CSA Raises The Bar For Non-GAAP Disclosure

The slicing and dicing of financial results by issuers (and the analysts who follow them), and the publication of the resulting financial measures, has a long history and can provide useful information to investors and the issuers themselves. Unlike measures calculated under generally accepted accounting principles (GAAP) such as International Financial Reporting Standards, however, there is no standard way of calculating non-GAAP measures.

Due to concerns about non-comparability between issuers' use of non-GAAP terms, inconsistent calculation of measures by individual issuers from period to period, and the potential for investors to be misled, securities regulators, including the Canadian Securities Administrators (CSA) and the U.S. Securities and Exchange Commission, have attempted to impose some discipline on the market in the use of non-GAAP measures. The CSA first did this in 2003 with the publication of CSA Staff Notice 52-306 Non-GAAP Financial Measures (SN