CSA Proposes Amendments To Non-GAAP And Other Financial Measures Disclosure Rules

Overview

On November 13, 2025, the Canadian Securities Administrators ("CSA") opened a 90-day comment period for proposed amendments to National Instrument 52-112 Non-GAAP and Other Financial Measures Disclosure ("NI 52-112") and related changes to the Companion Policy (together, the "Proposed Amendments"). The Proposed Amendments are intended to address the introduction of IFRS 18 Presentation and Disclosure in Financial Statements, recently issued by the International Accounting Standards Board ("IASB") and effective for annual periods beginning on or after January 1, 2027. The Proposed Amendments would expand the definition of a non-GAAP financial measure to include management-defined performance measures ("MPMs"), allow certain disclosures to be incorporated by reference from the financial statements, introduce prominence requirements for additional subtotals disclosed outside the financial statements, and consolidate existing exemptions. While the changes are narrow and largely aligned with current practice, they may affect how some issuers present and govern performance measures across continuous disclosure and other public communications.

The comment period for the Proposed Amendments closes on February 11, 2026.

Background

Adopted in 2021, NI 52-112 was designed to improve the quality, consistency, and transparency of financial measures presented outside of financial statements. IFRS 18 marks a significant shift by requiring entities that use MPMs in public communications to present those measures within financial statements. Because NI 52-112 defines a non-GAAP financial measure as one not presented in the financial statements, measures disclosed as MPMs under IFRS 18 would, when used in external disclosure, no longer fall within NI 52-112's current scope. The CSA's Proposed Amendments are intended to close this regulatory gap and preserve consistent oversight of these measures.

Key Proposed Amendments

The CSA's Proposed Amendments to NI 52-112 are intended to ensure that non-GAAP financial measures continue to be regulated under NI 52-112 even when they are disclosed as MPMs in the financial statements under IFRS 18. Key elements of the Proposed Amendments include the following:

• Expanded Scope to Include MPMs: The definition of "non-GAAP financial measure" in NI 52-112 would be amended to explicitly capture MPMs required to be disclosed under IFRS 18. This ensures that measures presented in financial statement notes remain subject to NI 52-112 when used outside the financial statements.
• Incorporation of Information by Reference: Issuers would be permitted to satisfy NI 52-112 disclosure requirements by incorporating them by reference to the notes to the relevant notes to the financial statements. This change is intended to reduce duplication, where the referenced notes fully meet NI 52-112 requirements.
• Additional Subtotal Presentation Requirements: The Proposed Amendments introduce prominence requirements for "additional subtotals" disclosed outside the financial statements, consistent with IFRS 18 by ensuring that such non-standard subtotals are not more prominent than IFRS-mandated subtotals.
• Codification of Exemptions: The CSA proposes to consolidate various existing exemptions (including those in Ontario Rule 52-503 and several blanket orders) into the Instrument itself. British Columbia's existing Blanket Order 52-513 will remain in force.
• Inclusion of NI 52-112 in Appendix D of MI 11-202: NI 52-112 would be added to Appendix D of Multilateral Instrument 11-102, Passport System, so that applications pertaining to NI 52-112 can proceed under the passport system.

The CSA's proposal is focused on disclosures outside the financial statements and does not alter or override the requirements of IFRS Accounting Standards.

Practical Considerations for Issuers

While the Proposed Amendments are narrow and not expected to materially change current practices, reporting issuers should prioritize the following as they prepare for IFRS 18 implementation:

1. Identify Measures That Will Qualify as MPMs or Additional Subtotals

Issuers should review all non-GAAP and specified financial measures currently used to determine which will be captured as MPMs or "additional subtotals" under IFRS 18 and the amended NI 52-112.

2. Ensure Consistency in Definitions and Calculations Across Disclosures

Issuers should align definitions, methodologies, labels, and reconciliations for performance measures that appear both inside and outside the financial statements so that MD&A, earnings releases, investor presentations, and other external materials are consistent.

3. Review Internal Processes and Controls to Support Compliance

Issuers should assess and update internal reporting systems and disclosure controls to identify, track, approve, and govern specified financial measures in accordance with IFRS 18 and the amended NI 52-112.

4. Streamline and Communicate Disclosure Changes

Where permitted, issuers should incorporate required information by reference to financial statement notes to reduce duplication and enhance consistency and proactively explain any changes in performance measures or disclosure practices to investors and other stakeholders.

5. Local Matters

In jurisdictions making related changes to local securities laws, an additional annex may be published setting out local notices, policy instruments, and other jurisdiction-specific information. Issuers should review any local materials that may apply to their disclosure obligations.

Future Developments and Next Steps

The IASB is currently evaluating whether additional types of non-GAAP measures, beyond MPMs (as currently defined), should be disclosed in the financial statement notes, such as certain cash-flow metrics.

The CSA has not incorporated these potential developments into the Proposed Amendments. It is monitoring the IASB's work and may consider further updates to NI 52-112 as international standard-setting evolves.

Stakeholders are invited to submit written comments on or before February 11, 2026. In the interim, issuers should begin assessing:

• whether their existing non-GAAP measures will be treated as MPMs under IFRS 18;
• how incorporation by reference may streamline disclosure; and
• whether updates to templates, disclosure controls, or investor materials will be required.

For assistance with preparing comment letters or assessing the impact of the Proposed Amendments on your disclosure practices, please contact a member of our Capital Markets and Securities Group.

The foregoing provides only an overview and does not constitute legal advice. Readers are cautioned against making any decisions based on this material alone. Rather, specific legal advice should be obtained.

© McMillan LLP 2025