Section PS 3430 - Restructuring transactions

Effective date:

Restructuring transactions occurring in fiscal years beginning on or after April 1, 2018. Earlier adoption is permitted.

Published by PSAB:

June 2015

Overview

This Section establishes standards on how to account for and report restructuring transactions by both transferors and recipients of assets and/or liabilities, together with related program or operating responsibilities.

Restructuring activities include, but are not limited to:

  1. amalgamation of entities or operations within the government reporting entity;
  2. amalgamation of local governments;
  3. annexation or boundary alteration between neighbouring local governments;
  4. transfers of operations or programs from one entity to another; and
  5. shared service arrangements entered into by local governments in a region.

Restructurings can be initiated by the entities involved or imposed by a higher level of government through legislation or by the controlling government.

History of Section PS 3430

Date

Development

Comments

June 2015

New Section

This new Section defines a restructuring transaction and establishes standards for recognizing and measuring assets and liabilities transferred in a restructuring transaction.

The main features of the new Section are:

  • A restructuring transaction is a transfer of an integrated set of assets and/or liabilities, together with related program or operating responsibilities without consideration based primarily on the fair value of the individual assets and individual liabilities transferred.
  • The net effect of a restructuring transaction should be recognized as revenue or as an expense by entities involved.
  • A recipient should recognize individual assets and liabilities received in a restructuring transaction at their carrying amount with applicable adjustments at the restructuring date.
  • A transferor and a recipient should not restate their financial position or results of operations.
  • A transferor and a recipient should disclose sufficient information to enable users to assess the nature and financial effects of a restructuring transaction on their financial position and operations.

This Section applies to restructuring transactions occurring in fiscal years beginning on or after April 1, 2018. Earlier adoption is permitted.

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 - Section PS 3430: Restructuring Transactions – Recipient Adjustments

Correction list for hyphenation

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