PSA Handbook Terminology

BACKGROUND

Application of sections in the CPA Canada Public Sector Accounting (PSA) Handbook for government organizations that previously followed the CPA Canada Handbook – Accounting and were directed to adopt the PSA standards need to be considered.

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The PSA Handbook was originally written primarily for government summary financial statements. The term “government” is used throughout the PSA Handbook.

This project will update terminology in the PSA Handbook to clarify standards and guidance that are applicable to public sector entities, which will be specifically defined in the Introduction to the Public Sector Accounting Standards.

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PROJECT NEWS & DECISION SUMMARIES

Basis for Conclusions – Amendments to the Introduction
December 1, 2014. This document sets out how PSAB reached its conclusions. As well, it sets out significant matters arising from comments received in response to its Exposure Draft and indicates how the Board dealt with the issues raised.

PSAB Decision Summary – September 15-16, 2014
PSAB reviewed responses to its Exposure Draft, “Amendments to the Introduction.” There was general support among the respondents for the proposed amendments. After discussing responses and the changes being proposed to the existing Introduction, PSAB approved final amendments to the Introduction to Public Sector Accounting Standards.

Re-exposure Draft – Amendments to the Introduction
February 3, 2014. PSAB has issued an Exposure Draft that proposes to add transitional provisions for government components and government partnerships and amend the set of standards to be followed by non-business government partnerships. Stakeholders are encouraged to submit their comments, on the form provided, by April 30, 2014.

PSAB Decision Summary – December 12-13, 2013
PSAB approved a re-exposure draft proposing amendments to the Introduction to Public Sector Accounting Standards.

The changes made to the Exposure Draft, “Amendments to the Introduction,” issued in February 2013:

  • require all public sector entities that apply standards in the CPA Canada Public Sector Accounting (PSA) Handbook to apply Section PS 1150, Generally Accepted Accounting Principles, where the standards are silent on an issue;
  • allow government partnerships between public sector entities that are not government business partnerships to apply standards in the PSA Handbook or standards applicable to publicly accountable enterprises in the CPA Canada Handbook — Accounting; and
  • include transitional provisions for government components and government partnerships.

PSAB Decision Summary – September 23-24, 2013
PSAB discussed the implications of including government components in the Introduction to Public Sector Accounting Standards. These discussions will continue at future meetings.

PSAB Decision Summary – June 12-13, 2013
PSAB reviewed responses to its Exposure Draft and requested further analysis on specific issues to be considered at the September 2013 meeting.

Exposure Draft – Amendments to the Introduction
February 6, 2013. PSAB has issued an Exposure Draft that proposes adding a definition of a government component and directing certain government partnerships to follow different accounting standards given their structure and nature of operations. Stakeholders are encouraged to submit their comments, on the form provided, by May 3, 2013.

PSAB Decision Summary – December 13-14, 2012
PSAB approved an exposure draft proposing amendments to the Introduction to Public Sector Accounting Standards and consequential amendments to other Sections. The exposure draft proposals:

  • amend the definition of a government organization to exclude entities that are component parts of a government and define a government component;
  • provide additional guidance on which standards government components and government organizations would follow;
  • provide guidance on which standards government partnerships would follow;
  • define general purpose and special purpose financial statements; and
  • clarify that the PSA Handbook does not require government components, government organizations or government partnerships to prepare general purpose financial statements.

PSAB Decision Summary – September 20-21, 2012
PSAB continued its discussion on the applicability of the CICA Public Sector Accounting (PSA) Handbook to entities that are integral to governments such as a government department or ministry. The Board concluded that parts of government that are not government organizations should follow the accounting policies of their government (i.e., the PSA Handbook) amended, where appropriate, for policies that reflect their nature as being part of a larger integrated entity when they prepare general purpose financial statements.

The Board reviewed a draft exposure draft proposing amendments to the Introduction to the Public Sector Accounting Standards and requested staff to reflect its discussion in a revised issues analysis document. The Board expects to approve the final text of the exposure draft and issues analysis document in late October or early November 2012.

