. Section 2.1 is amended by replacing "the Commission's website at www.osc.gov.on.ca/Public Companies/Issuers/is_index.jsp." with "the Commission's website at http://www.osc.gov.on.ca/en/Companies index.htm.".
3. Subsection 2.2(2) is amended by
a. replacing "file interim financial statements" with "file an interim financial report"; and
b. replacing "and interim financial statements" with "and interim financial reports".
4. Subsection 3.2(3) is replaced by the following:
(3) National Policy 12-203 Cease Trade Orders for Continuous Disclosure Defaults describes how the Canadian Securities Administrators will generally respond to certain types of continuous disclosure defaults by reporting issuers.
5. Paragraph 1(b) of Appendix A is amended by replacing "interim financial statements" with "interim financial report".
6. Paragraph 1(e) of Appendix A is amended by replacing "Multilateral" with "National" and "MI 52-109" with "NI 52-109".
7. Paragraph 1(n) of Appendix A is replaced by the following:
(n) audit committee disclosure as required by National Instrument 52-110 Audit Committees; or
8. Paragraph 1(o) of Appendix A is amended by replacing "MI" with "NI".
9. Paragraph 2(a) of Appendix A is amended by replacing "National Instrument 52-107 Acceptable Accounting Principles, Auditing Standards and Reporting Currency" with "National Instrument 52-107 Acceptable Accounting Principles and Auditing Standards".
10. Sections 3 and 5 of this Instrument only apply to periods relating to financial years beginning on or after January 1, 2011.
11. This Instrument becomes effective on January 1, 2011.
Amendments to OSC Policy 51-604 Defence for Misrepresentations in Forward-Looking Information
1. OSC Policy 51-604 Defence for Misrepresentations in Forward-Looking Information is amended by this Instrument.
2. Subsection 1.1(2) is amended by replacing "results of operations" with "financial performance".
3. This Instrument only applies to periods relating to financial years beginning on or after January 1, 2011.
4. This Instrument becomes effective on January 1, 2011.
Amendments to OSC Rule 62-504 Take-Over Bids and Issuer Bids
1. OSC Rule 62-504 Take-Over Bids and Issuer Bids is amended by this Instrument.
2. Item 19 of Part 2 of Form 62-504F2 is amended by
a. replacing "interim financial statements are" with "interim financial report is"; and
b. replacing "interim financial statements will" with "interim financial report will".
3. Item 13 of Form 62-504F3 is amended by replacing "interim or annual financial statement" with "interim financial report or annual financial statements".
4. Item 11 of Form 62-504F4 is amended by replacing "interim or annual financial statement" with "interim financial report or annual financial statements".
5. This Instrument only applies to periods relating to financial years beginning on or after January 1, 2011.
6. This Instrument comes into force on January 1, 2011.
Amendment Instrument for National Instrument 51-102 Continuous Disclosure Obligations
AMENDMENT INSTRUMENT FOR
NATIONAL INSTRUMENT 51-102 CONTINUOUS DISCLOSURE OBLIGATIONS
Although this amendment instrument amends section headers in National Instrument 51-102, section headers do not form part of the instrument and are inserted for ease of reference only.
1. National Instrument 51-102 Continuous Disclosure Obligations is amended by this Instrument.
2. Subsection 1.1(1) is amended
(a) before the definition of "AIF", by adding the following definition:
"acquisition date" has the same meaning as in the issuer's GAAP;,
(b) in the definition of "AIF", by deleting ", Form 10-KSB",
(c) by deleting the definition of "date of acquisition",
(d) after the definition of "common share", by adding the following definition:
"date of transition to IFRS" means the date of transition to IFRSs as that term is defined in Canadian GAAP applicable to publicly accountable enterprises;,
(e) in the definition of "financial outlook", by
(i) replacing "results of operations" with "financial performance", and
(ii) replacing "balance sheet, income statement or cash flow statement" with "statement of financial position, statement of comprehensive income or statement of cash flows",
(f) after the definition of "financial outlook", by adding the following definitions:
"financial statements" includes interim financial reports;
"first IFRS financial statements" has the same meaning as in Canadian GAAP applicable to publicly accountable enterprises;,
(g) in the definition of "FOFI", or "future-oriented financial information", by
(i) replacing "results of operations" with "financial performance", and
(ii) replacing "balance sheet, income statement or cash flow statement" with "statement of financial position, statement of comprehensive income or statement of cash flows",
(h) by deleting the definition of "income from continuing operations",
(i) after the definition of "form of proxy", by adding the following definition:
"forward-looking information" means disclosure regarding possible events, conditions or financial performance that is based on assumptions about future economic conditions and courses of action and includes future-oriented financial information with respect to prospective financial performance, financial position or cash flows that is presented either as a forecast or a projection;,
(j) by replacing the definition of "inter-dealer bond broker" with the following:
"inter-dealer bond broker" means a person or company that is approved by the Investment Industry Regulatory Organization of Canada under its Rule 36 Inter-Dealer Bond Brokerage Systems, as amended, and is subject to its Rule 36 and its Rule 2100Inter-Dealer Bond Brokerage Systems, as amended;,
(k) in the definition of "issuer's GAAP", by replacing "Acceptable Accounting Principles, Auditing Standards and Reporting Currency" with "Acceptable Accounting Principles and Auditing Standards",
(l) in the definition of "MD&A", by deleting "or Item 303 of Regulation S-B",
(m) after the definition of "old financial year", by adding the following definition:
"operating income" means gross revenue minus royalty expenses and production costs;,
(n) after the definition of "principal obligor", by adding the following definitions:
"private enterprise" has the same meaning as in Part 3 of National Instrument 52-107 Acceptable Accounting Principles and Auditing Standards;
"profit or loss attributable to owners of the parent" has the same meaning as in Canadian GAAP applicable to publicly accountable enterprises;
"profit or loss from continuing operations attributable to owners of the parent" has the same meaning as in Canadian GAAP applicable to publicly accountable enterprises";,
(o) after the definition of "proxy", by adding the following definition:
"publicly accountable enterprise" has the same meaning as in Part 3 of National Instrument 52-107 Acceptable Accounting Principles and Auditing Standards;,
(p) after the definition of "restructuring transaction", by adding the following definitions:
"retrospective" has the same meaning as in Canadian GAAP applicable to publicly accountable enterprises;
"retrospectively" has the same meaning as in Canadian GAAP applicable to publicly accountable enterprises;,
(q) by replacing the definition of "reverse takeover" with the following:
"reverse takeover" means
(a) a reverse acquisition, which has the same meaning as in Canadian GAAP applicable to publicly accountable enterprises; or
(b) a transaction where an issuer acquires a person or company by which the securityholders of the acquired person or company, at the time of the transaction, obtain control of the issuer, where, for purposes of this paragraph, "control" has the same meaning as in Canadian GAAP applicable to publicly accountable enterprises;,
(r) after the definition of "transition year", by adding the following definition:
"U.S. AICPA GAAS" has the same meaning as in National Instrument 52-107 Acceptable Accounting Principles and Auditing Standards;,
(s) by replacing the definition of "U.S. GAAP" with the following:
"U.S. GAAP" has the same meaning as in National Instrument 52-107 Acceptable Accounting Principles and Auditing Standards;,
(t) after the definition of "U.S. marketplace", by adding the following definition:
"U.S. PCAOB GAAS" has the same meaning as in National Instrument 52-107 Acceptable Accounting Principles and Auditing Standards;, and
(u) in the definition of "venture issuer", by replacing "date of acquisition" with "acquisition date".
3. Section 4.1 is amended
(a) by replacing subsection (1) with the following:
(1) Subject to subsection 4.8(6), a reporting issuer must file annual financial statements that include
(a) a statement of comprehensive income, a statement of changes in equity, and a statement of cash flows for
(i) the most recently completed financial year; and
(ii) the financial year immediately preceding the most recently completed financial year, if any;
(b) a statement of financial position as at the end of each of the periods referred to in paragraph (a);
(c) in the following circumstances, a statement of financial position as at the beginning of the financial year immediately preceding the most recently completed financial year:
(i) the reporting issuer discloses in its annual financial statements an unreserved statement of compliance with IFRS, and
(ii) the reporting issuer
(A) applies an accounting policy retrospectively in its annual financial statements,
(B) makes a retrospective restatement of items in its annual financial statements, or
(C) reclassifies items in its annual financial statements;
(d) in the case of the reporting issuer's first IFRS financial statements, the opening IFRS statement of financial position at the date of transition to IFRS; and
(e) notes to the annual financial statements., and
(b) by adding the following after subsection (2):
(3) If a reporting issuer presents the components of profit or loss in a separate income statement, the separate income statement must be displayed immediately before the statement of comprehensive income filed under subsection (1)..
4. Section 4.3 is amended
(a) in the title, by replacing "Interim Financial Statements" with "Interim Financial Report",
(b) in subsection (1), by replacing "interim financial statements for interim periods" with "an interim financial report for each interim period",
(c) by replacing subsection (2) with the following:
(2) Subject to subsections 4.7(4), 4.8(7), 4.8(8) and 4.10(3), the interim financial report required to be filed under subsection (1) must include
(a) a statement of financial position as at the end of the interim period and a statement of financial position as at the end of the immediately preceding financial year, if any;
(b) a statement of comprehensive income, a statement of changes in equity and a statement of cash flows, all for the year-to-date interim period, and comparative financial information for the corresponding interim period in the immediately preceding financial year, if any;
(c) for interim periods other than the first interim period in a reporting issuer's financial year, a statement of comprehensive income for the three month period ending on the last day of the interim period and comparative financial information for the corresponding period in the immediately preceding financial year, if any;
(d) in the following circumstances, a statement of financial position as at the beginning of the immediately preceding financial year:
(i) the reporting issuer discloses in its interim financial report an unreserved statement of compliance with International Accounting Standard 34 Interim Financial Reporting, and
(ii) the reporting issuer
(A) applies an accounting policy retrospectively in its interim financial report,
(B) makes a retrospective restatement of items in its interim financial report, or
(C) reclassifies items in its interim financial report;
(e) in the case of the reporting issuer's first interim financial report required to be filed in the year of adopting IFRS, the opening IFRS statement of financial position at the date of transition to IFRS; and
(f) notes to the interim financial report.,
(d) by adding the following after subsection (2):
(2.1) If a reporting issuer presents the components of profit or loss in a separate income statement, the separate income statement must be displayed immediately before the statement of comprehensive income filed under subsection (2).,
(e) in subsection (3),
(i) in the title, by replacing "Interim Financial Statements" with "an Interim Financial Report",
(ii) by replacing "interim financial statements" wherever it occurs with "interim financial report",
(iii) in paragraph (a), by
(A) replacing "review of the" with "review of an", and
(B) replacing "financial statements have" with "interim financial report has",
(iv) in paragraph (b), by replacing "review of the" with "review of an", and
(v) in paragraph (c), by replacing "expressed a reservation in" with "expressed a reservation of opinion in",
(f) in subsection (4),
(i) in the title, by replacing "Interim Financial Statements" with "an Interim Financial Report",
(ii) in paragraph (a), by
(A) replacing "interim financial statements" with "an interim financial report",
(B) adding "applicable to publicly accountable enterprises" after "Canadian GAAP", and
(C) adding "annual" before "financial statements have been filed",
(iii) in paragraph (b), by replacing "annual or interim financial statements" with "annual financial statements or an interim financial report",
(iv) in paragraph (c), by
(A) replacing "interim financial statements" with "interim financial report", and
(B) deleting "and comply with the reconciliation requirements set out in Part 4 of National Instrument 52-107 Acceptable Accounting Principles, Auditing Standards and Reporting Currency", and
(v) in paragraph (d), by replacing "restated financial statements" with "restated interim financial report".
5. Section 4.4 is amended
(a) in the title, by replacing "Interim Financial Statements" with "an Interim Financial Report",
(b) in the preamble, by replacing "The interim financial statements" with "An interim financial report", and
(c) in paragraphs (a) and (b), by replacing "interim financial statements" wherever it occurs with "an interim financial report".
6. Section 4.5 is amended
(a) in subsection (1), by adding "annual" before "financial",
(b) in subsection (2), by
(i) replacing "financial statements" with "interim financial report", and
(ii) replacing "statements are" with "report is", and
(c) in subsection (3), by replacing "financial statements" with "interim financial report".
7. Section 4.6 is amended
(a) in subsection (1), by replacing "interim financial statements" wherever it occurs with "interim financial reports",
(b) in subsection (3), by replacing "annual or interim financial statements" with "annual financial statements or interim financial reports", and
(c) in subsection (4), by replacing "annual or interim financial statements" with "annual financial statements or interim financial reports".
8. Section 4.7 is amended
(a) in subsection (1), by replacing "annual and interim financial statements" with "annual financial statements and interim financial reports",
(b) in subsection (2), by adding "annual" after "those",
(c) in subsection (3), by
(i) replacing "interim financial statements" with "an interim financial report", and
(ii) replacing "those financial statements" with "that interim financial report", and
(d) in paragraph (4)(c), by replacing "interim financial statements" with "interim financial report".
9. Section 4.8 is amended
(a) in subsection (3),
(i) in paragraph (e), by replacing "the interim and annual financial statements" with "each interim financial report and the annual financial statements", and
(ii) in paragraph (f), by replacing "the interim and annual financial statements" with "the annual financial statements and interim financial reports",
(b) in subsection (5), by replacing "interim financial statements" with "an interim financial report",
(c) by replacing subsection (6) with the following:
(6) Comparative Financial Information in Annual Financial Statements for New Financial Year -- If a transition year is less than nine months in length, the reporting issuer must include as comparative financial information to its annual financial statements for its new financial year
(a) a statement of financial position, a statement of comprehensive income, a statement of changes in equity, a statement of cash flows, and notes to the financial statements for its transition year;
(b) a statement of financial position, a statement of comprehensive income, a statement of changes in equity, a statement of cash flows and notes to the financial statements for its old financial year;
(c) in the following circumstances, a statement of financial position as at the beginning of the old financial year:
(i) the reporting issuer discloses in its annual financial statements an unreserved statement of compliance with IFRS, and
(ii) the reporting issuer
(A) applies an accounting policy retrospectively in its annual financial statements,
(B) makes a retrospective restatement of items in its annual financial statements, or
(C) reclassifies items in its annual financial statements; and
(d) in the case of the reporting issuer's first IFRS financial statements, the opening IFRS statement of financial position at the date of transition to IFRS.,
(d) by replacing subsection (7) with the following:
(7) Comparative Financial Information in each Interim Financial Report if Interim Periods Not Changed in Transition Year -- If interim periods for the reporting issuer's transition year end three, six, nine or twelve months after the end of its old financial year, the reporting issuer must include
(a) as comparative financial information in each interim financial report during its transition year, the comparative financial information required by subsection 4.3(2), except if an interim period during the transition year is 12 months in length and the reporting issuer's transition year is longer than 13 months, the comparative financial information must be the statement of financial position, statement of comprehensive income, statement of changes in equity and statement of cash flows for the 12 month period that constitutes its old financial year;
(b) as comparative financial information in each interim financial report during its new financial year
(i) a statement of financial position as at the end of its transition year; and
(ii) the statement of comprehensive income, statement of changes in equity and statement of cash flows for the periods in its transition year or old financial year, for the same calendar months as, or as close as possible to, the calendar months in the interim period in the new financial year;
(c) in the following circumstances, a statement of financial position as at the beginning of the earliest comparative period:
(i) the reporting issuer discloses in its interim financial report an unreserved statement of compliance with International Accounting Standard 34 Interim Financial Reporting, and
(ii) the reporting issuer
(A) applies an accounting policy retrospectively in its interim financial report,
(B) makes a retrospective restatement of items in its interim financial report, or
(C) reclassifies items in its interim financial report; and
(d) in the case of the reporting issuer's first interim financial report required to be filed in the year of adopting IFRS, the opening IFRS statement of financial position at the date of transition to IFRS., and
(e) by replacing subsection (8) with the following:
(8) Comparative Financial Information in Interim Financial Reports if Interim Periods Changed in Transition Year -- If interim periods for a reporting issuer's transition year end twelve, nine, six or three months before the end of the transition year, the reporting issuer must include
(a) as comparative financial information in each interim financial report during its transition year
(i) a statement of financial position as at the end of its old financial year; and
(ii) the statement of comprehensive income, statement of changes in equity and statement of cash flows for periods in its old financial year, for the same calendar months as, or as close as possible to, the calendar months in the interim period in the transition year;
(b) as comparative financial information in each interim financial report during its new financial year
(i) a statement of financial position as at the end of its transition year; and
(ii) the statement of comprehensive income, statement of changes in equity and statement of cash flows in its transition year or old financial year, or both, as appropriate, for the same calendar months as, or as close as possible to, the calendar months in the interim period in the new financial year;
(c) in the following circumstances, a statement of financial position as at the beginning of the earliest comparative period:
(i) the reporting issuer discloses in its interim financial report an unreserved statement of compliance with International Accounting Standard 34 Interim Financial Reporting, and
(ii) the reporting issuer
(A) applies an accounting policy retrospectively in its interim financial report,
(B) makes a retrospective restatement of items in its interim financial report, or
(C) reclassifies items in its interim financial report; and
(d) in the case of the reporting issuer's first interim financial report required to be filed in the year of adopting IFRS, the opening IFRS statement of financial position at the date of transition to IFRS..
10. Paragraph 4.9(h) is amended by replacing "interim and annual financial statements" with "interim financial reports and the annual financial statements".
11. Section 4.10 is amended
(a) in paragraph (2)(c), by replacing "the interim financial statements" with "each interim financial report", and
(b) in subsection (3),
(i) in the title, by replacing "Interim Financial Statements" with "each Interim Financial Report", and
(ii) in paragraph (c), by replacing "interim financial statements" with "interim financial report".
12. Section 4.11 is amended
(a) by replacing "former auditor" wherever it occurs with "predecessor auditor",
(b) in subsection (1), in the definition of "disagreement", by
(i) replacing "interim financial statements" wherever it occurs with "interim financial report", and
(ii) replacing "reservation" wherever it occurs with "modified opinion",
(c) in subsection (2), by replacing "Handbook" with "issuer's GAAP", and
(d) in paragraph (7)(d), by
(i) replacing "contained any reservation" with "expressed a modified opinion", and
(ii) replacing "each reservation" with "each modification".
13. Section 5.1 is amended
(a) in subsection (1), by replacing "annual and interim financial statements" with "annual financial statements and each interim financial report",
(b) in subsection (1.1), by replacing "annual and interim financial statements" with "annual financial statements and interim financial reports", and
(c) in subsection (2),
(i) in the preamble, by replacing "by" with "on or before", and
(ii) in paragraph (a), by replacing "annual and interim financial statements" with "annual financial statements and each interim financial report".
14. Section 5.2 is amended
(a) in the title, by deleting "and Supplement",
(b) in subsection (1), by deleting "or Item 303 of Regulation S-B",
(c) by repealing subsection (1.1), and
(d) by repealing subsection (2).
15. Section 5.3 is amended
(a) by replacing subsection (1) with the following:
(1) A venture issuer that has not had significant revenue from operations in either of its last two financial years, must disclose in its MD&A, for each period referred to in subsection (2), a breakdown of material components of
(a) exploration and evaluation assets or expenditures;
(b) expensed research and development costs;
(c) intangible assets arising from development;
(d) general and administration expenses; and
(e) any material costs, whether expensed or recognized as assets, not referred to in paragraphs (a) through (d);
and if the venture issuer's business primarily involves mining exploration and development, the analysis of exploration and evaluation assets or expenditures must be presented on a property-by-property basis.,
(b) in paragraph (2)(b), by replacing "interim financial statements" with "interim financial report", and
(c) in subsection (3), by deleting "or MD&A supplement".
16. Subsection 5.4(1) is amended by deleting ", or in its MD&A supplement if one is required under section 5.2,".
17. Section 5.5 is amended
(a) in subsection (1), by deleting "and any annual MD&A supplement",
(b) in subsection (2), by deleting "and any interim MD&A supplement", and
(c) in subsection (3), by deleting "and any MD&A supplement".
