Canada Business Corporations Regulations, 2001

71 (1) Subject to subsection (2), the annual financial statements referred to in paragraph 155(1)(a) of the Act shall be prepared in accordance with Canadian GAAP.

(2) For an SEC registrant, the financial statements may be prepared in accordance with US GAAP.

(3) For the first financial year in which the change from Canadian GAAP to US GAAP takes place, and for the following financial year, the notes to the financial statements shall

• (a) explain the material differences between Canadian GAAP and US GAAP that relate to recognition, measurement and presentation;

• (b) quantify the effect of the material differences between Canadian GAAP and US GAAP that relate to recognition, measurement and presentation, including a tabular reconciliation between the net income reported in the financial statements and the net income computed in accordance with Canadian GAAP; and

• (c) provide information consistent with disclosure requirements of Canadian GAAP to the extent not already reflected in the financial statements.

(4) If the financial statements of an SEC registrant were prepared in accordance with both Canadian GAAP and US GAAP for two years or more before the first financial year in which the statements were prepared in accordance with US GAAP only, for the first financial year in which the change from Canadian GAAP to US GAAP takes place, a note shall accompany the financial statements that

• (a) explains the material differences between Canadian GAAP and US GAAP that relate to recognition, measurement and presentation; and

• (b) quantifies the effect of the material differences between Canadian GAAP and US GAAP that relate to recognition, measurement and presentation, including a tabular reconciliation between the net income as previously reported in the most recent financial statements, annual or otherwise, prepared in accordance with Canadian GAAP and the net income as restated and presented in accordance with US GAAP.

(5) If the financial statements of an SEC registrant were prepared in accordance with both Canadian GAAP and US GAAP for less than two years before the first financial year in which the statements were prepared in accordance with US GAAP only, for the first financial year in which the change from Canadian GAAP to US GAAP takes place, the following shall be presented with the financial statements:

• (a) the financial information as previously reported under provincial securities legislation in the most recent financial statements, annual or otherwise, in accordance with Canadian GAAP;

• (b) the financial information referred to in paragraph (a) as restated and presented in accordance with US GAAP; and

• (c) an accompanying note supporting the comparative information required under paragraphs (a) and (b) that

  • (i) explains the material differences between Canadian GAAP and US GAAP that relate to recognition, measurement and presentation, and

  • (ii) quantifies the effect of the material differences between Canadian GAAP and US GAAP that relate to recognition, measurement and presentation, including a tabular reconciliation between the net income as previously reported in the most recent financial statements, annual or otherwise, prepared in accordance with Canadian GAAP and the net income as restated and presented in accordance with US GAAP.

(6) The comparative information required under paragraphs (5)(a) and (b) shall be presented either on the face of the financial statements or in the note to those statements referred to in paragraph (5)(c).

(7) The financial statements shall contain a note stating whether the statements have been prepared in accordance with Canadian GAAP or US GAAP.

(8) For greater certainty, subsections (3) to (6) do not apply to the financial statements of an SEC registrant that was incorporated after March 15, 2005, and that, since that date, has prepared its financial statements in accordance with US GAAP only.