On July 18, 2013, the Canadian Securities Administrators (the
"CSA") published Staff Notice 51-339 (the "Staff
Notice") detailing the results of its review of continuous
disclosure documents filed by selected reporting issuers for the
fiscal year ended March 31, 2013. The Staff Notice discusses a
number of common deficiencies identified in financial statements
and MD&A, as well as provides guidance concerning certain other
key disclosure topics.
1. Financial Statements
Judgments – Under paragraph 122 of IAS 1
Presentation of Financial Statements, reporting issuers
are required to disclose certain judgments that management has made
in the process of applying the entity's accounting policies and
that have the most significant effect on the amounts recognized in
the financial statements. The CSA found that the disclosure in this
area is generally deficient and boilerplate.
Impairment of Goodwill – Under paragraph
134 of IAS 36 Impairment of Assets, reporting issuers are
required to disclose certain information relating to the goodwill
and intangible assets of cash-generating units. The CSA determined
that certain reporting issuers did not disclose all of the
information required by IAS 36.
Going Concern – The Staff Notice
discusses certain common problems with going concern disclosure.
These problems include inconsistent information provided in the
reporting issuer's disclosure documents, such as the failure to
provide explicit going concern disclosure in the financial
statements despite such language being present in the auditor's
Liquidity – Under section 1.6 of Form
51-102F1, reporting issuers are required to provide detailed
disclosure regarding liquidity. The CSA found that MD&A
disclosure under this heading often reproduces information from the
financial statements, which may not fully comply with all of the
MD&A form requirements.
Discussion of Operations – The CSA found
that reporting issuers often reproduce information from the
statement of profit or loss and other comprehensive income in
MD&A, without providing an explanation for changes compared to
previous periods. To comply with section 1.4 of Form 51-102F1,
MD&A should include entity-specific disclosure regarding the
factors which contributed to changes in the reporting issuer's
Related Party Transactions – Under
section 1.9 of Form 51-102F1, reporting issuers are required to
disclose certain prescribed information regarding related party
transactions. The CSA notes that MD&A disclosure often repeats
the related party disclosure from the notes to the financial
statements, which may not fully comply with all of the MD&A
3. Other Deficiencies
Mineral Disclosure – Common mineral
disclosure deficiencies listed in the Staff Notice include
incomplete or inadequate disclosure of preliminary economic
assessments, mineral resources and mineral reserves and
non-compliant certificates and consents of qualified persons for
Oil and Gas Disclosure – Common oil and
gas disclosure deficiencies identified by the CSA include the
failure to adapt to current form requirements for technical
disclosure and non-compliance with certain sections of NI 51-101
regarding disclosure of resources other than reserves,
classification to the most specific category of resources,
summation across resource categories and disclosure of high case
DC&P and ICFR – Venture issuers using
Forms 52- 109FV1 or 52-109FV2, known as the Venture Issuer Basic
Certificates, are reminded that MD&A should not include any
conclusions on the effectiveness of DC&P or ICFR. Where
appropriate, the prescribed cautionary language set out in the
Companion Policy to NI 52-109 should be included in MD&A.
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.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
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.
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).