Canadian Securities Administrators Staff Notice 51-3371
summarizes the results of the CSA's continuous disclosure
review program for the fiscal year ended March 31, 2012. In
addition to providing guidance on common deficiencies, the notice
indicates that the CSA will focus on the first annual IFRS report
in the current year and that the following topics that may receive
judgments and sources of estimation uncertainty
asset impairments; and
The common deficiencies identified include the following:
First-time adoption of IFRS - omitting the required
reconciliations, failing to adequately explain material
adjustments, failing to change all of accounting policies, and
providing boilerplate accounting policy disclosure.
Statement of changes in equity - failing to include a statement
of changes of equity for comparative interim periods.
Current liabilities - failing to classify obligations as
current under IFRS, such as, obligations for which the issuer does
not have the unconditional right to defer settlement of liability
for at least 12 months after the reporting period.
Business combinations - failing to disclose required
information separately for each significant business combination or
on an aggregate basis for individually immaterial business
combinations that are collectively material and omitting required
disclosure, such as:
the amounts of revenue or profit or loss of the acquiree since
the acquisition date included in the consolidated statement of
the revenue and profit or loss of the combined entity as though
the acquisition dates had been as of the beginning of the annual
required information for business combinations done after the
end of the financial period but before the date of the financial
the primary reasons for the business combination and a
description of how the issuer obtained control,
a qualitative description of the factors that make up
required information for contingent liabilities
the reasons why the transaction resulted in a gain for bargain
the gross contractual amounts receivable and an estimate of
contractual cash flows not expected to be collected for acquired
Flow-through shares - failing to identify the IFRS transition
impact for flow-through shares despite the fact that IFRS does not
specifically address accounting for flow-through shares and that
the accounting under pre-changeover Canadian GAAP can no longer be
Boilerplate disclosure - providing boilerplate disclosure that
does not change from period to period and failing to provide entity
specific disclosure that complements the financial statements, such
as: the factors underlying operational changes, known or expected
fluctuations in trends in liquidity (particularly for issuers with
negative cash flow), and adequate descriptions of operations for
issuers in specialized industries.
Accounting principles - failing to clearly identify the
accounting principles used when presenting a mix of financial
information in accordance with pre-changeover Canadian GAAP and
Technical Disclosure for Mineral
Incomplete or inadequate disclosure of preliminary economic
assessments, mineral resources and mineral reserves.
Non-compliant certificates and consents of qualified
Incomplete or inadequate disclosure of historical estimates and
Omitting the name of the qualified person from documents
containing scientific and technical information.
Summary compensation table - failing to disclose grant date
fair value of share-based awards and option-based awards and the
key assumptions and estimates used to calculate fair value.
Compensation discussion and analysis - not fully and accurately
explaining significant elements of compensation.
Corporate Governance Disclosure
Failing to provide meaningful disclosure regarding governance
practices, such as the process use to identify new board candidates
for board nomination.
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.
While most are well aware that the sale of a business is generally a complex process, even sophisticated business owners are surprised by just how much cost and effort is required to complete the sale.
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