This summary of decisions of the Public Sector Accounting Board (PSAB) has been prepared for information purposes only. Decisions reported are tentative and reflect only the current status of discussions on projects, which might change after further deliberations by PSAB. Decisions to publish exposure draft and Handbook material are final only after a formal ballot process.
For more detailed information about PSAB projects, please refer to the project summaries under Projects. |
Introduction to PSA Handbook — Government Organizations PSAB approved an Exposure Draft (ED) for comment. The ED confirms the direction previously provided to government business enterprises to adhere to the standards for publicly accountable enterprises in the private sector (i.e., International Financial Reporting Standards (IFRSs)) for fiscal periods starting on or after January 1, 2011. The ED also proposes to eliminate the category “government business-type organizations” (GBTOs). It proposes that GBTOs be recategorized as either government not-for-profit organizations or other government organizations (OGOs), and follow the direction of the Introduction regarding the appropriate source of GAAP. While OGOs would generally base their financial reporting on the PSA Handbook, the ED proposes certain factors that must be considered for determining when IFRSs may be more suitable. The ED is expected to be released in early July 2009. Financial Instruments PSAB approved an ED for comment. A key implication is that all derivatives would be reported at fair value, thus bringing Canada in line with an international consensus on this important issue. In addition to derivatives, fair value measurement would be required for those portfolio investments that are equity instruments quoted in an active market. Cost or amortized cost would be the default basis of measurement for other items within the proposed scope, depending on the type of financial instrument. Proposed presentation amendments include a two-stage approach to the statement of operations: surplus/deficit excluding remeasurement gains and losses, and surplus/deficit, for the period. Finally, the ED proposes a disclosure framework to explain the nature and extent of risks arising from financial instruments and their significance to financial position and reported results. The ED is expected to be released this summer. Entity Level Financial Statements PSAB approved a Statement of Principles (SOP) for comment that provides direction to OGOs that issue general purpose financial statements and source their GAAP from the PSA Handbook. The SOP addresses accounting for appropriations, intra-government transactions and cost-sharing arrangements. It distinguishes agency from administrative activities and provides recognition and disclosure guidance. Further, it addresses disclosure requirements for related party transactions. The SOP is expected to be released in July 2009. New Project Approved — Assets PSAB approved a new project on assets. Ranked highly by constituent groups in the 2009 Project Prioritization Survey, the project will provide additional guidance on applying the asset definition in the public sector. The resulting standards are expected to be useful to constituents in understanding and debating what constitutes an asset, contingent asset and contractual right, in a similar manner as did the project on liabilities completed in 2004. New Project Approved — Revenue Recognition for Exchange Transactions PSAB approved a new project on revenue recognition for exchange transactions. This project was also ranked highly in the Survey. The project will expand on the guidance provided in Financial Statement Presentation, paragraphs PS 1200.077-.081, as it pertains to revenue recognition for exchange transactions and will begin by first considering the developments of the joint IASB and FASB project on revenue recognition of contracts with customers. |