November 19, 2007

PSAB Update and Draft 2009 FIR Update

PSAB Update

Keeping Informed
We have indicated in previous PSAB updates that members can keep up to date on the work of the Public Sector Accounting Board (PSAB) of the Canadian Institute of Chartered Accountants (CICA) by signing up for the free notification service on their website.  You might wish to sign up for PSABulletin as an easy way to stay on top of PSAB developments. 

Indicators of Government Financial Position (Statement of Principles)
At its October meeting, the Board approved a Statement of Principles (SOP) for Indicators of Government Financial Condition.  As noted in the Chair’s remarks in the October edition of PSABulletin, the “SOP proposes definitions and guidance for identifying and reporting a government’s financial condition. The SOP suggests a core set of common indicators that would allow for consistent computation and reporting.” 

The Board is seeking comments on the SOP.  The deadline for comments is December 10, 2007.  Further information on this initiative can be found on the status update for this topic.

Assessment of Tangible Capital Assets (Statement of Recommended Practices)
We have spoken of this project in previous updates and mention it again here for those that may have missed our previous comments.  In March, 2007, PSAB approved a Statement of Principles for the assessment of tangible capital assets.  The deadline for reporting comments was June 2007.  The objective of the Assessment of Tangible Capital Assets project is to issue a Statement of Recommended Practice that would:

  • assist governments in reporting information about major assets that is useful in evaluating the government's financial condition and financial and non-financial performance;
  • improve comparability and reliability of financial and non-financial information about major assets within and across governments; and
  • establish specific definition, measurement, presentation recommendations for providing supplementary information about major assets.

The Board hopes to issue an Exposure Draft on this topic in November of 2007 and to approve a final Statement of Recommended Practice in June of 2008.

What are SORPs?
The following description of Statements of Recommended Practices (SOPRs) is taken from the Chair’s message of the October edition of PSABulletin.

The objective of issuing SORPs is to enhance decision making and accountability by improving the understandability of reports issued in the public sector. SORPs address specific aspects of reporting on financial condition and financial and non-financial performance. SORPs do not form part of generally accepted accounting principles. They are not prescriptive, but offer general guidance to encourage and assist public sector entities in effectively reporting relevant information that is useful in evaluating the entity’s financial condition at the financial statement date and its financial and non-financial performance during the reporting period. Compliance with SORPs is not mandatory, but encouraged, as they supplement and add further depth to the financial statements.

FIR Update
As you are aware, municipalities will be reporting on their tangible capital assets beginning with their 2009 financial statements.  To facilitate the new financial reporting framework, the Ministry of Municipal Affairs and Housing has been working on a re-designed Financial Information Return (FIR) for 2009.  Earlier drafts have been given limited circulation for comment, and changes have been made to reflect some of the comments received to date.

The Ministry has just posted the draft 2009 FIR on the FIR website for all municipalities to view and provide comment.  You will receive a letter from Dana Richardson, Assistant Deputy Minister of Municipal Affairs and Housing, urging municipalities to review the draft of the FIR and provide comments by December 14, 2007.

Unlike earlier circulated drafts, this draft also contains 2009 draft Municipal Performance Measurement Program (MPMP) schedule as well.

We urge you to take the time to look at the various schedules in the draft FIR and provide your comments.  It is preferable to spend time on this issue now rather than to wrestle with schedules in 2010 that cannot be completed.