This summary of decisions of the Public Sector Accounting Board (PSAB) has been prepared for information purposes only. Decisions reported are tentative and reflect only the current status of discussions on projects, which might change after further deliberations by PSAB. Decisions to publish exposure draft and Handbook material are final only after a formal ballot process. For more information, please contact Michael Puskaric, Director at PSAB at [email protected].
Due Process Review
PSAB reviewed and provided feedback on changes to its governing documents (i.e., Terms of Reference, Statement of Operating Procedures, and the Due Process Manual). The revised governing documents will be presented to the Accounting Standards Oversight Council in early 2024.
GAAP Designation of Appendices
PSAB approved an exposure draft proposing narrow-scope amendments to elevate the level of generally accepted accounting principles (GAAP) designated for four CPA Canada Public Sector Accounting (PSA) Handbook appendices:
- Appendix A to Section PS 3400, Revenue;
- Appendix B to Section PS 3410, Government Transfers;
- Appendix A to Section PS 3450, Financial Instruments; and
- Appendix A to Section PS 4270, Disclosure of Allocated Expenses by Not-for-Profit Organizations.
A GAAP designation is the relative level of authority assigned to a pronouncement. GAAP designations are identified in Generally Accepted Accounting Principles, paragraph 1150.03(d), and together are generally termed the “GAAP hierarchy.” The GAAP hierarchy sets out the levels of primary sources of GAAP in descending order of authority, with standards in Sections PS 1202-PS 3510 having the highest level of authority (level i), followed by Public Sector Guidelines (level ii) and then appendices and other illustrative material of those pronouncements (level iii).
Application guidance describes how the principles established in the main body of a standard apply to specific types of items, transactions, and other events. The location of such guidance in an appendix is merely structural. It is solely to allow the main principles to be clear in the standard, with specifics on application of the standards in the appendix. In all cases addressed in the exposure draft, PSAB intended the application guidance to be applied with the same authority as the principles in the main body of the standard.
The exposure draft is also proposing a change to the final box in the decision tree in Appendix B to Public Sector Guidance (PSG) 2, Leased Tangible Capital Asset, to remove an outdated cross-reference to Section 3065, Leases, in former Part V of the CPA Canada Handbook. Part V has since been removed from the Handbook.
The exposure draft is expected to be published in early February 2024, with a response due date of April 11, 2024. PSAB will be encouraging interested and affected parties to respond using the Connect platform, given the proposals and questions in the exposure draft are straightforward; however, response letters are always acceptable too. The suggested effective date of the proposals is fiscal years beginning on or after April 1, 2026.
2023-2024 Performance Report and 2024-2025 Annual Plan
PSAB reviewed and provided feedback on the 2023-2024 Interim Performance Report and the 2024-2025 Draft Annual Plan, including the Risk Assessment. Final versions will be presented for approval at PSAB’s March 2024 meeting.
IPSASB Strategy and Work Plan Consultation
PSAB reviewed and discussed the draft response to the International Public Sector Accounting Sector Board’s (IPSASB) “Strategy and Work Program 2024-2028: Consultation.” PSAB will approve the finalized response at its February 2024 meeting and will publish it on its website once submitted to the IPSASB.