18. Section 5.6 is amended
(a) in subsection (1), by
(i) deleting "and any MD&A supplement required under section 5.2", and
(ii) replacing "annual or interim financial statements" with "annual financial statements or interim financial report",
(b) in subsection (2), by deleting "or MD&A supplement",
(c) in subsection (3), by deleting "and any related MD&A supplement" wherever it occurs, and
(d) in subsection (4), by replacing "annual or interim financial statements" with "annual financial statements or interim financial report".
19. Section 5.7 is amended
(a) in subsection (1), by deleting ", or in its MD&A supplement if one is required under section 5.2,",
(b) by replacing paragraph (1)(a) with the following:
(a) summarized financial information of the equity investee, including the aggregated amounts of assets, liabilities, revenue and profit or loss; and,
(c) in paragraph (1)(b), by replacing "earnings" with "profit or loss",
(d) in paragraph (2)(b), by replacing "statements" with "report", and
(e) in paragraph (3)(a), by deleting "or MD&A supplement".
20. Section 5.8 is amended
(a) in subsection (2), by deleting ", or MD&A supplement if one is required under section 5.2,",
(b) in subsection (3),
(i) by deleting "or MD&A supplement" wherever it occurs, and
(ii) in subparagraph (b)(iii), by replacing "on" with "at",
(c) in subsection (4), by deleting ", or MD&A supplement if one is required under section 5.2,",
(d) in subsection (5),
(i) in paragraph (a), by replacing ", in its MD&A or MD&A supplement if one is required under section 5.2, disclose" with "disclose in its MD&A", and
(ii) in paragraph (b), by deleting "or MD&A supplement" wherever it occurs, and
(e) in subsection (6),
(i) by deleting "or MD&A supplement" wherever it occurs, and
(ii) in subparagraph (b)(iii), by replacing "on" with "at".
21. Section 6.2 is amended
(a) in paragraph (b), by replacing "AIF in" with "AIF on", and
(b) by deleting ", Form 10-KSB" wherever it occurs.
22. Subsection 8.1(1) is amended
(a) in the definition of "acquisition of related businesses", by replacing "upon a single common event; and" with "upon a single common event;",
(b) by adding "; and" after the definition of "business", and
(c) after the definition of "business", by adding the following definition:
"specified profit or loss" means profit or loss from continuing operations attributable to owners of the parent, adjusted to exclude income taxes..
23. Section 8.2 amended by replacing "date of acquisition" wherever it occurs with "acquisition date".
24. Section 8.3 is amended
(a) by replacing "date of the acquisition" wherever it occurs with "acquisition date",
(b) by replacing "date of acquisition" wherever it occurs with "acquisition date",
(c) by replacing "income from continuing operations" wherever it occurs with "specified profit or loss",
(d) in the preamble to subsection (2), by adding "and subject to subsections (4.1) and (4.2)" after "subsection (1)",
(e) in paragraph (2)(a), by adding "annual" before "financial statements",
(f) in paragraph 2(c),
(i) in the title, by replacing "Income" with "Profit or Loss", and
(ii) by adding "annual" before "financial statements",
(g) in subsection (4),
(i) in the preamble, by adding "and subject to subsections (4.1) and (4.2)" after "subsection (3)", and
(ii) in paragraph (c), in the title, by replacing "Income" with "Profit or Loss",
(h) by adding the following after subsection (4):
(4.1) For the purposes of subsections (2) and (4), the reporting issuer must not remeasure its previously held equity interest in the business or related businesses.
(4.2) For the purposes of paragraphs (2)(b) and (4)(b), the reporting issuer's investments in and advances to the business or related businesses must include
(a) the consideration transferred for the acquisition, measured in accordance with the issuer's GAAP,
(b) payments made in connection with the acquisition which do not constitute consideration transferred but which would not have been paid unless the acquisition had occurred, and
(c) contingent consideration for the acquisition measured in accordance with the issuer's GAAP.,
(i) in subsection (7),
(i) in the title, by replacing "Income" with "Profit or Loss", and
(ii) by replacing "absolute value of the loss" with "absolute value of the loss from continuing operations attributable to owners of the parent, adjusted to exclude income taxes",
(j) in the title to subsection (8), by replacing "Income" wherever it occurs with "Profit or Loss",
(k) in subsection (9),
(i) in the title, by replacing "Income" wherever it occurs with "Profit or Loss", and
(ii) by replacing "income" after "average consolidated" with "specified profit or loss",
(l) in subsection (10),
(i) in the title, by replacing "Income" with "Profit or Loss", and
(ii) by replacing "average consolidated income" with "average consolidated specified profit or loss",
(m) in subsection (11),
(i) in the title, by replacing "Step-By-Step Acquisitions" with "Multiple Investments in the Same Business", and
(ii) by replacing "a "step-by-step" purchase as described in the Handbook" with "multiple investments in the same business",
(n) in subsection (11.1),
(i) in the title, by replacing "Income" with "Profit or Loss", and
(ii) by replacing "income test" with "profit or loss test",
(o) in subsection (12), by replacing "annual audited financial statements" with "audited annual financial statements",
(p) by replacing subsection (13) with the following:
(13) Application of Significance Tests -- Accounting Principles and Currency -- For the purposes of calculating the significance tests in subsections (2) and (4), the amounts used for the business or related businesses must
(a) subject to subsection (13.1), be based on the issuer's GAAP, and
(b) be translated into the same presentation currency as that used in the reporting issuer's financial statements.
(13.1) Application of Significance Tests -- Exemption -- Canadian GAAP Applicable to Private Enterprises -- Paragraph 8.3(13)(a) does not apply to a venture issuer if
(a) the financial statements for the business or related businesses referred to in subsections 8.3(2) and (4)
(i) are prepared in accordance with Canadian GAAP applicable to private enterprises, and
(ii) are prepared in a manner that consolidates any subsidiaries and accounts for significantly influenced investees and joint ventures using the equity method; and
(b) none of the accounting principles described in paragraphs 3.11(1)(a) through (e) of National Instrument 52-107 Acceptable Accounting Principles and Auditing Standards were used to prepare financial statements for the business or related businesses referred to in subsections 8.3(2) and (4)., and
(q) in subsection (14), by replacing "subsection 6.1(1) of National Instrument 52-107 Acceptable Accounting Principles, Auditing Standards and Reporting Currency" with "section 3.11 of National Instrument 52-107 Acceptable Accounting Principles and Auditing Standards".
25. Section 8.4 is amended
(a) by replacing "date of acquisition" wherever it occurs with "acquisition date",
(b) by replacing "balance sheet" wherever it occurs with "statement of financial position",
(c) in paragraph (1)(a), by replacing "an income statement, a statement of retained earnings and a cash flow statement" with "a statement of comprehensive income, a statement of changes in equity and a statement of cash flows",
(d) in the title to subsection (3), by replacing "Interim Financial Statements" with "Interim Financial Report",
(e) after subsection (3), by adding the following:
(3.1) Contents of Interim Financial Report -- Canadian GAAP Applicable to Private Enterprises -- If a reporting issuer is required under subsection (3) to include an interim financial report in a business acquisition report and the financial statements for the business or related businesses acquired are prepared in accordance with Canadian GAAP applicable to private enterprises, as permitted under National Instrument 52-107Acceptable Accounting Principles and Auditing Standards, the interim financial report must include
(a) a balance sheet as at the end of the interim period and a balance sheet as at the end of the immediately preceding financial year, if any;
(b) an income statement, a statement of retained earnings and a cash flow statement, all for the year-to-date interim period, and comparative financial information for the corresponding interim period in the immediately preceding financial year, if any; and
(c) notes to the financial statements.,
(f) in subsection (4),
(i) in the title, by deleting "Interim", and
(ii) in paragraph (a), by adding "and" after "before the acquisition;",
(g) by repealing paragraph (4)(b),
(h) in subparagraph (5)(b),
(i) in clause (i)(B), by replacing "financial statements" with "an interim financial report", and
(ii) in subparagraph (ii), by replacing "an income statement" with "a statement of comprehensive income",
(i) in the title to subsection (6), by deleting "Interim", and
(j) in subsection (7),
(i) by replacing paragraph (b) with the following:
(b) the reporting issuer must include in the pro forma financial statements
(i) adjustments attributable to each significant acquisition for which there are firm commitments and for which the complete financial effects are objectively determinable,
(ii) adjustments to conform amounts for the business or related businesses to the issuer's accounting policies, and
(iii) a description of the underlying assumptions on which the pro forma financial statements are prepared, cross-referenced to each related pro forma adjustment;, and
(ii) in paragraph (e), by replacing ", gross profit and income" with "and profit or loss".
26. Section 8.6 is amended
(a) by replacing subparagraph (b)(i) with the following:
(i) summarizes financial information of the equity investee, including the aggregated amounts of assets, liabilities, revenue and profit or loss; and,
(b) in subparagraph (b)(ii), by replacing "earnings" with "profit or loss",
(c) in subparagraph (d)(iii),
(i) by replacing "audit opinion" with "auditor expressed an unmodified opinion", and
(ii) by replacing ", or the financial information referred to in subparagraph (ii), was issued without a reservation" with "or the financial information referred to in subparagraph (ii)".
27. Section 8.9 is amended
(a) in the preamble, by replacing "interim financial statements" with "an interim financial report", and
(b) in paragraph (c), by replacing "interim financial statements" with "interim financial report".
28. Section 8.10 is amended
(a) in subsection (2),
(i) in the title, by replacing "Income" with "Profit or Loss",
(ii) by replacing "consolidated income from continuing operations" with "specified profit or loss", and
(iii) by replacing "income test" with "profit or loss test",
(b) by repealing paragraph (3)(d), and
(c) by replacing subparagraph (3)(e)(i) with the following:
(i) an operating statement for the business or related businesses prepared in accordance with subsection 3.11(5) of National Instrument 52-107 Acceptable Accounting Principles and Auditing Standards;.
29. Section 8.11 is amended
(a) in the title, by replacing "Step-By-Step Acquisitions" with "Multiple Investments in the Same Business", and
(b) by replacing "a "step-by-step" purchase as described in the Handbook" with "multiple investments in the same business".
30. Paragraph 9.4(9)(a) is amended by adding "or, in the case of a solicitation under subsection 9.2(4), the document required under paragraph 9.2(6)(a)" after "circular".
31. Subsection 10.1(3) is amended by replacing "interim financial statements" with "an interim financial report".
32. Section 11.4 is amended by replacing "results of operations" with "financial performance".
33. Paragraph 11.5(b) is amended by replacing "retroactive" with "retrospective".
34. Section 13.4 is amended
(a) in subsection (1),
(i) in the definition of "designated credit support securities", by
(A) replacing "non-convertible debt or convertible debt that is convertible" with "non-convertible debt securities or convertible debt securities that are convertible", and
(B) deleting "and" after "supporter within 15 days of any failure by the credit support issuer to make a payment;",
(ii) by adding "and" after the definition of "subsidiary credit supporter", and
(iii) by replacing the definition of "summary financial information" with the following:
"summary financial information" includes the following line items:
(a) revenue;
(b) profit or loss from continuing operations attributable to owners of the parent;
(c) profit or loss attributable to owners of the parent; and
(d) unless the accounting principles used to prepare the financial statements of the person or company permits the preparation of the person or company's statement of financial position without classifying assets and liabilities between current and non-current and the person or company provides alternative meaningful financial information which is more appropriate to the industry,
(i) current assets;
(ii) non-current assets;
(iii) current liabilities; and
(iv) non-current liabilities.
(a.1) by adding the following note after subsection (1):
[Note: See section 1.1 of the Instrument for the definitions of "profit or loss attributable to owners of the parent" and "profit or loss from continuing operations attributable to owners of the parent".],
(b) in paragraph (2)(g),
(i) in the preamble, by replacing "the interim and annual financial statements" with "each consolidated interim financial report and consolidated annual financial statements",
(ii) in clause (i)(A), by replacing "revenues" with "revenue", and
(iii) in subparagraph (ii), by replacing "interim or annual consolidated" with "consolidated interim financial report or consolidated annual",
(c) in paragraph (2.1)(c),
(i) by replacing "the interim and annual consolidated" with "each consolidated interim financial report and the consolidated annual", and
(ii) by replacing "any interim or annual consolidated" with "any consolidated interim financial report or consolidated annual", and
(d) in paragraph (2.2)(b), by replacing "revenues" with "revenue".
35. Part 14 is amended by adding the following after section 14.2:
14.3 Transition -- Interim Financial Report
(1) Despite section 4.4 and paragraph 4.10(2)(c), the first interim financial report required to be filed in the year of adopting IFRS in respect of an interim period beginning on or after January 1, 2011 may be filed
(a) in the case of a reporting issuer other than a venture issuer, on or before the earlier of
(i) the 75th day after the end of the interim period; and
(ii) the date of filing, in a foreign jurisdiction, an interim financial report for a period ending on the last day of the interim period; or
(b) in the case of a venture issuer, on or before the earlier of
(i) the 90th day after the end of the interim period; and
(ii) the date of filing, in a foreign jurisdiction, an interim financial report for a period ending on the last day of the interim period.
(2) Despite subsection 5.1(2), the MD&A required to be filed under subsection 5.1(1) relating to the first interim financial report required to be filed in the year of adopting IFRS in respect of an interim period beginning on or after January 1, 2011 may be filed on or before the earlier of
(a) the filing deadline for the interim financial report set out in subsection (1); and
(b) the date the reporting issuer files the interim financial report under subsections (1) or 4.3(1), as applicable.
(3) Despite subsection 4.6(3), if a registered holder or beneficial owner of securities, other than debt instruments, of a reporting issuer requests the issuer's first interim financial report required to be filed in the year of adopting IFRS in respect of an interim period beginning on or after January 1, 2011, the reporting issuer may send a copy of the required interim financial report and the interim MD&A relating to the interim financial report to the person or company that made the request, without charge, by the later of,
(a) in the case of a reporting issuer relying on subsection (1), 10 calendar days after the filing deadline set out in subsection (1), for the financial statements requested;
(b) in the case of a reporting issuer not relying on subsection (1), 10 calendar days after the filing deadline in subparagraph 4.4(a)(i) or 4.4(b)(i), subsection 4.10(2) or subsection 14.3(1), as applicable, for the financial statements requested; and
(c) 10 calendar days after the issuer receives the request.
(4) Subsections (1), (2) and (3) do not apply unless the reporting issuer
(a) is disclosing, for the first time, a statement of compliance with International Accounting Standard 34 Interim Financial Reporting; and
(b) did not previously file financial statements that disclosed compliance with IFRS.
(5) Subsections (1), (2) and (3) do not apply if the first interim financial report is in respect of an interim period ending after March 30, 2012..
36. Part 1 of Form 51-102F1 Management's Discussion & Analysis is amended
(a) by replacing "results of operations" wherever it occurs with "financial performance",
(b) by replacing "earnings" with "profit or loss",
(c) in paragraph (f), by deleting "This concept of materiality is consistent with the financial reporting notion of materiality contained in the Handbook.",
(d) by replacing paragraph (g) with the following:
(g) Venture Issuers Without Significant Revenue
If your company is a venture issuer without significant revenue from operations, focus your discussion and analysis of financial performance on expenditures and progress towards achieving your business objectives and milestones.,
(e) in paragraph (h), by
(i) replacing "When" with "If", and
(ii) deleting "accounted for as",
(f) by repealing paragraph (i),
(g) in paragraph (m), by adding "for further guidance" after "Companion Policy 51-102CP",
(h) in paragraph (m), by adding the following after the first paragraph:
"This Form also uses accounting terms that are defined or used in Canadian GAAP applicable to publicly accountable enterprises. For further guidance, see subsections 1.4(7) and (8) of Companion Policy 51-102CP.",
(i) in paragraph (n), by adding "for further guidance" after "Companion Policy 51-102CP", and
(j) by adding the following after paragraph (o):
(p) Use of "Financial Condition"
This Form uses the term "financial condition". Financial condition reflects the overall health of the company and includes your company's financial position (as shown on the statement of financial position) and other factors that may affect your company's liquidity, capital resources and solvency..
37. Part 2, section 1.1 of Form 51-102F1 is amended by adding "annual" before "financial statements".
38. Part 2, section 1.2 of Form 51-102F1 is amended
(a) by replacing "results of operations" wherever it occurs with "financial performance",
(b) in paragraph (a), by replacing "as those terms are used in the Handbook" with "as those terms are described in the issuer's GAAP",
(c) in subparagraph (b)(i), by replacing "revenues, income" with "revenue, profit or loss", and
(d) by deleting the first sentence of instruction (ii).
39. Part 2, section 1.3 of Form 51-102F1 is amended
(a) in the preamble of subsection (1), by adding "annual" before "financial statements",
(b) in subparagraph (1)(a), by replacing "net sales or total revenues" with "total revenue",
(c) in subparagraph (1)(b), by replacing "income or loss before discontinued operations and extraordinary items, in total" with "profit or loss from continuing operations attributable to owners of the parent, in total",
(d) in subparagraph (1)(c), by replacing "net income or loss, in total" with "profit or loss attributable to owners of the parent, in total",
(e) in subparagraph (1)(e), by replacing "long-term" with "non-current",
(f) in subparagraph (1)(f), by adding "distributions or" before "cash dividends",
(g) in subsection (2), by replacing "condition and results of operations" with "position and financial performance", and
(h) by replacing the Instruction with the following:
INSTRUCTIONS
(i) For each of the three most recently completed financial years, indicate the accounting principles that the financial data has been prepared in accordance with, the presentation currency and the functional currency if different from the presentation currency.
(ii) If the financial data provided was not prepared in accordance with the same accounting principles for all three years, focus the discussion on the important trends and risks that have affected the business..
40. Part 2, section 1.4 of Form 51-102F1 is amended
(a) in the title, by replacing "Results of Operations" with "Discussion of Operations",
(b) in paragraph (a), by replacing "net sales or total revenues by operating business" with "total revenue by reportable",
(c) in paragraph (b), by replacing "net sales or total revenues" with "total revenue",
(d) in paragraph (d), by deleting "operating",
(e) in paragraph (f), by replacing "revenues" with "revenue",
(f) in paragraph (g), by replacing "net sales, total revenue and income or loss before discontinued operations and extraordinary items" with "total revenue and profit or loss from continuing operations attributable to owners of the parent", and
(g) by replacing paragraph (h) with the following:
(h) effect of inflation and specific price changes on your company's total revenue and on profit or loss from continuing operations attributable to owners of the parent;.
41. Part 2, section 1.5 of Form 51-102F1 is amended
(a) by replacing paragraphs (a), (b) and (c) with the following:
(a) total revenue;
(b) profit or loss from continuing operations attributable to owners of the parent, in total and on a per-share and diluted per-share basis; and
(c) profit or loss attributable to owners of the parent, in total and on a per-share and diluted per-share basis.,
(b) in subparagraph (iii) of the instructions,
(A) in clause (G), by replacing "revenues" with "revenue", and
(B) in clause (J), by replacing "cash flow" with "cash flows", and
(c) by replacing subparagraph (iv) of the instructions with the following:
(iv) For each of the eight most recently completed quarters, indicate the accounting principles that the financial data has been prepared in accordance with, the presentation currency and the functional currency if different from the presentation currency.
(v) If the financial data provided was not prepared in accordance with the same accounting principles for all eight quarters, focus the discussion on the important trends and risks that have affected the business..
42. Part 2, section 1.6 of Form 51-102F1 is amended
(a) in paragraph (f), by replacing "balance sheet conditions or income" with "statement of financial position conditions or profit or loss attributable to owners of the parent",
(b) in subparagraph (h)(i), by adding "distributions or" before "dividend",
(c) in the instructions,
(i) by replacing "income" wherever it occurs with "profit or loss",
(ii) in clause (ii)(A), by replacing "earnings" with "profit or loss",
(iii) in subparagraph (iv), by replacing "balance sheet" with "statement of financial position",
(iv) in the table in subparagraph (iv), by
(A) deleting "Long Term" wherever it occurs, and
(B) replacing "Capital" with "Finance", and
(v) in footnote 2 of the table in subparagraph (iv), by
(A) replacing "Other Long Term Obligations" with "Other Obligations",
(B) replacing "long-term liabilities" with "financial liabilities", and
(C) replacing "balance sheet" with "statement of financial position".
