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) If the change from Canadian GAAP to US GAAP takes place in a financial year that begins on or before December 31, 2010 and ends on or after January 1, 2011, the notes to the financial statements for that financial year shall

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

• (b) quantify the effect of those material differences, including a tabular reconciliation between the net income reported in the financial statements and the net income computed in accordance with Canadian GAAP set out in Part V; and

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

(3.1) If the change from Canadian GAAP to US GAAP takes place in a financial year that ends on or before December 31, 2010 and the following financial year begins on or before December 31, 2010 and ends on or after January 1, 2011, the notes to the financial statements for that second financial year shall

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

• (b) quantify the effect of those material differences, including a tabular reconciliation between the net income reported in the financial statements and the net income computed in accordance with Canadian GAAP set out in Part V; and

• (c) provide information consistent with disclosure requirements of Canadian GAAP set out in Part V 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 at least two years before being prepared in accordance with US GAAP only, and that change to those principles takes place in a financial year that begins on or before December 31, 2010 and ends on or after January 1, 2011, the notes to the financial statements for that financial year shall

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

• (b) quantify the effect of those material differences, 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 set out in Part V 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 one year before being prepared in accordance with US GAAP only, and that change to those principles takes place in a financial year that begins on or before December 31, 2010 and ends on or after January 1, 2011, the following shall be presented with the financial statements for that financial year:

• (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 set out in Part V;

• (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 set out in Part V and US GAAP that relate to recognition, measurement and presentation, and

  • (ii) quantifies the effect of those material differences, 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 set out in Part V 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.