Summary Comparison of CICA Public Sector Accounting Handbook and
CICA Handbook — Accounting
as of June 30, 2011
1. This comparison has been prepared by the staff of the Public Sector Accounting Board
(PSAB) and has not been approved by PSAB. Recent amendments to the Introduction to
Public Sector Accounting Standards have resulted in directing some government
organizations to the standards in the CICA Public Sector Accounting (PSA) Handbook.
Government organizations that previously followed the CICA Handbook – Accounting (now
Part V of that Handbook) will be transitioning to the PSA Handbook. The comparison
provides a high-level comparison of the PSA Handbook and the CICA Handbook –
Accounting, highlighting certain differences. Handbook Sections and Guidelines issued as at
June 30, 2011 were considered. Effective dates of some standards might be after June 30,
2011 although earlier adoption may be permitted.
2. The comparison is not meant to be a complete overview nor an identification of all
differences between the PSA Handbook and the CICA Handbook – Accounting. It should not
be used in preparing financial statements. To understand fully the implications of applying,
and preparing financial statements in accordance with the PSA Handbook, users of this
comparison and financial statement preparers must refer to the standards themselves.
Users are encouraged to consult the respective Handbooks for more details regarding
differences between accounting standards.
3. The PSA Handbook is based on a conceptual framework that is substantially the same as
that on which the CICA Handbook – Accounting is based. The PSA Handbook covers many of
the same topics and reaches similar conclusions on many issues. However, there are subject
matters that are not covered under the PSA Handbook that are addressed under the CICA
Handbook – Accounting and alternatively matters that are addressed under the PSA
Handbook that are not addressed under the CICA Handbook – Accounting. Other sources of
generally accepted accounting principles will need to be consulted when applying the PSA
Handbook on matters that it does not specifically address.
4. PSAB has active standard-setting projects in process. The comparison identifies this work in
progress. For further information on project timetables, see the project pages on the PSAB
website.
Public Sector Accounting Board
277 Wellington St. West, Toronto, ON M5V 3H2
Tel: (416) 977-3222 Fax: (416) 977-8585
Page 1 of 45
The following is a listing of the titles of the Sections and Guidelines in the PSA Handbook and CICA Handbook – Accounting that are mentioned in
the comparison document.
PSA Handbook
Intro. Introduction to Public Sector Accounting Standards
PS 1000 Financial Statement Concepts
PS 1100 Financial Statement Objectives
PS 1150 Generally Accepted Accounting Principles
PS 1200 Financial Statement Presentation
PS 1201 Financial Statement Presentation
PS 1300 Government Reporting Entity
PS 2100 Disclosure of Accounting Policies
PS 2120 Accounting Changes
PS 2125 First-time Adoption by Government Organizations
PS 2130 Measurement Uncertainty
PS 2400 Subsequent Events
PS 2500 Basic Principles of Consolidation
PS 2510 Additional Areas of Consolidation
PS 2600 Foreign Currency Translation
PS 2601 Foreign Currency Translation
PS 2700 Segment Disclosures
PS 3030 Temporary Investments
PS 3040 Portfolio Investments
PS 3050 Loans Receivable
PS 3060 Government Partnerships
PS 3070 Investments in Government Business Enterprises
PS 3100 Restricted Assets and Revenues
PS 3150 Tangible Capital Assets
CICA Handbook – Accounting
Intro. Introduction to Accounting Standards
1000 Financial Statement Concepts
1100 Generally Accepted Accounting Principles
1300 Differential Reporting
1400 General Standards of Financial Statement Presentation
1505 Disclosure of Accounting Policies
1506 Accounting Changes
1508 Measurement Uncertainty
1510 Current Assets and Current Liabilities
1520 Income Statement
1530 Comprehensive Income
1535 Capital Disclosures
1540 Cash Flow Statements
1582 Business Combinations
1590 Subsidiaries
1601 Consolidated Financial Statements
1602 Non-controlling Interests
1625 Comprehensive Revaluation of Assets and Liabilities
1651 Foreign Currency Translation
1701 Segment Disclosures
1751 Interim Financial Statements
1800 Unincorporated Businesses
3000 Cash
3020 Accounts and Notes Receivable
Page 2 of 45
PSA Handbook
PS 3200 Liabilities
PS 3230 Long-Term Debt
PS 3250 Retirement Benefits
PS 3255 Post-employment Benefits, Compensated Absences and
Termination Benefits
PS 3260 Liability for Contaminated Sites
PS 3270 Solid Waste Landfill Closure and Post-Closure Liability
PS 3300 Contingent Liabilities
PS 3310 Loan Guarantees
PS 3390 Contractual Obligations
PS 3410 Government Transfers
PS 3450 Financial Instruments
PS 3510 Tax Revenue
PS 4200 Financial Statement Presentation by Not-for-Profit
Organizations
PS 4210 Contributions — Revenue Recognition
PS 4220 Contributions Receivable
PS 4230 Capital Assets Held by Not-for-Profit Organizations
PS 4240 Collections Held by Not-for-Profit Organizations
PS 4250 Reporting Controlled and Related Entities by Not-for-Profit
Organizations
PS 4260 Disclosure of Related Party Transactions by Not-for-Profit
Organizations
PS 4270 Disclosure of Allocated Expenses by Not-for-Profit
Organizations
PSG-2 Leased Tangible Capital Assets
PSG-4 Funds and Reserves
PSG-5 Sale-Leaseback Transactions
CICA Handbook – Accounting
3025 Impaired Loans
3031 Inventories
3051 Investments
3055 Interests in Joint Ventures
3061 Property, Plant and Equipment
3063 Impairment of Long-Lived Assets
3064 Goodwill and Intangible Assets
3065 Leases
3110 Asset Retirement Obligations
3210 Long-term Debt
3240 Share Capital
3260 Reserves
3280 Contractual Obligations
3290 Contingencies
3400 Revenue
3461 Employee Future Benefits
3465 Income Taxes
3475 Disposal of Long-Lived Assets and Discontinued Operations
3480 Extraordinary Items
3500 Earnings per Share
3610 Capital Transactions
3800 Government Assistance
3805 Investment Tax Credits
3820 Subsequent Events
3831 Non monetary Transactions
3840 Related party Transactions
3841 Economic Dependence
3855 Financial Instruments — Recognition and Measurement
Page 3 of 45
PSA Handbook
CICA Handbook – Accounting
3865 Hedges
3870 Stock-based Compensation and Other Stock-based Payments
4211 Life Insurance Enterprises — Specific Items
4250 Future-Oriented Financial Information
4400 Financial Statement Presentation by Not-for-Profit Organizations
4410 Contributions — Revenue Recognition
4420 Contributions Receivable
4430 Capital Assets Held by Not-for-Profit Organizations
4440 Collections Held by Not-for-Profit Organizations
4450 Reporting Controlled and Related Entities by Not-for-Profit
Organizations
4460 Disclosure of Related Party Transactions by Not-for-Profit
Organizations
4470 Disclosure of Allocated Expenses by Not-for-Profit Organizations
AcG-14 Disclosures of Guarantees
AcG-15 Consolidation of Variable Interest Entities
Page 4 of 45
Summary Comparison of CICA Public Sector Accounting (PSA) Handbook and
CICA Handbook – Accounting, as of June 30, 2011
Subject
PSA Handbook
CICA Handbook – Accounting
Reference
Reference
Comments
Highlighted
Difference(s)
Comments
CONCEPTS
Purpose and
scope
Intro.
and
PS 1000
Users
PS 1000
Elements
PS 1000
Recognition
PS 1000
The PSA Handbook applies to general
purpose financial reporting by
governments. Government
organizations also apply the PSA
Handbook unless otherwise specifically
directed to an alternative accounting
standard.
