This site uses cookies to provide you with a more responsive and personalised service. By using this site you agree to our use of cookies. Please read our cookie notice (http://www2.deloitte.com/ca/en/legal/cookies.html) for more information on the cookies we use and how to delete or block them.
The full functionality of our site is not supported on your browser version, or you may have 'compatibility mode' selected. Please turn off compatibility mode, upgrade your browser to at least Internet Explorer 9, or try using another browser such as Google Chrome or Mozilla Firefox.

Section PS 3450 - Financial Instruments

Effective date:

(i) Government organizations - April 1, 2012 (ii) Governments – April 1, 2021. Earlier adoption is permitted

Published by the PSAB:

June 2011

 

Reach out to our Section PS 3450 Specialist

Kerry Danyluk

Overview

This Section establishes standards on how to account for and report all types of financial instruments including derivatives. Financial instruments include primary instruments (such as receivables, payables and equity instruments) and derivative financial instruments (such as financial options, futures and forwards, interest rate swaps and currency swaps). Derivative financial instruments meet the definition of a financial instrument and, accordingly, are within the scope of this Section.
In general, a government should recognize a financial asset or a financial liability on its statement of financial position when, and only when, a government becomes a party to the contractual provisions of the instrument. From a measurement perspective, all items all items within the scope of this Section are assigned to one of two measurement categories:

  1. fair value; or
  2. cost or amortized cost.

A government should disclose information that enables users of its financial statements to evaluate the significance of financial instruments for its financial position and changes in its financial position.

History of Section PS 3450

Date

Development

Comments

June 2011

New Section

This new Section establishes standards for recognizing and measuring financial assets, financial liabilities and non-financial derivatives.

Effective for: (i) Government organizations – fiscal years beginning on or after April 1, 2012; and (ii) Governments – fiscal years beginning on or after April 1, 2015. Earlier adoption is permitted.

Sections PS 1201 Financial statement presentation, and PS 2601 Foreign currency translation, are to be adopted at the same time.

May 2012

Amended transitional provisions

The transitional provisions for this Section have been amended to clarify that the measurement provisions are applied prospectively. A new transitional provision has been added that applies to government organizations transitioning from the standards in Part V of the Handbook – Accounting with items classified as available for sale.

February 2013

Clarification and new transitional provisions

The Section has been amended to clarify that the requirements in Section PS 3100 Restricted assets and revenues, apply when reporting on externally restricted assets that are financial instruments. As well, a new transitional provision has been added.

August 2013

Clarification of the effective dates

This Section has been amended to clarify the effective dates for governments and government organizations.

March 2014

Revised transitional provisions

The transitional provisions have been amended to extend the effective date for governments by one year to fiscal years beginning on or after April 1, 2016. Earlier adoption is permitted.

June 2015

Revised transitional provisions

The transitional provisions have been amended to extend the effective date for governments by three years to fiscal years beginning on or after April 1, 2019. Earlier adoption is permitted.

March 2018

Re­vised tran­si­tional pro­vi­sions

The PSAB (i) concluded that the PSA Handbook sections on foreign currency and financial instruments were appropriate for public sector entities including governments, and (ii) approved an extension of the effective date for governments of Sections PS 3450, Financial Instruments, and PS 2601, Foreign Currency Translation, to fiscal years beginning on or after April 1, 2021. 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

  • March 3, 2016 - Section PS 3450 vs. IFRS 9 vs. ASPE – A Presentation on Financial Instruments

Amendments under consideration

 

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.