43. Part 2, section 1.8 of Form 51-102F1 is amended
(a) by replacing "results of operations" with "financial performance",
(b) in paragraph (c), by replacing "revenues" with "revenue", and
(c) in the instructions, by
(i) deleting "under a material variable interest", and
(ii) adding "activities" after "hedging".
44. Part 2, section 1.9 of Form 51-102F1 is amended
(a) in the title, by replacing "with" with "Between",
(b) by replacing "transactions involving related" with "transactions between related",
(c) by replacing "Handbook" with "issuer's GAAP", and
(d) in the instructions,
(i) by replacing "transactions with related" with "transactions between related", and
(ii) in clause (C), by adding "describe" before "the measurement".
45. Part 2, section 1.10 of Form 51-102F1 is amended by replacing "cash flows or results of operations, including extraordinary items" with "financial performance or cash flows".
46. Part 2, section 1.11 of Form 51-102F1 is amended by replacing "results of operations" with "financial performance".
47. Part 2, section 1.12 of Form 51-102F1 is amended
(a) in paragraph (b), by replacing "financial condition, changes in financial condition and results of operations" with "financial position, changes in financial position and financial performance",
(b) in paragraph (e), by
(i) adding "reportable" before "segments", and
(ii) adding "reportable" before "segment" wherever it occurs, and
(c) in clause (i)(B) of the instructions, by replacing "results of operations" with "financial performance".
48. Part 2, section 1.13 of Form 51-102F1 is amended
(a) by replacing "financial condition, changes in financial condition and results of operations" wherever it occurs with "financial position, changes in financial position and financial performance",
(b) in subparagraphs (b)(ii) and (v), by replacing "principle" wherever it occurs with "policy", and
(c) in subparagraph (b)(iv), by replacing "principles" with "policies".
49. Part 2, section 1.14 of Form 51-102F1 is amended
(a) in paragraph (e), by replacing "income" with "profit or loss",
(b) in subparagraph (ii) of the instructions, by replacing "results of operations" with "financial performance",
(c) in subparagraph (iii) of the instructions, by replacing "earnings" with "profit or loss", and
(d) in subparagraph (iv) of the instructions, by replacing "income" with "revenue".
50. Part 2, section 2.2 of Form 51-102F1 is amended
(a) in subparagraph (a)(i), by replacing "results of operations and cash flows" with "financial performance",
(b) by adding the following after subparagraph (a)(i):
(i.i) a comparison of cash flows to the corresponding period in the previous year;,
(c) in subparagraph (a)(ii), by
(i) replacing "results of operations" with "financial performance", and
(ii) replacing "income or loss" with "profit or loss attributable to owners of the parent",
(d) in subparagraph (a)(iii), by replacing "financial condition, results of operations" with "financial position, financial performance",
(e) in the instructions,
(i) by replacing "interim financial statements" wherever it occurs with "interim financial report", and
(ii) in subparagraph (iv), by
(A) replacing "balance sheet" with "statement of financial position",
(B) replacing "income" with "profit or loss", and
(C) deleting "that are outside the ordinary course of your company's business".
51. Part 1 of Form 51-102F2 Annual Information Form is amended
(a) in paragraph (e), by deleting "This concept of materiality is consistent with the financial reporting notion of materiality contained in the Handbook.",
(b) in paragraph (g), by adding "for further guidance" after "Companion Policy 51-102CP",
(c) by adding the following at the end of paragraph (g):
This Form also uses accounting terms that are defined or used in Canadian GAAP applicable to publicly accountable enterprises. For further guidance, see subsections 1.4(7) and (8) of Companion Policy 51-102CP.,
(d) in paragraph (h), by adding "for further guidance" after "Companion Policy 51-102CP", and
(e) in paragraph (i), by
(i) replacing "Special Purpose Vehicles" with "Special Purpose Entities", and
(ii) replacing "special purpose vehicle" with "special purpose entity".
52. Part 2, section 3.2 of Form 51-102F2 is amended, in subparagraph (ii) of the instruction, by
(a) replacing "sales and operating revenues" wherever it occurs with "revenue", and
(b) replacing "do" with "does".
53. Part 2, subsection 5.1(1) of Form 51-102F2 is amended
(a) in the preamble, by replacing "as those terms are used in the Handbook" with "as those terms are described in the issuer's GAAP",
(b) in subparagraph (a)(iii), by replacing "revenues" wherever it occurs with "revenue",
(c) in paragraph (h), by adding "reportable" before "segment",
(d) in paragraph (k), by replacing "earnings" with "profit or loss", and
(e) in paragraph (m), by adding "reportable" before "segment".
54. Part 2, paragraph 5.3(2)(b) of Form 51-102F2 is amended by replacing "income" with "profit".
55. Part 2, subsection 5.3(6) of Form 51-102F2 is amended by deleting ", Form 10-KSB".
56. Part 2, item 6 of Form 51-102F2 is amended by, in the title, adding "and Distributions" after "Dividends".
57. Part 2, section 6.1 of Form 51-102F2 is amended by, in the title, adding "and Distributions" after "Dividends".
58. Part 2, section 7.3 of Form 51-102F2 is amended by, in the instructions, replacing "derivatives" with "derivative instruments".
59. Part 2, subsection 16.2(2.1) of Form 51-102F2 is amended by replacing "US GAAS" with "U.S. PCAOB GAAS or U.S. AICPA GAAS".
60. Part 1 of Form 51-102F4 Business Acquisition Report is amended
(a) in paragraph (e), by adding "for further guidance" after "Companion Policy 51-102CP",
(b) by adding the following at the end of paragraph (e):
This Form also uses accounting terms that are defined or used in Canadian GAAP applicable to publicly accountable enterprises. For further guidance, see subsections 1.4(7) and (8) of Companion Policy 51-102CP., and
(c) in paragraph (f), by adding "for further guidance" after "Companion Policy 51-102CP".
61. Part 2, item 2 of Form 51-102F4 is amended
(a) in section 2.2,
(i) in the title, by replacing "date of acquisition" with "acquisition date", and
(ii) by replacing "date of acquisition" with "acquisition date",
(b) by repealing the instruction, and
(c) in section 2.4, by replacing "results of operations" with "financial performance".
62. Part 2, item 3 of Form 51-102F4 is amended by, in the title, adding "and Other Information" after "Financial Statements".
63. Part 1 of Form 51-102F5 Information Circular is amended
(a) in paragraph (d), by adding "for further guidance" after "Companion Policy 51-102CP",
(b) by adding the following at the end of paragraph (d):
This Form also uses accounting terms that are defined or used in Canadian GAAP applicable to publicly accountable enterprises. For further guidance, see subsections 1.4(7) and (8) of Companion Policy 51-102CP., and
(c) in paragraph (e), by adding "for further guidance" after "Companion Policy 51-102CP".
64. Part 2, section 9.3 of Form 51-102F5 is amended by, in paragraph (ii) of the Instructions, deleting "as described in section 3870 "Stock-based Compensation and Other Stock-based Payments" of the Handbook".
65. Part 2, section 14.1 of Form 51-102F5 is amended by adding "annual" before "financial statements".
66. Part 2, section 14.2 of Form 51-102F5 is amended by
(a) adding "for the company, business or entity" after "The disclosure", and
(b) replacing "the entity" with "the company, business or entity, respectively,".
67. Part 2, section 16.2 of Form 51-102F5 is amended by adding "annual" before "financial statements".
68. Form 51-102F6 Statement of Executive Compensation (in respect of financial years ending on or after December 31, 2008) is amended by replacing "Section 3870 of the Handbook" wherever it occurs with "IFRS 2 Share-based Payment".
69. Item 1.2 of Form 51-102F6 is amended by deleting the definition of "NI 52-107".
70. The commentary under subsection 1.3(4) of Form 51-102F6 is amended by replacing "Multilateral" with "National".
71. The commentary under subsection 1.3(8) of Form 51-102F6 is amended
(a) by replacing "NI 52-107" with "National Instrument 52-107 Acceptable Accounting Principles and Auditing Standards", and
(b) by deleting ", or the Handbook".
72. Section 3.1 of Form 51-102F6 is amended
(a) in subsection (3), by
(i) deleting "grant date", and
(ii) adding "on the grant date" after "the award",
(b) in subsection (4), by
(i) deleting "grant date", and
(ii) adding "on the grant date" after "the award",
(c) in subsection (5), by replacing "grant date fair value" wherever it occurs with "fair value of the award on the grant date",
(d) by replacing Commentary 2 with the following:
2. The value disclosed in columns (d) and (e) of the summary compensation table should reflect what the board of directors intended to pay, make payable, award, grant, give or otherwise provide as compensation on the grant date (fair value of the award) as set out in comment 3, below. This value might differ from the value reported in the issuer's financial statements.,
(e) in Commentary 4, by replacing "may" with "might",
(f) in Commentary 4 and 6, by replacing "grant date fair value" wherever it occurs with "fair value of the award", and
(g) in paragraph (10)(f), by replacing "grant date fair value" with "fair value of the award on the grant date".
73. Section 3.3 of Form 51-102F6 is amended by replacing "reporting currency" wherever it occurs with "presentation currency".
74. Section 5.1 of Form 51-102F6 is amended
(a) in subsection (1), by replacing "NI 52-107" with "National Instrument 52-107 Acceptable Accounting Principles and Auditing Standards",
(b) in the table in subsection (1), by
(i) replacing "Accrued obligation at start of year" with "Opening present value of defined benefit obligation", and
(ii) replacing "Accrued obligation at year end" with "Closing present value of defined benefit obligation",
(c) in subsection (2), by
(i) replacing "plan measurement" with "reporting", and
(ii) adding "annual" before "financial statements",
(d) in subsection (5), by replacing "accrued obligation" with "present value of the defined benefit obligation",
(e) in subsection (6), by
(i) replacing "accrued obligation" wherever it occurs with "present value of the defined benefit obligation",
(ii) adding "closing" after "quantifying the", and
(iii) deleting "at the end of the most recently completed financial year",
(f) in subsection (7), by
(i) replacing "accrued obligation" wherever it occurs with "present value of the defined benefit obligation", and
(ii) adding "most recently completed financial" after "start of the", and
(g) in subsection (8), by replacing "accrued obligation" with "present value of the defined benefit obligation".
75. Section 5.2 of Form 51-102F6 is amended by replacing "NI 52-107" with "National Instrument 52-107 Acceptable Accounting Principles and Auditing Standards".
76. This Instrument only applies to documents required to be prepared, filed, delivered or sent under National Instrument 51-102 Continuous Disclosure Obligations for periods relating to financial years beginning on or after January 1, 2011.
77. Despite section 76, an issuer may apply the amendments set out in this Instrument to all documents required to be prepared, filed, delivered or sent under National Instrument 51-102 Continuous Disclosure Obligations for periods relating to a financial year that begins before January 1, 2011 if the immediately preceding financial year ends no earlier than December 21, 2010 and if the issuer is relying on the exemption in section 5.3 of National Instrument 52-107 Acceptable Accounting Principles and Auditing Standards.
78. This Instrument comes into force on January 1, 2011.
Amendments to Companion Policy 51-102CP Continuous Disclosure Obligations
AMENDMENTS TO
COMPANION POLICY 51-102CP CONTINUOUS DISCLOSURE OBLIGATIONS
1. Companion Policy 51-102CP Continuous Disclosure Obligations is amended.
2. Section 1.3 is amended by replacing "interim financial statements" with "interim financial reports".
3. Section 1.4 is amended
(a) by replacing subsection (5) with the following:
(5) Reverse Takeover -- The definition of reverse takeover includes reverse acquisitions as defined or interpreted in Canadian GAAP applicable to publicly accountable enterprises and any other transaction in which an issuer issues enough voting securities as consideration for the acquisition of an entity such that control of the issuer passes to the securityholders of the acquired entity (such as a Qualifying Transaction, as that term is defined in the TSX Venture Exchange policies). In a reverse acquisition, although legally the entity (the legal parent) that issued the securities is regarded as the parent, the entity (the legal subsidiary) whose former securityholders now control the combined entity is treated as the acquirer for accounting purposes. As a result, for accounting purposes, the issuing entity (the legal parent) is deemed to be a continuation of the acquirer and the acquirer is deemed to have acquired control of the assets and business of the issuing entity in consideration for the issue of capital., and
(b) by adding the following after subsection (6):
(7) Accounting terms -- The Instrument uses accounting terms that are defined or used in Canadian GAAP applicable to publicly accountable enterprises. In certain cases, some of those terms are defined differently in securities legislation. In deciding which meaning applies, you should consider that National Instrument 14-101 Definitions provides that a term used in the Instrument and defined in the securities statute of a local jurisdiction has the meaning given to it in the statute unless: (a) the definition in that statute is restricted to a specific portion of the statute that does not govern continuous disclosure; or (b) the context otherwise requires.
For example, the term "associate" is defined in local securities statutes and Canadian GAAP applicable to publicly accountable enterprises. Securities regulatory authorities are of the view that the references to the term "associate" in the Instrument and its forms (e.g., item 7.1(g) of Form 51-102F5 Information Circular) should be given the meaning of the term under local securities statutes since the context does not indicate that the accounting meaning of the term should be used.
(8) Acceptable accounting principles other than Canadian GAAP applicable to publicly accountable enterprises -- If an issuer is permitted under National Instrument 52-107 Acceptable Accounting Principles and Auditing Standards to file financial statements in accordance with acceptable accounting principles other than Canadian GAAP applicable to publicly accountable enterprises, then the issuer may interpret any reference in the Instrument to a term or provision defined or used in Canadian GAAP applicable to publicly accountable enterprises as a reference to the corresponding term or provision in the other acceptable accounting principles.
(9) Rate-regulated activities -- If a qualifying entity is relying on the exemption in paragraph 5.4(1)(a) of National Instrument 52-107 Acceptable Accounting Principles and Auditing Standards, then the qualifying entity may interpret any reference in the Instrument to a term or provision defined or used in Canadian GAAP applicable to publicly accountable enterprises as a reference to the corresponding term or provision in Part V of the Handbook..
4. Section 1.8 is replaced with the following:
1.8 Acceptable Accounting Principles and Auditing Standards
An issuer filing any of the following items under the Instrument must comply with National Instrument 52-107 Acceptable Accounting Principles and Auditing Standards:
(a) financial statements;
(b) an operating statement for an oil and gas property as referred to in section 8.10 of the Instrument;
(c) summarized financial information, including the aggregated amounts of assets, liabilities, revenue and profit or loss of a business as referred to in section 8.6 of the Instrument; or
(d) financial information derived from a credit support issuer's financial statements as referred to in section 13.4 of the Instrument.
National Instrument 52-107 Acceptable Accounting Principles and Auditing Standards sets out, among other things, the use of accounting principles other than Canadian GAAP applicable to publicly accountable enterprises or auditing standards other than Canadian GAAS in preparing or auditing financial statements..
5. Section 3.2 is replaced with the following:
3.2 Audit of Comparative Annual Financial Statements
Section 4.1 of the Instrument requires a reporting issuer to file annual financial statements that include comparative information for the immediately preceding financial year and that are audited. The auditor's report must cover both the most recently completed financial year and the comparative period, except if the issuer changed its auditor during the periods presented in the annual financial statements and the new auditor has not audited the comparative period. In this situation, the auditor's report would normally refer to the predecessor auditor's report unless the predecessor auditor's report on the prior period's annual financial statements is reissued with the financial statements. This is consistent with Canadian Auditing Standard 710 Comparative Information -- Corresponding Figures and Comparative Financial Statements..
6. Section 3.3 is amended in the last sentence by adding "annual" before "financial statements".
7. Section 3.4 is replaced with the following:
3.4 Auditor Involvement with an Interim Financial Report
(1) The board of directors of a reporting issuer, in discharging its responsibilities for ensuring the reliability of an interim financial report, should consider engaging an external auditor to carry out a review of the interim financial report.
(2) Subsection 4.3(3) of the Instrument requires a reporting issuer to disclose if an auditor has not performed a review of the interim financial report, to disclose if an auditor was unable to complete a review and why, and to file a written report from the auditor if the auditor has performed a review and expressed a reservation in the auditor's interim review report. No positive statement is required when an auditor has performed a review and provided an unqualified communication. If an auditor was engaged to perform a review on an interim financial report applying review standards set out in the Handbook, and the auditor was unable to complete the review, the issuer's disclosure of the reasons why the auditor was unable to complete the review would normally include a discussion of
(a) inadequate internal control;
(b) a limitation on the scope of the auditor's work; or
(c) the failure of management to provide the auditor with the written representations the auditor believes are necessary.
(3) If a reporting issuer's annual financial statements are audited in accordance with Canadian GAAS, the terms "review" and "interim review report" used in subsection 4.3(3) of the Instrument refer to the auditor's review of, and report on, an interim financial report applying standards for a review of an interim financial report by the auditor as set out in the Handbook. However, if the reporting issuer's financial statements are audited in accordance with auditing standards other than Canadian GAAS, the corresponding review standards should be applied..
8. Section 3.5 is amended by replacing "interim financial statements" with "an interim financial report".
9. Section 3.6 is amended by adding "The test of whether "to a reasonable person it is impracticable to present prior-period information on a basis consistent with subsection 4.3(2)" is objective, rather than subjective. Securities regulatory authorities are of the view that a reporting issuer can rely on the exemption only if it has made every reasonable effort to present prior-period information on a basis consistent with subsection 4.3(2) of the Instrument. We are of the view that an issuer should only rely on this exemption in unusual circumstances and generally not related solely to the cost or the time involved in preparing the financial statements." after "to do so.".
10. Section 3.9 is amended
(a) in subsection (2), by deleting "for accounting purposes", and
(b) in subsection (3), by replacing "interim and annual financial statements" with "interim financial reports and the annual financial statements".
11. The title of Part 4 is amended by adding "AND PRESENTATION" after "DISCLOSURE".
12. Section 4.1 is amended
(a) in the title, by replacing "Results" with "Information",
(b) in subsection (1), by replacing "interim financial statements" with "each interim financial report", and
(c) in subsection (2), by replacing "NI 52-107" wherever it occurs with "National Instrument 52-107 Acceptable Accounting Principles and Auditing Standards".
13. Section 4.2 is amended by replacing "GAAP" with "Canadian GAAP applicable to publicly accountable enterprises".
14. Part 4 is amended by adding the following after section 4.2:
4.3 Presentation of Financial Information
Canadian GAAP applicable to publicly accountable enterprises provides an issuer two alternatives in presenting its income: (a) in one single statement of comprehensive income, or (b) in a statement of comprehensive income with a separate income statement. If an issuer presents its income using the second alternative, both statements must be filed to satisfy the requirements of this Instrument. (See subsections 4.1(3) and 4.3(2.1) of the Instrument)..
15. Section 4A.3 is amended
(a) by deleting "This concept of materiality is consistent with the one contained in the Handbook.",
(b) by replacing "revenues, net income" with "revenue, profit or loss", and
(c) by replacing "A financial outlook relating to earnings is commonly referred to" with "A financial outlook relating to profit or loss is commonly referred to".
16. Section 4A.9 is repealed.
17. Section 5.2 is amended
(a) by deleting "or MD&A supplement",
(b) by replacing "interim and annual financial statements" with "annual financial statements or interim financial report", and
(c) by replacing "capitalized, deferred or expensed" with "expensed or recognized as assets".
18. Section 5.4 is amended
(a) by deleting "or MD&A supplement", and
(b) by replacing "interim and annual financial statements" with "annual financial statements or interim financial report".
19. Section 5.5 is amended by deleting "or MD&A supplement" wherever it occurs.
20. Subsection 6.2(1) is amended by replacing "income" with "profit".
21. Subsection 8.1(3) is amended
(a) by replacing "NI 52-107" with "National Instrument 52-107 Acceptable Accounting Principles and Auditing Standards", and
(b) by replacing ", auditing standards and reporting currency" with "and auditing standards".