The PSA Handbook focuses on the
information needs of external users
including the public, legislators,
councillors, investors, analysts and
other governments.
Elements in the PSA Handbook are:
assets (financial and non-financial),
liabilities, revenues and expenses.
The PSA Handbook is an accrual-based
model. An item is recognized in the
financial statements when it meets the
following recognition criteria :
(a) the item has an appropriate basis of
measurement, and a reasonable
estimate can be made of the
amount involved; and
(b) for an item that involves obtaining
or giving up future economic
benefits, it is expected that such
benefits will be obtained or given
up.
Intro. and
1000
The CICA Handbook – Accounting
applies to general purpose financial
statements of all types of profitoriented enterprises and to not-forprofit organizations.
1000
The CICA Handbook – Accounting
focuses on the information needs of
investors and creditors and, for not-forprofit organizations, on the needs of
members, contributors and creditors.
Elements in the PSA handbook are:
assets, liabilities, equity/net assets,
revenues, expenses, gains and losses.
The CICA Handbook – Accounting is an
accrual-based model. Recognition
under the CICA Handbook – Accounting
is comparable to the PSA Handbook
although criterion (b) uses the term
“probable” rather than “expected”.
1000
1000
Page 5 of 45
Summary Comparison of CICA Public Sector Accounting (PSA) Handbook and
CICA Handbook – Accounting, as of June 30, 2011
Subject
PSA Handbook
CICA Handbook – Accounting
Reference
Comments
Reference
Measurement
PS 1000
Going concern
PS 1000
GAAP
hierarchy
PS 1150
1000
The PSA Handbook primarily uses the
historical cost basis of measurement.
Other bases of measurement are used
in limited circumstances including
replacement cost and realizable value.
Present value is not a basis of
measurement but a valuation
technique that may be used within the
historical cost-based or current-value
models.
In preparing financial statements for a 1000
government, there is a presumption of
going concern under the PSA
Handbook.
Under the PSA Handbook, the primary 1100
sources of generally accepted
accounting principles (GAAP), in
descending order of authority, are the
(a) Sections;
(b) Guidelines; and
(c) appendices and illustrative material
of those pronouncements.
There is no ranking of other sources of
GAAP to be used when the PSA
Handbook does not deal with an
accounting and reporting matter. The
other source of GAAP used should be
consistent in relation to the concepts
described in Section PS 1000.
Highlighted
Difference(s)
Comments
The CICA Handbook – Accounting
primarily uses the historical cost basis
of measurement although other bases
of measurement are used in limited
circumstances including replacement
cost, realizable value and present
value.
There is a comparable presumption
that the entity is a going concern under
the CICA Handbook – Accounting.
Under the CICA Handbook –
Accounting, the primary sources of
GAAP, in descending order of authority,
are:
(a) Sections, including appendices;
(b) Accounting Guidelines, including
appendices;
(c) Emerging Issues Committee
Abstracts of Issues Discussed;
(d) Background Information and Basis
for Conclusions documents
accompanying its Sections and
guidelines;
(e) illustrative material associated with
the above sources; and
Page 6 of 45
Summary Comparison of CICA Public Sector Accounting (PSA) Handbook and
CICA Handbook – Accounting, as of June 30, 2011
Subject
Subsequent
events
PSA Handbook
CICA Handbook – Accounting
Reference
Reference
PS 2400
Comments
The PSA Handbook describes two types 3820
of subsequent events:
(a) those that provide further evidence
of conditions which existed at the
financial statement date; and
(b) those that are indicative of
conditions which arose subsequent
to the financial statement date.
The extent to which, and the manner in
which, the effect of a subsequent event
is reflected in the financial statements
will depend on its type.
Highlighted
Difference(s)
Comments
(f) Implementation Guides authorized
by the Accounting Standards Board
(AcSB).
There is no ranking of other sources of
GAAP to be used when the CICA
Handbook – Accounting does not deal
with an accounting and reporting
matter. Similarly, the other source of
GAAP used is consistent in relation to
the CICA Handbook – Accounting
concepts described in Section 1000.
There are comparable requirements to
those in the PSA Handbook.
Page 7 of 45
Summary Comparison of CICA Public Sector Accounting (PSA) Handbook and
CICA Handbook – Accounting, as of June 30, 2011
Subject
PSA Handbook
CICA Handbook – Accounting
Reference
Comments
Reference
Comments
Various
There is no specific standard but
various requirements throughout the
PSA Handbook. 1
3840
Economic
dependence
There are no specific requirements in
the PSA Handbook.
3841
Comprehensive
revaluation of
assets and
liabilities
There are no specific requirements in
the PSA Handbook.
1625
The CICA Handbook – Accounting
defines related parties and sets out
disclosure requirements that apply. A
related party transaction is generally
measured at carrying amount although
a transaction with commercial
substance is measured at the exchange
amount.
The CICA Handbook – Accounting
requires the party be disclosed and
explained when the ongoing operations
of a reporting enterprise depend on a
significant volume of business with
another party.
The CICA Handbook – Accounting
allows for a comprehensive revaluation
of assets and liabilities by profitoriented enterprises when either all or
virtually all of the equity interests in
the enterprises have been acquired by
an acquirer between non-related
parties, or the enterprise has been
subject to a financial reorganization
and the same party does not control
the enterprise both before and after
the reorganization.
Related party
transactions
1
Highlighted
Difference(s)
PSAB is currently undertaking a project on Related Party Transactions. For further information, click here.
Page 8 of 45
Summary Comparison of CICA Public Sector Accounting (PSA) Handbook and
CICA Handbook – Accounting, as of June 30, 2011
Subject
PSA Handbook
CICA Handbook – Accounting
Reference
Reference
Comments
Highlighted
Difference(s)
Comments
OBJECTIVES
Characteristics PS 1100
of government
Specific objectives of government
financial statements are established in
the PSA Handbook. Nine unique
characteristics of governments and the
resulting reporting implications are
identified.
There are no specific requirements in
the CICA Handbook – Accounting.
The
characteristics of
governments and
the objectives of
government
financial
statements are
unique to the
PSA Handbook.
FINANCIAL STATEMENTS
Financial
Position /
Balance Sheet
PS 1200
and
PS 1201
Under the PSA Handbook, four key
figures describe the financial position
of governments:
(a) cash resources (financial assets);
(b) net debt position (liabilities minus
financial assets);
(c) non-financial assets available for
service provision; and
(d) accumulated surplus or deficit.
Prior year comparatives are presented
on the statement of financial position.
1000,
1400 and
1510
Under the CICA Handbook –
Accounting, the balance sheet includes
three elements:
(a) assets;
(b) liabilities; and
(c) equity/net assets.
Current assets and liabilities are
distinguished from non-current items.
Prior year comparatives are presented
on the balance sheet.
Page 9 of 45
There are
different
categorizations
of assets and
liabilities, and
measurements
on the statement
of financial
position.
