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Exposure Drafts – Revised Conceptual Framework for Financial Reporting in the Canadian Public Sector

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Jan 11, 2021

On January 11, 2021, the Pub­lic Sec­tor Ac­count­ing Board (PSAB) issued two Exposure Drafts together with related supporting information in respect of its project to develop a new Conceptual Framework for financial reporting in the Canadian public sector. Com­ments on the Exposure Drafts are re­quested by May 12, 2021.

The Exposure Drafts propose:

  • replacing Section PS1000, Financial Statement Concepts, and Section PS1100, Financial Statement Objectives, with a new 10 chapter Conceptual Framework; and
  • making consequential amendments to various other Sections in the PSA Handbook.

The Conceptual Framework will not be a standard and will not override specific standards. Hence, the changes to the existing conceptual framework would not have an immediate effect on the financial statements of most reporting entities. However, entities could be affected by the changes if they need to use the revised Conceptual Framework to develop or select accounting policies when no standard specifically applies to a particular economic resource, economic obligation, transaction or other event. In such circumstances, the revised Conceptual Framework would be applied prospectively. Applying the new presentation concepts in Chapter 10 of the proposed Conceptual Framework may also lead entities to review their financial statement disclosures.

The Exposure Drafts do not specify a proposed effective date for the new Conceptual Framework. They do, however, state that the PSAB will start using the revised Conceptual Framework once it is issued and that the revised concepts will guide the Board as it develops or amends standards.

For further details, refer to the following material on the PSAB's web­site:

  • Exposure Draft, The Conceptual Framework for Financial Reporting in the Public Sector;
  • Exposure Draft, Consequential Amendments Arising from the Proposed Conceptual Framework;
  • In Brief summary of the proposals;
  • Visual aid in respect of the proposals.

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