Message from the Chair – May 2016
March 2016 PSAB Meeting
Our March meeting saw many projects and initiatives move forward.
Use of Public Sector Financial Statements by Credit Rating Agencies
We received a presentation from Standard & Poor’s Ratings Services about the credit ratings process and how they use the financial statements of public sector entities.
Our Strategic Plan
Our draft 2017-2020 strategic plan was presented to the Accounting Standards Oversight Council (AcSOC) in February 2016. AcSOC was in agreement with the objectives outlined in the plan, which include:
- finalizing the conceptual framework;
- reviewing our approach to international public sector accounting standards;
- encouraging stakeholders to support and accept our standards;
- implementing a not-for-profit sector strategy that meets the public interest; and
- developing standards that support public interest considerations.
We approved the issuance of invitations to comment on our draft 2017-2020 strategic plan and a proposed one-year extension of our 2013-2016 Strategic Plan. Our draft strategic plan will be posted online shortly with an exposure period of five months.
We look forward to your feedback on these documents.
We concluded our first post-implementation review with the approval of our Feedback Statement on the Post-implementation Review of Section PS 3410, Government Transfers.
At our June 2016 meeting, we will explore whether an authoritative guideline would help clarify interpretations of the standard.
Financial Instruments Standard
Staff met with stakeholders to:
- understand the challenges in applying the financial instruments standard to specific transactions;
- present the similarities and differences between our financial instruments standard and the equivalent Canadian and international private sector standards; and
- understand the specific issues that prompted a number of stakeholders to ask us to consider a hedge accounting option.
We will receive a report from staff after they have met with stakeholders across the country.
Asset Retirement Obligations
We discussed possible approaches to accounting for the asset retirement costs based on the responses to our Statement of Principles, “Retirement Obligations.” We provided feedback to staff on the approaches presented. We also considered examples to be included in the development of an exposure draft.
We received an update on our Revenue project. We reflected on the factors to consider when determining whether revenue should be recognized at a point in time or over a period of time, for licences and permits. Feedback on these factors will be considered in developing an exposure draft.
Development of Other Projects
Our staff provided an update on the progress of other projects:
- The Conceptual Framework Task Force continues to deliberate on the responses to Consultation Paper 3, “Conceptual Framework Fundamentals and the Reporting Model.”
- The Public Private Partnerships Task Force was formed. We thank all individuals that expressed an interest in this volunteer opportunity.
- Both the Employment Benefits and the Public Private Partnerships Task Forces held their inaugural meetings in March and April respectively. Both projects are underway.
The comment period of the Exposure Draft, “Withdrawal of Disclosure of Related Party Transactions by Not-for-Profit Organizations, Section PS 4260,” closed in early May 2016. I would like to thank all stakeholders that responded and look forward to considering your comments in future meetings.
PSA Discussion Group
The Public Sector Accounting (PSA) Discussion Group met on March 3, 2016. Topics covered included:
- professional judgement;
- the definition of government in relation to applying reporting entity standards to First Nations trusts;
- accounting for endowments by government organizations; and
- comparing the hedging provisions within the Canadian public and private sector financial instruments standards with the international private sector standard.
A report on the public meeting will be posted online shortly.
The next meeting will be held on November 18, 2016. Individuals are encouraged to submit issues relating to the application of the PSA Handbook by September 23, 2016.
Participate in PSAB’s Survey
We are seeking stakeholder feedback to assess our performance and identify areas of improvement. Be sure to let us know your views by responding to the 2016 Stakeholder Survey on PSAB’s Performance by July 1, 2016.
I would like to thank members France Alain and Murray Lindo for their valuable contributions to standard setting through their service with PSAB over the years.
Rod Monette, FCPA, FCA
Chair, Public Sector Accounting Board