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PSAB Decision Summary – March 30-31, 2023

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].

Annual Report 2022-2023 & Annual Plan 2023-2024

PSAB approved the Annual Report 2022-2023 and the Annual Plan 2023-2024.

Financial Statement Presentation Standard ("Reporting Model")

The Board approved:

  • Section PS 1202, Financial Statement Presentation;
  • the consequential amendments arising from Section PS 1202 to various Sections of the PSA Handbook; and
  • the accompanying Basis for Conclusions document.

The Reporting Model contained in Section PS 1202:

  • is consistent with PSAB’s new Conceptual Framework;
  • builds on the Reporting Model in Section PS 1201, Financial Statement Presentation; and
  • provides the public with understandable information for accountability purposes.

This is a significant milestone for PSAB and the Canadian public sector. The Board thanks affected and interested parties for their input in creating a Canadian-specific Reporting Model and its Concepts Underlying Financial Performance Task Force for its dedication and hard work in creating the high-quality Financial Statement Presentation Standard.

Section PS 1202 will be effective for fiscal years beginning on or after April 1, 2026. Earlier adoption is permitted only if the Conceptual Framework is also adopted at the same time.

Major principles included in the 2021 Exposure Draft, “Financial Statement Presentation, Proposed Section PS 1202,” have been retained. Changes made were to add clarity or improve/refine principles based on feedback from interested and affected parties. Some of the notable amendments include:

  • refined the going concern discussion to consider Section PS 3430, Restructuring Transactions;
  • clarified that external restrictions may impact an asset’s classification as financial or non-financial;
  • provided additional guidance, decision trees, and illustrative examples for liability classification, specifically in relation to unearned revenue liabilities;
  • included an option to present the net financial assets/liabilities indicator at the bottom of the statement of financial position;
  • removed the requirement to explain the net financial assets/liabilities indicator on the statement of net financial assets or net financial liabilities;
  • provided additional guidance for certain budget requirements;
  • clarified that the budget requirements relate to the budget amounts presented for comparison purposes in the financial statements;
  • incorporated the principles approved through the Financial Instruments - Narrow Scope Amendments project, as the amendments were approved after the Reporting Model Exposure Draft was issued; and
  • adjusted the effective date to April 1, 2026.

Section PS 1202 and the related consequential amendments will be included in the CPA Canada Public Sector Accounting (PSA) Handbook in October 2023. The Basis for Conclusions, explaining PSAB’s reasoning on key project issues, will be published in the PSA Handbook in November 2023.

A comprehensive package of plain-language documents and non-authoritative guidance will be issued to help interested and affected parties better understand Section PS 1202.

Technical Advisory Group (TAG)

The Technical Advisory Group (TAG) will be created to support the implementation of PSAB’s International Strategy. The Board approved the Terms of Reference for the TAG. A call for volunteers to join the Group is expected in the Spring of 2023.

Indigenous Advisory Group (IAG)

An Indigenous Advisory Group (IAG) is being created to assist in better understanding Indigenous issues and perspectives relating to financial and other reporting matters and consistent with the strategies in the Board’s 2022-2027 Strategic Plan. PSAB approved the Terms of Reference for the IAG. A call for volunteers to join the Group is expected in the Spring of 2023.

Employee Benefits

PSAB provided further feedback on the analysis of the responses to the July 2021 Exposure Draft, “Employee Benefits, Proposed Section 3251.” The Board provided its feedback on technical and other topics of the project’s first phase, including:

  • Category-wide plans
  • Sufficient information

The Board supported amending the project timelines. Further discussion on the revised timeline for the project will occur at a future meeting.