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Public sector

In Brief – PSAB’s Recent Decision on Financial Instruments – Subsequent Issues

Jun 06, 2018

On June 6, 2018, the Public Sector Accounting Board (PSAB) published this In Brief, which provides a plain and simple overview of PSAB’s March 2018 decision on the applicability of financial instruments, foreign currency, and related standards.

Review the publication on the PSAB's website.

Statement of Concepts – A Revised Conceptual Framework for the Canadian Public Sector

May 28, 2018

On May 28, 2018, the Public Sector Accounting Board (PSAB) issued a Statement of Concepts proposing a revised conceptual framework and it wants your input. Stakeholders are encouraged to submit their responses by November 28, 2018.

The proposed revised conceptual framework is intended to replace Section PS 1000, FINANCIAL STATEMENT CONCEPTS and Section PS 1100, FINANCIAL STATEMENT OBJECTIVES.

The PSAB proposes to expose a proposed revised conceptual framework that would include 10 chapters.

  • Chapter 1: Introduction to the Conceptual Framework
  • Chapter 2: Characteristics of Public Sector Entities
  • Chapter 3: Financial Reporting Objective
  • Chapter 4: Role of Financial Statements
  • Chapter 5: Financial Statement Foundations
  • Chapter 6: Financial Statement Objectives
  • Chapter 7: Qualitative Characteristics and Related Considerations
  • Chapter 8: Elements of Financial Statements
  • Chapter 9: Recognition and Measurement
  • Chapter 10: Presentation Concepts

Review the press release and Statement of Concepts on the PSAB's website.

Statement of Principles – A Revised Reporting Model for the Canadian Public Sector

May 28, 2018

On May 28, 2018, the Public Sector Accounting Board (PSAB) issued a Statement of Principles proposing a revised reporting model for the Canadian public sector. Stakeholders are encouraged to submit their responses by November 28, 2018.

The PSAB proposes to expose a proposed revised Section on financial statement presentation. The proposed revised Section would replace Section PS 1201, FINANCIAL STATEMENT PRESENTATION.

The Board concluded that:

  • The model responds to the need for understandable financial statements for the public and its elected and appointed representatives. The model proposes only elements that the public recognizes from its own finances: assets, liabilities, revenues and expenses.
  • The model is aspirational in that it provides PSAB the ability to deal with current issues, such as hedge accounting, performance obligations and government transfers; and future issues, such as heritage, natural capital and endowments, while ensuring that the economic substance of transactions and other events is reflected for improved accountability information.

Review the press release and Statement of Principles 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.

IPSASB publishes proposed "Improvements to IPSAS, 2018"

Apr 16, 2018

On April 16, 2018, the International Public Sector Accounting Standards Board (IPSASB) published an exposure draft "Improvements to IPSAS, 2018", which sets out proposed amendments to International Public Sector Accounting Standards (IPSAS) to address issues raised by stakeholders and to converge with amendments to IFRS® Standards. Comments are requested by July 15, 2018.

The proposed IFRS convergence amendments reflect the following International Accounting Standards Board amendments:

  • Annual Improvements to IFRSs 2011 – 2013 Cycle (issued December 2013)
  • Disclosure Initiative (Amendments to IAS 7) (issued January 2016)
  • Transfers of Investment Property (Amendments to IAS 40) (issued December 2016)
  • Annual Improvements to IFRSs 2014 – 2016 Cycle (issued December 2016)
  • IFRIC 22 Foreign Currency Transactions and Advance Consideration (issued December 2016)
  • Annual Improvements to IFRS Standards 2015 – 2017 Cycle (issued December 2017)
  • Plan Amendment, Curtailment or Settlement (Amendments to IAS 19) (issued February 2018)

Review the press release and the exposure draft Improvements to IPSAS, 2018 on the IPSASB's website.

PSAB Annual Plan – 2018-2019

Apr 09, 2018

On April 9, 2018, the Public Sector Accounting Board (PSAB) released its Annual Plan, which sets out the PSAB’s key activities and project milestones in 2018-2019, helping to achieve the objectives in its three year strategic plan.

Their key strategies and objectives include:

  • Developing standards in line with due process and public interest
  • Finalizing the Conceptual Framework
  • Reviewing their approach to International Public Sector Accounting Standards
  • Encouraging stakeholders to support and accept our standards
  • Implementing a not-for-profit strategy that meets the public interest

Review the Annual Plan on the PSAB's website.

Webinar on the presentation of amalgamations in IPSAS 40

Mar 15, 2018

On March 15, 2018, the International Public Sector Accounting Standards Board (IPSASB) released a video intended to help users understand the requirements regarding amalgamations in IPSAS 40, "Public Sector Combinations", which IPSASB released in February 2017. The Standard applies from January 1, 2019 with earlier adoption encouraged.

IPSAS 40 uses the modified pooling of interests method of accounting for amalgamations. Because this approach does not require comparative figures to be restated, the presentation requirements may be different from other versions of the pooling of interests method that entities have used previously.

View the short video (11 minutes) on the IPSASB'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.

IPSASB proposes strategy and work plan for 2019-2023

Feb 02, 2018

On February 2, 2018, the International Public Sector Accounting Standards Board (IPSASB) proposed a new strategy and work plan for 2019 through 2023. Comments are requested by June 15, 2018.

The strategic objective of the IPSASB is stated as strengthening public financial management through increasing adoption of the International Public Sector Accounting Standards (IPSAS). The IPSASB intends to deliver this objective through developing IPSAS and other high-quality financial reporting guidance for the public sector and raising awareness of IPSAS and the benefits of accrual adoption.

To develop standards on critical areas in public sector accounting, the IPSASB proposes to take on three new major public sector specific projects:

  • accounting for natural resources,
  • discount rates, and
  • differential reporting.  

The IPSASB will also continue to strive to maintain convergence with International Financial Reporting Standards (IFRSs).

Review the proposed strategy and work plan and supporting material on the IPSASB's website.

IPSASB issues exposure draft proposing new requirements for lease accounting

Jan 31, 2018

On January 31, 2018, the International Public Sector Accounting Standards Board (IPSASB) published Exposure Draft 64 "Leases". The draft proposes new requirements for lease accounting covering both lessors and lessees to replace IPSAS 13 "Leases". Comments are requested by June 30, 2018.

The IPSASB proposes a single right-of-use model for lease accounting that will replace the risk and rewards incidental to ownership model in IPSAS 13.

For lessees, the ED proposes to adopt the right-of-use model in IFRS 16, Leases.

However, the ED proposes a departure from IFRS 16's requirements for lessor accounting. As converging with the requirements for lessors under IFRS 16 would “give rise to a number of public sector specific issues”, the IPSASB also proposes a right-of-use model for lessor accounting specifically designed for public sector financial reporting.

Proposals for new public sector specific guidance on concessionary leases for both lessors and lessees are also contained in the exposure draft.

Review the press release and exposure draft are available on the IPSASB's website.

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