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PSAB - Consequential Amendments Resulting from the Issue of Section PS 3450, Financial Instruments, including a new Section PS 3041, Portfolio Investments [Completed]

Effective date:

Same effective dates as Section PS 3450.

Transitional provisions:

Same effective date as Section PS 3450, being fiscal years beginning on or after April 1, 2012 for government organizations, and April 1, 2016 for governments.  Early adoption permitted.

Last updated:

April 2012


The consequential amendments include the issue of a new Section PS 3041, Portfolio Investments, and the withdrawal of Section PS 3030, Temporary Investments, and Section PS 3040, Portfolio Investments. In response to respondents’ feedback, some clarifications to the amendments were made in finalizing the changes.

The main features of the ED were as follows:

  1. The distinction between temporary and portfolio investments is removed. Temporary investments that are not cash equivalents as described in PS 1201, Financial Statement Presentation, paragraph 105, will be accounted for as portfolio investments.
  2. Requirements that apply to the reporting of portfolio investments are cross-referenced and conformed as a result of the adoption of Section PS 3450. Changes involve:
    1. including interests in pooled investment funds within scope;
    2. replacing the definition for “cost method” with a definition for “amortized cost”;
    3. conforming the definition of the effective interest method;
    4. deleting the definition of dividends;
    5. adding accounting requirements included within the former definition of the cost method to paragraph PS 3040.05;
    6. deleting the requirement to apply the cost method; instead, the recognition and measurement requirements within Section PS 3450 apply, other than to initial recognition of an investment with significant concessionary terms;
    7. clarifying provisions that apply to the reporting of portfolio investments held by sinking funds;
    8. replacing references to “carrying amount” and “carrying value” with “cost or amortized cost” within requirements that apply when accounting for a loss in value of a portfolio investment; and
    9. specifying that the effective interest method is used when amortizing an investment discount to revenue.

Other developments

April 2012

On April 3, 2012, the PSAB issued a Background Information and Basis for Conclusions document in respect of the new Section PS 3041.

December 2011

In December 2011, the PSAB approved these amendments to the PSA Handbook.

Correction list for hyphenation

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