2017-18 Financial Reporting Manual - …publications.gov.sk.ca/documents/11/82792-2016-17...

2017-18

Financial Reporting Manual

For School Divisions

Ministry of Education: Education Funding Branch

Last Updated: June 2018

School Division Financial Reporting Manual 2017-18

…page 1

APPENDIX C

PSAB - Summary of Standards, Guidelines and SORPs

The summary includes revisions up to and including release no. 45 (December 2016). This manual does not

include sections PS 4200 to PS 4270 standards pertaining to government not-for-profit organizations.

Appendix C-1.1: PSAB Revisions and New Standards – revision releases for future implementation

Appendix C-1.2: New standards to be implemented in 2017-18

Appendix C-2: Summary of PSAB Standards, Guidelines and SORPs

List of Public Sector Accounting Standards

Concepts & Principles (PS1000 – PS1300):

PS 1000 Financial Statement Concepts

PS 1100 Financial Statement Objectives

PS 1150 Generally Accepted Accounting Principles

PS 1201 Financial Statement Presentation

PS 1300 Government Reporting Entity

Financial Reporting (PS2100 – PS2700):

PS 2100 Disclosure of Accounting Policies

PS 2120 Accounting Changes

PS 2125 First-time Adoption

PS 2130 Measurement Uncertainty

PS 2200 Related Party Disclosures

PS 2400 Subsequent Events

PS 2500 Basic Principles of Consolidation

PS 2510 Additional Areas of Consolidation

PS 2601 Foreign Currency Translation

PS 2700 Segment Disclosures

Financial Statement Items (PS3041 – PS3510):

PS 3041 Portfolio Investments

PS 3050 Loans Receivable

PS 3060 Government Partnerships

PS 3070 Investments in Government Business Enterprises

PS 3100 Restricted Assets and Revenues

PS 3150 Tangible Capital Assets

PS 3200 Liabilities

PS 3210 Assets

PS 3230 Long-term Debt

PS 3250 Retirement Benefits

PS 3255 Post-employment Benefits, Compensated Absences and Termination Benefits

PS 3260 Liability for Contaminated Sites

PS 3270 Solid Waste Landfill Closure and Post-closure Liability

PS 3300 Contingent Liabilities

PS 3310 Loan Guarantees

PS 3320 Contingent Assets

PS 3380 Contractual Rights

PS 3390 Contractual Obligations

PS 3410 Government Transfers

PS 3420 Inter-entity Transactions

PS 3430 Restructuring Transactions

PS 3450 Financial Instruments

PS 3510 Tax Revenue


…page 2

Public Sector Guidelines

PSG-2 Leased Tangible Capital Assets

PSG-4 Funds and Reserves

PSG-5 Sale-Leaseback Transactions

PSG-7 Tangible Capital Assets of Local Governments

Public Sector Statements of Recommended Practice

SORP-1 Financial Statement Discussion and Analysis

SORP-2 Public Performance Reporting

SORP-3 Assessment of Tangible Capital Assets

SORP-4 Indicators of Financial Condition


…page 3

Appendix C-1.1: PSAB Revisions and New Standards PSAB revision releases for future implementation

Revision

Release

Revision Background Effective

Date

Implications

for School

Divisions

None


…page 4

Appendix C-1.2: New standards to be implemented in 2017-18 *Excludes revisions to PS 4200 series pertaining to government not-for-profit organizations

Revision

Release

Revision Background Effective

Date

Implications

for School Divisions

None


…page 5

Appendix C-2: Summary of PSAB Standards, Guidelines and SORPs

The summary includes revisions up to and including release no. 45 (December 2016). This

summary does not include sections PS 4200 to PS 4270 standards pertaining to government

not-for-profit organizations.

Source: CPA Canada Standards and Guidance Collection - Public Sector Accounting

Handbook

Caution: The summary below outlines the standards in place at a specific point in time, as

noted above. School divisions should be aware that PSAB is continually

evolving and new standards or changes to standards may occur at any time.

Public Sector Accounting Standards

PS 1000 Financial Statement Concepts

This section describes the concepts underlying the development and use of accounting

principles in government financial statements. Such financial statements are designed to

meet the common information needs of external users of financial information about a

government.

Content:

Purpose and scope

Context of government financial statements

Users and user information needs

Financial statement objectives

Benefit versus cost constraint

Qualitative characteristics

Elements of financial statements

Recognition

Measurement

PS 1100 Financial Statement Objectives

This section identifies and describes objectives of government financial statements that are

generally acceptable to the users and preparers of the statements. These objectives provide

the basis for determining standards of financial statement reporting and accounting principles

that are consistent with one another and appropriate for government. PSAB’s goal is to

improve government financial statements and enhance their comparability.

