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Public Sector Accounting Standards

Narrow Scope Amendment: GAAP Designation of PSA Handbook Appendices

Summary

PSAB is proposing to assign a higher level of authority under GAAP to four application guidance Public Sector Accounting (PSA) Handbook Appendices.

  1. Appendix A to Section PS 3400, Revenue;
  2. Appendix B to Section PS 3410, Government Transfers;
  3. Appendix A to Section PS 3450, Financial Instruments; and
  4. Appendix A to Section PS 4270, Disclosure of Allocated Expenses by Not-for-Profit Organizations.

Staff Contact(s)

Martha Jones Denning, CPA, CA Associate Director, Public Sector Accounting Board

Project Status

  • Information gathering

    Completed through responses to the 2022-23 Annual Improvements Exposure Draft

  • Approving project

    Approved at same time as Exposure Draft in December 2023

  • Consulting stakeholders

    PSAB issued its Exposure Draft, “Narrow Scope Amendment: GAAP Designation of PSA Handbook Appendices”, in February 2024

  • Deliberating feedback

    PSAB is currently deliberating feedback on the Exposure Draft

  • Final pronouncement

News


February 8, 2024

Document for Comment

Exposure Draft Issued: PSAB Proposes to Assign Higher Authority to Four Application Guidance Appendices

In its narrow-scope amendment Exposure Draft, GAAP Designation of PSA Handbook Appendices, PSAB proposes to assign a higher level of authority under GAAP to four application guidance PSA Handbook Appendices. Tell us if you agree with the amendments and submit your feedback by April 11, 2024.

Meeting & event summaries


December 7, 2023

PSAB Decision Summary – December 7, 2023

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:

  1. Appendix A to Section PS 3400, Revenue;
  2. Appendix B to Section PS 3410, Government Transfers;
  3. Appendix A to Section PS 3450, Financial Instruments; and
  4. 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.

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 voting process.