Third Exposure Draft on Government Transfers
to be Released
The Public Sector Accounting Board met
on March 22 and 23. One of the issues before the Board was the
accounting treatment of government transfers. A decision summary of
the Board’s meeting is
available on the PSAB website. The following is the full text of
the summary dealing with government transfers.
PSAB approved a third re-exposure
draft (Re-ED 3) on Government Transfers. It is expected to be issued for
comment in late April or early May 2010. Re-ED 3 is intended to seek
input in particular on the question of how recipient governments should
account for transfers.
only significant issue raised with the proposals in the second
re-exposure draft (Re-ED 2) was the proposed approach to accounting for
capital transfers received. Determining when revenue should
be recognized in operations in relation to transfers received has been
an issue since the project started in 2002. PSAB’s new proposals allow
more scope for applying professional judgment in determining if a
transfer results in revenue immediately or if it creates a liability
such that the transfer is recognized in revenue in future periods. The new proposals for recipients
would base the accounting for all transfers received on the principles
for operating transfers set out in Re-ED 2 in 2009.
Board believes that the new proposals will allow governments to reflect
the substance of the full range of complex transfer arrangements they
have with other levels of government in their financial
It is our understanding that the third
exposure draft on government transfers will be available in late April
or early May, along with an analysis of issues raised in the previous
drafts and how PSAB proposes to deal with them. The comment
deadline will be September 1, 2010.