Message from the Chair – November 2016

September 2016 PSAB Meeting

Rod MonetteI am pleased to let our stakeholders know that most of our projects are either reaching or approaching key milestones. We approved a document for comment on employment benefits and the withdrawal of Section PS 4260, Disclosure of Related Party Transactions by Not-for-Profit Organizations.

Asset Retirement Obligations

We considered the remaining issues related to finalizing an exposure draft for PSAB’s consideration, set for approval at our next meeting, including:

  • whether the scope of the proposed standard should be limited to legal obligations only;
  • how to account for asset retirement costs associated with fully amortized, non-depreciable and unrecognized tangible capital assets; and
  • whether asset retirement obligations should be accounted for at the component or network level.

Concepts Underlying Financial Performance

With regards to the Concepts Underlying Financial Performance project, our focus was on the reporting model.  We received an analysis of the reporting models of various standard setters and discussed a model recommended by the Conceptual Framework Task Force. Given the complexity and implications of the subject matter, we plan to continue the discussion at our next meeting. 

Employment Benefits

The issues to be addressed in the Employment Benefits project are complex and controversial. We decided to undertake this project in phases to facilitate a thorough consideration of the key issues. We will address the deferral provisions and discount rate guidance in the standards in Phase I, and the non-traditional plans and other issues in Phase II.

We approved the first document of this project, an invitation to comment, “Employment Benefits: Deferral Provisions in Sections PS 3250 and PS 3255.” This document does not cover all aspects of Phase I. A separate document on discount rates will be issued in 2017. A key objective of issuing this invitation to comment document is to seek stakeholder input prior to PSAB establishing its own preliminary views on the issues. The document is expected to be issued shortly and we look forward to receiving your comments.

Financial Instruments Standard

Staff met with stakeholders across the country to understand the challenges in applying Section PS 3450, Financial Instruments. We received a report summarizing these consultations, which resulted in a better understanding of the challenges.

We requested that staff develop a work plan that considers a hedge accounting option, for discussion at our next meeting.  The work plan is a way to evaluate what would be involved from a technical and resource perspective to address the feedback received from stakeholders prior to making any decisions.  We realize that such an undertaking can be affected by the Concepts Underlying Financial Performance project and requested staff to take this into consideration in developing the work plan.

Public Private Partnerships

We considered key principles developed by the Public Private Partnerships Task Force when accounting for public private partnership arrangements such as scope, asset recognition and measurement.  We provided feedback to the Task Force for consideration when developing the statement of principles.


We provided feedback on the key principles that will be outlined in the exposure draft for our consideration at the December 2016 meeting.  We also reviewed the issues raised in the responses to the Statement of Principles, “Revenue,” and how the Revenues Task Force proposes to address them. 

Standards for Not-for-Profit Organizations

We reviewed responses to the Exposure Draft, “Withdrawal of Disclosure of Related Party Transactions by Not-for-Profit Organizations, Section PS 4260.”  We approved the withdrawal of Section PS 4260, Disclosure of Related Party Transactions by Not-for-Profit Organizations.  As a result, those not-for-profit organizations that follow the PS 4200 series will apply Section PS 2200, Related Party Disclosures, which becomes effective for fiscal years beginning on or after April 1, 2017.

Information about how PSAB addressed the issues raised by respondents can be found in the Basis for Conclusions document that will be issued when the approved changes are made in the CPA Canada Public Sector Accounting Handbook.

International Public Sector Accounting Standards

We received a presentation from the Chair of the International Public Sector Accounting Standards Board on the adoption of International Public Sector Accounting Standards globally, including the nature and extent of their adoption, their experience, challenges and opportunities.  This presentation will be helpful when we discuss our international strategy at our next meeting.

Other Developments

Rate-regulated Activities

Accounting Standards Board staff published a research paper on rate-regulated activities for the Accounting Standards Advisory Forum to further the work of the International Accounting Standards Board’s project on rate-regulated activities. The paper depicts the Canadian rate-regulated landscape and examines the decision-usefulness of financial information that reflects the economics of rate-regulated activities. This paper might be of interest to government business enterprises that have rate-regulated activities.

CPA Canada Volunteer Awards

I would like to congratulate Michael Ferguson and Nickie Young, the nominees for the standards category of the 2016 CPA Canada Volunteer Award. This award recognizes the commitment and extraordinary contributions made by volunteers to independent standard setting in Canada. Both Michael, a current PSAB member and former member of various task forces, and Nickie, a former PSAB Chair and member and a current member of the Conceptual Framework Task Force, are long-time volunteers supporting public sector standard setting.

Thank you Michael and Nickie for your dedication and extraordinary contributions to standard setting!

Rod Monette, FCPA, FCA
Chair, Public Sector Accounting Board