Content:

Purpose and scope

Role of objectives in standard setting

Government operations

Objectives of government financial statements

Appendix A – Unique characteristics of government


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PS 1150 Generally Accepted Accounting Principles

This section:

(a) establishes standards for financial reporting in accordance with generally accepted

accounting principles;

(b) describes what constitutes generally accepted accounting principles, and their sources;

and,

(c) provides guidance on sources to consult when selecting accounting policies and

determining appropriate disclosures, when a matter is not dealt with explicitly in the

primary sources of generally accepted accounting principles.

Content:

Purpose and scope

Definitions

Sources of GAAP

Transitional provisions

PS 1201 Financial Statement Presentation

This section establishes general reporting principles and standards for the disclosure of

information in government financial statements. The principles and standards are based on

the concepts underlying government financial statements in Financial Statement Concepts,

section PS 1000, and the objectives of government financial statements set out in Financial

Statement Objectives, section PS 1100.

Content:

Purpose and scope

General reporting principles

Standards of presentation and disclosure


Appendix A – Illustrative financial statements – federal, provincial and territorial

governments

Appendix B - Illustrative financial statements — local governments

PS 1300 Government Reporting Entity

This section defines the scope of the government reporting entity in terms of the

organizations whose financial affairs and resources would be included in government

financial statements and establishes standards on how to account for and disclose those

organizations in government financial statements. It also establishes standards on how to

account for and disclose portfolio investments and trusts under administration.

Content:

Purpose and scope

Defining the government reporting entity

Determining whether control exists

Accounting for government organizations

Accounting for portfolio investments

Disclosure

Trusts under administration


Appendix A – Applying the transitional provisions


…page 7

PS 2100 Disclosure of Accounting Policies

This section establishes disclosure standards on the accounting policies adopted by an entity

in the preparation and presentation of its financial statements. Accounting policies are the

specific accounting principles used by a reporting entity and the methods for applying those

principles.

Content:

Disclosure

Content

Presentation

PS 2120 Accounting Changes

This section establishes standards on how to account for and disclose:

(a) a change in an accounting policy;

(b) a change in an accounting estimate; and,

(c) a correction of an error relating to prior period financial statements.

Content:

Change in an accounting policy

Change in an accounting estimate

Correction of an error in prior period financial statements

Prior period adjustments

PS 2125 First-Time Adoption

The purpose of this section is to ensure that a government organization's first financial

statements, prepared in accordance with Public Sector Accounting Standards, contain high-

quality information that:

(a) is transparent for users of the financial statements and comparable over all periods

presented;

(b) provides a suitable starting point for accounting in accordance with Public Sector

Accounting Standards; and,

(c) can be generated at a cost that does not exceed the benefits to users.

Content:

Purpose and scope

Definitions

Recognition, measurement and presentation

Disclosure



…page 8

PS 2130 Measurement Uncertainty

This section establishes disclosure standards for measurement uncertainty arising from items

recognized or disclosed in financial statements. The disclosure standards in this section

supplement the standards in other sections.

Content:

Purpose and scope

Definitions

Disclosure


PS 2200 Related Party Disclosures

This section defines a related party and establishes disclosures required for related party

transactions.

Content:

Purpose and scope

Definitions

Identifying a related party

Disclosure


Appendix A - Decision tree – Scope of applicability

PS 2400 Subsequent Events

This section establishes standards on how to account for and disclose events occurring

between the financial statement date and the date of their completion. Financial statements

are prepared to reflect a government's financial position at a particular date and changes in

financial position for a period ended on that date. However, events occurring after the

financial statement date may indicate a need to adjust items or to make specific disclosures in

those statements. Therefore, in preparing financial statements, the implications and financial

effects of subsequent events would be considered.

Content:

Accounting treatment

PS 2500 Basic Principles of Consolidation

This section establishes standards on the basic principles of consolidation involved in

preparing government financial statements as required by Government Reporting Entity,

paragraph PS 1300.27. Additional consolidation issues such as accounting for governmental

units with non-controlling interests, acquisitions and sales of government investments in

governmental units, and accounting for the change in status of a governmental unit to a

government business enterprise, are dealt with in Additional Areas of Consolidation, section

PS 2510.

