Message from the Chair – January 2016
As we enter into 2016, on behalf of PSAB, I want to thank stakeholders for your support in 2015. We look forward to working with you in the new year.
December 2015 PSAB Meeting
We have made progress on the following projects and initiatives.
PSAB’s Strategic Plan
PSAB presented its draft 2016-2019 strategic plan to the Accounting Standards Oversight Council (AcSOC) in October 2015. To allow sufficient time for proper consultation, AcSOC advised PSAB to consider extending its 2013-2016 Strategic Plan for a year. PSAB agreed with the extension and developed a draft 2017-2020 strategic plan to present to AcSOC in February 2016.
Concepts Underlying Financial Statements
PSAB received a high-level summary of the responses to Consultation Paper 3, “Conceptual Framework Fundamentals and the Reporting Model.” Preliminary analysis by the Conceptual Framework Task Force indicates that there is general support for a number of the fundamental concepts. PSAB discussed a few areas that received less support and considered alternatives identified by the Task Force to address them. PSAB provided initial feedback on those options.
The Task Force will continue with their analysis of the responses and development of options to address them. The Task Force thanks respondents to the Consultation Paper for sharing their views on the proposals.
PSAB completed its post-implementation review of Section PS 3410, Government Transfers. The findings of the review confirmed the earlier indications that the primary areas of concern are recipient accounting for capital transfers and the role of “authority to pay”. Stakeholders generally did not have major issues with the implementation of other changes or guidance in the standard. They indicated that the definitions of, and the distinction between, eligibility criteria and stipulations are particularly helpful.
PSAB planned to finalize a feedback statement to be posted online and discuss what it should do in response to the findings in the review at its March 2016 meeting. PSAB thanks respondents to its Request for Information by sharing their implementation experience and challenges.
Financial Instruments and Foreign Currency Translation Standards
PSAB staff highlighted the similarities and differences between PSAB’s foreign currency translation and financial instruments standards and the equivalent Canadian and international private sector standards with applicable public sector examples.
PSAB believes that it would be most productive for staff to meet with stakeholders from the senior government treasury and preparer communities to present these comparisons and to understand how their specific transactions fit into these standards. These outreach activities will be scheduled in early 2016.
Public Private Partnerships
Public Private Partnerships was identified as a high-priority project by stakeholders in PSAB’s 2014 Project Priority Survey. PSAB approved a project proposal to develop a standard on this topic. This project will focus on defining the scope of the proposed standard and developing guidance for public sector entities as the grantor.
A task force will be recruited to help develop the standard. A recruitment notice will be posted online in early 2016. PSAB invites stakeholders who have experience, expertise and interest in public private partnerships to apply for this volunteer opportunity.
PSAB recently balloted an exposure draft proposing withdrawal of Section PS 4260, Disclosure of Related Party Transactions by Not-for-Profit Organizations, and amendments to the transitional provisions in Section PS 2200, Related Party Disclosures, for not-for-profit organizations (NFPOs) applying the PSA Handbook including the PS 4200 series.
This exposure draft was approved in principle in June 2015, along with a project plan to improve standards for NFPOs in the public sector. PSAB encourages stakeholders to respond to this exposure draft, which is expected to be issued in early 2016.
Development of Other Proposed Standards
PSAB staff provided an update on the progress of its Revenue and Asset Retirement Obligations task forces in addressing issues identified in the statements of principles. PSAB’s Employment Benefits Task Force is also scheduled to meet in the first quarter of 2016.
PSA Discussion Group
The Public Sector Accounting (PSA) Discussion Group met on October 27, 2015. Topics covered included:
- vacation paid in the year of retirement;
- acquisition and development of software associated with cloud computing;
- liability for contaminated sites; and
- standard setting in the public interest.
A Report on the public meeting will be posted shortly. The next meeting will be held on March 3, 2016. Stakeholders are welcome to observe at the meeting. Registration prior to the meeting is required.
New PSAB Staff
I am happy to announce that we will have a new Director of Public Sector Accounting, Michael Puskaric, joining us in January 2016 to replace Tim Beauchamp. Tim kindly agreed to extend his retirement until early February 2016 to ensure a smooth transition.
PSAB staff resources have grown over the last few months with two new principals, Dave Warren and Umar Saeed, joining the team. This enables PSAB to undertake the Public Private Partnerships project and address implementation issues with its various standards.
On behalf of PSAB and staff, I would like to welcome Michael, Dave and Umar to the team.
Last but not least, I would like to express my sincere thanks to Tim for his tremendous contribution to public sector standard setting and the adoption of accrual accounting by all levels of governments in Canada. His counsel and support to PSAB will be greatly missed. I wish him the very best in his retirement.
Rod Monette, FCPA, FCA
Chair, Public Sector Accounting Board