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PSAB Matters Article – Investments in Government Business Enterprises

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Jan 21, 2016

On January 21, 2016, the Public Sector Accounting Board (PSAB) released an overview of Section PS 3070, Investments in Government Business Enterprises, which establishes how an entity should account for its investments in government business enterprises.

Public sector entities may acquire or create entities that carry on a business. These entities, called government business enterprises (GBEs), can normally operate with revenues from their business without outside financial assistance. They are reported as investments, rather than consolidated on a line-by-line basis, in the financial statements of the government reporting entity. 

Section PS 3070, Investment in Government Business Enterprises, establishes standards on how to account for and report an entity’s investment in GBEs applying the modified equity method of accounting. 

Review the Overview from the PSAB's Web site.

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