Content:

Purpose and scope

Definitions

Basic principles

Appendix A – Government reporting entity framework


…page 9

PS 2510 Additional Areas of Consolidation

This section establishes standards on the following consolidation issues that are rare or

require particular consideration:

(a) accounting for governmental units with non-controlling interests;

(b) acquisitions of governmental units;

(c) sales of government investments in governmental units; and,

(d) accounting for the change in status of a governmental unit to a government business

enterprise.

Content:

Purpose and scope

Definitions

Non-controlling interest

Acquisitions

Sale of all or part of a government's investment in a governmental unit

When a governmental unit becomes a government business enterprise


PS 2601 Foreign Currency Translation This section establishes standards on how to account for and report transactions that are

denominated in a foreign currency in government financial statements.

Content:

Purpose and scope

Definitions

Accounting

Presentation

Disclosure


PS 2700 Segment Disclosures

This section establishes standards on how to define and disclose segments in a government's

consolidated financial statements.

Content:

Purpose and scope

Defining segments

Identifying segments

Attributing items to segments

Segment accounting policies

Changes in segments

Disclosure



…page 10

PS 3041 Portfolio Investments

This section establishes standards on how to account for and report portfolio investments in

government financial statements. This section does not deal with accounting for derivatives.

Content:

Purpose and scope

Definitions

Accounting

Presentation and disclosure


PS 3050 Loans Receivable

This section establishes standards on how to account for and report loans receivable in

government financial statements. The standards apply to loans to borrowers outside of the

government reporting entity.

Content:

Purpose and scope

Definition

Loans to be repaid through future appropriations

Forgivable loans

Loans with significant concessionary terms

Recognition

Valuation

Write-offs

Recognition of interest revenue

Loan restructuring

Disclosure


Appendix A – Decision tree – Loans

PS 3060 Government Partnerships

This section defines a government partnership and establishes standards on how to account

for and report a government's interest in government partnerships in government financial

statements, regardless of the structures and forms under which the government partnership

activities take place. This section does not deal with accounting by the government

partnership itself.

Content:

Purpose and scope

Definitions

Elements that define a government partnership

Forms and structures of government partnerships

Accounting for the government's interest

Accounting for investments of assets


Appendix A – Types of government contractual arrangements


…page 11

PS 3070 Investments in Government Business Enterprises

This section establishes standards on how to account for and report investments in

government business enterprises in government financial statements by the modified equity

method of accounting. Government Reporting Entity, section PS 1300, specifies the

circumstances in which the modified equity method applies. This section outlines how to

apply the modified equity method to investments in government business enterprises. In

addition, this section addresses how to account for the change in status of a government

business enterprise to a governmental unit. Additional Areas of Consolidation, section

PS 2510, deals with the change in status of a governmental unit to a government business

enterprise.

Content:

Purpose and scope

Definitions

Method of accounting

Sale of all or part of an investment in a government business enterprise

Statements at different dates

When an organization no longer meets the definition of a government business enterprise


PS 3100 Restricted Assets and Revenues

This section establishes standards on how to account for and report restricted assets and

revenues in government financial statements. The standards do not apply to trusts under

administration, which are excluded from the government reporting entity (see Government

Reporting Entity, paragraph PS 1300.40) and government transfers, which are addressed in

Government Transfers, section PS 3410.

Content:

Purpose and scope

Definitions

External restrictions

Internally restricted entities

Designated assets

PS 3150 Tangible Capital Assets

This section establishes standards on how to account for and report tangible capital assets in

government financial statements.

Content:

Purpose and scope

Definitions

Accounting


Transitional provisions for local governments


…page 12

PS 3200 Liabilities

This section:

(a) provides guidance for applying the definition of liabilities set out in Financial Statement

Concepts, section PS 1000, and establishes general recognition and disclosure standards

for liabilities; but

(b) does not include standards for recognition and disclosure of specific types of liabilities,

which are dealt with in individual CPA Canada Public Sector Accounting Handbook

sections.

Content:

Purpose and scope

Recognition

Liabilities

Disclosure

Appendix – Decision tree – Obligations

PS 3210 Assets

This section:

(a) provides guidance for applying the definition of assets set out in Financial Statement

Concepts, Section PS 1000, and establishes general disclosure standards for assets; but

(b) does not include standards for recognition and disclosure of specific types of assets,

which are dealt with in other handbook sections.