PSAB Decision Summary – June 26-27, 2012
PSAB confirmed its previous view that government departments and ministries are integral to the operations of government and are not government organizations. Guidance in the CICA Public Sector Accounting (PSA) Handbook was not developed to specifically address the reporting needs of government departments and ministries and some application issues have been brought to PSAB’s attention.

PSAB has two active projects, related party transactions and appropriations, which address accounting and reporting issues relevant to government departments and ministries. Completion of these two projects will add new guidance to the PSA Handbook applicable to government departments and ministries. In the future, the Board also recognized that it may need to reconsider the applicability of the PSA Handbook to government departments and ministries that are required or choose to prepare general purpose financial statements.

PSAB requested that staff reflect these conclusions in a revised exposure draft for its consideration at its September 2012 meeting.

PSAB Decision Summary – March 21-23, 2012
At its December 2011 meeting, PSAB discussed a concern over whether there is a need to distinguish certain government organizations (such as departments and ministries) from other government organizations. PSAB considered an analysis of the issue and deliberated the alternatives at this meeting.

PSAB requested staff to prepare an exposure draft proposing amendments to the Introduction to Public Sector Accounting Standards for its consideration at the June 2012 meeting. The amendments will clarify the definition of a government organization including whether public sector entities (such as departments and ministries, for example) are government organizations or are part of government. The amendments will also address whether government partnerships are within the scope of the public sector and, if so, the appropriate basis of GAAP to be followed.

PSAB Decision Summary – December 15-16, 2011
PSAB reviewed responses received to the Exposure Draft that set out Phase I of the proposals to update the terminology in the PSA Handbook to more explicitly include government organizations in the wording of the individual Sections of the PSA Handbook.

A recurring theme in PSAB discussions is a concern over whether there is a need to distinguish certain government organizations, such as departments and ministries, from other government organizations. PSAB asked staff to consider the implications of making this distinction. An analysis of the issues will be considered at the March 2012 meeting.

PSAB Decision Summary – June 23-24, 2011
PSAB approved an exposure draft of proposed updates to the terminology used in the Public Sector Accounting (PSA) Handbook.  The updates form part of a review of the PSA Handbook to explicitly indicate the applicability of individual standards to both governments and those government organizations that follow the PSA Handbook.  

The PSA Handbook was originally developed to address the financial reporting needs of governments in Canada. The terminology used in many of the standards still indicates that they are applicable to governments preparing their summary financial statements.

Some government organizations now follow the PSA Handbook. A number of additional government organizations will be adopting the PSA Handbook for the first time in 2011 and 2012 due to recent amendments to the Introduction to Public Sector Accounting Standards.

PSAB staff conducted a review of the PSA Handbook and, in most cases, concluded that only a simple update of terminology (for example, from “government” to “public sector entity”) was needed, in addition to defining the term “public sector entity” in the Introduction to mean both governments and government organizations.  However, for some standards, more in-depth consideration of how the text should be updated to explicitly include government organizations is needed and these updates will be exposed for public comment in the future.  

It is expected the exposure draft will be issued for comment in July 2011 with comments due by September 30, 2011.

PSAB Decision Summary – March 24-25, 2011
PSAB discussed a project for enhancing the completeness of the PSA Handbook for government organizations. As a result of recent changes to the basis of GAAP to be followed by different types of government organizations, a number of organizations that previously followed the CICA Handbook – Accounting (Part V) will be adopting the PSA Handbook in 2011 and 2012.

The intent is to identify the accounting topics currently covered in the CICA Handbook – Accounting that are not addressed in the PSA Handbook and consider their relevance for governments and government organizations. PSAB also approved the recruitment of an advisory group that will assist staff in the identification and prioritizing of topics not covered in the PSA Handbook of relevance to governments and government organizations.

In addition, as the PSA Handbook was originally written for governments, the project would update the terminology in the PSA Handbook to explicitly include government organizations, where appropriate. PSAB requested staff to review the terminology used throughout the PSA Handbook and prepare an exposure draft for PSAB’s consideration at its June 2011 meeting.

 

Disclaimer: This project summary has been prepared for information purposes only. Decisions reported are tentative and reflect only the current status of discussions on this project, which may change after further Board deliberations. Decisions to publish Handbook material are final only after a formal ballot process.