Assets

Status: Project Proposal approved. Task Force members being recruited.

Background
Activities to Date
Next Steps
Contact Information

Background

Assets are currently defined in Section PS 1000, Financial Statement Concepts, as “economic resources controlled by a government as a result of past transactions or events and from which future economic benefits are expected to be obtained.” Guidance on applying the definition of assets is currently limited to identification of three essential characteristics of assets and definitions of financial, non-financial and tangible capital assets.

This project is expected to result in new standards similar to the approach taken in:

• Section PS 3200, Liabilities;
• Section PS 3300, Contingent Liabilities; and
• Section PS 3390, Contractual Obligations.

Reasons for the Project
This project was ranked a high priority in the 2009 Project Priority Survey.

Section PS 3200 addresses the basic concepts and key terms in the definition of liabilities with further guidance, examples and indicators. It also establishes the recognition and disclosure standards for liabilities. Similar standards on assets would be useful not only for financial statement preparers and auditors in application and interpretation of the definition of assets, but also for development of future standards on specific assets.

Issues
PSAB does not intend to develop a new definition of assets in this project. However, the Board will monitor the development of other standard setters’ conceptual framework projects, which may lead to revising their current definition of assets, and assess if there are any implications for this project.

The issues to be addressed include:

• government rights and powers that may give rise to assets;
• contractual rights;
• service potential;
• contingent assets;
• derecognition of assets;
• situations that may not result in asset recognition; and
• presentation and disclosure issues.

Objective
The objective is to issue one or more accounting standards for assets, contingent assets and contractual rights that addresses:

• guidance relating to the key terms in the definition and essential characteristics of assets ;
• definitions of contingent assets and contractual rights;
• recognition and derecognition criteria for assets and contingent assets;
• measurement including impairment of assets and contingent assets; and
• disclosure of assets, contingent assets and contractual rights.

Activities to Date

June 2009
PSAB approved a Project Proposal.

Next Steps

PSAB expects to reach the following key steps at the dates indicated:

Contact Information

Questions or comments on this project should be directed to:

Lydia P. So, CA
Principal, Public Sector Accounting
Telephone: +1 (416) 204-3281
Fax: +1 (416) 204-3412

The Canadian Institute of Chartered Accountants
277 Wellington Street West
Toronto ON M5V 3H2 Canada