2009-08-27 New CICA Publication - MD&A: Guidance on Preparation and Disclosure

View this page in: Français

This newsletter discusses the Canadian Performance Reporting Board's new publication on MD&A preparation and disclosure.

New Volume of the CICA Guidance on Management Discussion and Analysis (MD&A) In August 2009, the Canadian Performance Reporting Board of the CICA issued a new volume of Management's Discussion and Analysis: Guidance on Preparation and Disclosure.

This publication will assist senior management and boards of directors by providing principles and a framework to help preparers identify and organize information for their MD&A disclosures. It also emphasizes aspects of existing regulation, and, in several instances, adds dimensions that go beyond existing regulation.

A PDF copy of the publication is attached for your reference.
407 KB New CICA Publication — MD&A: Guidance on Preparation and Disclosure (407 KB)
Download the full PDF report
Comprehensive Revision of the 2004 version While the 2009 edition does not materially change the principles or recommended practices for preparing MD&A, the guidance does contain several significant revisions which reflect changes in securities regulation and legislation, the economic environment, and best-practice in MD&A reporting.

Among others:
  • The guidance now suggests prefacing the MD&A with an executive summary to help frame and focus the discussion.
  • The focus on a forward-looking orientation has been reinforced and supplemented with additional guidance in light of changes in the securities regulations.
  • The guidance recognizes that a complete discussion of historical results may be misleading if it fails to consider known matters about future prospects that will affect results.
  • The strategy section includes examples of disclosures.
  • The discussion of the nature of key performance drivers, and how they relate to key performance indicators, has been expanded.
  • The capability section has been revised to focus on productive capacity, leadership, the labour force, liquidity, and the delivery of capabilities through the extended entity.
  • The results discussion contains additional guidance about non-GAAP financial measures.
  • The prospective analysis discussion now focuses on an entity's outlook, including both qualitative and quantitative considerations, and disclosures needed when providing forward-looking information.
  • The risk discussion contains additional guidance about disclosures that may need to be considered.
  • The oversight section has been updated in view of securities regulators' certification requirements and civil liability legislation for secondary market disclosures.
Word of caution Preparers and auditors should recognize that the Canadian Securities Administrators set out rules for the preparation of MD&A in National Instrument 51-102 Continuous Disclosure Obligations. The purpose of the CICA guidance is to provide a structure for preparing a fact-based disclosure document that gives a reader the ability to look at the issuer "through the eyes of management".