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Securities Law

NIN 91/20 - Comparative Interim Financial Statements [NIN - Rescinded]

Published Date: 1991-11-01
Effective Date: 1991-10-31

Comparative Figures Required

Section 135(1)(b) of the Securities Regulation, B.C. Reg. 270/86 (the "Regulation") requires that a reporting issuer other than a mutual fund file comparative interim financial statements,

"where the reporting issuer has completed its first financial year, for the periods commencing after the end of its last completed financial year and ending 3, 6 and 9 months after that date and a comparative financial statement to the end of the corresponding periods in the last financial year."

It has been noted in certain circumstances that reporting issuers are failing to prepare their interim financial statements on a comparative basis. In particular, this is occurring in two situations. The first is in the twelve months following a reverse take-over (a "RTO"), as defined under generally accepted accounting principles was not previously a reporting issuer required to file or otherwise prepare interim financial statements. The second is after a change in the ending date of a financial year.

The purpose of this Notice is to clarify, subject to the comments set out below, that interim financial statements required under section 135(1)(b) of the Regulation must be prepared on a comparative basis and that the comparative period must correspond to the interim reporting period in the current financial year.

While this Notice specifically discusses requirements for continuous disclosure filings, the principles set out provide guidance in other circumstances, such as those involving offering documents.

Reporting Issuer Status Continues After RTO

The RTO of a reporting issuer does not change its status or obligations under the Securities Act, S.B.C. 1985, c.83 and Regulation. Accordingly, regardless of whether the acquirer for accounting purposes was required to prepare interim financial statements prior to the RTO, the reporting issuer continues to be required to prepare and file its post-RTO interim financial statements on a comparative basis. These financial statements must be prepared in accordance with generally accepted accounting principles. As the financial statements for the comparative periods will be those of the acquirer for accounting purposes, this may require that pre-RTO interim financial statements of the acquirer for accounting purposes be prepared.

Acceptable Comparative Periods After RTO or Change in Year End

Section 135(1)(b) of the Regulation requires that comparative interim financial statements be prepared to the end of the corresponding periods in the last financial year. Subsequent to a RTO or change of financial year end, the Commission will accept comparative financial statements from the previous financial year that:

(a) cover the same number of months as the current financial year's interim financial statements, and

(b) cover a period that ends eleven, twelve or thirteen months prior to the ending date of the current financial year's interim reporting period.


Exceptions from these requirements will be considered only in connection with an application for an exemption under section 143 of the Regulation.

DATED at Vancouver, British Columbia, on October 31, 1991.

Wade D. Nesmith
Superintendent of Brokers