The rules governing how wealth managers disclose non-GAAP measures are up for revision
Canadian wealth firms will face stricter disclosure rules for non-GAAP financial measures starting 2027 under proposed CSA amendments now open for industry comment.
The Canadian Securities Administrators published proposed amendments to National Instrument 52-112 on November 13, 2025, targeting how reporting issuers disclose non-GAAP and other financial measures outside audited financial statements. The changes respond directly to IFRS 18 Presentation and Disclosure in Financial Statements, which takes effect for annual reporting periods beginning January 1, 2027.
At the heart of the amendments lies a fundamental shift in how management-defined performance measures are treated. Under existing securities rules, a measure only counts as non-GAAP if it appears outside the formal financial statements. However, IFRS 18 requires certain measures to appear in notes to financial statements when companies use them in public communications like management discussion and analysis reports or earnings releases.
Without the proposed amendments, measures historically considered non-GAAP such as adjusted net income or adjusted EBITDA would escape NI 52-112 requirements once disclosed as management-defined performance measures in financial statement notes. This regulatory gap prompted the CSA to expand the definition of non-GAAP financial measure to explicitly include management-defined performance measures, ensuring continued oversight regardless of where disclosure occurs.
The amendments also introduce rules around something called additional subtotals. These are line items that companies add to their income statements beyond what accounting standards require. When firms mention these subtotals in earnings releases or investor calls, they cannot give them more visual weight than the standard GAAP figures investors use to compare companies.
To reduce duplicative disclosure burdens, the proposed rules allow incorporation by reference to financial statement notes for management-defined performance measures. Companies can reference the specific note containing required reconciliations rather than reproducing identical information in their MD&A, provided they identify the exact location and confirm the financial statements are available on SEDAR+.
Financial institutions get special treatment under the proposed rules. Banks, insurers and similar entities that follow guidelines from the Office of the Superintendent of Financial Institutions can skip certain disclosure requirements when reporting measures those guidelines specifically define. The exemption covers federal institutions and companies licensed under provincial acts including the Insurers Act, though British Columbia maintains its own separate exemption.
Insurance companies operating as reporting issuers will fall under these amended disclosure requirements like other publicly traded financial services firms. Those following OSFI or Autorité des marchés financiers guidelines may qualify for the financial institution exemption when disclosing specified measures defined by those regulatory frameworks.
The CSA acknowledged the International Accounting Standards Board may expand disclosure requirements beyond management-defined performance measures to include cash-flow metrics like free cash flow. However, given uncertainty around that work, these amendments adopt a narrow scope addressing only known IFRS 18 changes.
The comment period runs through February 11, 2026. Industry groups representing wealth managers, dealers and insurers have three months to tell regulators whether the proposed rules strike the right balance between investor protection and compliance costs.
The changes also touch the passport system that lets companies file applications in one province and have them recognized across the country. National Instrument 52-112 will join the list of rules covered under that streamlined process.
For the finance teams at publicly traded wealth firms, the timeline is clear. IFRS 18 arrives in just over a year, and these disclosure rules are designed to travel alongside it without forcing companies to overhaul how they talk about performance. The goal, regulators said, is maintaining transparency standards that already exist rather than creating new burdens.