Content:

Purpose and scope

Assets

Disclosure


Appendix A - Decision tree – Economic resources

PS 3230 Long-term Debt

This section establishes standards on how to account for and report long-term debt in

government financial statements, including debt issued on behalf of a government business

enterprise. It does not address the presentation and disclosure of other long-term obligations

of a government. General guidance regarding the presentation and disclosure of a

government's liabilities is provided in Financial Statement Presentation, paragraphs

PS1201.044 -.048. Retirement benefits are specifically dealt with in Retirement Benefits,

section PS 3250. Other employee future benefits are specifically dealt with in Post-

Employment Benefits, Compensated Absences and Termination Benefits, section PS 3255.

Content:

Purpose and scope

Financial statement presentation

Disclosure


…page 13

PS 3250 Retirement Benefits

This section establishes standards on how to account for and report obligations for employee

retirement benefits in government financial statements. Other employee future benefits are

specifically dealt with in Post-Employment Benefits, Compensated Absences and

Termination Benefits, section PS 3255.

Content:

Purpose and scope

Defined benefit plans

Defined contribution plans

Multi-employer and multiple-employer benefit plans


Timing of actuarial valuations

Glossary

Appendix A – Limit on accrued benefit asset

Appendix B – Illustrative examples

PS 3255 Post-employment Benefits, Compensated Absences and Termination Benefits

This section establishes standards on how to account for and report obligations for post-

employment benefits, compensated absences and termination benefits in government

financial statements.

Content:

Purpose and scope

Post-employment benefits and compensated absences

Termination benefits

Disclosure


Appendix A — Characteristics of benefit plans

Appendix B — Illustrative example


…page 14

PS 3260 Liability for Contaminated Sites

This section establishes standards on how to account for and report a liability associated with

the remediation of contaminated sites. Specifically, it:

(a) defines which activities would be included in a liability for remediation;

(b) establishes when to recognize and how to measure a liability for remediation; and,

(c) provides the related financial statement presentation and disclosure requirements.

Content:

Purpose and scope

Recognition

Measurement

Disclosure


Glossary

Appendix A — Decision tree — Liability for contaminated sites

Appendix B — Illustrative examples

Decision Tree (Liability for contaminated sites recognition):

The following decision tree illustrates the accounting treatment specified in this section.


…page 15

PS 3270 Solid Waste Landfill Closure and Post-closure Liability This section establishes standards on how to account for and report the liability for closure

and post-closure care of a solid waste landfill site in government financial statements.

Specifically, it:

(a) defines which activities should be included in closure and post-closure care;

(b) establishes when to recognize and how to measure the closure and post-closure care

liability; and,

(c) provides the related financial statement presentation and disclosure requirements.

Content:

Purpose and scope

Landfill operations

Definitions

Recognition and measurement

Disclosure

PS 3300 Contingent Liabilities

This section:

(a) defines and establishes standards on how to account for and report contingent liabilities

in government financial statements; but

(b) does not include standards for specific types of contingent liabilities, which are dealt with

in individual CPA Canada Public Sector Accounting Handbook sections.

Content:

Purpose and scope

Definition

Characteristics of contingent liabilities

Existence uncertainty

Recognition

Measurement

Disclosure

PS 3310 Loan Guarantees

This section establishes standards on how to account for and report government loan

guarantees in government financial statements. The standards apply to loan guarantees to

persons and to organizations outside of the government reporting entity. They are not

intended to apply to contractual obligations, or to other contingencies such as indemnities,

self-insurance or government insurance programs.

Content:

Purpose and scope

Providing for losses

Estimating the provision for losses

Removal of the provision for losses from the financial statements

Guaranteed loans to be repaid from future government assistance

Disclosure



…page 16

PS 3320 Contingent Assets

This section:

(a) defines and establishes disclosure standards on contingent assets; but

(b) does not include disclosure standards for specific types of contingent assets.

Content:

Purpose and scope

Definition

Characteristics of contingent assets

Disclosure


PS 3380 Contractual Rights

This section:

(a) defines and establishes disclosure standards on contractual rights; but

(b) does not include disclosure standards for specific types of contractual rights; and

(c) does not include those contractual rights to exchange one asset for another where

revenue does not arise.

Content:

Purpose and scope

Definition

Characteristics of contractual rights

Disclosure


PS 3390 Contractual Obligations

This section:

(a) defines and establishes disclosure standards on contractual obligations in government

financial statements; but

(b) does not include disclosure standards for specific types of contractual obligations.

Content:

Purpose and scope

Definition

Disclosure


…page 17

PS 3410 Government Transfers

This section establishes standards on how to account for and report government transfers

to individuals, organizations and other governments from both a transferring government

and a recipient government perspective.