22. Section 8.2 is amended
(a) in subsection (1), by
(i) replacing "income from continuing operations" wherever it occurs with "specified profit or loss",
(ii) replacing "time of the acquisition" wherever it occurs with "acquisition date",
(iii) replacing "annual audited financial statements" with "audited annual financial statements", and
(iv) replacing "business acquisition or report" with "business acquisition report".
(b) by replacing subsection (2) with the following:
(2) Business Using Accounting Principles Other Than Those Used by the Reporting Issuer -- Subsection 8.3(13) of the Instrument provides that, for the purposes of calculating the significance tests, the amounts used for the business or related businesses must, subject to subsection 8.3(13.1) of the Instrument, be based on the issuer's GAAP, and translated into the same presentation currency as that used in the reporting issuer's financial statements. This means that in some cases the amounts must be converted to the issuer's GAAP and translated into the same presentation currency as that used in the reporting issuer's financial statements.
Subsection 8.3(13.1) of the Instrument exempts venture issuers from the requirement in paragraph 8.3(13)(a) that, for the purposes of calculating the significance tests, the amounts used for the business or related businesses must be based on the issuer's GAAP, but only where the financial statements for the business or related businesses were prepared in accordance with Canadian GAAP applicable to private enterprises and certain other conditions are met.
National Instrument 52-107 Acceptable Accounting Principles and Auditing Standards permits financial statements for a business or related businesses to be prepared in accordance with U.S. GAAP without reconciliation to the issuer's GAAP. This does not impact the application of paragraph 8.3(13)(a) of the Instrument. Thus, if the issuer's GAAP is not U.S. GAAP, paragraph 8.3(13)(a) of the Instrument requires, for the purposes of calculating the significance tests, that the amounts used for the business or related businesses be based on the issuer's GAAP.
Paragraph 8.3(13)(b) of the Instrument applies to all issuers and requires, for the purpose of calculating the significance tests, that the amounts used for the business or related businesses be translated into the same presentation currency as that used in the reporting issuer's financial statements.,
(c) in subsection (3), by adding "annual" before "financial statements" in the first three occurrences,
(d) by adding the following after subsection (3):
(3.1) Application of Significance Tests for Business Combinations Achieved in Stages -- IFRS 3 Business Combinations, requires that when a business combination is achieved in stages the acquirer's previously held equity interest in the acquiree is remeasured at its acquisition date fair value with any resulting gain or loss recognized in profit or loss. The remeasurement of the previously held equity interest should not be included in the asset or the investment test and the resulting gain or loss from remeasurement should not be included in the profit or loss test. (See subsection 8.3(4.1) of the Instrument).,
(e) by replacing subsection (4) with the following:
(4) Application of Investment Test for Significance of an Acquisition -- One of the significance tests set out in subsections 8.3(2) and (4) of the Instrument is whether the reporting issuer's consolidated investments in and advances to the business or related businesses exceed a specified percentage of the consolidated assets of the reporting issuer. In applying this test, the "investments in" the business should be determined using the consideration transferred, measured in accordance with the issuer's GAAP, including any contingent consideration. In addition, any payments made in connection with the acquisition which would not constitute consideration transferred but which would not have been paid unless the acquisition had occurred, should be considered part of investments in and advances to the business for the purpose of applying the significance tests. Examples of such payments include loans, royalty agreements, lease agreements and agreements to provide a pre-determined amount of future services. For purposes of the investment test, "consideration transferred" should be adjusted to exclude the carrying value of assets transferred by the reporting issuer to the business or related businesses that will remain with the business or related businesses after the acquisition., and
(f) in subsection (5), by adding "annual" before "financial statements" wherever it occurs.
23. Section 8.3 is amended
(a) in subsection (3), by replacing "date of the acquisition" with "acquisition date", and
(b) in subsection (4),
(i) in the title, by replacing "Income Test" with "Profit or Loss Test",
(ii) by replacing "optional income test" wherever it occurs with "optional profit or loss test", and
(iii) by replacing "income from continuing operations" wherever it occurs with "specified profit or loss".
24. Section 8.5 is amended
(a) in the title, by replacing "Step-By-Step Acquisitions" with "Multiple Investments in the Same Business",
(b) by replacing "increases its investments in a business by way of a step-by-step purchase as described in the Handbook" with "has made multiple investments in the same business", and
(c) by adding "annual" before "financial statements" wherever it occurs.
25. Subparagraph 8.6(4)(b) is replaced with the following:
(b) When complete financial records of the business acquired do not exist, carve-out financial statements must be prepared in accordance with subsection 3.11(6) of National Instrument 52-107 Acceptable Accounting Principles and Auditing Standards..
26. Section 8.7 is amended
(a) in subsection (1),
(i) by replacing "pro forma statements" with "pro forma financial statements",
(ii) by replacing "results of operations" with "financial performance", and
(iii) by deleting "extraordinary items or",
(b) in subsection (2),
(i) in the title, by replacing "Balance Sheet and Income Statements" with "Statement of Financial Position", and
(ii) by replacing "balance sheet" wherever it occurs with "statement of financial position",
(c) in subsection (3), by replacing "an income statement" with "a statement of comprehensive income",
(d) in subsection (4), by replacing "should be based on the purchase price allocation arising from giving effect to the acquisition as if it occurred on the date of the reporting issuer's most recent balance sheet filed" with "should be based on the acquisition date amounts of assets acquired and liabilities assumed as if the acquisition occurred on the date of the reporting issuer's most recent statement of financial position filed",
(e) by replacing subsection (5) with the following:
(5) Acceptable Adjustments -- Pro forma adjustments are generally limited to the following two types of adjustments required by paragraph 8.4(7)(b) of the Instrument:
(a) those directly attributable to the specific acquisition transaction for which there are firm commitments and for which the complete financial effects are objectively determinable; and
(b) adjustments to conform amounts for the business or related businesses to the issuer's accounting policies.
If financial statements for a business or related businesses are prepared in accordance with accounting principles that differ from the issuer's GAAP and the financial statements do not include a reconciliation to the issuer's GAAP, pro forma adjustments as described in item (b) above will often be necessary. For example, financial statements for a business or related businesses may be prepared in accordance with U.S. GAAP, or in the case of a venture issuer, in accordance with Canadian GAAP applicable to private enterprises, in each case without a reconciliation to the issuer's GAAP. Even if financial statements for a business or related businesses are prepared in accordance with the issuer's GAAP, pro forma adjustments as described in item (b) may be necessary to conform amounts for the business or related businesses to the issuer's accounting policies, including, for example, the issuer's revenue recognition policy where the revenue recognition policy of the business or related businesses differs from the issuer's policy.
If the presentation currency used in financial statements for a business or related businesses differs from the presentation currency used in the issuer's financial statements, the pro forma financial statements must present amounts for the business or related businesses in the presentation currency of the issuer's financial statements. The pro forma financial statements should explain any adjustments to conform presentation currency.,
(f) in subsection (7),
(i) in the title, by replacing "Earlier Interim Financial Statements" with "an Earlier Interim Financial Report", and
(ii) by replacing "pro forma statements" with "pro forma financial statements",
(g) in subsection (8), by replacing "these statements" with "these financial statements", and
(h) by adding the following after subsection (8):
(9) Pro Forma Financial Statements where Financial Statements of a Business or Related Businesses are Prepared using Accounting Principles that Differ from the Issuer's GAAP -- Section 3.11 of National Instrument 52-107 Acceptable Accounting Principles and Auditing Standards permits reporting issuers to include in a business acquisition report financial statements of a business or related businesses prepared in accordance with U.S. GAAP and without a reconciliation to the issuer's GAAP. That section also permits, subject to specified conditions, a venture issuer to include in a business acquisition report financial statements of a business or related businesses prepared in accordance with Canadian GAAP applicable to private enterprises and without a reconciliation to the issuer's GAAP. However, section 3.14 of National Instrument 52-107 Acceptable Accounting Principles and Auditing Standards requires that pro forma financial statements be presented using accounting principles that are permitted by the issuer's GAAP and would apply to the information presented in the pro forma financial statements if that information were included in the issuer's financial statements for the same time period as that of the pro forma financial statements. As well, subsection 8.4(7) of the Instrument requires pro forma financial statements to include a description of the underlying assumptions on which the pro forma financial statements are prepared, cross-referenced to each related pro forma adjustment. Therefore, the pro forma financial statements must describe the adjustments presented in the pro forma income statement relating to the business or related businesses to adjust amounts to the issuer's GAAP and accounting policies.
The pro forma statement of financial position should present the following information:
(i) the statement of financial position of the reporting issuer;
(ii) the statement of financial position of the business or related businesses;
(iii) pro forma adjustments attributable to each significant acquisition that reflect the reporting issuer's accounting for the acquisition and include new values for the business' assets and liabilities; and
(iv) a pro forma statement of financial position combining items (i) through (iii).
The pro forma income statement should present the following information:
(i) the income statement of the reporting issuer;
(ii) the income statement of the business or related businesses;
(iii) pro forma adjustments attributable to each significant acquisition and other adjustments relating to the business or related businesses to conform amounts to the issuer's GAAP and accounting policies; and
(iv) a pro forma income statement combining items (i) through (iii)..
27. Section 8.8 is amended by replacing "date of the acquisition" with "acquisition date".
28. Subsection 8.9(2) is amended
(a) by adding "annual" before "financial statements",
(b) by replacing "income statements" with "statements of comprehensive income",
(c) by replacing "cash flow" with "cash flows", and
(d) by replacing "statement of net operating income for a business" with "statement of operations".
29. Subsection 8.10(2) is amended
(a) in the title, by replacing "Interim Financial Statements" with "an Interim Financial Report", and
(b) by replacing "interim financial statements" wherever it occurs with "interim financial report".
30. Part 13 is amended
(a) by replacing
Department of Justice, Northwest TerritoriesLegal RegistriesP.O. Box 13201st Floor, 5009-49th StreetYellowknife, NWT X1A 2L9Attention: Director, Legal Registrieswith
Department of Justice, Northwest TerritoriesSecurities OfficeP.O. Box 13201st Floor, 5009-49th StreetYellowknife, NWT X1A 2L9Attention: Superintendent of Securities,(b) under "Department of Justice, Nunavut", by replacing "Director, Legal Registries Division" with "Superintendent of Securities", and
(c) by replacing
Registrar of Securities, Government of YukonCorporate Affairs J-9P.O. Box 2703Whitehorse, YukonY1A 5H3Attention: Registrar of Securitieswith
Superintendent of Securities, Government of YukonCorporate Affairs J-9P.O. Box 2703Whitehorse, YukonY1A 5H3Attention: Superintendent of Securities.
31. The following is added after Part 13:
PART 14 TRANSITION
14.1 Transition -- Application of Amendments
The amendments to the Instrument and this Policy which came into effect on January 1, 2011 only apply to documents required to be prepared, filed, delivered or sent under the Instrument for periods relating to financial years beginning on or after January 1, 2011..
32. Appendix A is amended, in the footnote, by replacing "Balance sheet" with "Statement of financial position".
33. These amendments only apply to documents required to be prepared, filed, delivered or sent under National Instrument 51-102 Continuous Disclosure Obligations for periods relating to financial years beginning on or after January 1, 2011.
34. Despite section 33, an issuer may apply these amendments to all documents required to be prepared, filed, delivered or sent under National Instrument 51-102 Continuous Disclosure Obligations for periods relating to a financial year that begins before January 1, 2011 if the immediately preceding financial year ends no earlier than December 21, 2010 and if the issuer is relying on the exemption in section 5.3 of National Instrument 52-107 Acceptable Accounting Principles and Auditing Standards.
35. These amendments become effective on January 1, 2011.
Amendment Instrument for National Instrument 71-102 Continuous Disclosure and Other Exemptions Relating to Foreign Issuers
AMENDMENT INSTRUMENT FOR
NATIONAL INSTRUMENT 71-102
CONTINUOUS DISCLOSURE AND OTHER EXEMPTIONS
RELATING TO FOREIGN ISSUERS
Although this amendment instrument amends section headers in National Instrument 71-102, section headers do not form part of the instrument and are inserted for ease of reference only.
1. National Instrument 71-102 Continuous Disclosure and Other Exemptions Relating to Foreign Issuers is amended by this Instrument.
2. Section 1.1 is amended
(a) in the definition of "AIF", by deleting "Form 10-KSB",
(b) after the definition of "executive officer", by adding the following definition:
"financial statements" has the same meaning as in section 1.1 of National Instrument 51-102 Continuous Disclosure Obligations;,
(c) by replacing the definition of "inter-dealer bond broker" with the following:
"inter-dealer bond broker" means a person or company that is approved by the Investment Industry Regulatory Organization of Canada under its Rule 36 Inter-Dealer Bond Brokerage Systems, as amended, and is subject to its Rule 36 and its Rule 2100 Inter-Dealer Bond Brokerage Systems, as amended;,
(d) in the definition of "MD&A", by deleting "or Item 303 of Regulation S-B",
(e) in the definition of "NI 52-107", by replacing "Acceptable Accounting Principles, Auditing Standards and Reporting Currency" with "Acceptable Accounting Principles and Auditing Standards", and
(f) in the definition of "transition year", by adding "a" after "means the financial year of".
3. Section 1.3 is amended by replacing "operating results are" with "financial performance is".
4. Section 4.3 is amended
(a) in the preamble, by deleting "its interim financial statements, and annual",
(b) in paragraph (a), by deleting "interim financial statements, annual",
(c) in paragraph (b), by deleting "interim financial statements and annual", and
(d) in paragraph (c), by deleting "interim financial statements, annual".
5. Subparagraph 4.7(2)(b) is amended by deleting ", Form 10-KSB".
6. Section 4.9 is amended by replacing "results of operations" with "financial performance".
7. Section 4.14 is replaced with the following:
4.14 Business Combinations and Related Party Transactions
Securities legislation requirements relating to business combinations and related party transactions in Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions do not apply to an SEC foreign issuer carrying out a business combination or related party transaction if the total number of equity securities of the SEC foreign issuer owned, directly or indirectly, by residents of Canada, does not exceed 20 per cent, on a diluted basis, of the total number of equity securities of the SEC foreign issuer..
8. Section 5.4 is amended
(a) in the preamble, by deleting "its interim financial statements, annual",
(b) in paragraph (a), by deleting "interim financial statements, annual", and
(c) in paragraph (b), by deleting "interim financial statements, annual".
9. Section 5.10 is amended by replacing "results of operations" with "financial performance".
10. Section 5.15 is replaced with the following:
5.15 Business Combinations and Related Party Transactions
Securities legislation requirements relating to business combinations and related party transactions in Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions do not apply to a designated foreign issuer carrying out a business combination or related party transaction..
11. Part 6 is repealed.
12. This Instrument only applies to documents required to be prepared, filed, delivered or sent under National Instrument 71-102 Continuous Disclosure and Other Exemptions Relating to Foreign Issuers for periods relating to financial years beginning on or after January 1, 2011.
13. Despite section 12, an issuer may apply the amendments set out in this Instrument to all documents required to be prepared, filed, delivered or sent under National Instrument 71-102 Continuous Disclosure and Other Exemptions Relating to Foreign Issuers for periods relating to a financial year that begins before January 1, 2011 if the immediately preceding financial year ends no earlier than December 21, 2010 and if the issuer is relying on the exemption in section 5.3 of National Instrument 52-107 Acceptable Accounting Principles and Auditing Standards.
14. This Instrument comes into force on January 1, 2011.
Amendments to Companion Policy 71-102CP Continuous Disclosure and Other Exemptions Relating to Foreign Issuers
AMENDMENTS TO
COMPANION POLICY 71-102CP CONTINUOUS DISCLOSURE
AND OTHER EXEMPTIONS RELATING TO FOREIGN ISSUERS
1. Companion Policy 71-102CP Continuous Disclosure and Other Exemptions Relating to Foreign Issuers is amended.
2. Subsection 1.2(3) is amended by replacing "Acceptable Accounting Principles, Auditing Standards and Reporting Currency" with "Acceptable Accounting Principles and Auditing Standards".
3. Section 2.1 is amended
(a) in the preamble, by deleting ", other than the relief for "foreign transition issuers" in Part 6,", and
(b) in the last paragraph, by deleting "and paragraph (d) of the definition of "foreign transition issuer" in section 6.2 of the Instrument".
4. Section 4.1 is amended by replacing "Form 20 on SEDAR" with "Form 20F on SEDAR".
5. Section 6.4 is amended
(a) in paragraph (a), by deleting "applicable in jurisdictions other than Alberta, British Columbia and Manitoba", and
(b) in paragraph (c), by
(i) replacing "Multilateral" with "National", and
(ii) deleting "or BC Instrument 52-509 Audit Committees".
6. The following is added after Part 7:
PART 8 TRANSITION
8.1 Transition
The amendments to the Instrument and this Policy which came into effect on January 1, 2011 only apply to documents required to be prepared, filed, delivered or sent under the Instrument for periods relating to financial years beginning on or after January 1, 2011..
7. These amendments only apply to documents required to be prepared, filed, delivered or sent under National Instrument 71-102 Continuous Disclosure and Other Exemptions Relating to Foreign Issuers for periods relating to financial years beginning on or after January 1, 2011.
8. Despite section 7, an issuer may apply these amendments to all documents required to be prepared, filed, delivered or sent under National Instrument 71-102 Continuous Disclosure and Other Exemptions Relating to Foreign Issuers for periods relating to a financial year that begins before January 1, 2011 if the immediately preceding financial year ends no earlier than December 21, 2010 and if the issuer is relying on the exemption in section 5.3 of National Instrument 52-107 Acceptable Accounting Principles and Auditing Standards.
9. These amendments become effective on January 1, 2011.
Amendment Instrument for Ontario Securities Commission Rule 51-801 Implementing National Instrument 51-102 Continuous Disclosure Obligations
AMENDMENT INSTRUMENT FOR
ONTARIO SECURITIES COMMISSION RULE 51-801
IMPLEMENTING NATIONAL INSTRUMENT 51-102
CONTINUOUS DISCLOSURE OBLIGATIONS
Although this amendment instrument amends section headers in Ontario Securities Commission Rule 51-801, section headers do not form part of the rule and are inserted for ease of reference only.
1. Ontario Securities Commission Rule 51-801 Implementing National Instrument 51-102 Continuous Disclosure Obligations is amended by this Instrument.
2. Subsection 3.1(1) is amended
(a) by deleting ", balance sheet", and
(b) by replacing "subsection 4.1(1)" with "subsections 4.1(1) and 4.1(3)".
3. Subsection 3.2(1) is amended
(a) by deleting ", balance sheet", and
(b) by replacing "4.3(1) and 4.3(2)" with "4.3(1), 4.3(2) and 4.3(2.1)".
4. The title to section 3.4 is amended by replacing "interim financial statements" with "interim financial report".
5. Paragraph 3.5(b) is amended by replacing "interim financial statements"with "interim financial reports".
6. This Instrument only apply to documents required to be prepared, filed, delivered or sent under Ontario Securities Commission Rule 51-801 Implementing National Instrument 51-102 Continuous Disclosure Obligations for periods relating to financial years beginning on or after January 1, 2011.
7. Despite section 6, an issuer may apply the amendments set out in this Instrument to all documents required to be prepared, filed, delivered or sent under Ontario Securities Commission Rule 51-801 Implementing National Instrument 51-102 Continuous Disclosure Obligations for periods relating to a financial year that begins before January 1, 2011 if the immediately preceding financial year ends no earlier than December 21, 2010 and if the issuer is relying on the exemption in section 5.3 of National Instrument 52-107 Acceptable Accounting Principles and Auditing Standards.
8. This Instrument comes into force on January 1, 2011.
Amendment Instrument for Ontario Securities Commission Rule 71-802 Implementing National Instrument 71-102 Continuous Disclosure and Other Exemptions Relating to Foreign Issuers
AMENDMENT INSTRUMENT FOR
ONTARIO SECURITIES COMMISSION RULE 71-802
IMPLEMENTING NATIONAL INSTRUMENT 71-102 CONTINUOUS DISCLOSURE
AND OTHER EXEMPTIONS RELATING TO FOREIGN ISSUERS
1. Ontario Securities Commission Rule 71-802 Implementing National Instrument 71-102 Continuous Disclosure and Other Exemptions Relating to Foreign Issuers is amended by this Instrument.
