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At its May 5, 2020 meeting, the Public Sector Accounting Board (PSAB) voted to adapt International Public Sector Accounting Standards (IPSAS) principles when developing future standards.
Previously, in May 2018, the PSAB issued the first of two Consultation Papers (CPs) to review its current approach to IPSAS. This first CP sought feedback to develop a decision-making model and the criteria that PSAB will use to make a final decision on its international strategy. This paper outlined 4 international strategy options. It did not seek opinions on which option PSAB should adopt, but rather sought opinions on the criteria each option would be weighted against.
After reviewing the feedback received on this first CP, PSAB issued the second CP in May 2019 to clarify the international strategy options and ask stakeholders which option they support for an international approach. Since its December 2019 meeting, the Board reviewed all proposed options and the information requested at its December meeting, and considered the decision-making criteria in the second CP and its relevant stakeholder feedback.
PSAB determined the decision on the international strategy that best serves the public sector should be evidence based. Initially, PSAB proposed six criteria to be used for its decision-making. After receiving feedback from the first CP, PSAB settled on five decision-making criteria to facilitate the evaluation of evidence. These five criteria, in order of importance, are:
PSAB initially considered four options for an international approach:
In accordance with its due process, PSAB voted to approve Option II: Adapt IPSAS principles when developing future Canadian standards.
While PSAB has made the decision, more planning and work will be done to support stakeholders in this change. The Board itself will also continue to work on implementing this change into its due process, which will require further discussion and work in the coming year. A basis for conclusions will be issued in July 2002 that will outline how PSAB came into this important decision.
The implementation date of this decision is April 1, 2021. All standards projects initiated on or after this date will use the principles of IPSAS in the development of the PSAS standard, if a similar IPSAS already exists. In cases where a similar IPSAS does not exist, PSAS standards would continue to be developed as they are today.
Full details on the project can be found
For more information on the financial reporting library, contact a local
MNP Assurance Professional, or
Jody MacKenzie, Director, Assurance Professional Standards.
This communication contains a general overview of the topic and is current as of July 13, 2020. The application of the principles addressed will depend upon the particular facts and circumstances of each individual case. Accordingly, this publication is not a substitute for professional advice and we recommend that any decisions you take about the application or not of any of the information presented be made in consultation with a qualified professional who can address any variance that may be required to reflect your circumstances. Please contact your local MNP representative for customized assistance with the application of this material. MNP LLP accepts no responsibility or liability for any loss related to any person's use of or reliance upon this material. © MNP LLP 2020. All rights reserved.
Categories:Public Sector Standards
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