Summary Comparison of CICA Public Sector Accounting (PSA) Handbook and
CICA Handbook – Accounting, as of June 30, 2011
Subject
Statement of
Operations /
Income
Statement
PSA Handbook
CICA Handbook – Accounting
Reference
Comments
Reference
PS 1200
and
PS 1201
1400 and
Under the PSA Handbook, an entity:
1520
(a) reports revenues by significant
types and expenses by function or
major program;
(b) accounts for the difference
between revenues and expenses as
surplus or deficit for the period;
and
(c) reports the accumulated
surplus/deficit at the beginning and
end of the period on either the
statement of operations or
alternatively on a separate
statement.
Prior year comparatives are presented
as well as originally planned (budgeted)
comparatives on the statement of
operations.
Highlighted
Difference(s)
Comments
Under the CICA Handbook –
Accounting, the income statement
presents the results of operations for
the period reporting revenues,
expenses, gains and losses. Items to be
distinguished on the income statement
are included in Section 1520. Prior year
comparatives are presented on the
income statement.
Page 10 of 45
Originally
planned
(budgeted)
comparatives are
required to be
presented under
the PSA
Handbook. The
PSA Handbook is
less prescriptive
regarding items
required to be
separately
reported on the
statement of
operations as
compared to the
CICA Handbook –
Accounting.
Summary Comparison of CICA Public Sector Accounting (PSA) Handbook and
CICA Handbook – Accounting, as of June 30, 2011
Subject
PSA Handbook
Reference
Statement of
Change in Net
Debt /
Statement of
Retained
Earnings /
Statement of
Comprehensive
Income /
Statement of
Remeasurement Gains
and Losses
PS 1200
and
PS 1201
CICA Handbook – Accounting
Highlighted
Difference(s)
Comments
Reference
Comments
Under the PSA Handbook, the
statement of change in net debt serves
to report the extent to which the
expenditures of the accounting period
are met by the revenues recognized.
Items that explain the difference
between surplus/deficit and the change
in net debt in the period include:
acquisitions of TCAs, amortization of
TCAs, dispositions of TCAs,
expenditures to acquire other nonfinancial assets, etc. Prior year
comparatives are presented as well as
originally planned (budgeted)
comparatives on the statement of
change in net debt.
For fiscal periods beginning on or after
April 1, 2015 for governments and on
or after April 1, 2012 for government
organizations, the statement of
remeasurement gains and losses
reports both unrealized gains and
losses on financial instruments and
unrealized foreign currency gains and
losses.
1000,
1400 and
1530
Under the CICA Handbook –
Accounting, a separate statement of
retained earnings is required that will
reconcile opening retained earnings to
closing retained earnings for the
period. A separate statement of
comprehensive income may also be
presented (may alternatively be
presented on the income statement)
that will reconcile net income to
comprehensive income for the period.
Prior year comparatives are presented
for both the statement of retained
earnings and the statement of
comprehensive income.
Page 11 of 45
The statement of
change in net
debt and the
statement of
remeasurement
gains and losses
are unique to the
PSA Handbook
while no
statement of
retained earnings
or
comprehensive
income is to be
provided under
the PSA
Handbook.
Originally
planned
(budgeted)
comparatives are
required to be
presented under
the PSA
Handbook on the
statement of
change in net
debt.
Summary Comparison of CICA Public Sector Accounting (PSA) Handbook and
CICA Handbook – Accounting, as of June 30, 2011
Subject
PSA Handbook
CICA Handbook – Accounting
Reference
Comments
Reference
Statement of
Cash Flow
PS 1200
and
PS 1201
Under the PSA Handbook, the
statement of cash flow reports on cash
flows from operating, capital, investing
and financing activities. Either the
direct or indirect method may be used.
Prior year comparatives are presented
on the statement of cash flow.
1400 and
1540
Comparative
figures
PS 1200
and
PS 1201
Refer to the comments regarding the
particular statements provided
previously.
There are no specific requirements in
the PSA Handbook.
1400
Capital
disclosures
1535
Highlighted
Difference(s)
Comments
Under the CICA Handbook –
Accounting, the statement of cash flow
reports on cash flows from operating,
investing and financing activities. Cash
transactions relating to capital assets
are treated as investing activities.
Either the direct or indirect method
may be used. Cash flow amounts per
share are disclosed in the financial
statements. Prior year comparatives
are presented on the statement of cash
flow.
Refer to the comments regarding the
particular statements provided
previously.
The CICA Handbook – Accounting
requires disclosure of information
relating to an entity’s objectives,
policies and processes for managing
capital.
Page 12 of 45
A separate
capital category
on the statement
of cash flow is
presented under
the PSA
Handbook.
Summary Comparison of CICA Public Sector Accounting (PSA) Handbook and
CICA Handbook – Accounting, as of June 30, 2011
Subject
Segment
disclosures
PSA Handbook
CICA Handbook – Accounting
Reference
Comments
Reference
PS 2700
Under the PSA Handbook, a segment is 1701
a distinguishable activity or group of
activities of a government for which it
is appropriate to separately report
financial information so as to help users
of the financial statements. Different
bases of segmentation include: by
major functional classification of
activities, by service line segments, or
by segments that reflect the different
accountability and control relationship
between the government and various
organizations in the reporting entity.
The standard outlines disclosures
required in respect of government
segments.
Highlighted
Difference(s)
Comments
Under the CICA Handbook –
Accounting, an operating segment is
defined as a component of an
enterprise that engages in business
activities from which it may earn
revenue and incur expenses, whose
operating results are regularly
reviewed by the enterprise’s chief
operating decision maker and for which
discrete financial information is
available. A reportable operating
segment must meet quantitative
thresholds based on revenues, profit or
loss, or assets. The standard outlines
disclosures required in respect of
reportable operating segments that
differ from the PSA Handbook
disclosure requirements.
Page 13 of 45
The basis of
identifying
reportable
segments and
the required
disclosure for
those segments
is different under
the PSA
Handbook
compared with
the CICA
Handbook –
Accounting.
Summary Comparison of CICA Public Sector Accounting (PSA) Handbook and
CICA Handbook – Accounting, as of June 30, 2011
Subject
Items
denominated
in a foreign
currency
PSA Handbook
CICA Handbook – Accounting
Reference
Comments
Reference
PS 2600
and
PS 2601
1651
Under the PSA Handbook, the
government’s functional currency is
presumed to be the Canadian dollar.
Transactions made in a currency other
than Canadian dollars are translated
applying the exchange rate in effect on
the date of the transaction.
Monetary items denominated in a
foreign currency are translated at each
subsequent reporting date to reflect
the current exchange rate.
For fiscal periods beginning prior to
April 1, 2015 for governments and prior
to April 1, 2012 for government
organizations, exchange gains and
losses are recognized in the statement
of operations except in the case of
long-term monetary items. For such
items, the gain or loss is deferred and
amortized to revenue/expense over the
remaining life of the item. The
unamortized foreign exchange gain or
loss is separately reported on the
statement of financial position as an
offset or addition to the related longterm monetary item.
Highlighted
Difference(s)
Comments
Similarly, under the CICA Handbook –
Accounting, the functional currency is
assumed to be the Canadian dollar.
Transactions made in a currency other
than Canadian dollars are translated
applying the exchange rate in effect on
the date of the transaction.
Monetary items denominated in a
foreign currency are translated at each
subsequent reporting date to reflect
the current exchange rate with the
exchange gain or loss being included in
the determination of net income for
the period.
Similarly, for non-monetary assets that
are carried at market, these assets are
translated at each subsequent
reporting date to reflect the current
exchange rate with the exchange gain
or loss being included in the
determination of net income for the
period.
