These changes are intended to update existing Canadian Non-GAAP (Generally Accepted Accounting Principles) disclosure standards to conform to the new international accounting standard, IFRS 18 Presentation and Disclosure in Financial Statements, which is effective for annual periods beginning on or after January 1, 2027.
Background and Context
IFRS 18 Impact: The IFRS 18 standard requires the disclosure of Management-Defined Performance Measures in a note to the financial statements, which would have removed them from the scope of the existing NI 52-112 definition of non-GAAP measures.
Purpose: To continue providing investor protection and transparency, both in the financial statements and beyond them.
Key Aspects of the Proposed Amendments
The CSA is taking action to ensure that financial measures such as “adjusted earnings” or “free cash flow” remain subject to rigorous disclosure standards, even if reported in the financial statements in accordance with the new IFRS 18 standards
Definition Changes: The definition of “non-GAAP financial measure” is being amended to include Management-Defined Performance Measures.
New Definitions: The following new definitions are being added: “additional subtotal” and “management-defined performance measure.”
Reduced Duplication: Issuers will be permitted to incorporate disclosures by reference to the notes to their financial statements.
Prominence Rules: Requirements will be added to ensure that disclosures of additional subtotals outside the financial statements are not more prominent than the comparable GAAP measures.
Exemption Codification: The existing blanket orders and existing relief will be codified, except for specific instruments in British Columbia and Ontario.
Key Lessons for Governance Officers and Young lawyers
- Governance officers and young lawyers must understand how securities regulation interacts with financial reporting frameworks.
- These amendments sit at the intersection of good governance and securities law. Every lawyer, as well as governance professional who acquire basic financial literacy, and comfortable interpreting financial statements will stand out in securities law and corporate governance practice.
Final takeaway
In recent years, non-GAAP disclosure, corporate disclosure, and modern securities law practice is not just about interpreting rules, they require strategic thinking, practical implementation insight, and sensitivity to regulatory risk.
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Olufemi Adabale
Manager, Thought Leadership
Governance Professionals of Canada
The post Canadian Securities Administrators (CSA) Propose Amendments to National Instrument 52-112 Non-GAAP Disclosure: Lessons for Governance and Legal Practitioners appeared first on Slaw.