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PSAB - Improvements to Not-for-Profit Standards in the public sector [Completed]

Comment period ended on

December 15, 2013

Proposed effective date:

N/A – Statement of Principles only

Last updated:

January 2016


The main features affecting both private and public sector NFPOs are as follows:

  1. A contribution would be recognized as an asset, when the NFPO has control of the contribution, would exercise that control if necessary and can reasonably estimate the amount to be received. A contribution would be revenue, except when the contribution gives rise to an obligation that meets the definition of a liability. The proposals replace the deferral and restricted fund methods and would affect the recognition of contributions by NFPOs in both the private and public sectors. The proposals could also have a significant impact on the accounting for contribution pledges and endowment contributions (Principles 1 to 3) and
  2. A capital asset would be recognized by an NFPO on its statement of financial position regardless of the size of the NFPO, thereby removing the size exemption currently available for NFPOs in both the private and public sectors (Principle 7).

The main features affecting public sector (or government) NFPOs only are as follows:

  1. The accounting for tangible capital assets and controlled and related entities, and financial statement presentation by a public sector NFPO would follow the standards in the PSA Handbook currently followed by governments and other government organizations. The proposals would remove the current options available for reporting controlled and related entities by a public sector NFPO. The proposals would require a public sector NFPO to show the “net debt” indicator, statements of change in net debt and remeasurement gains and losses, and budget information in their financial statements (Principles 5, 10, 13 and 14).
  2. Intangibles, works of arts and historical treasures (including collections), and economic interests would continue to be accounted for and presented on a basis consistent with the guidance currently in the PS Section 4200 series until PSAB gives further consideration to these matters (Principles 6, 8, 9 and 11).

Other developments

January 2016

On January 21, 2016, the Public Sector Accounting Board (PSAB) issued an Exposure Draft proposing to withdraw Section PS 4260, Disclosure of Related Party Transactions by Not-for-Profit Organizations, and add a transitional provision to Section PS 2200, Related Party Disclosures. Stakeholders are encouraged to submit their comments by April 29, 2016.

February 2014

As of February 2014, the AcSB and PSAB have received a substantial number of responses from a broad variety of stakeholders in the private and public sectors. Stakeholders have provided the Boards with a variety of carefully considered positions on each of the principles described in the SOP. Out of the 290 comment letters received to date, approximately 190 provided responses to the AcSB, 45 to PSAB and 55 to both Boards.

July 2013

On July 15, 2013, the PSAB and the AcSB extended the comment deadline on the SOP from September 15, 2013 to December 15, 2013.

April 2013

On April 10, 2013, the PSAB (jointly with the AcSB) issued a SOP which includes 15 proposed principles which should underlie accounting standards for NFPOs.

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