The Canadian Securities Administrators (CSA) today published for comment proposed amendments to National Instrument 52-107Acceptable Accounting Principles and Auditing Standards (NI 52-107) and its companion policy as well as related consequential amendments to National Instrument 14-101 Definitions. As previously discussed, International Financial Reporting Standards (IFRS) will apply to Canadian publicly accountable enterprises for financial years beginning on or after January 1, 2011. The amendments are intended to "provide an efficient transition mechanism for issuers and registrants to reflect the change to IFRS".

The Canadian Accounting Standards Board (AcSB) has announced that it plans to incorporate IFRS into the Handbook of the Canadian Institute of Chartered Accountants (the CICA Handbook) as “Canadian GAAP for publicly accountable enterprises.” As a result, Part 1 of the CICA Handbook will contain a version of Canadian GAAP to be known as Canadian GAAP for publicly accountable enterprises that will apply for financial years beginning on or after January 1, 2011, and Part IV will contain a version known as Canadian GAAP for public enterprises that are the standards constituting Canadian GAAP before the mandatory effective date (current Canadian GAAP).

The proposed amendments therefore require that, for financial years beginning on or after January 1, 2011, domestic issuers prepare financial statements in accordance with part 1, or Canadian GAAP applicable to publicly accountable enterprises, and report compliance with IFRS. A domestic issuer who is also an SEC issuer will continue to have the option to use U.S. GAAP. The proposed amendments also require that for financial years beginning on or after January 1, 2011, domestic registrants prepare financial statements in accordance with Canadian GAAP applicable to publicly accountable enterprises (except that financial statements must account for investments in subsidiaries, jointly controlled entities and associates as specified for separate financial statements in Canadian GAAP applicable to publicly accountable enterprises), and report compliance with IFRS (except that the financial statements account for investments in subsidiaries, jointly controlled entities and associates as specified for separate financial statements in IFRS). Registrants will continue to be required to provide their financial statements on a non-consolidated basis in order to facilitate identification of potential concerns with a registrant’s capital adequacy and financial solvency.

In connection with the proposed amendment to NI 52-107, amendments are also proposed to be made to the continuous disclosure, prospectus and certification rules, including NI 51-102 Continuous Disclosure Obligations, NI 71-102 Continuous Disclosure and other Exemptions Relating to Foreign Issuers as well as the prospectus rules, National Instrument 41-101 General Prospectus Requirements, National Instrument 44-101 National Instrument, National Instrument 44-102 Shelf Distributions and National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings. Notably, these amendments have been published for a 90-day comment period by all members of the CSA other than the Autorité des marchés financiers and the New Brunswick Securities Commission.

The primary purpose of these proposals is to accommodate the transition to IFRS, although other changes are also being proposed.

The published proposals are open for comment with respect to the changeover to IFRS until December 24, 2009.