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PSAB - Financial Instruments – Narrow Scope Amendments [ED]

Comment period ends on May 1, 2019

Next steps:

The PSAB will consider approving a further Exposure Draft in December 2019

Last up­dated:

September 2019

 

Overview

In conjunction with the decision to move forward with Section PS 3450, Financial Instruments, the Public Sector Accounting Board (PSAB) will investigate three non-hedge accounting issues brought forward by stakeholders during recent consultations.

The objective of this project is to develop options for PSAB to address the following:

Accounting treatment of a bond repurchase

  • The current standard states that, when a public sector entity acquires its own bond from the market, this transaction should be treated as an extinguishment. PSAB is investigating alternatives to this treatment.

Scope exclusion of certain activities by the Federal government

  • Section PS 2601, Foreign Currency Translation, excludes foreign exchange balances “intended to sustain foreign exchange reserves and orderly conditions in the foreign exchange market for the Canadian dollar or to provide assistance to foreign countries.” PSAB is investigating whether derivatives that are used as part of such activities should be excluded from the scope.

Improvements to transitional provisions

  • Several improvements to the transitional provisions of Section PS 3450, Financial Instruments, were proposed in the Exposure Draft, Financial Instruments: Transition, issued in 2014. PSAB is revisiting these improvements to ensure they remain appropriate.

 

Other de­vel­op­ments

January 2019

On January 31, 2019, the PSAB released an Exposure Draft that proposes, subject to comments received following exposure, to amend Section PS 3450, "Financial Instruments". The Basis for Conclusions, which accompanies the Exposure Draft, addresses alternative views and the Board position, with its reasons. Comments are requested by May 1, 2019.

August 2018

In August, 2018, the staff of the PSAB up­dated the in­for­ma­tion in re­spect of this pro­ject to ad­vise that the PSAB ex­pects to is­sue an Ex­po­sure Draft in Q1/2019.

 

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