2. Section 2.1 is amended by replacing "section 3.4" with "section 3.6".
3. Section 2.3 is amended by replacing "section 4.8" with "section 4.11".
4. Section 3.3 is amended by replacing "section 5.9" with "section 5.12".
5. This Instrument comes into force on January 1, 2011.
Amendment Instrument for National Instrument 41-101 General Prospectus Requirements
AMENDMENT INSTRUMENT FOR
NATIONAL INSTRUMENT 41-101 GENERAL PROSPECTUS REQUIREMENTS
Although this amendment instrument amends section headers in National Instrument 41-101, section headers do not form part of the instrument and are inserted for ease of reference only.
1. National Instrument 41-101 General Prospectus Requirements is amended by this Instrument.
2. Section 1.1 is amended
(a) after the definition of "acquisition", by adding the following definition:
"acquisition date" has the same meaning as in section 1.1 of NI 51-102;,
(b) by deleting the definition of "date of acquisition",
(c) after the definition of "custodian", by adding the following definition:
"date of transition to IFRS" has the same meaning as in section 1.1 of NI 51-102;,
(d) after the definition of "executive officer", by adding the following definitions:
"financial statements" includes interim financial reports;
"first IFRS financial statements" has the same meaning as in section 1.1 of NI 51-102;,
(e) by deleting the definition of "income from continuing operations",
(f) in the definition of "Form 52-110F1", by replacing "MI 52-110" with "NI 52-110",
(g) in the definition of "Form 52-110F2", by replacing "MI 52-110" with "NI 52-110",
(h) in the definition of "junior issuer",
(i) by replacing "balance sheet" wherever it occurs with "statement of financial position",
(ii) by deleting "shareholders'" wherever it occurs,
(iii) in paragraphs (d) and (g), by replacing "annual income statement" with "annual statement of comprehensive income", and
(iv) in subparagraph (g), by replacing "an income statement" with "a statement of comprehensive income",
(i) by deleting the definition of "MI 52-110",
(j) in the definition of "NI 52-107", by replacing "Acceptable Accounting Principles, Auditing Standards and Reporting Currency" with "Acceptable Accounting Principles and Auditing Standards",
(k) after the definition of "NI 52-107", by adding the following definition:
"NI 52-110" means National Instrument 52-110 Audit Committees;,
(l) after the definition of "private issuer", by adding the following definitions:
"profit or loss attributable to owners of the parent" has the same meaning as in Canadian GAAP applicable to publicly accountable enterprises;
"profit or loss from continuing operations attributable to owners of the parent" has the same meaning as in Canadian GAAP applicable to publicly accountable enterprises;
"publicly accountable enterprise" has the same meaning as in Part 3 of NI 52-107;,
(m) after the definition of "restructuring transaction", by adding the following definitions:
"retrospective" has the same meaning as in section 1.1 of NI 51-102;
"retrospectively" has the same meaning as in section 1.1 of NI 51-102;,
(n) after the definition of "transition year", by adding the following definition:
"U.S. AICPA GAAS" has the same meaning as in section 1.1 of NI 52-107;,
(o) by deleting the definition of "U.S. GAAS", and
(p) after the definition of "U.S. marketplace", by adding the following definition:
"U.S. PCAOB GAAS" has the same meaning as in section 1.1 of NI 52-107;.
3. Subsection 4.2(2) is amended by replacing "interim financial statements" with "an interim financial report".
4. Paragraph 4.3(3)(a) is replaced with the following:
(a) U.S. AICPA GAAS, the unaudited financial statements may be reviewed in accordance with the review standards issued by the American Institute of Certified Public Accountants,
(a.1) U.S. PCAOB GAAS, the unaudited financial statements may be reviewed in accordance with the review standards issued by the Public Company Accounting Oversight Board (United States of America),.
5. Section 14.2 is amended by deleting "shareholders'" wherever it occurs.
6. Section 20.1 is repealed.
7. Schedule 3 of Appendix A is amended
(a) opposite "Northwest Territories", by
(i) replacing "Securities Registries" with "Superintendent of Securities", and
(ii) replacing "www.justice.gov.nt.ca/SecuritiesRegistry/SecuritiesRegistry.html" with "www.justice.gov.nt.ca/SecuritiesRegistry",
(b) opposite "Nunavut", by adding "Superintendent of Securities" above "Government of Nunavut", and
(c) opposite "Yukon", by replacing "Registrar of Securities" with "Superintendent of Securities".
8. The general instructions of Form 41-101F1 Information Required in a Prospectus are amended
(a) in instruction (3), by deleting "This concept of materiality is consistent with the financial reporting notion of materiality contained in the Handbook.",
(b) in instruction (7), by replacing "the Handbook" with "Canadian GAAP applicable to publicly accountable enterprises",
(c) in instruction (8), by replacing "special purpose vehicle" with "special purpose entity",
(d) in instruction (10), by replacing "disclose the currency in which the financial information is disclosed" with "display the presentation currency", and
(e) in instruction (15), by replacing "Forward-looking information included" with "Forward-looking information, as defined in NI 51-102, included".
9. Section 1.5 of Form 41-101F1 is amended by deleting "reporting".
10. Paragraph 4.2(4)(b) of Form 41-101F1 is amended
(a) by replacing "sales and operating revenues" wherever it occurs with "revenue", and
(b) by replacing "do" with "does".
11. Subsection 5.1(1) of Form 41-101F1 is amended by replacing "as those terms are used in the Handbook" with "as those terms are described in the issuer's GAAP".
12. Section 5.5 of Form 41-101F1 is amended
(a) in subsection (1), by replacing "balance sheet" wherever it occurs with "statement of financial position",
(b) in paragraph (1)(b), by replacing "income statement" with "statement of comprehensive income", and
(c) in subsection (4), by replacing "balance sheet" with "statement of financial position".
13. Subsection 8.1(1) of Form 41-101F1 is amended by deleting "or Item 303 of Regulation S-B".
14. Section 8.2 of Form 41-101F1 is amended
(a) in paragraph (1)(b), by replacing "interim financial statements" with "interim financial report",
(b) in subsection (2), by replacing "If the prospectus includes the issuer's annual income statements, statements of retained earnings, and cash flow statements" with "If the prospectus includes the issuer's annual statements of comprehensive income, statements of changes in equity, and statements of cash flow", and
(c) in subsection (3), by replacing "balance sheet" with "statement of financial position".
15. Section 8.3 of Form 41-101F1 is repealed.
16. Section 8.6 of Form 41-101F1 is amended
(a) in paragraph (1)(a), by replacing "capitalized or expensed exploration and development costs" with "exploration and evaluation assets or expenditures",
(b) in paragraph (1)(c), by replacing "deferred development costs" with "intangible assets arising from development",
(c) in paragraph (1)(e), by replacing "capitalized, deferred or expensed" with "expensed or recognized as assets",
(d) in subsection (2), by replacing "capitalized or expensed exploration and development costs" with "exploration and evaluation assets or expenditures", and
(e) in paragraph (3)(b), by replacing "interim financial statements" with "interim financial report".
17. Section 8.7 of Form 41-101F1 is amended
(a) by replacing "negative operating cash flow" with "negative cash flow from operating activities", and
(b) by adding the following paragraph after paragraph (c):
In determining cash flow from operating activities, the issuer must include cash payments related to dividends and borrowing costs..
18. Section 8.8 of Form 41-101F1 is amended
(a) in paragraph (1)(a), by replacing "summarized information as to the assets, liabilities and results of operations of the equity investee," with "summarized financial information of the equity investee, including the aggregated amounts of assets, liabilities, revenue and profit or loss,",
(b) in paragraph (1)(b), by replacing "earnings" with "profit or loss", and
(c) in subsection (2), by replacing "interim financial statements" with "interim financial report".
19. Section 9.1 of Form 41-101F1 is amended
(a) in paragraph (1)(c), by replacing "interim financial statements of the issuer have" with "an interim financial report of the issuer has",
(b) in paragraphs (2)(b) and (d), by replacing "annual or interim financial statements" wherever it occurs with "annual financial statements or interim financial report",
(c) in paragraph (2)(c), by replacing "annual or interim financial statements" with "annual financial statements or interim financial report, and",
(d) in paragraphs (2)(c) and (d), by deleting "long-term" wherever it occurs,
(e) in paragraph (2)(d), by replacing "prospectus, and" with "prospectus.",
(f) by repealing paragraph (2)(e),
(g) by repealing subsection (3), and
(h) in subsection (4), by replacing "earnings required" with "numerator required".
20. The instructions under item 9 of Form 41-101F1 are amended
(a) in instruction (2), by replacing "entity's earnings (the numerator) by its interest" with "entity's profit or loss attributable to owners of the parent (the numerator) by its borrowing costs",
(b) in instruction (3),
(i) in paragraph (a), by replacing "net income before interest" with "profit or loss attributable to owners of the parent before borrowing costs",
(ii) by repealing paragraph (c),
(iii) by replacing paragraph (d) with the following:
(d) for distributions of debt securities, the appropriate denominator is borrowing costs, after giving effect to the new debt securities issue and any retirement of obligations, plus the borrowing costs that have been capitalized during the period;,
(iv) in subparagraph (e)(i), by replacing "annual interest requirements, including the amount of interest that has" with "annual borrowing cost requirements, including the borrowing costs that have",
(v) in paragraph (f), by adding "securities" after "effect of the debt",
(c) in instruction (4),
(i) by replacing "interest obligations on all long-term debt" with "borrowing cost obligations on all financial liabilities",
(ii) by replacing paragraph (a) with the following:
(a) the issuance of all financial liabilities and, in addition in the case of an issuance of preferred shares, all preferred shares issued, since the date of the annual financial statements or interim financial report;,
(iii) in paragraph (b), by adding "and" after "distributed;",
(iv) by replacing paragraph (c) with the following:
(c) the repayment or redemption of all financial liabilities since the date of the annual financial statements or interim financial report, all financial liabilities to be repaid or redeemed from the proceeds to be realized from the sale of securities under the prospectus and, in addition, in the case of an issuance of preferred shares, all preferred shares repaid or redeemed since the date of the annual financial statements or interim financial report and all preferred shares to be repaid or redeemed from the proceeds to be realized from the sale of securities under the prospectus.,
(v) by repealing paragraph (d),
(d) by repealing instruction (5),
(e) in instruction (6), by replacing "interest requirements, after giving effect to the issue of [the debt securities to be distributed under the prospectus], amounted to $• for the 12 months ended •. [Name of the issuer]'s earnings before interest and income tax for the 12 months then ended was $•, which is • times [name of the issuer]'s interest requirements" with "borrowing cost requirements, after giving effect to the issue of [the debt securities to be distributed under the prospectus], amounted to $• for the 12 months ended •. [Name of the issuer]'s profit or loss attributable to owners of the parent before borrowing costs and income tax for the 12 months then ended was $•, which is • times [name of the issuer]'s borrowing cost requirements", and
(f) in instruction (7), by replacing "interest requirements for the 12 months then ended amounted to $•. [Name of the issuer]'s earnings before interest and income tax for the 12 months ended • was $•, which is • times [name of the issuer]'s aggregate dividend and interest requirements" with "borrowing cost requirements for the 12 months then ended amounted to $•. [Name of the issuer]'s profit or loss attributable to owners of the parent before borrowing costs and income tax for the 12 months ended • was $•, which is • times [name of the issuer]'s aggregate dividend and borrowing cost requirements".
21. Paragraph 10.3(8)(b) of Form 41-101F1 is amended by replacing "income" with "profit".
22. The instruction under section 10.9 of Form 41-101F1 is amended by replacing "derivatives" with "derivative instruments".
23. Paragraph 32.1(c) of Form 41-101F1 is amended by replacing "continuity of interests" with "combination in which all of the combining entities or businesses ultimately are controlled by the same party or parties both before and after the combination, and that control is not temporary".
24. Item 32.2 of Form 41-101F1 is replaced with the following:
Annual financial statements
32.2(1) Subject to section 32.4, include annual financial statements of the issuer consisting of
(a) a statement of comprehensive income, a statement of changes in equity, and a statement of cash flows for each of the three most recently completed financial years ended more than
(i) 90 days before the date of the prospectus, or
(ii) 120 days before the date of the prospectus, if the issuer is a venture issuer,
(b) a statement of financial position as at the end of the two most recently completed financial years described in paragraph (a),
(c) a statement of financial position as at the beginning of the earliest comparative period for which financial statements that are included in the prospectus comply with IFRS in the case of an issuer that
(i) discloses in its annual financial statements an unreserved statement of compliance with IFRS, and
(ii) does any of the following
(A) applies an accounting policy retrospectively in its annual financial statements,
(B) makes a retrospective restatement of items in its annual financial statements, or
(C) reclassifies items in its annual financial statements,
(d) in the case of an issuer's first IFRS financial statements, the opening IFRS statement of financial position at the date of transition to IFRS, and
(e) notes to the annual financial statements.
(1.1) If an issuer presents the components of profit or loss in a separate income statement, the separate income statement must be displayed immediately before the statement of comprehensive income filed under subsection (1).
(2) If the issuer has not completed three financial years, include the financial statements described under subsection (1) for each completed financial year ended more than
(a) 90 days before the date of the prospectus, or
(b) 120 days before the date of the prospectus, if the issuer is a venture issuer.
(3) If the issuer has not included in the prospectus financial statements for a completed financial year, include the financial statements described under subsection (1) or (2) for a period from the date the issuer was formed to a date not more than 90 days before the date of the prospectus.
(4) If an issuer changed its financial year end during any of the financial years referred to in this section and the transition year is less than nine months, the transition year is deemed not to be a financial year for the purposes of the requirement to provide financial statements for a specified number of financial years in this section.
(5) Despite subsection (4), all financial statements of the issuer for a transition year referred to in subsection (4) must be included in the prospectus.
(6) Subject to section 32.4, if financial statements of any predecessor entity, business or businesses acquired by the issuer, or of any other entity are required under this section, then include
(a) statements of comprehensive income, statements of changes in equity, and statements of cash flow for the entities or businesses for as many periods before the acquisition as may be necessary so that when these periods are added to the periods for which the issuer's statements of comprehensive income, statements of changes in equity, and statements of cash flow are included in the prospectus, the results of the entities or businesses, either separately or on a consolidated basis, total three years,
(b) statements of financial position for the entities or businesses for as many periods before the acquisition as may be necessary so that when these periods are added to the periods for which the issuer's statements of financial position are included in the prospectus, the financial position of the entities or businesses, either separately or on a consolidated basis, total two years,
(c) if the entities or businesses have not completed three financial years, the financial statements described under paragraphs (a) and (b) for each completed financial year of the entities or businesses for which the issuer's financial statements in the prospectus do not include the financial statements of the entities or businesses, either separately or on a consolidated basis, and ended more than
(i) 90 days before the date of the prospectus, or
(ii) 120 days before the date of the prospectus, if the issuer is a venture issuer,
(d) if an entity's or business's first IFRS financial statements are included under paragraphs (a), (b) or (c), the opening IFRS statement of financial position at the date of transition to IFRS, and
(e) a statement of financial position as at the beginning of the earliest comparative period for which financial statements that are included in the prospectus comply with IFRS in the case of an issuer that
(i) discloses in its annual financial statements an unreserved statement of compliance with IFRS, and
(ii) does any of the following
(A) applies an accounting policy retrospectively in its financial statements,
(B) makes a retrospective restatement of items in its financial statements, or
(C) reclassifies items in its financial statements..
25. Section 32.3 of Form 41-101F1 is replaced with the following:
Interim financial report
32.3(1) Include a comparative interim financial report of the issuer for the most recent interim period, if any, ended
(a) subsequent to the most recent financial year in respect of which annual financial statements of the issuer are included in the prospectus, and
(b) more than
(i) 45 days before the date of the prospectus, or
(ii) 60 days before the date of the prospectus if the issuer is a venture issuer.
(2) The interim financial report referred to in subsection (1) must include
(a) a statement of financial position as at the end of the interim period and a statement of financial position as at the end of the immediately preceding financial year, if any,
(b) a statement of comprehensive income, a statement of changes in equity, and a statement of cash flows, all for the year-to-date interim period, and comparative financial information for the corresponding interim period in the immediately preceding financial year, if any,
(c) for interim periods other than the first interim period in an issuer's financial year, a statement of comprehensive income for the three month period ending on the last day of the interim period and comparative financial information for the corresponding period in the immediately preceding financial year, if any,
(d) a statement of financial position as at the beginning of the earliest comparative period for which financial statements that are included in the prospectus comply with IFRS in the case of an issuer that
(i) discloses in its interim financial report an unreserved statement of compliance with International Accounting Standard 34 Interim Financial Reporting, and
(ii) does any of the following
(A) applies an accounting policy retrospectively in its interim financial report,
(B) makes a retrospective restatement of items in its interim financial report, or
(C) reclassifies items in its interim financial report,
(e) in the case of the first interim financial report required to be filed in the year of adopting IFRS, the opening IFRS statement of financial position at the date of transition to IFRS, and
(f) notes to the interim financial report.
(3) If an issuer presents the components of profit or loss in a separate income statement, the separate income statement must be displayed immediately before the statement of comprehensive income filed under subsection (2).
(4) If the issuer is required to include under subsection 32.3(1), a comparative interim financial report of the issuer for the second or third interim period in the year of adopting IFRS, include
(a) the issuer's first interim financial report in the year of adopting IFRS, or
(b) both
(i) the opening IFRS statement of financial position at the date of transition to IFRS, and
(ii) the annual and date of transition to IFRS reconciliations required by IFRS 1 First-time Adoption of International Financial Reporting Standards to explain how the transition from previous GAAP to IFRS affected the issuer's reported financial position, financial performance and cash flows.
(5) Subsection (4) does not apply to an issuer that was a reporting issuer in at least one jurisdiction immediately before filing the prospectus..
26. Section 32.4 of Form 41-101F1 is replaced with the following:
Exceptions to financial statement requirements
32.4 Despite section 32.2, an issuer is not required to include the following financial statements in a prospectus
(a) the statement of comprehensive income, the statement of changes in equity, and the statement of cash flows for the third most recently completed financial year, if the issuer is a reporting issuer in at least one jurisdiction immediately before filing the prospectus,
(b) the statement of comprehensive income, the statement of changes in equity, and the statement of cash flows for the third most recently completed financial year, and the financial statements for the second most recently completed financial year, if
(i) the issuer is a reporting issuer in at least one jurisdiction immediately before filing the prospectus, and
(ii) the issuer includes financial statements for a financial year ended less than
(A) 90 days before the date of the prospectus, or
(B) 120 days before the date of the prospectus, if the issuer is a venture issuer,
(c) the statement of comprehensive income, the statement of changes in equity, and the statement of cash flows for the third most recently completed financial year, and the statement of financial position for the second most recently completed financial year, if the issuer includes financial statements for a financial year ended less than 90 days before the date of the prospectus,
(d) the statement of comprehensive income, the statement of changes in equity, and the statement of cash flows for the third most recently completed financial year, and the financial statements for the second most recently completed financial year, if
(i) the issuer is a reporting issuer in at least one jurisdiction immediately before filing the prospectus,
(ii) the issuer includes audited financial statements for a period of at least nine months commencing the day after the most recently completed financial year for which financial statements are required under section 32.2,
(iii) the business of the issuer is not seasonal, and
(iv) none of the financial statements required under section 32.2 are for a financial year that is less than nine months,
(e) the statement of comprehensive income, the statement of changes in equity, and the statement of cash flows for the third most recently completed financial year, and the statement of financial position for the second most recently completed financial year, if
(i) the issuer includes audited financial statements for a period of at least nine months commencing the day after the most recently completed financial year for which financial statements are required under section 32.2,
(ii) the business of the issuer is not seasonal, and
(iii) none of the financial statements required under section 32.2 are for a financial year that is less than nine months, or
(f) the separate financial statements of the issuer and the other entity for periods prior to the date of the transaction, if the restated combined financial statements of the issuer and the other entity are included in the prospectus under paragraph 32.1(c)..
27. Paragraph 32.5(c) of Form 41-101F1 is amended by replacing "interim financial statements" with "interim financial report".
