Section PS 3420 - Inter-entity transactions

Effective date:

April 1, 2017

Published by the PSAB:

March 2015

Overview

This Section establishes standards on how to account for and report transactions between public sector entities that comprise a government's reporting entity from both a provider and recipient perspective.

The main features of the new Section are:

  • Under a policy of cost allocation, revenues and expenses are recognized on a gross basis.
  • Transactions are measured at the carrying amount, except in specific circumstances.
  • A recipient may choose to recognize unallocated costs for the provision of goods and services and measure them at the carrying amount, fair value or other amount dictated by policy, accountability structure or budget practice.
  • The transfer of an asset or liability for nominal or no consideration is measured by the provider at the carrying amount and by the recipient at the carrying amount or fair value.
  • Inter-entity transactions are considered in conjunction with, Section PS 2200 Related Party Disclosures.

History of Section PS 3420

Date

Development

Comments

March 2015

New Section

This new Section establishes standards on how to account for and report transactions between public sector entities that comprise a government's reporting entity from both a provider and recipient perspective.

This Section applies to fiscal years beginning on or after April 1, 2017. Earlier adoption is permitted.

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

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.