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2018

Article – The Evolution of Public Sector Pension Plans and Its Accounting Implications

Oct 30, 2018

On October 30, 2018, CPA Canada published an article on how the public sector pension plans have evolved substantially in the past decade and that new plan features and arrangements have been introduced to address plan sustainability.

Review the article to learn about why an update to the accounting standard may be needed on the PSAB's website.

Article – What’s Happening with Net Debt?

Sep 28, 2018

On September 28, 2018, CPA Canada published an article on how the Public Sector Accounting Board is proposing amendments to the calculation and presentation of net debt.

The proposed amendments form part of the project to revise the conceptual framework and reporting model for public sector entities.

Review the article on CPA Canada's website.

Article – Working in the public interest: Increasing accountability in public sector financial statements

Oct 17, 2018

On October 17, 2018, CPA Canada released an article on PSAB’s project to revise the public sector conceptual framework and reporting model.

The project proposes changes that promote greater understandability and transparency to increase the accountability value of information in the financial statements to the public.

Review the article on CPA Canada's website.

Asset Retirement Obligations – Basis for Conclusions and new standard

Aug 01, 2018

On August 1, 2018, the Public Sector Accounting Board (PSAB) released the new standard, "Asset Retirement Obligations", Section PS 3280. They also released the Basis for Conclusions, which sets out how the PSAB reached its conclusions, and includes discussion of significant matters arising from comments received and issues raised in response to its proposals exposed.

Section PS 3280 applies to asset retirement obligations associated with tangible capital assets controlled by the public sector entity that are in productive use and no longer in productive use. Only legal obligations, including obligations created by promissory estoppel, are in scope of this standard.

The new Sec­tion applies to fis­cal years be­gin­ning on or af­ter April 1, 2021. Ear­lier adop­tion is per­mit­ted.

Review the Basis for Conclusions on the PSAB's website.

Consultation Paper – Reviewing PSAB’s Approach to International Public Sector Accounting Standards

May 28, 2018

On May 28, 2018, the Public Sector Accounting Board (PSAB) issued a Consultation Paper that introduces the criteria PSAB will use to make a decision on its future international strategy and illustrates the application of the criteria through four possible options. Stakeholders are encouraged to submit their responses by September 28, 2018.

The purpose of this Consultation Paper is to:

  • make stakeholders aware of the process PSAB will follow in evaluating the international strategy that best serves the public sector;
  • introduce stakeholders to the decision-making criteria the Board expects to consider in evaluating the international strategy that best serves the public sector;
  • illustrate the application of the criteria, in bullet two above, in four unique proposals the Board believes are viable international strategies available in the public sector context;
  • raise stakeholder awareness of the criteria the Board will consider in its decision making process in determining an appropriate option for its future international strategy; and
  • solicit stakeholder input on the decision-making criteria and international options proposed.

Review the press release and Consultation Paper on the PSAB's website.

Employment Benefits Discount Rate: Anything Wrong with Expected Return on Plan Assets?

Jan 04, 2018

On January 4, 2018, the Public Sector Accounting Board (PSAB) published an article about the debate on whether the expected return on plan assets, commonly used in the public sector in discounting obligations for funded benefit plans, is an appropriate discount rate for determining benefit obligation.

A recent stock contribution made by Boeing to its pension plan illustrates the debate over using the expected return on plan assets as the discount rate in determining employment benefit obligation.

The PSAB is considering the appropriate discount rate guidance that should be provided in its employment benefits standard. The expected return on plan assets is usually used in calculating the obligation of fully or partially funded benefit plans in the public sector.

Review the full article on the PSAB's website.

Employment Benefits Discount Rate: Any Case for a Current Rate?

Feb 05, 2018

On February 5, 2018, the Public Sector Accounting Board (PSAB) published an article about the debate on whether a current rate, an average rate or a projected rate would be appropriate for the discount rate used in determining benefit obligation.

Employees of U.S. nuclear power firm Westinghouse Electric Co. got a surprise recently. The Pension Benefit Guaranty Corp. (PBGC), a U.S. government agency that insures certain U.S. private employer pension plans, had estimated that the Westinghouse pension plan was under-funded by US$937 million.

The news came as a shock because the plan had been considered fully funded in its most recent report, filed with the U.S. Department of Labor in 2015. This shortfall is massive, given that the plan had US$926 million in assets. However, the shortfall did not arise from mismanagement, fraud or aggressive plan investment strategy. Instead, it was due to the different discount rates used by the company and the PBGC.

The Westinghouse example, however, demonstrated the implications of using an average rate versus a current market rate in estimating benefit obligation, and the implications of using different lengths of period for the average rate.

Review the full article in PSAB's website.

Encouragement to Comment: 2018-2019 Annual Improvements Process

Nov 13, 2018

On November 13, 2018, the Public Sector Accounting Board (PSAB) issued a news item regarding its 2018 – 2019 Annual Improvements project. Noting that the PSAB approved its new annual improvements process in June 2018 to correct errors in the wording or clarify the CPA Canada Public Sector Accounting (PSA) Handbook or Statements of Recommended Practices, the news item encourages interested parties to participate in the project this coming January when the first Annual Improvements exposure draft is issued.

The PSAB discussed the issues to be included in the 2018 - 2019 Annual Improvements project at its meeting on September 27/28, 2018.  Details of the items will be included in the exposure draft in January 2019.

On November 13, 2018, the PSAB also encouraged interested parties to submit issues to be considered for the 2019 – 2020 Annual Improvements project by June 30, 2019.

For further details refer to the PSAB website page.  

In Brief – How Asset Retirement Obligations, Section PS 3280 applies to asset retirement obligations associated with landfills

Nov 19, 2018

On November 19, 2018, the Public Sector Accounting Board (PSAB) published an overview of how Section PS 3280 applies to asset retirement obligations associated with solid waste landfills.

Review the overview on the PSAB's website.

In Brief – How the proposals for a revised conceptual framework and reporting model consider the needs of government not-for-profit organizations

Oct 05, 2018

On October 5, 2018, the Public Sector Accounting Board (PSAB) published an overview of how the proposals in the Statement of Concepts, “A Revised Conceptual Framework for the Canadian Public Sector” and the Statement of Principles, “A Revised Reporting Model for the Canadian Public Sector” consider the needs of government not-for-profit organizations and their stakeholders. Deadline for comments is November 28.

Review the overview on the PSAB's website.

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