The standard addresses situations not
included in the PSA Handbook, such as
the translation of an integrated foreign
operation and of a self-sustaining
foreign operation.
Page 14 of 45
There can be a
difference in the
accounting for
long-term foreign
currency
denominated
monetary items.
Summary Comparison of CICA Public Sector Accounting (PSA) Handbook and
CICA Handbook – Accounting, as of June 30, 2011
Subject
Legislative
control and
accountability
PSA Handbook
CICA Handbook – Accounting
Reference
Reference
PS 1200
and
PS 1201
Comments
For fiscal periods beginning on or after
April 1, 2015 for governments and on
or after April 1, 2012 for government
organizations, unrealized exchange
gains and losses are recognized in the
statement of remeasurement gains and
losses. There is no deferral of exchange
gains and losses on long-term
monetary items. When realized, the
exchange gains and losses are
transferred from the statement of
remeasurement gains and losses to the
statement of operations.
Under the PSA Handbook, a
comparison of results to the original
planned (budgeted) amounts is
required for both the statement of
operations and the statement of
change in net debt. Disclosure is
required when a government exceeds
its revenue, borrowing, investing,
expense or expenditure authority
limits.
Highlighted
Difference(s)
Comments
There are no specific requirements in
the CICA Handbook – Accounting.
Page 15 of 45
The PSA
Handbook
requires the
inclusion of
originally
planned
(budgeted)
comparative
amounts for both
the statement of
operations and
statement of
change in net
debt.
Summary Comparison of CICA Public Sector Accounting (PSA) Handbook and
CICA Handbook – Accounting, as of June 30, 2011
Subject
PSA Handbook
CICA Handbook – Accounting
Reference
Comments
Reference
Change in
accounting
policy
Intro.,
PS 2120
and
PS 2125
1506
Under the PSA Handbook, there is a
general presumption that accounting
policies are consistent within each
accounting period and from one period
to the next. Initial application of a new
PSA requirement or adoption of the
PSA Handbook for the first time
(transitioning from a non-GAAP basis)
may be applied retroactively or
prospectively. Adoption of the PSA
Handbook for the first time
(transitioning from another source of
GAAP) is to be treated on a retroactive
basis with restatement. Exemptions to
this general requirement are offered
with respect to specific aspects of some
standards. When there is a change
between two or more appropriate
principles or methods, the new
accounting policy is applied
retroactively unless the necessary
financial data is not reasonably
determinable.
Correction of
an error
PS 2120
Under the PSA Handbook, a correction
of an error is reported retroactively
with restatement unless impracticable
to do so.
1506
Highlighted
Difference(s)
Comments
Similarly, under the CICA Handbook –
Accounting, there is a general
presumption that accounting policies
are consistent within each accounting
period and from one period to the
next. A change in accounting policy
resulting from the initial application of
a primary source of GAAP is accounted
for in accordance with its specific
transitional provisions, if any, or
retrospectively if no specific
transitional provisions are included.
When an entity changes an accounting
policy upon initial application of a
primary source of GAAP that does not
include specific transitional provisions,
or changes an accounting policy
voluntarily, it shall apply the change
retrospectively. Disclosure is also
required of a new primary source of
GAAP that has been issued but is not
yet effective including the possible
impact the new source of GAAP will
have on the entity’s financial
statements, if known.
There are comparable requirements to
those in the PSA Handbook.
Page 16 of 45
Adoption of the
PSA Handbook
when
transitioning
from a non-GAAP
basis (for
example, from a
cash basis) may
be accounted for
on a prospective
or retroactive
basis. Also, there
is no
requirement to
disclose new
primary sources
of GAAP issued
but not yet
effective under
the PSA
Handbook.
Summary Comparison of CICA Public Sector Accounting (PSA) Handbook and
CICA Handbook – Accounting, as of June 30, 2011
Subject
PSA Handbook
CICA Handbook – Accounting
Reference
Comments
Reference
Comments
Change in
estimates
PS 2120
1506
There are comparable requirements to
those in the PSA Handbook.
Measurement
uncertainty
PS 2130
Under the PSA Handbook, a change in
estimate is recognized in the period of
the change and applicable future
periods.
Under the PSA Handbook, the nature
and extent of the measurement
uncertainty for an item recognized or
disclosed in the financial statements is
disclosed when the measurement
uncertainty is material.
There are no specific requirements in
the PSA Handbook.
1508
There are comparable requirements to
those in the PSA Handbook.
1751
The CICA Handbook – Accounting is
directed at all profit-oriented
enterprises that are required by law,
regulation or contract to prepare
interim financial statements in
accordance with GAAP or that elect to
do so including the minimum
components and disclosure required in
the interim financial statements.
There are comparable requirements to
those in the PSA Handbook.
Interim
financial
statements
Disclosure of
accounting
policies
PS 2100
Under the PSA Handbook, disclosure
should include a clear and concise
description of all significant accounting
policies of a reporting entity and be
included as an integral part of the
financial statements.
1505
Highlighted
Difference(s)
Page 17 of 45
Summary Comparison of CICA Public Sector Accounting (PSA) Handbook and
CICA Handbook – Accounting, as of June 30, 2011
Subject
PSA Handbook
CICA Handbook – Accounting
Highlighted
Difference(s)
Reference
Comments
Reference
Comments
Futureoriented
financial
information
There are no specific requirements in
the PSA Handbook.
4250
Differential
reporting
There are no specific requirements in
the PSA Handbook.
1300
Unincorporate
d businesses
There are no specific requirements in
the PSA Handbook.
1800
The CICA Handbook – Accounting
addresses the measurement,
presentation and disclosure of futureoriented financial information when
presented for external users in the
format of general purpose financial
statements or in such special purpose
format as agreed by the parties.
The CICA Handbook – Accounting
establishes principles for the use of
differential reporting by certain profitoriented enterprises. Under the
differential reporting principles,
qualifying enterprises may apply
specified reporting options in financial
statements prepared in accordance
with GAAP.
The CICA Handbook – Accounting
addresses special problems that arise in
statements of unincorporated
businesses because such businesses,
unlike limited companies, are not
separate from their owners.
Page 18 of 45
Summary Comparison of CICA Public Sector Accounting (PSA) Handbook and
CICA Handbook – Accounting, as of June 30, 2011
Subject
PSA Handbook
CICA Handbook – Accounting
Reference
Reference
Comments
Highlighted
Difference(s)
Comments
REPORTING ENTITY
Defined by
PS 1300
Under the PSA Handbook, a reporting
1590
entity is the government and
organizations controlled by it. A list of
indicators that provide more
persuasive evidence of control and
other indicators of control are included.
The ability of the parent to obtain
either financial or non-financial
benefits from the entity is considered.
Types of
controlled
entities
Intro. and Under the PSA Handbook, a controlled
PS 2500 entity may be classified as a
government business enterprise, a
government not-for-profit organization
or another government organization.
Each type of entity has different
characteristics and is directed to
varying sources of GAAP based on
these characteristics.
Under the CICA Handbook –
Accounting, an enterprise should
consolidate all of its subsidiaries. A
subsidiary is defined as “an enterprise
controlled by another enterprise (the
parent) that has the right and ability to
obtain future economic benefits from
the resources of the enterprise and is
exposed to the related risks.” The right
and ability of the parent to obtain
future economic benefits from the
resources of an enterprise that it
controls and the parent’s exposure to
the related risks are necessary
characteristics of a parent/subsidiary
relationship.
There are no specific requirements in
the CICA Handbook – Accounting.