Content:

Purpose and scope

Recognition



Glossary

Appendix A - Decision tree – Recognition

Appendix B - Distinguishing types of transfers

PS 3420 Inter-entity Transactions

This section establishes standards on how to account for and report transactions between

public sector entities that comprise a government's reporting entity from both a provider

and recipient perspective.

Content:

Purpose and scope

Definitions

Recognition

Measurement

Disclosure


Appendix A - Decision tree – Accounting

PS 3430 Restructuring Transactions

This section establishes standards on how to account for and report restructuring transactions

by both transferors and recipients of assets and/or liabilities, together with related program or

operating responsibilities.

Content:

Purpose and scope

Definitions

Characteristics of restructuring transactions

Recognition

Measurement

Classification




…page 18

PS 3450 Financial Instruments

This section establishes standards on how to account for and report all types of financial

instruments including derivatives. Financial instruments include primary instruments

(such as receivables, payables and equity instruments) and derivative financial

instruments (such as financial options, futures and forwards, interest rate swaps and

currency swaps). Derivative financial instruments meet the definition of a financial

instrument and, accordingly, are within the scope of this section.

Content:

Purpose and scope

Recognition

Measurement

Derecognition of a financial liability

Presentation

Financial statement disclosures

Risk disclosures


Glossary

Appendix A - Applying the requirements

PS 3510 Tax Revenue

This section establishes standards on how to account for and report tax revenue in

government financial statements.

Content:

Purpose and scope

Definitions

Recognition

Measurement

Transfers made through a tax system and tax concessions



Appendix A – Decision tree – Transfers made through a tax system and tax concessions


…page 19

Public Sector Guidelines

PSAB Guidelines set out PSAB's interpretations of existing standards, or its opinions on

other issues of concern with respect to matters of financial accounting policies and

disclosures for which the process of issuing exposure drafts and eventual standards does not

apply or cannot be undertaken on a timely basis. As described in section PS1150 Generally

Accepted Accounting Principles, Guidelines are a primary source of GAAP.

PSG-2 Leased Tangible Capital Assets

The purpose of this guideline is to:

(a) define leased tangible capital assets;

(b) describe how to account for a leased tangible capital asset and the related lease liability;

(c) describe the information that should be disclosed about transactions involving leased

tangible capital assets; and,

(d) provide guidance on initial application of the guideline.

It applies to government financial statements.

PSG-4 Funds and Reserves

The purpose of this guideline is to provide guidance on reporting information related to a

government's financial funds and reserves that are part of the government reporting entity. It

applies to government financial statements. This guideline does not apply to funds and

reserves that are externally restricted. External restrictions are addressed in Restricted Assets

and Revenues, section PS 3100.

This guideline applies to local governments that have adopted Financial Statement

Presentation, PS 1201.

PSG-5 Sale-Leaseback Transactions

The purpose of this guideline is to define a sale-leaseback transaction and describe how to

account for such transactions when the leaseback involves either a leased tangible capital

asset (LTCA) or an operating lease.

PSG-7 Tangible Capital Assets of Local Governments

The purpose of this guideline is to provide transitional guidance to a local government on

reporting information related to tangible capital assets in notes or schedules to its financial

statements.


…page 20

Public Sector Statements of Recommended Practice (SORPs)

Statements of Recommended Practice (SORPs) are issued by PSAB to enhance decision

making and accountability by improving the understandability of reports issued in the public

sector. However, as described in section PS1150.17 SORPs do not form part of the CPA

Canada Public Sector Accounting Handbook or generally accepted accounting principles, nor

are they designed to become GAAP in the future. For practical purposes, SORPs may be filed

within the Handbook.

SORP-1 Financial Statement Discussion and Analysis

Provides guidance for reporting financial statement discussion and analysis (FSD&A).

SORP-2 Public Performance Reporting

Provides guidance for reporting performance information in a public performance report of a

government or a government organization. For simplicity, the terms "entity" and "entities"

are used throughout this SORP to refer to all governments and government organizations,

unless otherwise specifically indicated. This SORP offers general guidance. It is not

prescriptive with respect to the structure of the report and is not intended as a template for a

public performance report.

SORP-3 Assessment of Tangible Capital Assets

Provides guidance to governments or government organizations that choose to prepare and

present a report on the physical condition of their tangible capital assets, including leased

tangible capital assets. The guidance provides a basis for exercising professional judgment as

to the nature and extent of the information to be reported.

SORP-4 Indicators of Financial Condition

Provides guidance to governments that choose to report supplementary information on

financial condition. The ability of governments to report indicators of financial condition

may vary. Some governments may choose to report certain indicators initially, but over time,

and as experience is gained, additional indicators may be reported.

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