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Proposal to Modify the Canadian Public Sector GAAP Hierarchy
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Consultation has concluded
On May 5, 2020, PSAB voted to approve “Option 2 – Adapt IPSAS principles when developing future standards” as its future international strategy. This decision resulted from extensive consultation with Canadian stakeholders and careful consideration of the international strategy decision-making criteria.
Under Option 2, PSAB will continue to develop Public Sector Accounting Standards (PSAS), but future standards would be based on the principles in International Public Sector Accounting Standards (IPSAS). This means that if a project is undertaken and an IPSAS already exists, the principles of that IPSAS will be used as a base for developing the corresponding Canadian PSAS. The Board has established Criteria for Modifying and Reviewing IPSAS Principles that will be a framework and provide guidance when departures from IPSAS principles in the development of PSAS are permitted.
Our Exposure Draft, Proposal to Modify the Canadian Public Sector GAAP Hierarchy is out for comment until February 15, 2021. It proposes to modify the GAAP hierarchy set out in GENERALLY ACCEPTED ACCOUNTING PRINCIPLES, Section PS 1150, to position IPSAS as the go-to accounting framework in situations where PSAB has not issued a specific standard. This would begin April 1, 2021.
A change in the GAAP hierarchy will affect where stakeholders seek accounting guidance when PSAS is silent.It is important for PSAB to understand and consider stakeholder views to any and all changes to the GAAP hierarchy.
On May 5, 2020, PSAB voted to approve “Option 2 – Adapt IPSAS principles when developing future standards” as its future international strategy. This decision resulted from extensive consultation with Canadian stakeholders and careful consideration of the international strategy decision-making criteria.
Under Option 2, PSAB will continue to develop Public Sector Accounting Standards (PSAS), but future standards would be based on the principles in International Public Sector Accounting Standards (IPSAS). This means that if a project is undertaken and an IPSAS already exists, the principles of that IPSAS will be used as a base for developing the corresponding Canadian PSAS. The Board has established Criteria for Modifying and Reviewing IPSAS Principles that will be a framework and provide guidance when departures from IPSAS principles in the development of PSAS are permitted.
Our Exposure Draft, Proposal to Modify the Canadian Public Sector GAAP Hierarchy is out for comment until February 15, 2021. It proposes to modify the GAAP hierarchy set out in GENERALLY ACCEPTED ACCOUNTING PRINCIPLES, Section PS 1150, to position IPSAS as the go-to accounting framework in situations where PSAB has not issued a specific standard. This would begin April 1, 2021.
A change in the GAAP hierarchy will affect where stakeholders seek accounting guidance when PSAS is silent.It is important for PSAB to understand and consider stakeholder views to any and all changes to the GAAP hierarchy.
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Tell us more about your views on the proposed amendments to modify the PSAS GAAP hierarchy to outline IPSAS as the first go-to accounting framework in matters not covered by a primary source of GAAP or for assistance in applying a primary source of GAAP to specific circumstances.
Do you agree with the proposed changes?
Or do you feel the GAAP hierarchy should remain as is, with equal weighting to pronouncements from the Canadian Accounting Standards Board (AcSB), International Accounting Standards Board (IASB), US Federal Accounting Standards Advisory Board (FASAB), US Governmental Accounting Standards Board (GASB), or International Public Sector Accounting Standards Board (IPSASB) when PSAS is silent?
