2011-08-19 OSC Publishes IFRS Release #4 - Prospectus Issues
On August 18, 2011 the OSC's Corporate Finance Branch continued with their series of short publications on IFRS transition issues with the publication of IFRS Release #4: IFRS Transition - Prospectus Issues to clarify some frequently asked questions on prospectus requirements and IFRS transition.
- When Q2 or Q3 interim financial statements are included in a prospectus in the year of adoption of IFRS, securities regulations require certain IFRS transition information to also be included.
- "IFRS transition information" means the opening balance sheet on the date of transition to IFRS and the IFRS 1 reconciliations for the date of transition and the most recent annual period.
- The IFRS transition information can be included within the Q2/Q3 interim financial statements, or by the inclusion of the entire Q1 interim financial report within the prospectus. The IFRS transition information cannot be included as additional information elsewhere in the prospectus.
- All interim financial reports included in a prospectus must be reviewed by an auditor.
Short-form and non-IPO prospectuses
- "IFRS transition information" (as defined above) is not required to be included or incorporated by reference in a short form or non-IPO long form prospectus, and IFRS 1 does not require the opening balance sheet or the date of transition and annual reconciliations to be provided in Q2 or Q3 interim financial statements in the year of adoption. (We note that IFRS 1 still requires reconciliations from previous GAAP to IFRS relating to comparable interim periods).
Annual financial statements
- For prospectuses filed before the first annual IFRS financial statements are filed, the reporting issuer should include 2 years (short-form) or 3 years (long-form) of annual financial statements prepared using Canadian GAAP. There is no requirement to prepare these financial statements under IFRS.
- For long-form prospectuses filed after the first annual IFRS financial statements are filed, the prospectus will include either:
- 3 years of annual financial statements prepared under IFRS. The transition date to IFRS is the first day of the earliest period of full comparative information presented; OR
- 2011 annual financial statements with 2010 comparatives prepared under IFRS plus 2010 annual financial statements with 2009 comparatives prepared under Canadian GAAP; OR
- 2011 annual financial statements with 2010 comparatives prepared under IFRS plus 2009 annual financial statements with 2008 comparatives prepared under Canadian GAAP.
The full publication can be found on the OSC's website at OSC IFRS Release #4