Page 19 of 45
The
determination of
controlled
entities could
differ due to
different criteria
to determine
control.
The appropriate
source of GAAP
for controlled
entities may vary
depending on the
type of entity
under the PSA
Handbook.
Summary Comparison of CICA Public Sector Accounting (PSA) Handbook and
CICA Handbook – Accounting, as of June 30, 2011
Subject
PSA Handbook
CICA Handbook – Accounting
Highlighted
Difference(s)
Reference
Comments
Reference
Accounting for
controlled
entities
PS 1300,
PS 2500
and
PS 3070
1590,
Under the PSA Handbook, other
1601 and
government organizations and
1602
government not-for-profit
organizations are consolidated on a
line-by-line basis by the government
reporting entity applying a uniform
basis of accounting (i.e., the PSA
Handbook).
For government business enterprises,
the modified equity basis of accounting
applies. Under the modified equity
basis, the accounting principles of the
government business enterprise are
not adjusted to conform with those of
the government reporting entity.
Under the CICA Handbook- Accounting,
consolidated financial statements are
produced by aggregating the financial
statements of one or more subsidiary
companies on a line-by-line basis with
the financial statements of the parent
company, eliminating intercompany
balances and transactions and
providing for any non-controlling
interest in a subsidiary company.
Accounting for
jointly
controlled
entities
PS 3060
Under the PSA Handbook, the modified 3055
equity basis of accounting is applied to
account for the government’s share of
government business partnerships (i.e,
GBEs). Proportionate consolidation is
applied to all other government
partnerships.
Under the CICA Handbook –
Accounting, joint control of an
economic activity is defined as “the
contractually agreed sharing of the
continuing power to determine its
strategic operating, investing and
financing policies.” Interests in joint
ventures are recognized in the financial
statements of the venturer using the
proportionate consolidation method.
The CICA Handbook – Accounting does
not include an equivalent concept of a
government business partnership.
Comments
Page 20 of 45
There is a
difference in the
method of
accounting for
controlled
government
organizations
categorized as
government
business
enterprises
(GBEs), which are
accounted for by
the modified
equity basis
under the PSA
Handbook.
There is a
difference in the
method of
accounting for
joint ventures in
government
business
partnerships
(i.e,GBEs), which
are accounted
for by the
modified equity
basis under the
PSA Handbook.
Summary Comparison of CICA Public Sector Accounting (PSA) Handbook and
CICA Handbook – Accounting, as of June 30, 2011
Subject
PSA Handbook
CICA Handbook – Accounting
Reference
Comments
Reference
Investments in
associates
PS 3040
Under the PSA Handbook, when an
entity is not controlled or subject to
joint control, it is accounted for as a
portfolio investment at cost.
Variable
interest
entities
PS 1300
AcG-15
Under the PSA Handbook, a list of
indicators that provide more
persuasive evidence of control and
other indicators of control are included.
Combinations
involving
common
control
There are no specific requirements in
the PSA Handbook.
3051
1601
Highlighted
Difference(s)
Comments
Under the CICA Handbook –
Accounting, when an investor is able to
exercise significant influence over an
investee that is not a subsidiary, a joint
venture or a variable interest entity,
the investor should account for the
investment by the equity method.
The cost method is used in accounting
for investments for which the investor
is not able to exercise significant
influence over an investee.
The CICA Handbook – Accounting
requires certain entities that are
subject to control on a basis other than
ownership of voting interests to be
consolidated.
Under the CICA Handbook –
Accounting, combined financial
statements (as distinguished from
consolidated financial statements in
that the financial statements of the
parent company are not included),
while not a substitute for consolidated
financial statements, are prepared
using principles similar to those used in
preparing consolidated financial
statements.
Page 21 of 45
The PSA
Handbook does
not contain a
“significant
influence”
concept, which
results in a
difference in the
method of
accounting for
some types of
investments.
Summary Comparison of CICA Public Sector Accounting (PSA) Handbook and
CICA Handbook – Accounting, as of June 30, 2011
Subject
PSA Handbook
CICA Handbook – Accounting
Reference
Reference
Comments
Highlighted
Difference(s)
Comments
CONSOLIDATION PRINCIPLES
Intergovernmental
/ entity
transactions
PS 2500
and
PS 3070
Acquisitions
PS 2510
Dispositions
PS 2510
Under the PSA Handbook, transactions 1601
and balances between governmental
units are eliminated on consolidated.
Governmental units, as defined,
exclude government business
enterprises. However, unrealized gains
and losses arising on transactions
between governmental units and
government business enterprises are
required to be eliminated.
Under the PSA Handbook, the purchase 1582
method is applied for business
acquisitions.
1602
Under the PSA Handbook, on
disposition of a business, a gain or loss
is reported based on the difference
between the proceeds and the carrying
value of the net assets at the date of
sale.
Under the CICA Handbook –
Accounting, balances, transactions,
revenues and expenses between
parents and subsidiaries are eliminated
on consolidation.
Similarly, under the CICA Handbook –
Accounting, the purchase method of
accounting is used to account for all
business combinations.
There are comparable requirements to
those in the PSA Handbook.
Page 22 of 45
There is a
difference in the
accounting for
controlled
government
organizations
categorized as
GBEs under the
PSA Handbook
on consolidation.
While the
purchase method
is used to
account for
acquisitions
under both
Handbooks, the
details of the
purchase method
under the
standards do
vary.
Summary Comparison of CICA Public Sector Accounting (PSA) Handbook and
CICA Handbook – Accounting, as of June 30, 2011
Subject
PSA Handbook
CICA Handbook – Accounting
Reference
Comments
Reference
Noncontrolling
interests
PS 2510
Under the PSA Handbook, when there
is a non-controlling interest,
proportionate consolidation effectively
excludes the portion of the entity a
government does not control.
Changes in the
status of a
controlled
entity
PS 2510
and
PS 3070
Under the PSA Handbook, when a
governmental unit becomes a
government business enterprise,
accounting for the change cannot
create revenue or result in reporting
TCAs that would improve the net
financial position of the government
reporting entity.
When an organization no longer meets
the definition of a government business
enterprise, the effect of conforming its
accounting policies to those of the
government reporting entity for
purposes of consolidation is included in
the determination of consolidated
operating results in the period.
1602
Highlighted
Difference(s)
Comments
Under the CICA Handbook –
Accounting, non-controlling interests
shall be presented in the consolidated
statement of financial position within
equity, separately from the equity of
the owners of the parent.
There are no specific requirements in
the CICA Handbook – Accounting.
Page 23 of 45
Summary Comparison of CICA Public Sector Accounting (PSA) Handbook and
CICA Handbook – Accounting, as of June 30, 2011
Subject
PSA Handbook
CICA Handbook – Accounting
Reference
Reference
Comments
Highlighted
Difference(s)
Comments
REVENUES
Definition
PS 1000
The PSA Handbook defines revenues,
including gains, as an increase in
economic resources, either by way of
increases of assets or decreases of
liabilities, resulting from the
operations, transactions and events of
the accounting period.
1000
Criteria
PS 1000
Under the PSA Handbook, the general
recognition criteria apply for revenues.
1000
The CICA Handbook – Accounting
defines revenues as an increase in
economic resources, either by way of
inflows or enhancements of assets or
reductions of liabilities, resulting from
the ordinary activities of an entity.
Gains are defined and reported in
relation to increases in equity/net
assets from peripheral or incidental
transactions or events.
