CSA Staff Notice 52-306 Non-GAAP Financial Measures
Part I Purpose

Lexata note: As of August 25, 2021, this staff notice has been replaced by new NI 52-112, with some exceptions for annual materials in respect of 2020. See Part 5 of the new rule for transition details.

Purpose

The primary purpose of this notice is to provide guidance to an issuer that discloses non-GAAP financial measures. The guidance applies both to an issuer that uses International Financial Reporting Standards (IFRS) and to an issuer that uses accounting principles other than IFRS. Non-GAAP financial measures may mislead investors if they are not accompanied by the appropriate disclosure. Therefore, staff will monitor disclosure accompanying non-GAAP financial measures.

The notice also provides guidance on additional subtotals presented in the financial statements but disclosed before the financial statements are filed, and additional subtotals presented in the statement of cash flows for IFRS financial statements.

The guidance is intended to help ensure that the information disclosed does not mislead investors.

Staff cautions issuers that regulatory action may be taken if an issuer discloses information in a manner considered misleading and therefore potentially harmful to the public interest.


CSA Staff Notice 52-306 Non-GAAP Financial Measures
Part IV Disclosing Additional Subtotals before Filing Financial Statements

Lexata note: As of August 25, 2021, this staff notice has been replaced by new NI 52-112, with some exceptions for annual materials in respect of 2020. See Part 5 of the new rule for transition details.

Disclosing Additional Subtotals Before Filing Financial Statements

An issuer`s GAAP may require the presentation of additional subtotals in the financial statements when such presentation is relevant to an understanding of the issuer’s financial position or financial performance. An example of this requirement is found in paragraphs 55 and 85 of IAS 1 Presentation of Financial Statements (IAS 1). An issuer may choose to present these additional subtotals in a press release or some other location outside of an issuer’s financial statements before filing on SEDAR its financial statements. In order to avoid any confusion about these additional subtotals, management should explain their composition. This may be accomplished by:

  • including a copy of the statement that contains these additional subtotals (for example, the statement of profit or loss and other comprehensive income), or
  • reconciling these additional subtotals to the most directly comparable line item specified or defined by IFRS that will be presented in financial statements (for example, profit or loss).

CSA Staff Notice 52-306 Non-GAAP Financial Measures
Part V Presentation of Additional Subtotals in the Statement of Cash Flows for IFRS Financial Statements

Lexata note: As of August 25, 2021, this staff notice has been replaced by new NI 52-112, with some exceptions for annual materials in respect of 2020. See Part 5 of the new rule for transition details.

Presentation of Additional Subtotals in the Statement of Cash Flows for IFRS Financial Statements

IAS 1 includes requirements that apply to additional subtotals presented in the statement of financial position and statement of profit or loss and other comprehensive income (see paragraphs 55A, 85A and 85B of IAS 1). The practices outlined in the paragraphs noted, will also help ensure that additional subtotals presented in the statement of cash flows do not mislead investors.

In addition, if an issuer chooses to present additional subtotals from the statement of cash flows in a press release or some other location outside of an issuer’s financial statements before filing on SEDAR its financial statements, then in order to avoid any confusion about these additional subtotals, management should explain their composition (as discussed in Section IV of this notice).