We included transitional provisions in our instruments so that issuers, that are required to adopt IFRS, include in an IPO prospectus the issuer’s financial statements prepared in accordance with:
- Canadian GAAP applicable for years prior to the adoption of IFRS (old Canadian GAAP) – for any financial years (or interim periods relating to financial years) beginning before January 1, 2011; and
- IFRS – for any financial years (or interim periods relating to financial years) beginning on or after January 1, 2011.
The result of the transitional provisions may be that an offering document will include some historical financial statements prepared in accordance with old Canadian GAAP and some historical financial statements prepared in accordance with IFRS.
To illustrate this point, we have provided two specific scenarios involving a Canadian company with a December 31 year end that files an IPO as an IPO venture issuer:
- on or after May 16, 2011 and on or before March 30, 2012 ; and
- on or after March 31, 2012 and on or before May 15, 2012 .
1. IPO filed by an IPO venture issuer on or after May 16, 2011 and on or before March 30, 2012
Interim financial statements:
Annual financial statements:
If a company filing an IPO prospectus wishes to present financial statements in the prospectus in accordance with IFRS for financial years beginning before January 1, 2011, it must file a waiver application.
If you require a waiver, please refer to Part 8 of National Policy 11-202 Process for Prospectus Reviews in Multiple Jurisdictions.
2. IPO filed by an IPO venture issuer on or after March 31, 2012 and on or before May 15, 2012
Interim financial statements – not applicable as only annual financial statements are required.
Option 1 for annual financial statements:
Option 2 for annual financial statements:
Option 3 for annual financial statements:
More detailed information is provided in Part 2.8 of Companion Policy 52-107CP Acceptable Accounting Principles and Auditing Standards.
If you require a waiver, please refer to Part 8 of National Policy 11-202 Process for Prospectus Reviews in Multiple Jurisdictions.
IPOs and Additional IFRS Disclosures
Securities legislation requires a transition date IFRS statement of financial position to be included in a reporting issuer’s first IFRS interim financial report filed for continuous disclosure purposes. Securities legislation does not require inclusion of a transition date statement of financial position in the second and third interim financial reports filed for continuous disclosure purposes unless there are changes to IFRS policy choices or the application of IFRS 1. However, securities rules require issuers to include a transition date IFRS statement of financial position in every IPO prospectus filed in the year of changeover.
If a company is required to provide either a second or third quarter interim financial report to satisfy prospectus requirements, then Part 32.3(4) of National Instrument 41-101F1 Information Required in a Prospectus requires one of the following:
Option 1:
- The complete first IFRS interim financial report.
Option 2:
- Opening IFRS statement of financial position at date of transition; and
- IFRS reconciliations relating to the most recent annual period and the date of transition to IFRS.