Alert: Financial Instruments Project Phase II - Federal Government Narrow Scope Amendments

Alert: Financial Instruments Project Phase II - Federal Government Narrow Scope Amendments

In July 2020 the Public Sector Accounting Board (“PSAB”) approved narrow-scope amendments to the CPA Canada Public Sector Accounting (“PSA”) Handbook providing a scope exclusion of certain activities by the Federal government. 

The Amendments relate to Phase II of the PSAB’s Financial Instruments Narrow-Scope Amendments project intended to develop a series of amendments to address specific stakeholder concerns raised related to:

  • the presentation of the fair value of derivatives;
  • the presentation of certain foreign exchange gains/losses and changes in the fair value of associated derivatives; and
  • the accounting for rate-setting transactions.

The Amendments permit the federal government to present exchange gains and losses resulting from transactions intended to sustain foreign exchange reserves and orderly conditions in the foreign exchange market for the Canadian dollar or to aid foreign countries, directly in the statement of operations. 

The Amendments, were reflected in the PSA Handbook on October 1, 2020, in the following Sections:

  • PS 1201, Financial Statement Presentation;
  • PS 2601, Foreign Currency Translation; and
  • PS 3450, Financial Instruments.

The Amendments apply to fiscal years beginning on or after April 1, 2022 except for those government organizations that applied the CPA Canada Handbook – Accounting prior to adopting the PSA Handbook. Earlier adoption is permitted.

Information on this and other PSAB projects, including related supporting materials, can be accessed here.

This communication contains a general overview of the topic and is current as of July 3, 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 2019. All rights reserved.

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Michelle Balmer

Michelle Balmer CPA, CA

Vice President, Assurance

Michelle Balmer, CPA, CA, is a Senior Assurance Services Partner with MNP. With 14 years of experience in public practice, Michelle helps a broad range of public and privately held companies in a variety of industries. She also works on special projects, including costing studies, benchmarking and best-practice studies, operational analyses, litigation support and due diligence.

As a key member of MNP's Assurance team, Michelle has played an instrumental role in assurance policy development, implementing accounting and assurance standards firm-wide and educating assurance practitioners regarding methodologies and new pronouncements. She also provides technical advice and consultation on accounting and assurance issues, as well as on rules of professional conduct issues, to all MNP practitioners.

Michelle was certified a Chartered Accountant (CA) after obtaining a Bachelor of Commerce degree from the University of Alberta. She has been actively involved with the Institute of Chartered Accountants of Alberta, including the Chartered Accountants School of Business, in an instructional and marketing capacity. An avid volunteer, she has assisted numerous groups such as the Easter Seals of Alberta, Paralympic Sports Association and Junior Achievement of Northern Alberta.