As we outlined in our September 2008 Alert entitled Impact of International Financial Reporting Standards on Canadian Registrants [available here], the Canadian Securities Administrators (CSA) announced their views last fall that many registrants would be required to use International Financial Reporting Standards (IFRS) under the Accounting Standards Board’s (AcSB) definition of a publicly accountable enterprise. The CSA also indicated that they were considering whether securities rules should require registrants to prepare financial statements using IFRS, regardless of whether they meet the definition of a publicly accountable enterprise.
The CSA now have confirmed that staff have concluded that all non-SRO registrants should be required to use IFRS for financial years beginning on or after January 1, 2011 regardless of whether the registrant fits the definition of a publicly accountable enterprise set by the AcSB. CSA Staff Notice 33-314 International Financial Reporting Standards and Registrants [available here] confirms the latest CSA staff position. The CSA confirmed that the requirement to use IFRS will apply also to the firms that will be required to register in the various new registration categories set out in National Instrument 31-103 Registration Requirements and Exemptions, once that instrument comes into force. This will include firms that may not be registrants today, including exempt market dealers and investment fund managers.
The CSA expect to publish for comment later this year amendments to National Instrument 52-107 Acceptable Accounting Principles, Auditing Standards and Reporting Currency that will propose the new requirements for registrants to use IFRS in preparing their financial statements.
The CSA indicated that the Investment Industry Regulatory Organization of Canada (IIROC) and the Mutual Fund Dealers Association of Canada (MFDA) will be publishing separate notices regarding the use of IFRS for their members.