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Public Sector Accounting Standards

Financial Instruments – Narrow Scope Amendments

Summary

In response to feedback received from the Canadian Council of Comptrollers, the Public Sector Accounting Board (PSAB) will develop additional narrow scope amendments to address specific concerns raised.

The objective of this project is to review the following topics:

  • Presentation of the fair value of derivatives;
  • Presentation of certain foreign exchange gains/losses and changes in the fair value of associated derivatives; and 
  • Accounting for rate-setting transactions.  

In connection with this project, PSAB also previously approved the following amendments:

  • Financial Instruments - Narrow Scope Amendments; and 
  • Financial Instruments - Federal Government Narrow Scope Amendments.

Staff Contact(s)

Lauren Pennycook, CPA, CA Principal, Public Sector Accounting Board

Phone number  +1 416 204 2950
Email address  [email protected]

Project Status

  • Information gathering

    Completed between 2016–2018 and 2020

  • Approving project

    Narrow scope amendments project approved by PSAB in March 2018

    Additional narrow scope amendments approved by PSAB in April 2020

  • Consulting stakeholders

    Financial Instruments Advisory Group established September 2018

    The Financial Instruments – Narrow Scope Amendments Exposure Draft issued in January 2019

    The Financial Instruments – Federal Government Narrow Scope Amendments Exposure Draft issued in January 2020

    The Financial Instruments – Presentation Narrow Scope Amendments Exposure Draft issued in July 2020

    The Financial Instruments – Foreign Exchange Narrow Scope Amendments Exposure Draft issued in July 2020

  • Deliberating feedback

    PSAB reviewed stakeholder feedback on the Financial Instruments – Narrow Scope Amendments Exposure Draft in December 2019

    PSAB reviewed stakeholder feedback on the Financial Instruments – Federal Government Narrow Scope Amendments Exposure Draft in July 2020

    PSAB reviewed stakeholder feedback on the Financial Instruments – Presentation Narrow Scope Amendments and Financial Instruments – Foreign Exchange Narrow Scope Amendments in December 2020

  • Final pronouncement

    The final amendments for the Financial Instruments – Narrow Scope Amendments were issued in the PSA Handbook in March 2020

    The final amendments for the Financial Instruments – Federal Government Narrow Scope Amendments were issued in the PSA Handbook in October 2020

    The final amendments for the Financial Instruments – Presentation Narrow Scope Amendments and Financial Instruments – Foreign Exchange Narrow Scope Amendments were issued in the PSA Handbook in April 2021

Meeting & event summaries

July 8, 2021 PSAB Decision Summary – June 29, 2021 and July 8, 2021

PSAB received the Financial Instruments Advisory Group’s overview, comprehensive analysis, and recommendation on rate-setting transactions, as part of the Financial Instruments – Narrow-scope Amendments project.

PSAB accepted the Financial Instruments Advisory Group’s recommendation not to proceed with an exposure draft on the accounting for rate-setting transactions. The Board made this decision on the basis that the amendments required to permit such transactions within public sector accounting standards could not be accommodated through the narrow-scope-amendment mandate. The extensive changes required to accommodate rate-setting transactions were inconsistent with the Board’s due process for narrow-scope amendments and could introduce principles inconsistent with previously approved decisions in the development of the financial instruments suite of standards.

This completes the Financial Instruments – Narrow-scope Amendments project prior to its effective date for fiscal years beginning on or after April 1, 2022. PSAB will continue to monitor and review the accounting for the financial instruments suite of standards, including rate-setting and other financial risk management activities. In accordance with its due process, approximately two years after the implementation of these new standards, the Board will assess whether a post-implementation review of the financial instruments suite of standards should be performed.

December 9, 2020 PSAB Decision Summary – December 9, 2020

PSAB approved the following narrow-scope amendments:

  • Financial Instruments, Presentation Narrow-scope Amendments; and
  • Financial Instruments, Foreign Exchange Narrow-scope Amendments.  

These amendments will be effective for fiscal years beginning on or after April 1, 2022.

These amendments will be reflected in the PSA Handbook in spring 2021.

July 3, 2020 PSAB Decision Summary – July 3, 2020

At its recent meeting, the Board discussed the Financial Instruments – Narrow Scope Amendments project and its Basis for Conclusions on its International Strategy decision. Read the Decision Summary for full details.

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.