On October 15, 2026, the Canadian Securities Administrators (the “CSA”) published final amendments (the “Amendments”) to National Instrument 52-112 Non-GAAP and Other Financial Measures Disclosure (“NI 52-112”), together with related changes to Companion Policy 52-112 Non-GAAP and Other Financial Measures Disclosure (“CP 52-112”) and consequential amendments to Multilateral Instrument 11-102 Passport System.
The Amendments are intended to address the introduction of IFRS® Accounting Standard, IFRS 18 Presentation and Disclosure in Financial Statements (“IFRS 18”), which was issued by the International Accounting Standards Board (the “IASB”) in April 2024 and becomes effective for annual reporting periods beginning on or after January 1, 2027. Subject to all required approvals, the Amendments will come into force on December 29, 2026. The Amendments are substantively consistent with the draft amendments originally proposed by the CSA in November 2025, with only minor clarifying revisions.
The Amendments are narrow in scope and are principally intended to ensure that measures historically treated as non-GAAP financial measures, and which may now constitute management-defined performance measures (“MPMs”) under IFRS 18, remain subject to NI 52-112 when disclosed outside an issuer’s financial statements. The Amendments also allow certain disclosure to be incorporated by reference to the notes to the financial statements to avoid duplication, introduce a prominence requirement for additional subtotals disclosed outside an issuer’s financial statements, and codify existing exemptive relief granted to certain financial institutions.
Background
NI 52-112, which came into force in 2021, prescribes disclosure requirements for specified financial measures, including non-GAAP financial measures, that reporting issuers disclose outside their financial statements. The CSA adopted NI 52-112 in response to calls from investors and other stakeholders for more consistent, transparent and decision-useful disclosure of these measures.
IFRS 18 will, among other things, require entities to disclose information about MPMs in a single note to the financial statements. For the purposes of IFRS 18, MPMs are subtotals of income and expenses that: (i) are not specified by IFRS Accounting Standards; (ii) are used in an entity’s public communications outside its financial statements (such as in management’s discussion and analysis (“MD&A”), press releases or investor presentations); and (iii) communicate management’s view of an aspect of the entity’s financial performance as a whole.
The introduction of this disclosure requirement under IFRS 18 creates a potential gap in the application of NI 52-112. NI 52-112 currently defines a non-GAAP financial measure, in part, as a financial measure that is not disclosed in the financial statements of the entity. As a result, without the Amendments, measures that have historically been treated as non-GAAP financial measures, such as adjusted net income and adjusted EBITDA, would cease to qualify as non-GAAP financial measures once disclosed as MPMs in the notes to the financial statements under IFRS 18 and would therefore fall outside the scope of NI 52-112.
Summary of Amendments
• Expanded Definition of Non-GAAP Financial Measures: The Amendments expand the definition of “non-GAAP financial measure” in NI 52-112 to expressly include MPMs, thereby ensuring that MPMs remain subject to the disclosure requirements of NI 52-112 when disclosed outside an issuer’s financial statements.
• Incorporation by Reference: To reduce duplicative disclosure, the Amendments permit issuers to incorporate certain required MPM disclosure by reference to the notes to the issuer’s financial statements for the same reporting period, provided that the referenced notes fully satisfy the requirements of NI 52-112.
• Additional Subtotal Disclosure: To promote connectivity with IFRS 18, the Amendments introduce the concept of an “additional subtotal”, being a subtotal presented in an issuer’s primary financial statements that is not specified by IFRS Accounting Standards or captured as a specified financial measure under NI 52-112. IFRS 18 already requires these subtotals to be presented no more prominently than the IFRS-required totals and subtotals, and the Amendments apply a similar prominence requirement to disclosure outside the financial statements. An issuer that discloses an additional subtotal outside its financial statements must also disclose the most directly comparable financial measure presented in the primary financial statements that is not an MPM and must not present the additional subtotal more prominently than that measure. For example, the additional subtotal “cash flow from operating activities before working capital changes” must not be presented more prominently than “cash flow from operating activities”.
• Codification of Existing Exemptions for Certain Financial Institutions: The Amendments codify, as an exemption within NI 52-112, existing exemptive relief granted to certain financial institutions in respect of specified financial measures required under guidelines or advisory guidance of the Office of the Superintendent of Financial Institutions or the Autorité des marchés financiers applicable to such financial institutions. Accordingly, blanket orders relating to NI 52-112 (other than British Columbia’s existing blanket order, BC Instrument 52-513) as well as OSC Rule 52-503 in Ontario will be rescinded, withdrawn or will automatically expire upon the coming into force of the Amendments.
Practical Considerations for Issuers
While the Amendments are narrow in scope and are generally intended to preserve the existing reporting framework under NI 52-112, issuers should review their existing disclosure practices ahead of the coming into force of the Amendments and their first reporting periods under IFRS 18. In particular, issuers should consider the following:
• Review Existing Financial Measures: Issuers should review the non-GAAP and other specified financial measures in their continuous disclosure filings and other public documents to determine which will be captured as MPMs or additional subtotals under IFRS 18 and the Amendments. Updated guidance in CP 52-112 clarifies that a measure combining information from different line items in the primary financial statements will constitute a non-GAAP financial measure if it depicts financial performance, financial position or cash flow, unless it is separately disclosed in a note to the financial statements other than the MPM note.
• Use Consistent Labels and Calculations: Where a measure will appear both in the MPM note and in public documents or communications, such as MD&A, press releases or presentations, issuers should ensure it carries the same label, definition, calculation and reconciliation in each place. CP 52-112 specifically expects issuers to use the same label for a measure inside and outside the financial statements.
• Incorporation by Reference: Issuers intending to rely on the new incorporation-by-reference mechanism for certain MPM disclosure should include precise references to the relevant notes to the financial statements, confirm that the referenced notes fully satisfy the requirements of NI 52-112, and ensure that the financial statements are filed before, or at the same time as, the referencing document.
• Earnings Releases: The Amendments do not alter NI 52-112’s existing prohibition on incorporating information by reference into an earnings release. The CSA notes that earnings releases are one of the most critical documents relied upon by investors and are where the use of specified financial measures is generally most prevalent. Accordingly, where a specified financial measure is disclosed in an earnings release, the disclosure required by NI 52-112 must continue to be included in the earnings release itself. For example, an issuer that reports adjusted net income as an MPM could cross-reference the MPM note in its MD&A, but would still be required to set out the full NI 52-112 disclosure, including the reconciliation, in its quarterly earnings release.
• Anti-Avoidance: Issuers should be aware that disclosing or referring to a financial measure in the notes to the financial statements in order to avoid NI 52-112 is not permitted. The revised guidance in CP 52-112 confirms that this anti-avoidance principle applies to non-GAAP ratios in addition to non-GAAP financial measures.
Looking Ahead
The IASB continues to consider whether additional measures that have historically been treated as non-GAAP financial measures, including cash flow measures such as free cash flow, should be disclosed in the notes to the financial statements. As the outcome of this work remains uncertain, the Amendments do not address these potential future developments. The CSA has indicated that it will continue to monitor developments and assess whether further amendments to NI 52-112 may be warranted.
This publication is intended for general information purposes only and should not be relied upon as legal advice.
