The Canadian Securities Administrators yesterday
released a staff notice summarizing the results of the
CSA's continuous disclosure review program for fiscal 2012.
Beyond identifying disclosure deficiencies, the notice
also provides guidance intended to assist issuers in
addressing common issues.
Of the approximately 4,200 issuers in Canada (other than
investment funds), the CSA completed 1,351 full or
issue-oriented reviews. Ultimately, 56% of review outcomes
required issuers to take action to improve disclosure, which was a
decrease from the 70% required to take action in fiscal 2011. The
most common outcome involved an issuer being informed of changes or
enhancements required in its next filing.
Common deficiencies in the CSA's IFRS issue-oriented review
included not clearly labeling and identifying the accounting
principles used when presenting a mix of financial information in
accordance with pre-changeover Canadian GAAP and IFRS in
the MD&A. Issuers also commonly neglected to include a
statement of changes in equity for the comparative interim
With respect to issuers engaged in oil and gas activities,
deficiencies were identified with respect to disclosure of
significant factors and uncertainties in Form 51-101F1 and the use of proper
terminology set out in the Canadian Oil and Gas Evaluation
Meanwhile, with respect to full reviews, the CSA noted
a number of deficiencies, including with respect to liability
classification under IFRS. On that issue, the notice reminded
issuers that liabilities may only be classified as current when the
issuer expects to settle the liability in its normal operating
cycle, holds the liability primarily for the purpose of trading, or
the liability is due to be settled within 12 months after the
reporting period or the issuer does not have an unconditional right
to defer settlement of the liability for at least 12 months after
the reporting period.
The CSA also set out a number of compliance issues with
respect to the significant new disclosure requirements concerning
business acquisitions under IFRS. The CSA specifically noted
omissions in information respecting the qualitative description of
the factors that make up the goodwill recognized, such as expected
synergies from combining operations of the acquiree and the
acquirer, intangible assets that do not qualify for separate
recognition or other factors.
Executive compensation disclosure was an additional topic of
concern. Among other things, the report noted that some issuers did
not disclose the full grant date fair value of multi-year
share-based awards and option-based awards up front in the summary
For fiscal 2013, the CSA stated that they will focus on the
first annual IFRS report. Topics that may receive greater
attention were also identified, namely judgments and sources of
estimation uncertainty disclosure, asset impairments and business
combinations. For more information, see CSA Staff Notice 51-337.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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Under the Income Tax Act, the Employment Insurance Act, and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions or GST.
Under the Income Tax Act, the Employment Insurance Act, the Canada Pension Plan Act and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions.
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