28. Subsection 34.1(1) of Form 41-101F1 is amended
(a) in paragraph (c), by replacing "revenues" with "revenue",
(b) in subparagraph (g)(i), by replacing "sales or revenues" with "revenue",
(c) in subparagraph (g)(ii), by replacing "income from continuing operations" with "profit or loss from continuing operations attributable to owners of the parent",
(d) in subparagraph (g)(iii), by replacing "net earnings or loss" with "profit or loss attributable to owners of the parent",
(e) in subparagraph (g)(iv), by replacing "balance sheet" with "statement of financial position", and
(f) by adding the following instruction after paragraph (g):
INSTRUCTION
See section 1.1 of the Instrument for the definitions of "profit or loss attributable to owners of the parent" and "profit or loss from continuing operations attributable to owners of the parent". .
29. Subparagraph 34.2(e)(ii) of Form 41-101F1 is amended by replacing "interim and annual consolidated" with "consolidated interim financial report and consolidated annual".
30. Section 35.1 of Form 41-101F1 is amended
(a) in subsection (1), by deleting "accounted for as", and
(b) in subsection (4),
(i) by replacing "date of the acquisition" wherever it occurs with "acquisition date",
(ii) in subparagraph (b)(iv), by replacing "income" with "profit or loss", and
(iii) in subparagraph (b)(vi), by replacing "annual audited statements" with "audited annual statements".
31. Section 35.3 of Form 41-101F1 is amended
(a) in the title, by replacing "date of acquisition" with "acquisition date", and
(b) by replacing "date of the acquisition" wherever it occurs with "acquisition date".
32. Section 35.4 of Form 41-101F1 is amended
(a) in the title, by replacing "Results" with "Financial Performance", and
(b) by replacing "operations" with "financial performance".
33. Subsection 35.5(3) of Form 41-101F1 is amended by replacing "date of acquisition" wherever it occurs with "acquisition date".
34. Subsection 35.6(3) of Form 41-101F1 is amended by replacing "date of the acquisition" wherever it occurs with "acquisition date".
35. Subsection 35.8(1) of Form 41-101F1 is amended
(a) by replacing "annual and interim financial statements" with "annual financial statements and an interim financial report", and
(b) by replacing "date of the acquisition" with "acquisition date".
36. Form 41-101F1 is amended by adding the following after Item 37:
ITEM 38: Transition
Interim financial report
38.1(1) Despite subsection 32.3(1), an issuer may include a comparative interim financial report of the issuer for the most recent interim period, if any, ended
(a) subsequent to the most recent financial year in respect of which annual financial statements of the issuer are included in the prospectus, and
(b) more than
(i) 75 days before the date of the prospectus, or
(ii) 90 days before the date of the prospectus if the issuer is a venture issuer.
(2) Subsection (1) does not apply unless
(a) the comparative interim financial report is the first interim financial report required to be filed in the year of adopting IFRS in respect of an interim period beginning on or after January 1, 2011,
(b) the issuer
(i) is disclosing, for the first time, a statement of compliance with International Accounting Standard 34 Interim Financial Reporting, and
(ii) did not previously file financial statements that disclosed compliance with IFRS,
(c) the issuer is a reporting issuer in any jurisdiction immediately before the date of the final long form prospectus, and
(d) the final long form prospectus is filed before July 5, 2012.
Asset-backed securities
38.2(1) Despite subsection 10.3(5), all financial disclosure that describes the underlying pool of financial assets of the issuer for a transition year must be included in the prospectus for the most recent interim period, if any, ended
(a) subsequent to the most recent financial year referred to in paragraphs 10.3(3)(a) and 10.3(3)(b) in respect of which financial disclosure on the underlying pool of financial assets is included in the prospectus, and
(b) more than
(i) 75 days before the date of the prospectus, or
(ii) 90 days before the date of the prospectus if the issuer is a venture issuer.
(2) Subsection (1) does not apply unless
(a) the financial disclosure in respect of the interim period is the first interim financial report required to be filed in the year of adopting IFRS in respect of an interim period beginning on or after January 1, 2011,
(b) the issuer
(i) is disclosing, for the first time, a statement of compliance with International Accounting Standard 34 Interim Financial Reporting, and
(ii) did not previously file financial statements that disclosed compliance with IFRS,
(c) the issuer is a reporting issuer in any jurisdiction immediately before the date of the final long form prospectus, and
(d) the final long form prospectus is filed before July 5, 2012..
37. This Instrument only applies to a preliminary prospectus, an amendment to a preliminary prospectus, a final prospectus or an amendment to a final prospectus of an issuer which includes or incorporates by reference financial statements of the issuer in respect of periods relating to financial years beginning on or after January 1, 2011.
38. Despite section 37, an issuer may apply the amendments set out in this Instrument to a preliminary prospectus, an amendment to a preliminary prospectus, a final prospectus, or an amendment to a final prospectus of the issuer, which includes or incorporates by reference financial statements of the issuer in respect of periods relating to a financial year that begins before January 1, 2011 if the immediately preceding financial year ends no earlier than December 21, 2010 and if the issuer is relying on the exemption in section 5.3 of National Instrument 52-107 Acceptable Accounting Principles and Auditing Standards.
39. This Instrument comes into force on January 1, 2011.
Amendments to Companion Policy 41-101CP Companion Policy to National Instrument 41-101 General Prospectus Requirements
AMENDMENTS TO
COMPANION POLICY 41-101CP COMPANION POLICY TO
NATIONAL INSTRUMENT 41-101 GENERAL PROSPECTUS REQUIREMENTS
1. Companion Policy 41-101CP Companion Policy to National Instrument 41-101 General Prospectus Requirements is amended.
2. Section 1.3 is amended by adding the following after subsection (2):
Accounting terms
(3) The Instrument uses accounting terms that are defined or used in Canadian GAAP applicable to publicly accountable enterprises. In certain cases, some of those terms are defined differently in securities legislation. In deciding which meaning applies, you should consider that NI 14-101 provides that a term used in the Instrument and defined in the securities statute of a local jurisdiction has the meaning given to it in the statute unless: (a) the definition in that statute is restricted to a specific portion of the statute that does not govern prospectuses; or (b) the context otherwise requires.
Acceptable accounting principles other than Canadian GAAP applicable to publicly accountable enterprises
(4) If an issuer is permitted under NI 52-107 to file financial statements in accordance with acceptable accounting principles other than Canadian GAAP applicable to publicly accountable enterprises, then the issuer may interpret any reference in the Instrument to a term or provision defined or used in Canadian GAAP applicable to publicly accountable enterprises as a reference to the corresponding term or provision in the other acceptable accounting principles.
Financial statements prepared in accordance with different accounting principles
(5) Issuers intending to include financial statements that are prepared in accordance with different accounting principles should consider the guidance in section 2.8 of Companion Policy 52-107CP Acceptable Accounting Principles and Auditing Standards.
Rate-regulated activities
(6) If a qualifying entity is relying on the exemption in paragraph 5.4(1)(a) of NI 52-107, then the qualifying entity may interpret any reference in the Instrument to a term or provision defined or used in Canadian GAAP applicable to publicly accountable enterprises as a reference to the corresponding term or provision in Part V of the Handbook..
3. Subsection 4.3(1) is replaced with the following:
4.3(1) Subsection 6.3(1) of Form 41-101F1 requires disclosure of each of the principal purposes for which the issuer will use the net proceeds. If an issuer has negative cash flow from operating activities in its most recently completed financial year for which financial statements have been included in the long form prospectus, the issuer should prominently disclose that fact in the use of proceeds section of the long form prospectus. The issuer should also disclose whether, and if so, to what extent, the issuer will use the proceeds of the distribution to fund any anticipated negative cash flow from operating activities in future periods. An issuer should disclose negative cash flow from operating activities as a risk factor under subsection 21.1(1) of Form 41-101F1. For the purposes of this section, in determining cash flow from operating activities, the issuer must include cash payments related to dividends and borrowing costs..
4. Subsection 4.4(1) is amended by replacing "capitalized, deferred or expensed" with "expensed or recognized as assets".
5. Part 5 is amended by adding the following after section 5.1:
Presentation of Financial Results
5.1.1 Canadian GAAP applicable to publicly accountable enterprises provides an issuer two alternatives in presenting its income: (a) in one single statement of comprehensive income, or (b) in a statement of comprehensive income with a separate income statement. If an issuer presents its income using the second alternative, both statements must be filed to satisfy the requirements of this Instrument. (See subsections 32.2(1.1) and 32.3(3) of Form 41-101F1)..
6. Section 5.2 is amended
(a) by replacing "annual or interim financial statements" wherever it occurs with "annual financial statements or interim financial report", and
(b) by adding "financial" before "statements for the purpose".
7. Section 5.5 is amended by adding the following after subsection (2):
(3) An issuer is subject to certain additional disclosure requirements when it discloses an interim financial report for a period in the year of adopting IFRS, as set out in subparagraph 32.3(2)(e) and subsection 32.3(4) of Form 41-101F1. These requirements only apply to interim financial reports relating to periods in the year of adopting IFRS and therefore do not apply if the prospectus includes annual financial statements prepared in accordance with IFRS.
An issuer is required to provide an opening IFRS statement of financial position at the date of transition to IFRS. An issuer with, for example, a year-end of December 31, 2010 that files a prospectus for which it must include its first interim financial report in the year of adopting IFRS for the period ended March 31, 2011, must generally provide an opening IFRS statement of financial position at January 1, 2010.
An issuer must also include various reconciliations required by IFRS 1 to explain how the transition from previous GAAP to IFRS has affected its reported financial position, financial performance and cash flows. In the first interim period IFRS 1 requires certain additional reconciliations which relate to annual periods and the date of transition to IFRS. Where an issuer that was not a reporting issuer in at least one jurisdiction immediately before filing the prospectus includes an interim financial report in respect of the second or third interim period in the year of adopting IFRS, subsection 32.3(4) of Form 41-101F1 requires these additional reconciliations to be included in the prospectus. Alternatively, pursuant to subsection 32.3(4) of Form 41-101F1, the issuer may include the first interim financial report in the year of adopting IFRS as this report includes the required reconciliations.
These additional reconciliations may be summarized as follows:
• reconciliations of the issuer's equity presented in accordance with previous GAAP to its equity in accordance with IFRS for the date of transition to IFRS (January 1, 2010 in the above-noted example);
• reconciliations of the issuer's equity presented in accordance with previous GAAP to its equity in accordance with IFRS for the end of the latest period presented in the issuer's most recent annual financial statements in accordance with previous GAAP (December 31, 2010 in the above-noted example); and
• a reconciliation of the issuer's total comprehensive income (or total profit or loss) presented in accordance with previous GAAP to its total comprehensive income in accordance with IFRS for the latest period in the issuer's most recent annual financial statements presented in the prospectus in accordance with previous GAAP (year ended December 31, 2010 in the above-noted example).
The reconciliations summarized above must give sufficient detail to enable investors to understand the material adjustments to the statement of financial position, statement of comprehensive income and statement of cash flows..
8. Subsection 5.6(4) is amended
(a) by replacing "audited interim financial statements" with "an audited interim financial report",
(b) by adding "comprehensive" before "income or cash flows", and
(c) by replacing "containing a reservation of opinion" with "that expresses a modified opinion".
9. Subsection 5.8(2) is amended
(a) by replacing "does not contain a reservation if they were audited in accordance with Canadian GAAS" with "expresses an unmodified opinion if they were audited in accordance with Canadian GAAS or International Standards on Auditing",
(b) by replacing "U.S. GAAS" with "U.S. PCAOB GAAS",
(c) by replacing "subsection 6.2(6) of NI 52-107 only applies" with "subsections 3.12(3) and 4.12(6) of NI 52-107 only apply",
(d) by replacing "reservation relating to opening inventory" with "qualified opinion relating to opening inventory",
(e) by replacing "contains no reservation and the business" with "expresses an unmodified opinion and the business", and
(f) by replacing "accompanied by an unqualified auditors' report" with "accompanied by an auditors' report that expresses an unmodified opinion".
10. Section 5.9 is amended
(a) in subparagraph (1)(h)(iii), by deleting "or",
(b) in subsection (2), by
(i) replacing "date of acquisition" with "acquisition date", and
(ii) replacing "date of the acquisition" wherever it occurs with "acquisition date",
(c) in subsection (3), by replacing "Our interpretation of the phrase "where a reasonable person would believe that the likelihood of the acquisition being completed is high" is consistent with the concept of a likely contingency in CICA Handbook section 3290 "Contingencies". It is" with "When interpreting the phrase "where a reasonable person would believe that the likelihood of the acquisition being completed is high", it is",
(d) in paragraph (4)(d), by replacing "comparative interim financial statements" with "a comparative interim financial report", and
(e) by adding the following after subsection (6)
(7) Section 3.11 of NI 52-107 permits acquisition statements included in a business acquisition report or prospectus to be prepared in accordance with Canadian GAAP applicable to private enterprises in certain circumstances. The ability to present acquisition statements using Canadian GAAP applicable to private enterprises would not extend to a situation where an entity acquired or to be acquired is considered the primary business or the predecessor of the issuer..
11. Subsection 6.4(7) is amended
(a) by replacing "Investment Dealers Association has adopted IDA by-law 29.13" with "Investment Industry Regulatory Organization of Canada has adopted IIROC Rule 29.13", and
(b) by adding "securities" after "whether debt or equity".
12. The following is added after Part 6:
PART 7: TRANSITION
Transition -- Application of Amendments
7.1 The amendments to the Instrument and this Policy which came into effect on January 1, 2011 only apply to a preliminary prospectus, an amendment to a preliminary prospectus, a final prospectus or an amendment to a final prospectus of an issuer which includes financial statements of the issuer in respect of periods relating to financial years beginning on or after January 1, 2011..
13. Appendix A is amended by replacing "operating results" wherever it occurs with "financial performance".
14. These amendments only apply to a preliminary prospectus, an amendment to a preliminary prospectus, a final prospectus or an amendment to a final prospectus of an issuer which includes or incorporates by reference financial statements of the issuer in respect of periods relating to financial years beginning on or after January 1, 2011.
15. Despite section 14, an issuer may apply these amendments to a preliminary prospectus, an amendment to a preliminary prospectus, a final prospectus, or an amendment to a final prospectus of the issuer, which includes or incorporates by reference financial statements of the issuer in respect of periods relating to a financial year that begins before January 1, 2011 if the immediately preceding financial year ends no earlier than December 21, 2010 and if the issuer is relying on the exemption in section 5.3 of National Instrument 52-107 Acceptable Accounting Principles and Auditing Standards.
16. These amendments become effective on January 1, 2011.
Amendment Instrument for National Instrument 44-101 Short Form Prospectus Distributions
AMENDMENT INSTRUMENT FOR
NATIONAL INSTRUMENT 44-101 SHORT FORM PROSPECTUS DISTRIBUTIONS
Although this amendment instrument amends section headers in National Instrument 44-101, section headers do not form part of the instrument and are inserted for ease of reference only.
1. National Instrument 44-101 Short Form Prospectus Distributions is amended by this Instrument.
2. Subsection 1.1 is amended, in the definition of "short form eligible exchange", by replacing "Canadian Trading and Quotation System Inc." with "Canadian National Stock Exchange".
3. Paragraph 4.3(2)(a) is replaced with the following:
(a) U.S. AICPA GAAS, the unaudited financial statements may be reviewed in accordance with the review standards issued by the American Institute of Certified Public Accountants,
(a.1) U.S. PCAOB GAAS, the unaudited financial statements may be reviewed in accordance with the review standards issued by the Public Company Accounting Oversight Board (United States of America),.
4. The general instructions of Form 44-101F1 are amended
(a) in instruction (3), by deleting "This concept of materiality is consistent with the financial reporting notion of materiality contained in the Handbook.",
(b) in instruction (8), by replacing "the Handbook" with "Canadian GAAP applicable to publicly accountable enterprises", and
(c) in instruction (14), by replacing "disclose the currency in which the financial information is disclosed" with "display the presentation currency".
5. Section 1.6.1 of Form 44-101F1 is amended by deleting "reporting".
6. Section 6.1 of Form 44-101F1 is amended
(a) in paragraph (1)(c), by replacing "interim financial statements of the issuer have" with "an interim financial report of the issuer has",
(b) in subparagraph 2(b)(i), by deleting "issued",
(c) in paragraphs (2)(b) and (d), by replacing "annual or interim financial statements" wherever it occurs with "annual financial statements or interim financial report",
(d) in paragraph (2)(c), by replacing "annual or interim financial statements" with "annual financial statements or interim financial report; and",
(e) in paragraphs (2)(c) and (d), by deleting "long-term" wherever it occurs,
(f) in paragraph (2)(d), by replacing "prospectus; and" with "prospectus.",
(g) by repealing paragraph (2)(e),
(h) by repealing subsection (3), and
(i) in subsection (4), by replacing "earnings required" with "numerator required".
7. The instructions under item 6 of Form 44-101F1 are amended
(a) in instruction (2), by replacing "entity's earnings (the numerator) by its interest" with "entity's profit or loss attributable to owners of the parent (the numerator) by its borrowing costs",
(b) in instruction (3),
(i) in paragraph (a), by replacing "net income before interest" with "profit or loss attributable to owners of the parent before borrowing costs",
(ii) by repealing paragraph (c),
(iii) by replacing paragraph (d) with the following:
(d) for distributions of debt securities, the appropriate denominator is borrowing costs, after giving effect to the new debt securities issue and any retirement of obligations, plus the borrowing costs that have been capitalized during the period;,
(iv) in subparagraph (e)(i), by replacing "annual interest requirements, including the amount of interest that has" with "annual borrowing cost requirements, including the borrowing costs that have", and
(v) in paragraph (f), by adding "securities" after "effect of the debt",
(c) in instruction (4),
(i) by replacing "interest obligations on all long-term debt" with "borrowing cost obligations on all financial liabilities",
(ii) by replacing paragraph (a) with the following:
(a) the issuance of all financial liabilities and, in addition in the case of an issuance of preferred shares, all preferred shares issued, since the date of the annual financial statements or interim financial report;,
(iii) in paragraph (b), by adding "and" after "distributed;",
(iv) by replacing paragraph (c) with the following:
(c) the repayment or redemption of all financial liabilities since the date of the annual financial statements or interim financial report, all financial liabilities to be repaid or redeemed from the proceeds to be realized from the sale of securities under the short form prospectus and, in addition, in the case of an issuance of preferred shares, all preferred shares repaid or redeemed since the date of the annual financial statements or interim financial report and all preferred shares to be repaid or redeemed from the proceeds to be realized from the sale of securities under the short form prospectus., and
(v) by repealing paragraph (d),
(d) by repealing instruction (5),
(e) in instruction (6), by replacing "interest requirements, after giving effect to the issue of [the debt securities to be distributed under the short form prospectus], amounted to $• for the 12 months ended •. [Name of the issuer]'s earnings before interest and income tax for the 12 months then ended was $•, which is • times [name of the issuer]'s interest requirements" with "borrowing cost requirements, after giving effect to the issue of [the debt securities to be distributed under the short form prospectus], amounted to $• for the 12 months ended •. [Name of the issuer]'s profit or loss attributable to owners of the parent before borrowing costs and income tax for the 12 months then ended was $•, which is • times [name of the issuer]'s borrowing cost requirements", and
(f) in instruction (7), by replacing "interest requirements for the 12 months then ended amounted to $•. [Name of the issuer]'s earnings before interest and income tax for the 12 months ended • was $•, which is • times [name of the issuer]'s aggregate dividend and interest requirements" with "borrowing cost requirements for the 12 months then ended amounted to $•. [Name of the issuer]'s profit or loss attributable to owners of the parent before borrowing costs and income tax for the 12 months ended • was $•, which is • times [name of the issuer]'s aggregate dividend and borrowing cost requirements".
8. Paragraph 7.3(3)(b) of Form 44-101F1 is amended by replacing "income" with "profit".
9. Paragraph 11.1(1)3 of Form 44-101F1 is amended by replacing "interim financial statements" with "interim financial report".
