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. |
PSAB Planning Initiatives PSAB approved a Strategic Plan for 2010-13 and a Work Plan for 2010-11 subject to revisions related to the conceptual framework initiative. The Strategic Plan will be posted on PSAB’s website in the second quarter of 2010. The Board also approved its Performance Report for 2009-10. Conceptual Framework PSAB discussed recent input received on the conceptual framework from the senior government finance community. Over the term of the Strategic Plan, PSAB plans to actively influence the development of the international conceptual framework through participation on the International Public Sector Accounting Board (IPSASB) and by encouraging Canadian input into IPSASB’s documents for comment. Given the concerns expressed that PSAB should take a more proactive approach, PSAB directed staff to develop a project plan. Liabilities for Contaminated Sites PSAB approved Section PS 3260, Liabilities for Contaminated Sites, as a final standard. Responses to the November 2009 Exposure Draft (ED) were generally positive and provided some constructive improvements for finalizing the standard. Specifically, examples have been moved to an Appendix and clarification has been provided for two issues – conditional present obligations to remediate a contaminated site and what is meant by the term “best estimate”. These clarifications were provided to the Board’s satisfaction and other more minor changes were made to address input received on the ED. The final standard is expected to be issued in June 2010. Amalgamations and Restructurings PSAB reviewed extensive staff research papers on amalgamations, annexations, government (internal) restructurings, and realignments of responsibilities, as well as demergers and divestments. This was originally constituted as a staff project focusing on amalgamations. Given the broader scope of issues revealed in the research, PSAB re-evaluated that decision and decided to actively seek members to appoint to a task force. Amendments Resulting from the Adoption of IFRSs in Canada After consideration of responses to its December 2009 Exposure Draft (ED), PSAB approved the withdrawal of Section PS 3800, Government Assistance – Application of CICA Handbook – Accounting Section 3800, from the CICA Public Sector Accounting (PSA) Handbook and the removal of Appendix B from the Introduction to Public Sector Accounting Standards. These changes are consistent with PSAB’s policy decision to not impose additional requirements on government organizations directed to an alternative basis of generally accepted accounting principles (GAAP) including International Financial Reporting Standards (IFRSs). Some respondents to the ED expressed concern that IFRSs do not address certain topics impacting government organizations, such as landfill post-closure care liabilities. PSAB reiterated its concern about developing a Canadian version of IFRSs for the public sector. PSAB concluded that for topics not specifically addressed by IFRSs, government organizations would deal with such topics in the same manner as would other entities following IFRSs, through the GAAP hierarchy. Some respondents were concerned that IFRSs provide accounting policy choices that should not be available for government organizations. PSAB reconfirmed its decision that certain government organizations are best served by IFRSs because of the commercial-type nature of their operations and that these government organizations should be selecting accounting policies that best represent their operations and best present this information to their financial statement users. The above-noted changes to the PSA Handbook are expected to be published in June 2010; however, the withdrawn standard and Appendix will remain in force until the effective date of IFRS adoption on January 1, 2011, unless a government organization elects early adoption of IFRSs. Government Transfers PSAB approved a third re-exposure draft (Re-ED 3) on Government Transfers. It is expected to be issued for comment in late April or early May 2010. Re-ED 3 is intended to seek input in particular on the question of how recipient governments should account for transfers. The only significant issue raised with the proposals in the second re-exposure draft (Re-ED 2) was the proposed approach to accounting for capital transfers received. Determining when revenue should be recognized in operations in relation to transfers received has been an issue since the project started in 2002. PSAB’s new proposals allow more scope for applying professional judgment in determining if a transfer results in revenue immediately or if it creates a liability such that the transfer is recognized in revenue in future periods. The new proposals for recipients would base the accounting for all transfers received on the principles for operating transfers set out in Re-ED 2 in 2009. The Board believes that the new proposals will allow governments to reflect the substance of the full range of complex transfer arrangements they have with other levels of government in their financial statements. Financial Instruments/Foreign Currency PSAB held its first discussion of the responses to two Exposure Drafts, “Financial Instruments,” issued in June 2009, and “Foreign Currency Translation,” issued in September 2009. Generally, while there was support among many respondents for the proposals, the issue of recognition or disclosure remains for senior government respondents. The Board discussed the issues raised by respondents and decided to have the task force assess a variety of options to address the input received. Among the options is an alternative that considers the reintroduction of hedge accounting. Other presentation models are also being considered. A disclosure standard might be considered at a later date, if necessary. Discussion is expected to continue at PSAB’s upcoming meetings. |
