ARCHIVED — Regulations amending the Canada Business Corporations Regulations, 2001 - Sections 70 and 71

Table of Contents

• Amendment
  • Interpretation
  • Financial Statements
  • Auditor's Report
• Coming Into Force

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Amendment

1. The heading "General" before section 70 and sections 70 and 71 of the Canada Business Corporations Regulations, 2001 are replaced by the following:

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Interpretation

70. The following definitions apply in this Part.

"Canadian GAAP" means generally accepted accounting principles as set out in the Handbook of the Canadian Institute of Chartered Accountants, as amended from time to time. (PCGR canadiens)

"Canadian GAAS" means generally accepted auditing standards as set out in the Handbook of the Canadian Institute of Chartered Accountants, as amended from time to time. (PVGR canadiens)

"NI 52-107" means National Instrument 52-107 of the Canadian Securities Administrators, entitled Acceptable Accounting Principles, Auditing Standards and Reporting Currency and published January 16, 2004, as amended from time to time. (Règlement 52-107)

"SEC" means the United States Securities and Exchange Commission. (SEC) "SEC registrant" means a corporation that

1. has securities registered under section 12 of the Securities Exchange Act of 1934 of the United States, as amended from time to time, or is required to file reports under section 15(d) of that Act; and
2. is not registered or required to be registered as an investment company under the Investment Company Act of 1940 of the United States, as amended from time to time. (société inscrite auprès de la SEC)

"US GAAP" means the generally accepted accounting principles established by the Financial Accounting Standards Board of the United States, as amended from time to time. (PCGR américains)

"US GAAS" means the generally accepted auditing standards established by the Public Company Accounting Oversight Board of the United States, as amended from time to time. (PVGR américains)

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Financial Statements

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

1. explain the material differences between Canadian GAAP and US GAAP that relate to recognition, measurement and presentation;
2. 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
3. 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

1. explains the material differences between Canadian GAAP and US GAAP that relate to recognition, measurement and presentation; and
2. 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:

1. the financial information as previously reported under provincial securities legislation in the most recent financial statements, annual or otherwise, in accordance with Canadian GAAP;
2. the financial information referred to in paragraph (a) as restated and presented in accordance with US GAAP; and
3. an accompanying note supporting the comparative information required under paragraphs (a) and (b) that
   1. explains the material differences between Canadian GAAP and US GAAP that relate to recognition, measurement and presentation, and
      
      
   2. 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 GAAPonly.

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Auditor's Report

71.1  (1) Subject to subsection (2), the auditor's report referred to in section 169 of the Act shall be prepared in accordance with Canadian GAAS.

(2) For an SEC registrant that has prepared its financial statements in accordance with US GAAPand subsections 71(3) to (6), and whose auditors are in compliance with the professional practice standards established or adopted by the Public Company Accounting Oversight Board of the United States, the auditor's report may be prepared in accordance with US GAAS.

(3) If the auditor's report referred to in subsection (2) is prepared in accordance with US GAAS, it shall comply with section 4.2 of NI 52-107, but for the purpose of applying that section,

1. the expression "US GAAS" has the meaning assigned to that expression by section 70 of these Regulations; and
2. the expression "SEC issuer" has the meaning assigned to the expression "SEC registrant" by section 70 of these Regulations.

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Coming Into Force

2.  These Regulations come into force on the day on which they are registered.