10. Subsection 13.1(1) of Form 44-101F1 is amended
(a) in paragraph (c), by replacing "revenues" with "revenue",
(b) in paragraph (g)
(i) in subparagraph (i), by replacing "sales or revenues" with "revenue",
(ii) in subparagraph (ii), by replacing "income from continuing operations" with "profit or loss from continuing operations attributable to owners of the parent",
(iii) in subparagraph (iii), by replacing "net earnings or loss" with "profit or loss attributable to owners of the parent",
(iv) in subparagraph (iv), by replacing "balance sheet" with "statement of financial position", and
(c) by adding the following instruction after paragraph (g):
INSTRUCTION
See section 1.1 of NI 41-101 for the definitions of "profit or loss attributable to owners of the parent" and "profit or loss from continuing operations attributable to owners of the parent"..
11. Subparagraph 13.2(f)(ii) of Form 44-101F1 is amended by replacing "interim and annual consolidated" with "consolidated interim financial report and consolidated annual".
12. This Instrument only applies to a preliminary short form prospectus, an amendment to a preliminary short form prospectus, a final short form prospectus or an amendment to a final short form prospectus of an issuer which includes or incorporates by reference financial statements of the issuer in respect of periods relating to financial years beginning on or after January 1, 2011.
13. Despite section 12, an issuer may apply the amendments set out in this Instrument to a preliminary short form prospectus, an amendment to a preliminary short form prospectus, a final short form prospectus, or an amendment to a final short form prospectus of the issuer, which includes or incorporates by reference financial statements of the issuer in respect of periods relating to a financial year that begins before January 1, 2011 if the immediately preceding financial year ends no earlier than December 21, 2010 and if the issuer is relying on the exemption in section 5.3 of National Instrument 52-107 Acceptable Accounting Principles and Auditing Standards.
14. This Instrument comes into force on January 1, 2011.
Amendments to Companion Policy 44-101CP to National Instrument 44-101 Short Form Prospectus Distributions
AMENDMENTS TO
COMPANION POLICY 44-101CP TO NATIONAL INSTRUMENT 44-101
SHORT FORM PROSPECTUS DISTRIBUTIONS
1. Companion Policy 44-101CP to National Instrument 44-101 Short Form Prospectus Distributions is amended.
2. Subsection 1.7(4) is amended by replacing "former auditor" wherever it occurs with "predecessor auditor".
3. Subsection 4.4(1) is amended
(a) by replacing "operating cash flow" wherever it occurs with "cash flow from operating activities", and
(b) by adding the following at the end of the paragraph:
For the purposes of this section, in determining cash flow from operating activities, the issuer must include cash payments related to dividends and borrowing costs..
4. Section 4.9 is amended
(a) in subsection (1), by
(i) replacing "Our interpretation of" with "When interpreting", and
(ii) replacing "is consistent with the concept of a likely contingency in CICA Handbook section 3290. It" with ", it", and
(b) in subparagraph (2)(d), by replacing "comparative interim financial statements" with "a comparative interim financial report".
5. Section 4.11 is amended by replacing "Interim financial statements" with "Certain transition rules in the applicable CD rule apply to the first interim financial report required to be filed in the year of adopting IFRS in respect of an interim period beginning on or after January 1, 2011. Otherwise, an interim financial report".
6. Section 4.14 is amended by deleting "or MD&A supplement".
7. The following is added after Part 5:
PART 6 TRANSITION
6.1 Transition -- The amendments to NI 44-101 and this Policy which came into effect on January 1, 2011 only apply to a preliminary short form prospectus, an amendment to a preliminary short form prospectus, a final short form prospectus or an amendment to a final short form prospectus of an issuer which includes or incorporates by reference financial statements of the issuer in respect of periods relating to financial years beginning on or after January 1, 2011..
8. These amendments only apply to a preliminary short form prospectus, an amendment to a preliminary short form prospectus, a final short form prospectus or an amendment to a final short form prospectus of an issuer which includes or incorporates by reference financial statements of the issuer in respect of periods relating to financial years beginning on or after January 1, 2011.
9. Despite section 8, an issuer may apply these amendments to a preliminary short form prospectus, an amendment to a preliminary short form prospectus, a final short form prospectus, or an amendment to a final short form prospectus of the issuer, which includes or incorporates by reference financial statements of the issuer in respect of periods relating to a financial year that begins before January 1, 2011 if the immediately preceding financial year ends no later than December 21, 2010 and if the issuer is relying on the exemption in section 5.3 of National Instrument 52-107 Acceptable Accounting Principles and Auditing Standards.
10. These amendments become effective on January 1, 2011.
Amendment Instrument for National Instrument 44-102 Shelf Distributions
AMENDMENT INSTRUMENT FOR
NATIONAL INSTRUMENT 44-102 SHELF DISTRIBUTIONS
Although this amendment instrument amends section headers in National Instrument 44-102, section headers do not form part of the instrument and are inserted for ease of reference only.
1. National Instrument 44-102 Shelf Distributions is amended by this Instrument.
2. Subsection 6.2(4) is amended
(a) by deleting "Acceptable Accounting Principles, Auditing Standards and Reporting Currency", and
(b) by replacing paragraph (a) with the following:
(a) U.S. AICPA GAAS, the unaudited financial statements may be reviewed in accordance with the review standards issued by the American Institute of Certified Public Accountants,
(a.1) U.S. PCAOB GAAS, the unaudited financial statements may be reviewed in accordance with the review standards issued by the Public Company Accounting Oversight Board (United States of America),.
3. Paragraph 8.4(a) is amended by replacing "interim" with "an interim financial report".
4. This Instrument only applies to a preliminary base shelf prospectus, an amendment to a preliminary base shelf prospectus, a base shelf prospectus, an amendment to a base shelf prospectus or a shelf prospectus supplement of an issuer which includes or incorporates by reference financial statements of the issuer in respect of periods relating to financial years beginning on or after January 1, 2011.
5. Despite section 4, an issuer may apply the amendments set out in this Instrument to a preliminary base shelf prospectus, an amendment to a preliminary base shelf prospectus, a base shelf prospectus, an amendment to a base shelf prospectus, or a shelf prospectus supplement of the issuer, which includes or incorporates by reference financial statements of the issuer in respect of periods relating to a financial year that begins before January 1, 2011 if the immediately preceding financial year ends no earlier than December 21, 2010 and if the issuer is relying on the exemption in section 5.3 of National Instrument 52-107 Acceptable Accounting Principles and Auditing Standards.
6. This Instrument comes into force on January 1, 2011.
Amendment Instrument for National Instrument 52-109 Certification of Disclosure in Issuers' Annual and Interim Filings
AMENDMENT INSTRUMENT FOR
NATIONAL INSTRUMENT 52-109 CERTIFICATION OF DISCLOSURE
IN ISSUERS' ANNUAL AND INTERIM FILINGS
Although this amendment instrument amends section headers in National Instrument 52-109, section headers do not form part of the instrument and are inserted for ease of reference only
1. National Instrument 52-109 Certification of Disclosure in Issuers' Annual and Interim Filings is amended by this Instrument.
2. Section 1.1 is amended
(a) after the definition of "financial period", by adding the following definition:
"financial statements" has the meaning ascribed to it in section 1.1 of NI 51-102;,
(b) in the definition of "internal control over financial reporting", in paragraph (c), by replacing "interim financial statements" with "interim financial reports",
(c) in the definition of "interim filings", by replacing "interim financial statements" with "interim financial report",
(d) by deleting the definition of "interim financial statements" and adding the following definition:
"interim financial report" means the interim financial report required to be filed under NI 51-102;,
(e) in the definition of "material weakness", by replacing "annual or interim financial statements" with "annual financial statements or interim financial report",
(f) in the definition of "NI 52-107", by replacing "Acceptable Accounting Principles, Auditing Standards and Reporting Currency" with "Acceptable Accounting Principles and Auditing Standards",
(g) in the definition of "proportionately consolidated entity", by replacing "revenues" with "revenue",
(h) after the definition of "Sarbanes-Oxley Act", by adding the following definition:
"special purpose entity" has, in respect of an issuer, the meaning ascribed to that term in the issuer's GAAP;,
(i) in the definition of "U.S. marketplace", by adding "and" after "NI 51-102;", and
(j) by deleting the definition of "variable interest entity".
3. Section 3.3 is amended by replacing "variable interest entity" wherever it occurs with "special purpose entity".
4. Section 5.6 is amended by replacing "interim financial statements" wherever it occurs with "interim financial reports".
5. Section 6.2 is amended
(a) in the title, by replacing "interim financial statements" with "interim financial report", and
(b) by replacing "interim financial statements" wherever it occurs with "interim financial report".
6. Subsection 8.2(3) is amended by replacing "interim financial statements" wherever it occurs with "interim financial report".
7. Section 3 of Form 52-109F1 Certification of annual filings -- full certificate is amended by replacing "results of operations" with "financial performance".
8. Section 5.3 of Form 52-109F1 Certification of annual filings -- full certificate is amended by replacing "variable interest entity" wherever it occurs with "special purpose entity".
9. Section 3 of Form 52-109FV1 Certification of annual filings -- venture issuer basic certificate is amended by replacing "results of operations" with "financial performance".
10. Section 3 of Form 52-109F1 -- IPO/RTO Certification of annual filings following an initial public offering, reverse takeover or becoming a non-venture issuer is amended by replacing "results of operations" with "financial performance".
11. Section 1 of Form 52-109F2 Certification of interim filings -- full certificate is amended by replacing "interim financial statements" with "interim financial report".
12. Section 3 of Form 52-109F2 Certification of interim filings -- full certificate is amended
(a) by replacing "interim financial statements" with "interim financial report", and
(b) by replacing "results of operations" with "financial performance".
13. Section 5.3 of Form 52-109F2 Certification of interim filings -- full certificate is amended by replacing "variable interest entity" wherever it occurs with "special purpose entity".
14. Section 1 of Form 52-109FV2 Certification of interim filings -- venture issuer basic certificate is amended by replacing "interim financial statements" with "interim financial report".
15. Section 3 of Form 52-109FV2 Certification of interim filings -- venture issuer basic certificate is amended
(a) by replacing "interim financial statements" with "interim financial report", and
(b) by replacing "results of operations" with "financial performance".
16. Section 1 of Form 52-109F2 -- IPO/RTO Certification of interim filings following an initial public offering, reverse takeover or becoming a non-venture issuer is amended by replacing "interim financial statements" with "interim financial report".
17. Section 3 Form 52-109F2 -- IPO/RTO Certification of interim filings following an initial public offering, reverse takeover or becoming a non-venture issuer is amended
(a) by replacing "interim financial statements" with "interim financial report", and
(b) by replacing "results of operations" with "financial performance".
18. Section 1 of Form 52-109F2R Certification of refiled interim filings is amended by replacing "interim financial statements" with "interim financial report".
19. This Instrument only applies to annual filings and interim filings for periods relating to financial years beginning on or after January 1, 2011.
20. Despite section 19, an issuer may apply the amendments set out in this Instrument to annual filings and interim filings for periods relating to a financial year that begins before January 1, 2011 if the immediately preceding financial year ends no earlier than December 21, 2010 and if the issuer is relying on the exemption in section 5.3 of National Instrument 52-107 Acceptable Accounting Principles and Auditing Standards.
21. This Instrument comes into force on January 1, 2011.
Amendments to Companion Policy 52-109CP to National Instrument 52-109 Certification of Disclosure in Issuers' Annual and Interim Filings
AMENDMENTS TO
COMPANION POLICY 52-109CP TO
NATIONAL INSTRUMENT 52-109 CERTIFICATION OF DISCLOSURE
IN ISSUERS' ANNUAL AND INTERIM FILINGS
1. Companion Policy 52-109CP to National Instrument 52-109 Certification of Disclosure in Issuers' Annual and Interim Filings is amended.
2. Part 1 is amended by adding the following after section 1.4:
1.5 Accounting terms -- The Instrument uses accounting terms that are defined or used in Canadian GAAP applicable to publicly accountable enterprises. In certain cases, some of those terms are defined differently in securities legislation. In deciding which meaning applies, you should consider that National Instrument 14-101 Definitions provides that a term used in the Instrument and defined in the securities statute of a local jurisdiction has the meaning given to it in the statute unless: (a) the definition in that statute is restricted to a specific portion of the statute that does not govern continuous disclosure; or (b) the context otherwise requires.
1.6 Acceptable accounting principles other than Canadian GAAP applicable to publicly accountable enterprises -- If an issuer is permitted under NI 52-107 to file financial statements in accordance with acceptable accounting principles other than Canadian GAAP applicable to publicly accountable enterprises, then the issuer may interpret any reference in the Instrument to a term or provision defined or used in Canadian GAAP applicable to publicly accountable enterprises as a reference to the corresponding term or provision in the other acceptable accounting principles.
1.7 Rate-regulated activities - If a qualifying entity is relying on the exemption in paragraph 5.4(1)(a) of NI 52-107, then the qualifying entity may interpret any reference in the Instrument to a term or provision defined or used in Canadian GAAP applicable to publicly accountable enterprises as a reference to the corresponding term or provision in Part V of the Handbook..
3. Section 4.1 is amended
(a) in the title, by replacing "results of operations" with "financial performance", and
(b) by replacing "results of operations" wherever it occurs with "financial performance".
4. Section 4.2 is amended by replacing "balance sheet" with "statement of financial position".
5. Section 6.10 is amended
(a) in subsection (2), by
(i) replacing "net sales" with "net revenue",
(ii) deleting "on the income statement",
(iii) replacing "gross sales" wherever it occurs with "gross revenue", and
(iv) replacing "sales returns" with "returns",
(b) in subparagraph (3)(f), by adding "conditions that will give rise to" after "the likelihood (or possibility) of", and
(c) in subsection (4), by replacing "revenues" with "revenue".
6. Subsection 7.9(2) is amended by replacing "controls for recording sales transactions" with "controls for recording revenue".
7. Section 13.1 is amended
(a) in paragraph (b), by
(i) replacing "variable interest entity" with "special purpose entity", and
(ii) replacing "VIE" with "SPE",
(b) in paragraph (e), by replacing "entity that is accounted for using the cost method in the issuer's financial statements (a portfolio investment)" with "entity that is not accounted for by consolidation, proportionate consolidation or the equity method (a portfolio investment)", and
(c) in the last paragraph, by
(i) replacing "VIE" with "SPE", and
(ii) replacing "The terms "consolidated", "subsidiary", "VIE", "proportionately consolidated", "equity method" and "cost method" have the meaning ascribed to such terms under the issuer's GAAP." with "The terms "consolidated", "subsidiary", "SPE", "proportionately consolidated", and "equity method" have the meaning ascribed to such terms under the issuer's GAAP.".
8. Section 13.3 is amended
(a) in subsection (1), by replacing "VIE" wherever it occurs with "SPE",
(b) in subparagraph (2)(b), by
(i) replacing "interim financial statements" with "interim financial reports", and
(ii) replacing "GAAP" with "accounting principles",
(c) in subsection (4), by
(i) replacing "VIE" wherever it occurs with "SPE",
(ii) replacing "sales or revenues" with "revenue",
(iii) replacing "income or loss before discontinued operations and extraordinary items" with "profit or loss before discontinued operations",
(iv) replacing "net income or loss for the period" with "profit or loss for the period",
(v) replacing "balance sheet" with "statement of financial position", and
(vi) replacing "contingencies" with "contingent liabilities",
(d) in subsection (5),
(i) in paragraph (c), by replacing "any required impairment charge related to the investment" with "any impairment loss in the investment", and
(ii) in paragraph (d), by replacing "income/loss" with "profit or loss", and
(e) in subsection (6), by replacing "VIE" with "SPE".
9. Section 14.2 is amended
(a) by replacing "sales or revenues" with "revenue",
(b) by replacing "income or loss before discontinued operations and extraordinary items" with "profit or loss before discontinued operations",
(c) by replacing "net income or loss for the period" with "profit or loss for the period",
(d) by replacing "balance sheet" with "statement of financial position", and
(e) by replacing "contingencies" with "contingent liabilities".
10. Section 17.1 is amended by replacing "acceptable form of GAAP" with "acceptable form of accounting principles".
11. Part 19 is amended by adding the following after section 19.1:
19.2 Application of Amendments -- The amendments to the Instrument and this Policy which came into effect on January 1, 2011 only apply to annual filings and interim filings for periods relating to financial years beginning on or after January 1, 2011..
12. These amendments only apply to annual filings and interim filings for periods relating to financial years beginning on or after January 1, 2011.
13. Despite section 12, an issuer may apply these amendments to annual filings and interim filings for periods relating to a financial year that begins before January 1, 2011 if the immediately preceding financial year ends no earlier than December 21, 2010 and if the issuer is relying on the exemption in section 5.3 of National Instrument 52-107 Acceptable Accounting Principles and Auditing Standards.
14. These amendments become effective on January 1, 2011.
Amendments to National Instrument 31-103 Registration Requirements and Exemptions
AMENDMENTS TO
NATIONAL INSTRUMENT 31-103
REGISTRATION REQUIREMENTS AND EXEMPTIONS
1. National Instrument 31-103 Registration Requirements and Exemptions is amended by this Instrument.
2. Section 1.1 is amended by adding the following definition before the definition of "investment dealer":
"interim period" means a period commencing on the first day of the financial year and ending 9, 6 or 3 months before the end of the financial year;.
3. Section 12.10 is amended by
(a) repealing subsection (1) and substituting the following:
(1) Annual financial statements delivered to the regulator under this Division for financial years beginning on or after January 1, 2011 must include the following:
(a) a statement of comprehensive income, a statement of changes in equity and a statement of cash flows, each prepared for the most recently completed financial year and the financial year immediately preceding the most recently completed financial year, if any;
(b) a statement of financial position, signed by at least one director of the registered firm, as at the end of the most recently completed financial year and the financial year immediately preceding the most recently completed financial year, if any;
(c) notes to the financial statements., and
(b) repealing subsection (3).
4. Section 12.11 is amended by repealing subsection (1) and substituting the following:
(1) Interim financial information delivered to the regulator under this Division for interim periods relating to financial years beginning on or after January 1, 2011 may be limited to the following:
(a) a statement of comprehensive income for the 3-month period ending on the last day of the interim period and for the same period of the immediately preceding financial year, if any;
(b) a statement of financial position, signed by at least one director of the registered firm, as at the end of the interim period and as at the end of the same interim period of the immediately preceding financial year, if any..
5. Section 12.12 is amended by striking out "quarter" wherever it occurs and substituting "interim period".
6. Section 12.14 is amended by striking out "quarter" wherever it occurs and substituting "interim period".:
7. Part 12 is amended by adding the following after Section 12.14:
12.15 Exemptions for financial years beginning in 2011
(1) Despite subsections 12.10(1), 12.11(1), 12.12(1) and (2), 12.13 and 12.14(1) and (2), the annual financial statements, the interim financial information, and the completed Form 31-103F1 Calculation of Excess Working Capital, for a financial year beginning in 2011 or for interim periods relating to a financial year beginning in 2011 may exclude comparative information for the preceding financial period.
(2) Despite subsection 12.12(2), the first interim financial information, and the first completed Form 31-103F1 Calculation of Excess Working Capital, required to be delivered in respect of an interim period beginning on or after January 1, 2011 must be delivered no later than the 45th day after the end of the interim period.
(3) Despite subsection 12.14(2), the first interim financial information, the first completed Form 31-103F1 Calculation of Excess Working Capital, and the description of any net asset value adjustment, required to be delivered in respect of an interim period beginning on or after January 1, 2011 must be delivered no later than the 45th day after the end of the interim period..
8. Form 31-103F1 Calculation of Excess Working Capital is amended
(a) in the first line following "Notes", by striking out "unconsolidated basis" and substituting "non-consolidated basis; registrants must account for investments in subsidiaries, jointly controlled entities and associates as specified for separate financial statements in International Accounting Standard 27 Consolidated and Separate Financial Statements.", and
(b) in Line 11, by striking out "balance sheet" and substituting "statement of financial position".
9. This Instrument only applies to annual financial statements and interim financial information in respect of periods relating to financial years beginning on or after January 1, 2011.
