In conjunction with the decision to move forward with Section PS 3450, Financial Instruments, the Public Sector Accounting Board (PSAB) will also investigate three non-hedge accounting issues brought forward by stakeholders during recent consultations.
The objective of this project is to develop options for PSAB to address the following:
- Accounting treatment of a bond repurchase
The current standard states that, when a public sector entity acquires its own bond from the market, this transaction should be treated as an extinguishment. PSAB is investigating alternatives to this treatment.
- Scope exclusion of certain activities by the Federal government
Section PS 2601, Foreign Currency Translation, excludes foreign exchange balances “intended to sustain foreign exchange reserves and orderly conditions in the foreign exchange market for the Canadian dollar or to provide assistance to foreign countries.” PSAB is investigating whether derivatives that are used as part of such activities should be excluded from the scope.
- Improvements to transitional provisions
Several improvements to the transitional provisions of Section PS 3450, Financial Instruments, were proposed in the Exposure Draft, Financial Instruments: Transition, issued in 2014. PSAB is revisiting these improvements to ensure they remain appropriate.