Under the CICA Handbook –
Accounting, revenues are generally
recognized when performance is
achieved and reasonable assurance
regarding measurement and
collectability of the consideration
exists.
Page 24 of 45
Summary Comparison of CICA Public Sector Accounting (PSA) Handbook and
CICA Handbook – Accounting, as of June 30, 2011
Subject
Exchange
transactions
2
PSA Handbook
CICA Handbook – Accounting
Reference
Comments
Reference
PS 1000
Under the PSA Handbook, the general
3400
recognition criteria apply for revenues.
Revenues, including gains, are
recognized in the period in which the
transaction or event occurred that gave
rise to the revenues. 2
Highlighted
Difference(s)
Comments
Under the CICA Handbook –
Accounting, revenues arising from
exchange transactions are recorded at
the fair value established by the parties
to the transaction. Revenues from a
transaction involving the sale of goods
are recognized when the significant
risks and rewards of ownership have
been transferred. Revenues from
service transactions and long-term
contracts are usually recognized as the
service or contract activity is performed
using either the percentage of
completion method or the completed
contract method.
PSAB is currently undertaking a project on Revenue from Exchange Transactions. For further information, click here.
Page 25 of 45
Summary Comparison of CICA Public Sector Accounting (PSA) Handbook and
CICA Handbook – Accounting, as of June 30, 2011
Subject
Non-exchange
transactions
Non-monetary
transactions
PSA Handbook
CICA Handbook – Accounting
Reference
Comments
Reference
PS 3410
and
PS 3510
Under the PSA Handbook, a
government transfer is recognized by a
transferring government as an expense
in the period the transfer is authorized
and all eligibility criteria have been met
by the recipient. A government transfer
is recognized by a recipient
government as revenue in the period
the transfer is authorized and all
eligibility criteria have been met except
to the extent the transfer gives rise to
an obligation that meets the definition
of a liability.
Taxes are to be recognized as assets
and revenue when they meet the
definition of an asset, when they are
authorized and when the taxable event
occurs.
There are no specific requirements in
the PSA Handbook.
Highlighted
Difference(s)
Comments
There are no specific requirements in
the CICA Handbook – Accounting.
3831
Under the CICA Handbook –
Accounting, an entity should generally
measure an asset exchanged or
transferred in a non-monetary
transaction at the more reliably
measurable of the fair value of the
asset given up and the fair value of the
asset received. In certain circumstances
the asset is measured at the carrying
amount of the asset given up adjusted
by the fair value of any monetary
consideration received or given.
Page 26 of 45
Summary Comparison of CICA Public Sector Accounting (PSA) Handbook and
CICA Handbook – Accounting, as of June 30, 2011
Subject
Accounting for
government
assistance
PSA Handbook
CICA Handbook – Accounting
Reference
Comments
Reference
PS 3410
3800
Under the PSA Handbook, a
government transfer is recognized by a
recipient government as revenue in the
period the transfer is authorized and all
eligibility criteria have been met except
to the extent the transfer gives rise to
an obligation that meets the definition
of a liability.
Highlighted
Difference(s)
Comments
The CICA Handbook – Accounting
allows for government assistance to be
treated using the capital approach or
income approach. The income
approach requires government
assistance to be credited to income in
the following ways: directly to revenues
or as a reduction in expenses, as a
reduction to the capital asset or as
deferred revenue. The capital approach
requires government assistance be
treated as a capital transaction and
credited to contributed surplus.
EXPENSES
Definition
PS 1000
The PSA Handbook defines expenses,
1000
including losses, as a decrease in
economic resources either by way of
decreases in assets or increases in
liabilities resulting from the operations,
transactions and events of the
accounting period.
The CICA Handbook – Accounting,
defines expenses as a decrease in
economic resources, either by way of
outflows or reductions of assets or
incurrences of liabilities, resulting from
an entity’s ordinary revenue generating
or service delivery activities. Losses are
defined as decreases in equity/net
assets from peripheral or incidental
transactions and events affecting an
entity.
Page 27 of 45
Summary Comparison of CICA Public Sector Accounting (PSA) Handbook and
CICA Handbook – Accounting, as of June 30, 2011
Subject
PSA Handbook
CICA Handbook – Accounting
Highlighted
Difference(s)
Reference
Comments
Reference
Comments
Criteria
PS 1000
Under the PSA Handbook, the general
recognition criteria apply for expenses.
1000
Interest
PS 3150,
PS 3230
and
PS 3450
3061 and
Under the PSA Handbook, when
3855
incurred by the passage of time,
interest recognized includes
amortization of discounts or premiums
and issue expenses. Interest costs
directly attributable to the acquisition,
construction and development of a TCA
may be capitalized during the
construction period. Capitalization of
interest ceases when no construction
or development is taking place or when
a TCA is ready for use in producing
goods and services. For fiscal periods
beginning on or after April 1, 2015 for
governments and on or after April 1,
2012 for government organizations, the
effective interest method is to be used
to calculate amortized cost and interest
for financial assets and liabilities.
Under the CICA Handbook –
Accounting, expenses and losses are
generally recognized when an
expenditure or previously recognized
asset does not have future economic
benefit.
Under the CICA Handbook –
Accounting, the effective interest
method is used to calculate amortized
cost and interest for financial assets
and liabilities. Interest directly
attributable to the acquisition,
construction, development and
betterment of an asset is capitalized up
to when an item of property, plant and
equipment (PPE) is substantially
complete and ready for productive use.
Page 28 of 45
Summary Comparison of CICA Public Sector Accounting (PSA) Handbook and
CICA Handbook – Accounting, as of June 30, 2011
Subject
Pensions and
employee
future
benefits
PSA Handbook
CICA Handbook – Accounting
Reference
Comments
Reference
PS 3250
and
PS 3255
3461
Under the PSA Handbook, retirement
benefits, post-employment benefits,
and compensated absences are
accounted for as liabilities. Defined
benefit plans sponsored by the
government are subject to periodic
actuarial valuations to attribute the
cost of the benefits to the periods of
employee service and to determine the
liability and assets (if any) to be
reported. When a defined benefit
multiemployer plan is not sponsored by
the government, it only accounts for
contributions it has made. Similar rules
apply to defined contribution plans.
Changes arising from plan amendments
are accounted for when effective.
Highlighted
Difference(s)
Comments
The CICA Handbook – Accounting has
comparable requirements to those in
the PSA Handbook with some
exceptions. For example, for a defined
benefit plan, the method of recognizing
actuarial gains and losses is by way of
the “corridor” approach or immediately
compared to the PSA Handbook, which
requires the amortization of actuarial
gains and losses on a systematic basis
over the remaining service life of the
related employee group. The discount
rate used to determine the accrued
benefit obligation is the market rate on
high-quality corporate bonds compared
to the PSA Handbook in which the
discount rate is by reference to its plan
asset earnings or by reference to its
cost of borrowing. Sick-pay benefits
that do not vest are not required to be
accrued compared to the PSA
Handbook, which indicates such an
obligation is recorded unless
circumstances indicate that it is not
significant or may not justify an accrual.
Page 29 of 45
Differences exist
in the
recognition of
actuarial gains
and losses for
defined benefit
plans, the
discount rate
used in actuarial
valuations and
the accounting
for sick-pay
benefits that do
not vest.
