Narrow Scope Amendment – Purchased Intangibles


As a result of stakeholder feedback received, PSAB was asked to revisit the validity of the prohibition against recognizing purchased intangibles in public sector financial statements

Key stakeholder feedback includes:

  • At its April 26, 2019 Public Sector Accounting Discussion Group (PSA DG) meeting, PSA DG members suggested that PSAB consider a narrow scope amendment.
  • Input received in response to the 2018 conceptual framework and reporting model documents for comment supported PSAB relocating the recognition prohibitions from the conceptual framework to the standards level. Some urged PSAB to remove them entirely.
  • Input received at the 2018 AFOA conference told PSAB how significant this issue is for Indigenous governments and how the prohibition was distorting their financial position.
  • PSAB stakeholders have asked why purchased intangibles acquired through an exchange transaction cannot be recognized in public sector financial statements as they are measurable at the price in the transaction.

Staff Contact(s)

Martha Jones Denning, CPA, CA

Principal, Public Sector Accounting Board

Project Status

  • Information gathering

    Input received from stakeholders in response to documents for comment and during consultations.

  • Approving project

    PSAB approved the project at its June 2019 meeting.

  • Consulting stakeholders

    PSAB approved an Exposure Draft is at its September 2019 meeting as the first document for comment in this project.

  • Deliberating feedback

    PSAB is deliberating the feedback received on the Exposure Draft. The Board will consider next steps in the project at its June and September 2020 meetings.

  • Final pronouncement

Meeting & event summaries

November 15, 2019

PSAB’s September 26-27, 2019 Decision Summary Narrow Scope Amendment Purchased Intangibles

PSAB approved an exposure draft that proposes to remove the exclusion in the conceptual framework prohibiting recognition of purchased intangibles in financial statements. The exposure draft proposes allowing recognition of intangibles purchased through an exchange transaction. Removing the recognition prohibition on purchased intangibles would address a material imbalance in the statements of financial position of many Indigenous governments that finance the purchase of commercial fishing (and other) licenses with debt but cannot currently recognize the licenses as assets. The proposal may also have implications for other public sector entities that purchase intangibles.

Similar to the current situation for purchased Crown lands and purchased natural resources, no guidance on how to account for purchased intangibles is proposed. For now, reference to the asset definition, the general recognition criteria and the GAAP hierarchy is expected. Accounting for these items may be the subject of future PSAB projects.


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.