Message from the Chair – July 2017
June 2017 PSAB Meeting
Our June meeting marks the end of my five-year term as Chair. And with that, my last Chair’s message.
Before getting into the details of our meeting, I want to thank everyone who I’ve worked with as a Public Sector Accounting Board (PSAB) member and Chair over the years. It was an honour and privilege to make a contribution to Canadian standard setting. I can also say that PSAB is in good hands with its new Chair, Charles-Antoine St-Jean.
Our June meeting had a full agenda. Many items were discussed. We continued to make progress on key projects.
Concepts Underlying Financial Performance
We continued to discuss and review the proposed conceptual framework, chapter by chapter. During this meeting we considered what the elements of financial statements, such as asset, liability, revenue and expense, should be and how they should be defined. We provided our feedback to the Conceptual Framework Task Force.
Some time has passed since Consultation Paper 3 was issued for comment. Both the Task Force and PSAB are working diligently during this time, reviewing and deliberating the feedback from stakeholders to develop a conceptual framework and reporting model appropriate for the public sector.
The Employment Benefits Task Force has been developing an invitation to comment (ITC) on discount rates. We received a presentation on the issues related to developing discount rate guidance for estimating accrued benefit obligation. We provided our feedback to the Task Force in the approach to the ITC, which is expected to be approved in September and issued in the fall.
We also considered options for accelerating the project and the related risks. We reprioritized the work related to the project and have provided direction to streamline the process.
Financial Instruments Standard
At our December 2016 meeting, we asked staff to consult with entities that have already adopted Section PS 3450, Financial Instruments. Our intention was to understand their implementation experience in order to inform our future decisions on the standard. At this meeting, we received an update on the consultations with these entities.
We provided feedback to staff on the development of a project plan for our international strategy. We expect a project plan to be presented at our September meeting.
We discussed a consultation project plan related to government not-for-profit organizations. The purpose of the consultation is to better understand the fiscal and regulatory environment these organizations operate in and their financial reporting needs. At our December meeting we expect to receive a report summarizing these consultations.
Public Private Partnerships
We approved a statement of principles that provides accounting and reporting principles for certain types of arrangements between public and private sector entities.
Public private partnership arrangements are becoming more common in the public sector. Canadian jurisdictions have over 250 projects representing more than $100 billion in capital investment — including highways, bridges, light rail transit, hospitals, schools and water-treatment facilities.
The statement of principles reflects proposals that provide guidance on certain types of public private partnership arrangements and would assist in:
- evaluating which party in the arrangement controls the infrastructure; and
- measuring the infrastructure.
PSAB’s 2016-2017 Annual Report
We issued our 2016-2017 Annual Report – Progress Through Collaboration, which highlights our key activities and accomplishments for the fiscal year ended March 31, 2017.
The Accounting Standards Oversight Council concluded that we had a successful year. We substantially achieved the key objectives set out in our 2016-2017 Work Plan and the long-term outcomes of our Strategic Plan.
PSAB’s 2017-2018 Work Plan
We issued a public version of our work plan for the year ending March 31, 2018. Our Work Plan sets out our key activities and project milestones for the year, which are aligned with the objectives in our 2017-2020 Strategic Plan.
PSA Discussion Group
We approved an update to the Terms of Reference of the Public Sector Accounting (PSA) Discussion Group. The current Terms of Reference indicate that the Group discuss issues arising from the application of the Public Sector Accounting Handbook. The new Terms of Reference would allow the Group to also discuss emerging issues or other issues requested by us. We realize that, based on topic submissions received, we need the role of the Group to evolve.
The next meeting of the Group will be held on November 17, 2017. This upcoming meeting will be live streamed. It will allow stakeholders outside of Toronto to observe the PSA Discussion Group meeting. Further details on the live streaming will be available closer to the date of the meeting.
Have Your Voice Heard
The comment period of PSAB’s Exposure Draft, “Revenue, Proposed Section PS 3400,” will end on August 15, 2017. We look forward to considering your views.
The feedback received from our 2016 Stakeholder Survey provided us with valuable information on how we can best meet your needs. A summary of this feedback can be reviewed in the article, Results of 2016 Stakeholder Survey.
New and Reappointed Board Members
I would like to welcome new PSAB members Clyde MacLellan, from the Office of the Auditor General of Canada, and Kim MacPherson, from the Office of the Auditor General of New Brunswick, who were appointed for three-year terms. I would also like to congratulate Andrew Newman who was reappointed as Vice-Chair of PSAB for a three-year term, and Bill Cox who was reappointed as a member for a three-year term.
Rod Monette, FCPA, FCA
Chair, Public Sector Accounting Board