Summary Comparison of CICA Public Sector Accounting (PSA) Handbook and
CICA Handbook – Accounting, as of June 30, 2011
Subject
PSA Handbook
CICA Handbook – Accounting
Highlighted
Difference(s)
Reference
Comments
Reference
Comments
Income taxes
and
investment
tax credits
There are no specific requirements in
the PSA Handbook.
3465 and
3805
Extraordinary
items
There are no specific requirements in
the PSA Handbook.
3480
Stock-based
compensation
and other
stock-based
payments
There are no specific requirements in
the PSA Handbook.
3870
The CICA Handbook – Accounting
addresses the recognition,
measurement, presentation and
disclosure of income and refundable
taxes in an enterprise’s financial
statements plus the recognition of
investment tax credits in income.
The CICA Handbook – Accounting
addresses items resulting from
transactions or events having all the
necessary characteristics of
extraordinary items, which are included
in net income and reported separately,
net of applicable income taxes, on the
income statement.
The CICA Handbook – Accounting
addresses the recognition,
measurement and disclosure of stockbased compensation and other stockbased payments made in exchange for
goods and services.
Page 30 of 45
Summary Comparison of CICA Public Sector Accounting (PSA) Handbook and
CICA Handbook – Accounting, as of June 30, 2011
Subject
PSA Handbook
CICA Handbook – Accounting
Reference
Reference
Comments
Highlighted
Difference(s)
Comments
FINANCIAL ASSETS
Definition
PS 1000,
PS 1200
and
PS 1201
The PSA Handbook defines assets as
1000 and
economic resources controlled by a
3855
government as a result of past
transactions or events and from which
future economic benefits are expected
to be obtained.
Financial assets are assets that could be
used to discharge existing liabilities or
finance future operations and are not
for consumption in the normal course
of operations. As such they may
include inventories or items for sale.
The indicator of net debt is determined
by deducting the financial assets of the
government from its liabilities.
Recognition
PS 1000
Under the PSA Handbook, the general
recognition criteria apply for financial
assets.
1000
The CICA Handbook – Accounting
defines assets as economic resources
controlled by an entity as a result of
past transactions or events and from
which future economic benefits may be
obtained.
A financial asset is any asset that is:
(a) cash;
(b) a contractual right to receive cash
or another financial asset from
another party;
(c) a contractual right to exchange
financial instruments with another
party under conditions that are
potentially favourable to the entity;
or
(d) an equity instrument of another
entity.
Similarly, under the CICA Handbook –
Accounting, the general recognition
criteria apply for financial assets.
Page 31 of 45
There is a
different
definition of
financial assets
under the two
Handbooks.
Summary Comparison of CICA Public Sector Accounting (PSA) Handbook and
CICA Handbook – Accounting, as of June 30, 2011
Subject
PSA Handbook
Reference
Measurement
and
impairment
PS 1000,
PS 3030,
PS 3040,
PS 3050
and
PS 3450
CICA Handbook – Accounting
Highlighted
Difference(s)
Comments
Reference
Comments
Under the PSA Handbook, financial
assets are primarily measured at
historical cost.
Loans receivable are recorded at the
lower of cost and net recoverable
value. When a loss is known with
sufficient precision, and there is no
realistic prospect of recovery, the loan
receivable is reduced by the amount of
the loss. Once all or a part of a loan has
been written off, the write-offs should
not be reversed.
For fiscal periods beginning prior to
April 1, 2015 for governments and prior
to April 1, 2012 for government
organizations, temporary investments
are recorded at the lower of cost and
market value. When there has been an
other than temporary decline in the
value of a portfolio investment, the
investment is written down to
recognize the loss. Impairment
provisions are not reversed if there is a
subsequent increase in value.
For fiscal periods beginning prior to
April 1, 2015 for governments and prior
to April 1, 2012 for government
organizations, portfolio investments
are accounted for by the cost method.
3000,
3020 and
3855
Under the CICA Handbook –
Accounting, a financial asset is
categorized as either held for trading,
held to maturity, available for sale or
loans and receivables. A financial
liability is categorized as held for
trading or other liabilities.
Financial instruments are measured at
fair value or amortized cost depending
on their categorization. Unrealized
gains and losses on available for sale
financial assets are recorded in other
comprehensive income until the
financial asset is derecognized.
Unrealized gains and losses on held for
trading instruments are recorded in the
income statement.
Loans or receivables with non-market
rates of interest are initially recognized
at their fair value discounted using the
prevailing market rates of interest from
similar instruments.
Loans or receivables are written off as
soon as it is known to be uncollectible
or are written down to its estimated
realizable value as soon as it is known
that it is not collectible in full.
Interest is recognized using the
effective interest rate method on
Page 32 of 45
There is a
different basis of
categorizing and
measuring
financial
instruments
under the PSA
Handbook and
the CICA
Handbook –
Accounting.
Summary Comparison of CICA Public Sector Accounting (PSA) Handbook and
CICA Handbook – Accounting, as of June 30, 2011
Subject
Derecognition
PSA Handbook
CICA Handbook – Accounting
Reference
Reference
PS 3050
Comments
When a portfolio investment contains
significant concessionary terms, it is
initially recognized at its net present
value (face value less the amount of
the grant portion) discounted using the
government’s average borrowing rate.
For fiscal periods beginning on or after
April 1, 2015 for governments and on
or after April 1, 2012 for government
organizations, derivatives and portfolio
investments that are equity
instruments quoted in an active market
are fair valued. Other financial
instruments are accounted for at cost
or amortized cost unless they are
classified to the fair value category.
Unrealized gains and losses on financial
instruments are recognized in the
statement of remeasurement gains and
losses. When realized, the gains and
losses are transferred from the
statement of remeasurement gains and
losses to the statement of operations.
Under the PSA Handbook, loans and
3020,
other financial assets are removed
3025 and
when repaid, the risks and rewards are 3855
transferred, the right to repayment has
expired or been waived, or it is written
off.
Highlighted
Difference(s)
Comments
financial instruments categorized as
held to maturity, available for sale,
loans and receivables, or other
liabilities.
There are comparable requirements to
those in the PSA Handbook.
Page 33 of 45
Summary Comparison of CICA Public Sector Accounting (PSA) Handbook and
CICA Handbook – Accounting, as of June 30, 2011
Subject
PSA Handbook
CICA Handbook – Accounting
Reference
Reference
Comments
Highlighted
Difference(s)
Comments
NON-FINANCIAL ASSETS
Definition
PS 1000
Recognition
PS 1000
Under the PSA Handbook, a nonfinancial asset is any asset acquired,
constructed or developed that does not
normally provide resources to
discharge existing liabilities, but
instead:
(a) is normally employed to deliver
government services;
(b) may be consumed in the normal
course of operations; and
(c) is not for sale in the normal course
of operations.
1000
Under the PSA Handbook, the general
recognition criteria apply for nonfinancial assets. Intangible assets,
natural resources and lands held by a
government that were not purchased
are not recognized on the statement of
financial position.
There is no similar categorization of
assets between financial and nonfinancial made under the CICA
Handbook – Accounting.
Under the CICA Handbook –
Accounting, the general recognition
criteria apply for assets that are other
than financial instruments.
Page 34 of 45
Summary Comparison of CICA Public Sector Accounting (PSA) Handbook and
CICA Handbook – Accounting, as of June 30, 2011
Subject
PSA Handbook
CICA Handbook – Accounting
Reference
Comments
Reference
Measurement
and
impairment
PS 1200,
PS 1201
and
PS 3150
3061,
Under the PSA Handbook, items
inherited by right of the Crown, such as 3063 and
3475
Crown lands, forests, water and
mineral resources, are not recognized
in government financial statements.
