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Guideline PSG 2 - Leased tangible capital assets

Effective date:

April 1, 2000, except for subsequent amendments.

Published by the PSAB:

April 2000


The purpose of this Guideline is to:

  1. define leased tangible capital assets;
  2. describe how to account for a leased tangible capital asset and the related lease liability;
  3. describe the information that should be disclosed about transactions involving leased tangible capital assets; and
  4. provide guidance on initial application of the Guideline.

For purposes of this Guideline, a "benefits and risks" approach is adopted to assess whether a government should classify a lease as a leased tangible capital asset.

A leased tangible capital asset is defined as a non-financial asset that has physical substance and a useful life extending beyond an accounting period, and is held under lease by a government for use, on a continuing basis, in the production or supply of goods and services. Under the terms and conditions of the lease, substantially all of the benefits and risks incident to ownership are, in substance, transferred to the government without necessarily transferring legal ownership. 

A government should account for leased property that meets the definition of a leased tangible capital asset as a tangible capital asset and a liability. 

History of Guideline PSG 2




April 2000

New Guideline

This new Guideline relates to leased tangible capital assets.

June 2005 and February 2007


Editorial revisions in June 2005 and February 2007.

Note: The above summary does not include details of consequential amendments made as the result of other projects.

Public Sector Accounting Discussion Group meetings

  • November 17, 2017 - PSG-2 vs. IFRS 16 on Consolidation of Entities using IFRS Standards: Lessee Accounting for Operating Leases
  • May 7, 2015 - PSG-2:  Contractual Obligations

Correction list for hyphenation

These words serve as exceptions. Once entered, they are only hyphenated at the specified hyphenation points. Each word should be on a separate line.