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Financial Instruments: Income on Externally Restricted Assets [Completed]

Effective date:

Fiscal years beginning on or after March 1, 2013. Earlier adoption is permitted as of the beginning of the fiscal year in which this Section is first applied

Transitional provisions:

Fiscal years beginning on or after March 1, 2013. Earlier adoption is permitted as of the beginning of the fiscal year in which this Section is first applied.

Last updated:

December 2012

Overview

At its meeting on December 13-14, 2012, the PSAB approved these amendments to Section PS 3450, Financial Instruments. In doing so, PSAB revised certain wording in the ED, but did not consider it necessary to re-expose the revisions as they did not represent significant changes.

The amendments align the reporting of income on externally restricted assets that are financial instruments in Section PS 3450 with the requirements in Section PS 3100, Restricted Assets and Revenues, and address transitional issues that can arise when Section PS 3450 is adopted. Responses to the ED supported the proposed changes.

The following summarizes the proposals:

  1. amend paragraphs PS 3450.053, .056 and .057 to address the accounting for gains, losses, interest and dividends when income attributable to a financial asset is externally restricted in accordance with the criterion in Restricted Assets and Revenues, paragraph PS 3100.11; and
  2. amend paragraphs PS 3450.099(b) (iii) and .099(c) to address the accounting for adjustments associated with the transition to Section PS 3450 when income attributable to a financial asset is externally restricted.

Section PS 3100, Restricted Assets and Revenues, requires that income attributable to a financial asset that is externally restricted (such as interest, dividends and a change in fair value of an item carried at fair value) is accounted for as a liability until the resources are used for the purpose or purposes specified.

Recent activities

December 2012

At its meeting on December 13-14, 2012, the PSAB approved these amendments to Section PS 3450, Financial Instruments.

Correction list for hyphenation

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