Alberta Securities Commission staff have found numerous deficiencies in their comparison of selected 2001 quarterly financial statements with the CICA Handbook.

The ASC says that its review found that interim financials frequently include disclosures that do not conform in all respects to the requirements of Generally Accepted Accounting Principles for annual statement.

ASC staff found a failure to recognize costs in interim financial statements on the same basis as the annual financial statements, including, no provision for future income taxes made, no amortization expense reported, significant management fees recorded in last annual statements, but none recorded for the current interim period, and disclosure of capital lease obligation but no interest expense recorded.

ASC staff also noted a failure to provide updated information where a material change has occurred since the annual financials. “We noted an instance where an issuer provided no note disclosure regarding a material amount of contributed surplus that was disclosed on the interim balance sheet while there was none disclosed on the last annual balance sheet.”

The commission also says that a number of issuers used balance sheets at either the end of the previous quarter or at the end of the corresponding period of the prior year rather than using the balance sheet at the end of the immediately preceding year for comparative purposes.

“All issuers are reminded that the new section also requires disclosures regarding seasonality and cyclicality, certain segment information, and subsequent events information in relevant circumstances. Oil and gas issuers are reminded that the ceiling test [must] be conducted at the interim balance sheet date, taking into account important changes in reserves, prices, taxes, etc. since the previous financial statement.”