CSA keeps adjusted EBITDA under non-GAAP rules as IFRS 18 nears

Adjusted EBITDA will stay covered by Canada’s non-GAAP disclosure rules under final changes published October 15, 2026, set to take effect December 29, 2026.

The Canadian Securities Administrators finalized amendments to National Instrument 52-112 Non-GAAP and Other Financial Measures Disclosure and its companion policy. Pending ministerial approvals, they take effect days before a new global accounting standard kicks in.

Why adjusted earnings needed a new address

That standard is IFRS 18 Presentation and Disclosure in Financial Statements, issued April 9, 2024, by the International Accounting Standards Board. For annual periods beginning on or after January 1, 2027, it asks companies to report management-defined performance measures in a note to their financial statements.

Here’s the snag. NI 52-112 defines a non-GAAP financial measure as, among other things, one that isn’t disclosed in the financial statements. The CSA said that without the amendments, measures such as adjusted net income and adjusted EBITDA would fall outside the rule once they moved into those notes. The fix folds management-defined performance measures into the definition.

“Under the Amendments, issuers will not be required to materially change their reporting practices for non-GAAP financial measures disclosed outside the financial statements,” the notice said.

What banks, insurers and wealth firms need to know

Financial institutions keep a familiar break. Relief once found in blanket orders and Ontario Rule 52-503 is now in the rule itself, covering reporting issuers that are, or have a subsidiary or affiliate that is, a financial institution subject to guidelines from the Office of the Superintendent of Financial Institutions or Quebec’s Autorité des marchés financiers. The measure must follow the guideline, which the issuer must name near the measure’s first mention. In British Columbia, BC Instrument 52-513 continues to apply instead.

Registered firms keep their carve-out for client documents, like analyst reports on unrelated companies, when the figures don’t relate to the firm’s own financial performance, position or cash flow. The companion policy also lists assets under management, meaning client-owned assets not reported in the issuer’s primary financial statements, as an example of a figure outside the non-GAAP definition.

Additional subtotals, extra lines a company adds to its main financial statements, can appear in other documents only alongside the most directly comparable measure and with no more prominence. Companies can also point to the notes instead of repeating details on management-defined performance measures. That shortcut doesn’t cover the required reconciliation in earnings releases, which the CSA described as “one of the most critical documents relied upon by investors.”

Ontario’s clock and what comes next

In Ontario, the package went to the Minister of Finance on October 14, 2026. If the minister approves it or takes no further action by December 13, it takes effect December 29, and Rule 52-503 will be repealed that day. Saskatchewan’s start date shifts to its filing date if its regulations are filed after December 29. The BC Securities Commission expects to publish the notice after the provincial election.

The CSA received nine comment letters, including from the Canadian Bankers Association and Intact Financial Corporation, all expressing general support. It is also withdrawing CSA Staff Notice 52-306 (Revised) and will monitor IASB work that could bring other measures, such as free cash flow, into the notes.

The companion policy also shuts one door: “An issuer should not disclose or refer to a financial measure in the notes to the financial statements for the purpose of avoiding application of the Instrument.”

The full text of the CSA Notice of Amendments to National Instrument 52-112 Non-GAAP and Other Financial Measures Disclosure is available on CSA members’ websites.