10. This Instrument comes into force on January 1, 2011.
Amendments to Companion Policy 31-103CP Registration Requirements and Exemptions
AMENDMENTS TO
COMPANION POLICY 31-103CP REGISTRATION REQUIREMENTS AND EXEMPTIONS
1. Companion Policy 31-103CP Registration Requirements and Exemptions is amended by this Instrument.
2. The following is added after section 12.6:
12.10 Annual financial statements and interim financial information
Accounting Principles
Registrants are required to deliver annual financial statements and interim financial information that comply with National Instrument 52-107 Acceptable Accounting Principles and Auditing Standards (NI 52-107). Depending on the financial year, a registrant will look to different parts of NI 52-107 to determine which accounting principles and auditing standards apply:
• Part 3 of NI 52-107 applies for financial years beginning on or after January 1, 2011
• Part 4 of NI 52-107 applies to financial years beginning before January 1, 2011.
Part 3 of NI 52-107 refers to Canadian GAAP applicable to publicly accountable enterprises, which is IFRS as incorporated into the Handbook. Under Part 3 of NI 52-107, annual financial statements and interim financial information delivered by a registrant must be prepared in accordance with Canadian GAAP applicable to publicly accountable enterprises except that any investments in subsidiaries, jointly controlled entities and associates must be accounted for as specified for separate financial statements in International Accounting Standard 27 Consolidated and Separate Financial Statements. Separate financial statements are sometimes referred to as non-consolidated financial statements. Section 3.2(3) of NI 52-107 requires annual financial statements to include a statement and description about this required financial reporting framework. Section 2.7 of Companion Policy 52-107CP Acceptable Accounting Principles and Auditing Standards (CP 52-107) provides guidance on section 3.2(3). We remind registrants to refer to these provisions in NI 52-107 and CP 52-107 in preparing their annual financial statements and interim financial information.
Part 4 of NI 52-107 refers to Canadian GAAP for public enterprises, which is Canadian GAAP as it existed before the mandatory effective date for the adoption of IFRS, included in the Handbook as Part V. Under Part 4 of NI 52-107, annual financial statements and interim financial information delivered by a registrant must be prepared in accordance with Canadian GAAP for public enterprises except that the financial statements and interim financial information must be prepared on a non-consolidated basis.
Changeover to International Financial Reporting Standards
When preparing annual financial statements, interim financial information or Form 31-103F1 for a financial year beginning in 2011 or for interim periods relating to a financial year beginning in 2011, registrants may rely on the exemption in subsection 12.15(1) and exclude comparative information for the preceding financial year. Section 3.2(4) of NI 52-107 provides a corresponding exemption for the accounting principles used by registrants. If a registrant relies on these exemptions, its date of transition to IFRS will be the first day of its financial year beginning in 2011. Section 2.7 of CP 52-107 provides further guidance on this topic. We remind registrants to refer to the provisions in NI 52-107 and CP 52-107 in preparing their financial statements and interim financial information for a financial period beginning in 2011..
3. Section 13.4 is amended by replacing "special purpose vehicle" with "special purpose entity".
4. These amendments only apply to annual financial statements and interim financial information in respect of periods relating to financial years beginning on or after January 1, 2011.
5. These amendments become effective on January 1, 2011.
Amendments to National Instrument 33-109 Registration Information
AMENDMENTS TO
NATIONAL INSTRUMENT 33-109 REGISTRATION INFORMATION
1. National Instrument 33-109 Registration Information is amended by this Instrument.
2. Section 5.13 of Form 33-109F6 Firm Registration is amended by striking out "balance sheet" and substituting "statement of financial position".
3. This Instrument only applies to filings of Form 33-109F6 Firm Registration that include annual financial statements or interim financial information for periods relating to financial years beginning on or after January 1, 2011.
4. This Instrument comes into force on January 1, 2011.
Amendments to National Instrument 45-106 Prospectus and Registration Exemptions
AMENDMENTS TO
NATIONAL INSTRUMENT 45-106 PROSPECTUS AND REGISTRATION EXEMPTIONS
Amendment Instrument for National Instrument 45-106
Prospectus and Registration Exemptions
1. National Instrument 45-106 Prospectus and Registration Exemptions is amended by this Instrument.
2. Section 1.1 is amended
(a) by adding the following after "accredited investor":
"acquisition date" has the same meaning as in the issuer's GAAP;,
(b) by adding the following after "financial assets":
"financial statements" includes interim financial reports;,
(c) by adding the following after "investment fund":
"issuer's GAAP" has the same meaning as in National Instrument 52-107 Acceptable Accounting Principles and Auditing Standards;,
(d) by adding the following after "person":
"private enterprise" has the same meaning as in Part 3 of National Instrument 52-107 Acceptable Accounting Principles and Auditing Standards;,
(e) by adding the following after "private enterprise":
"publicly accountable enterprise" has the same meaning as in Part 3 of National Instrument 52-107 Acceptable Accounting Principles and Auditing Standards;, and
(f) by adding the following after"related liabilities":
"retrospective" has the same meaning as in Canadian GAAP applicable to publicly accountable enterprises;
"retrospectively" has the same meaning as in Canadian GAAP applicable to publicly accountable enterprises;.
3. Clause 5.2(e)(i)(C) is amended by striking out "statements" and substituting "reports".
4. Subsection 6.2(1) is amended by striking out "section 6.1(a)" and substituting "section 6.1(1)(a)".
5. Subsection 6.5(1) is amended by striking out "subsection 2.9(12) or subsection 3.9(12)" and substituting "subsection 2.9(15)".
6. Item 1.1 Available Funds of Form 45-106F2 Offering Memorandum for Non-Qualifying Issuers is amended by striking out "H" in the table and substituting "G".
7. Item 4.2 of Form 45-106F2 Offering Memorandum for Non-Qualifying Issuers is amended
(a) by striking out the heading "4.2 Long Term Debt" and substituting "4.2 Long Term Debt Securities", and
(b) by striking out "the current portion of the long-term debt" and substituting "the portion of the debt".
8 Item 8(b) of Form 45-106F2 Offering Memorandum for Non-Qualifying Issuers is amended by striking out "sales" and substituting "revenue".
9. Part B Financial Statements -- General of the Instructions for Completing Form 45-106F2 Offering Memorandum for Non-Qualifying Issuers is amended
(a) by repealing section 1 and substituting the following:
All financial statements, operating statements for an oil and gas property that is an acquired business or a business to be acquired, and summarized financial information as to the aggregated amounts of assets, liabilities, revenue and profit or loss of an acquired business or business to be acquired that is, or will be, an investment accounted for by the issuer using the equity method included in the offering memorandum must comply with National Instrument 52-107 Acceptable Accounting Principles and Auditing Standards, regardless of whether the issuer is a reporting issuer or not.
Under National Instrument 52-107 Acceptable Accounting Principles and Auditing Standards, financial statements are generally required to be prepared in accordance with Canadian GAAP applicable to publicly accountable enterprises. An issuer using this form cannot use Canadian GAAP applicable to private enterprises, except, subject to the requirements of NI 52-107, certain issuers may use Canadian GAAP applicable to private enterprises for financial statements for a business referred to in C.1. An issuer that is not a reporting issuer may prepare acquisition statements in accordance with the requirements of NI 52-107 as if the issuer were a venture issuer as defined in NI 51-102. For the purposes of Form 45-106F2, the "applicable time" in the definition of a venture issuer is the acquisition date.,
(b) in paragraph 3(a) by striking out "an income statement" and substituting "a statement of comprehensive income", by striking out "statement of retained earnings" and substituting "statement of changes in equity", and by striking out "cash flow statement" and substituting "statement of cash flows",
(c) in paragraph 3(b) by striking out "balance sheet" and substituting "statement of financial position",
(d) in paragraph 4(a) by striking out "an income statement" and substituting "a statement of comprehensive income", by striking out "statement of retained earnings" and substituting "statement of changes in equity", and by striking out "cash flow statement" and substituting "statement of cash flows",
(e) in paragraph 4(b) by striking out "balance sheet" and substituting "statement of financial position" and by striking out "and",
(f) in paragraph 4(c) by striking out "(c) notes to the financial statements." and substituting:
(c) a statement of financial position as at the beginning of the earliest comparative period for which financial statements that are included in the offering memorandum comply with IFRS in the case of an issuer that
(i) discloses in its annual financial statements an unreserved statement of compliance with IFRS, and
(ii) does any of the following:
(A) applies an accounting policy retrospectively in its annual financial statements;
(B) makes a retrospective restatement of items in its annual financial statements;
(C) reclassifies items in its annual financial statements,
(d) in the case of an issuer's first IFRS financial statements as defined in NI 51-102, the opening IFRS statement of financial position at the date of transition to IFRS as defined in NI 51-102, and
(e) notes to the financial statements.
4.1 If an issuer presents the components of profit or loss in a separate income statement, the separate income statement must be displayed immediately before the statement of comprehensive income filed under Item 4 above.,
(g) in section 5 by striking out "interim financial statements" and substituting "an interim financial report",
(h) in paragraphs 5(a) and 5(b) by striking out "an income statement" and substituting "a statement of comprehensive income", by striking out "statement of retained earnings" and substituting "statement of changes in equity", and by striking out "cash flow statement" and substituting "statement of cash flows",
(i) in paragraph 5(c) by striking out "balance sheet" and substituting "statement of financial position", and by striking out "the periods required by paragraphs (a) and (b) and" , and substituting "the period required by paragraph (a) and the end of the immediately preceding financial year",:
(j) by adding the following after paragraph 5(c):
(d) a statement of financial position as at the beginning of the earliest comparative period for which financial statements that are included in the offering memorandum comply with IFRS in the case of an issuer that
(i) discloses in its interim financial report an unreserved statement of compliance with International Accounting Standard 34 Interim Financial Reporting, and
(ii) does any of the following:
(A) applies an accounting policy retrospectively in its interim financial report;
(B) makes a retrospective restatement of items in its interim financial report;
(C) reclassifies items in its interim financial report,
(e) in the case of the first interim financial report in the year of adopting IFRS, the opening IFRS statement of financial position at the date of transition to IFRS,
(f) for an issuer that is not a reporting issuer in at least one jurisdiction of Canada immediately before filing the offering memorandum, if the issuer is including an interim financial report of the issuer for the second or third interim period in the year of adopting IFRS include
(i) the issuer's first interim financial report in the year of adopting IFRS, or
(ii) both
(A) the opening IFRS statement of financial position at the date of transition to IFRS, and
(B) the annual and date of transition to IFRS reconciliations required by IFRS 1 First-time Adoption of International Financial Reporting Standards to explain how the transition from previous GAAP to IFRS affected the issuer's reported financial position, financial performance and cash flows, and
(g) notes to the financial statements.
5.1 If an issuer presents the components of profit or loss in a separate income statement, the separate income statement must be displayed immediately before the statement of comprehensive income filed under item 5 above.,
(k) by repealing section 8 and substituting the following:
The comparative financial information required under B.5(b) and (c) may be omitted if the issuer has not previously prepared financial statements in accordance with its current or, if applicable, its previous GAAP.,
(l) in section 13 by striking out "statements" and substituting "reports",
(m) in section 14 by adding ", as defined in NI 51-102," after "Forward looking information", and
(n) by adding the following after section 15:
16. Despite section B.5, an issuer may include a comparative interim financial report of the issuer for the most recent interim period, if any, ended
(a) subsequent to the most recent financial year in respect of which annual financial statements of the issuer are included in the offering memorandum, and
(b) more than 90 days before the date of the offering memorandum.
This section does not apply unless
(a) the comparative interim financial report is the first interim financial report required to be filed in the year of adopting IFRS, and the issuer is disclosing, for the first time, a statement of compliance with International Accounting Standard 34 Interim Financial Reporting,
(b) the issuer is a reporting issuer in the local jurisdiction immediately before the date of the offering memorandum, and
(c) the offering memorandum is dated before June 29, 2012..
10. Part C Financial Statements -- Business Acquisitions of the Instructions for Completing Form 45-106F2 Offering Memorandum for Non-Qualifying Issuers is amended
(a) in paragraph 2(a), and 2(b) by striking out "date of acquisition" and substituting "acquisition date",
(b) in paragraph 2(b) by adding the following after "offering memorandum for a proposed acquisition.":
For information about how to perform the investment test in this paragraph, please refer to subsections 8.3(4.1) and (4.2) of NI 51-102. Additional guidance may be found in the companion policy to NI 51-102.,
(c) by repealing section 2.1,
(d) in subparagraph 4(a)(i) by striking out "an income statement" and substituting "a statement of comprehensive income", by striking out "statement of retained earnings" and substituting "statement of changes in equity", and by striking out "cash flow statement" and substituting "statement of cash flows",
(e) in clause 4(a)(i)(B) by striking out "date of acquisition" and substituting "acquisition date",
(f) in subparagraph 4(a)(ii) by striking out "balance sheet" and substituting "statement of financial position",
(g) in clause 4(b)(i)(A) by striking out "an income statement" and substituting "a statement of comprehensive income", by striking out "statement of retained earnings" and substituting "statement of changes in equity", and by striking out "cash flow statement" and substituting "statement of cash flows",
(h) in subclause 4(b)(i)(A)(i) by striking out "date of acquisition" and substituting "acquisition date",
(i) in clause 4(b)(i)(B) by striking out "balance sheet" and substituting "statement of financial position",
(j) by repealing subparagraph 4(b)(ii) and substituting the following:
(ii) an interim financial report comprised of
A) either
(i) a statement of comprehensive income, a statement of changes in equity and a statement of cash flows for the most recently completed year-to-date interim period ending on the last date of the interim period that ended before the acquisition date and more than 60 days before the date of the offering memorandum and ended after the date of the financial statements required under subclause (b)(i)(A)(i), and a statement of comprehensive income and a statement of changes in equity for the three month period ending on the last date of the interim period that ended before the acquisition date and more than 60 days before the date of the offering memorandum and ended after the date of the financial statements required under subclause (b)(i)(A)(i), or
(ii) a statement of comprehensive income, a statement of changes in equity and a statement of cash flows for the period from the first day after the financial year referred to in subparagraph (b)(i) to a date before the acquisition date and after the period end in subclause (b)(ii)(A)(i),
B) a statement of comprehensive income, a statement of changes in equity and a statement of cash flows for the corresponding period in the immediately preceding financial year, if any,
C) a statement of financial position as at the end of the period required by clause (A) and the end of the immediately preceding financial year, and
D) notes to the financial statements.
Refer to Instruction B.7 for the meaning of "interim period",
(k) in section 6 by striking out "date of acquisition" and substituting "acquisition date", and
(l) in section 8 by striking out "accounted for as" and by striking out ", as that term is defined in the CICA Handbook,".
11. Part D Financial Statement -- Exemptions of the Instructions for Completing Form 45-106F2 Offering Memorandum for Non-Qualifying Issuers is amended
(a) in paragraph 2 by striking out "section 3.2(a) of NI 52-107" and substituting "section 3.3(1)(a)(i) of National Instrument 52-107 Acceptable Accounting Principles and Auditing Standards",
(b) in paragraph 2 and 2(b) by striking out "contain" and substituting "express",
(c) in paragraph 2(a) and 2(b) by striking out "balance sheet" and substituting "statement of financial position",
(d) in paragraph 2(c) by striking out "contained" and substituting "expressed",
(e) in subparagraph 3(a)(i) by adding "aggregated amounts of" before "assets", by adding ", revenue and profit or loss" after "liabilities", and by striking out "and results of operations",
(f) in subparagraph 3(a)(ii) by striking out "earnings" and substituting "profit or loss",
(g) in subparagraph 3(c)(ii) by striking out "issued without a reservation of opinion" and substituting "an unmodified opinion", and by striking out the following:
If the financial information included in an offering memorandum under D.3(a) has been derived from financial statements of a business incorporated or organized in a foreign jurisdiction that have been prepared in accordance with foreign GAAP, the information must be accompanied by a note that explains and quantifies the effect of material differences between Canadian GAAP and the foreign GAAP.,
(h) in paragraph 4(b) by striking out "accounted for as" , by striking out "reverse take-over" and substituting "reverse take-over", and by adding "and" after "NI 51-102,",
(i) by repealing paragraph 4(c),
(j) by repealing subparagraph 4(d)(i) and replacing it with the following:
(i) an operating statement for the business or related businesses for each of the financial periods for which financial statements would, but for this section, be required under C.4 prepared in accordance with subsection 3.11(5) of National Instrument 52-107 Acceptable Accounting Principles and Auditing Standards. The operating statement for the most recently completed financial period referred to in C.4(b)(i) must be audited.,
(k) in section 5 by striking out "date of acquisition" and substituting "acquisition date" , and
(l) in paragraph 5(iii) by striking out "D.5(b)(ii)" and substituting "D.5(ii)".
12. Section 1.1 Available Funds of Form 45-106F3 Offering Memorandum for Qualifying Issuers is amended by striking out "H" in the table and substituting "G".
13. Item 8(b) of Form 45-106F3 Offering Memorandum for Qualifying Issuers is amended by striking out "sales" and substituting "revenue".
14. Section 1, Part B Financial Statements of the Instructions for Completing Form 45-106F3 Offering Memorandum for Qualifying Issuers is amended by striking out "Acceptable Accounting Principles, Auditing Standards and Reporting Currency" and substituting "Acceptable Accounting Principles and Auditing Standards".
15. Section 2, Part C Required Updates to the Offering Memorandum of the Instructions for Completing Form 45-106F3 Offering Memorandum for Qualifying Issuers is amended by striking out "interim financial statements" and substituting "interim financial reports".
16. Paragraph 1(c), Part D Information about the Issuer of the Instructions for Completing Form 45-106F3 Offering Memorandum for Qualifying Issuers is amended by striking out "interim financial statements" and substituting "interim financial report", and by striking out "interim financial statements that are" and substituting "an interim financial report that is".
17. Transition -- This Instrument only applies in respect of an offering memorandum or an amendment to an offering memorandum of an issuer if that offering memorandum or amendment includes or incorporates by reference financial statements of the issuer in respect of periods relating to financial years beginning on or after January 1, 2011.
18. Exception -- Despite section 17, this Instrument may be applied by an issuer to an offering memorandum or an amendment to an offering memorandum of the issuer which includes or incorporates by reference financial statements of the issuer in respect of periods relating to a financial year that begins before January 1, 2011 if the immediately preceding financial year ends no earlier than December 21, 2010 and if the issuer is relying on the exemption in section 5.3 of National Instrument 52-107 Acceptable Accounting Principles and Auditing Standards.
19. Effective Date -- This Instrument comes into force on January 1, 2011.
Amendments to Companion Policy 45-106CP Prospectus and Registration Exemptions
AMENDMENTS TO COMPANION POLICY 45-106CP
PROSPECTUS AND REGISTRATION EXEMPTIONS
Amendment Instrument for
Companion Policy 45-106 Prospectus and Registration Exemptions
1. Companion Policy 45-106CP Prospectus and Registration Exemptions is amended by this Instrument.
2. Subsection 3.8(1) is amended by adding "or profit" after "$75 000 pre-tax net income".
3. The following is added after Part 6:
PART 7 -- TRANSITION
7.1 Transition -- Application of Amendments -- The amendments to NI 45-106 and this Companion Policy which came into effect on January 1, 2011 only apply in respect of an offering memorandum or an amendment to an offering memorandum of an issuer which includes or incorporates by reference financial statements of the issuer in respect of periods relating to financial years beginning on or after January 1, 2011..
4. These amendments only apply in respect of an offering memorandum or an amendment to an offering memorandum of an issuer which includes or incorporates by reference financial statements of the issuer in respect of periods relating to financial years beginning on or after January 1, 2011.
5. Despite section 4, these amendments may be applied by an issuer to an offering memorandum or an amendment to an offering memorandum of the issuer which includes or incorporates by reference financial statements of the issuer in respect of periods relating to a financial year that begins before January 1, 2011 if the immediately preceding financial year ends no earlier than December 21, 2010 and if the issuer is relying on the exemption in section 5.3 of National Instrument 52-107 Acceptable Accounting Principles and Auditing Standards.
6. This Instrument comes into force on January 1, 2011.