Purpose of the Questionnaires
Use the questionnaires to dramatically reduce time and confusion when navigating the rules on acquired company financial statements. You’ll be directed to the relevant rules via the Q&A, making it much faster and simpler to figure out which rules apply and also which significance tests to use.
You may start with the Item 32 Q&A (covering predecessor financial statements, primary business financial statements, and financial statements for combinations). It will automatically redirect you, based on your answers, to the Item 35 Q&A if applicable (covering financial statements for significant acquisitions when Item 32 does not apply). Alternatively, you may start immediately with the Item 35 Q&A if you know that Item 32 is not applicable to your facts.
Summary Charts for Financial Statements
The questionnaires operate like a decision tree, linking to Lexata’s charts that summarize, for various scenarios, the financial statements (annual, interim and pro forma) of an acquired company that are needed in a prospectus or other document requiring prospectus-level disclosure.
- ABC has completed or is planning an M&A transaction with XYZ.
- ABC is preparing a long form prospectus for a public offering of securities (or another document requiring prospectus-level disclosure).
- ABC must determine whether XYZ’s financial statements are required in the prospectus under Item 32 or Item 35 of Form 41-101F1.
Item 32 Questionnaires:
ABC’s principal asset before the acquisition is not cash, cash equivalents or an exchange listing:
ABC’s principal asset before the acquisition is cash, cash equivalents or an exchange listing:
The Item 32 Questionnaires assess whether predecessor, primary business or restated combined financial statements are needed for XYZ. Based on your answers to the questions, they automatically redirect to the Item 35 Questionnaires if applicable.
Item 35 Questionnaires
Instead of starting with the Item 32 Questionnaires, if you are certain that Item 32 is not applicable, you may go straight to the Item 35 Questionnaires. They assess whether XYZ’s financial statements are required based on the significance of the acquisition to ABC.
The questionnaires direct you to the significance tests where applicable; or you may skip the questionnaires and go straight to the significance tests: