CSA proposes reform to accommodate IFRS change

Canadian securities regulators are proposing rule changes that aim to accommodate forthcoming revisions to international accounting standards.  

A new accounting standard, known as IFRS 18, is slated to take effect in 2027 that will require issuers to disclose certain non-GAAP metrics in a note to their financial statements. 

Under existing securities rules, these kinds of metrics are already subject to regulatory disclosure requirements. However, the Canadian Securities Administrators (CSA) proposed rule changes would maintain issuers’ disclosure obligations while avoiding needless duplication.

“Without the proposed amendments, IFRS 18 adoption would result in certain non-GAAP financial measures beginning to fall outside of the scope of [securities rules], leading to undesirable and unintended regulatory outcomes,” noted a cost-benefit analysis on the proposed rule changes by the Ontario Securities Commission (OSC) that accompanied the proposals. 

The CSA said that its proposed reforms, which will allow certain information to be incorporated by reference, aim to avoid duplication in issuers’ disclosure requirements, and to minimize the disruption to their existing disclosure practices.

“Under the proposed amendments, issuers would not be required to materially change their reporting practices for non-GAAP financial measures disclosed outside the financial statements,” the CSA said in a notice spelling out its proposals.

The OSC said that clarifying the relationship between securities rules and IFRS 18 will “facilitate capital formation by continuing to require timely continuous disclosure of accurate, comparable and complete material information by issuers and facilitating opportunities for investors to assess risk and make informed investment decisions.” 

At the same time, the proposals “will enhance investor protection by ensuring investors continue to receive information about non-GAAP financial measures … and help to avoid misleading financial reporting,” it added. 

“The proposed amendments help avoid duplicative disclosure, which minimizes regulatory burden for Canadian issuers,” said Stan Magidson, chair of the CSA and chair and CEO of the Alberta Securities Commission (ASC), in a release. 

The proposals are out for comment until Feb. 11, 2026.

James Langton

James is a senior reporter for Advisor.ca and its sister publication, Investment Executive. He has been reporting on regulation, securities law, industry news and more since 1994.