TCAs are recorded at cost. Write-downs
are recorded when the asset no longer
contributes to the government’s ability
to provide goods and services, or when
the value of future economic benefits is
less than its book value. Such writedowns are not reversed.
Amortization
PS 3150
Under the PSA Handbook, amortization 3061 and
is calculated by taking the cost of the
3475
TCA, less any residual value, over its
useful life in a rational and systematic
manner.
Highlighted
Difference(s)
Comments
Under the CICA Handbook –
Accounting, PPE are recorded at cost.
An impairment loss is recognized when
the carrying amount of a long-lived
asset is not recoverable and exceeds its
fair value. An impairment loss is not
reversed if the fair value subsequently
rises.
A long-lived asset classified as held for
sale is measured at the lower of its
carrying amount or fair value less cost
to sell. A loss is recognized for any
initial or subsequent write-down to fair
value less cost to sell. A gain is
recognized for any subsequent increase
in fair value less cost to sell, but not in
excess of the cumulative loss previously
recognized for a write-down.
Under the CICA Handbook –
Accounting, amortization is calculated
by taking the greater of:
(a) the cost of the PPE less salvage
value over the life of the asset; and
(b) the cost of the PPE less residual
value over the useful life of the
asset,
in a rational and systematic manner. A
long-lived asset should not be
amortized while it is classified as held
for sale.
Page 35 of 45
There are
differences in the
basis in which
impairments of
TCAs are
determined. The
PSA Handbook
evaluates
impairment on
the ability to
provide goods
and services
rather than on
economic
recoverability as
in the CICA
Handbook –
Accounting.
Summary Comparison of CICA Public Sector Accounting (PSA) Handbook and
CICA Handbook – Accounting, as of June 30, 2011
Subject
PSA Handbook
CICA Handbook – Accounting
Reference
Comments
Reference
Disposal
PS 3150
Under the PSA Handbook, on
disposition of a non-financial asset, a
gain or loss is reported based on the
difference between the proceeds and
the net book value at the date of sale.
3475
Inventories
PS 1200
and
PS 1201
There is no specific standard on
inventories but some requirements in
the PSA Handbook.
3031
Highlighted
Difference(s)
Comments
Similarly, under the CICA Handbook –
Accounting, on disposition of a nonfinancial asset, a gain or loss is reported
based on the difference between the
proceeds and the net book value at the
date of sale.
Under the CICA Handbook –
Accounting, inventories are assets:
(a) held for sale in the ordinary course
of business;
(b) in the process of production for
such sale; or
(c) in the form of materials or supplies
to be consumed in the production
process or in the rendering of
services.
The CICA Handbook – Accounting
prescribes the accounting treatment
for inventories.
Page 36 of 45
Summary Comparison of CICA Public Sector Accounting (PSA) Handbook and
CICA Handbook – Accounting, as of June 30, 2011
Subject
Goodwill and
intangible
assets
PSA Handbook
CICA Handbook – Accounting
Highlighted
Difference(s)
Reference
Comments
Reference
Comments
PS 1000,
PS 2510
and
PS 3150
Under the PSA Handbook, intangibles
(with the exception of computer
software) are not recognized as assets
in government financial statements.
A purchase premium (goodwill) arising
on acquisition of a governmental unit
would be charged to expenses in the
period of acquisition because the
future net cash flows associated with a
governmental unit are unlikely to
indicate that the purchase premium
has been paid for anything but policy
reasons. A purchase premium arising
on acquisition of a GBE is reflected in
the investment balance recorded by
the government reporting entity as
calculated under the modified equity
basis.
3064
In the CICA Handbook – Accounting,
goodwill is defined as the excess of the
cost of an acquired enterprise over the
net amounts assigned to assets
acquired and liabilities assumed.
Goodwill is recognized on an
enterprise’s balance sheet at the
amount initially recognized, less any
write-down for impairment.
An intangible asset is an identifiable
non-monetary asset without physical
substance. An intangible asset is
measured initially at cost and
subsequently amortized.
Page 37 of 45
There are
differences in the
accounting for
intangibles and
goodwill.
Summary Comparison of CICA Public Sector Accounting (PSA) Handbook and
CICA Handbook – Accounting, as of June 30, 2011
Subject
Leases and
multiple
element
contracts that
include leases
PSA Handbook
CICA Handbook – Accounting
Reference
Comments
Reference
PSG-2
and
PSG-5
Under the PSA Handbook, accounting
for leased TCAs is dependent on
whether the contract transfers the
benefits and risks of ownership to the
government. When a contract contains
multiple elements, the discount rate
applicable to the financing component
is estimated based on what would
apply to comparable leases.
Transactions involving a sale and 100%
leaseback do not give rise to any
change in the carrying value of the
leased TCA. Alternatively, when an
arm’s length party contracts to
leaseback all or a portion of the
property, a components approach is
applied to determine whether a gain is
recognized.
3065
Highlighted
Difference(s)
Comments
Under the CICA Handbook –
Accounting, lease accounting provisions
are similar to those in the PSA
Handbook.
A difference arises in the case of a saleleaseback. For a capital lease, the CICA
Handbook – Accounting generally
requires any profit or loss to be
deferred and amortized in proportion
to the amortization of the leased asset.
For an operating lease, any profit or
loss is deferred and amortized in
proportion to rental payments over the
lease term.
LIABILITIES
Definition
PS 1000
Under the PSA Handbook, liabilities are 1000
defined as present obligations of a
government to others arising from past
transactions or events, the settlement
of which is expected to result in the
future sacrifice of economic benefits.
Under the CICA Handbook –
Accounting, liabilities are defined as
obligations of an entity arising from
past transactions or events, the
settlement of which may result in the
transfer or use of assets, provision of
services or other yielding of economic
benefits in the future.
Page 38 of 45
In the PSA
Handbook,
certain additional
factors are to be
analyzed in
determining
whether the
benefits and risks
of ownership
have been
transferred to
the lessee.
Summary Comparison of CICA Public Sector Accounting (PSA) Handbook and
CICA Handbook – Accounting, as of June 30, 2011
Subject
PSA Handbook
CICA Handbook – Accounting
Reference
Comments
Reference
Recognition
PS 3200
Measurement
PS 1000
Under the PSA Handbook, liabilities are 1000
recognized in the financial statements
when:
(a) there is an appropriate basis of
measurement; and
(b) a reasonable estimate can be made
of the amount involved.
Under the PSA Handbook, liabilities are 1000
primarily measured at historical cost
although other bases of measurement
are used in limited circumstances
including replacement cost and
realizable value.
Derecognition
There are no specific requirements in
the PSA Handbook.
3855
Highlighted
Difference(s)
Comments
Under the CICA Handbook –
Accounting, the general recognition
criteria apply for liabilities.
Under the CICA Handbook –
Accounting, liabilities are primarily
measured at historical cost although
other bases of measurement are also
used in limited circumstances including
replacement cost, realizable value and
present value.
Under the CICA Handbook –
Accounting, an entity removes a
financial liability from its balance sheet
when it is extinguished (i.e., when the
obligation is discharged, cancelled or
expires).
Page 39 of 45
Summary Comparison of CICA Public Sector Accounting (PSA) Handbook and
CICA Handbook – Accounting, as of June 30, 2011
Subject
PSA Handbook
CICA Handbook – Accounting
Highlighted
Difference(s)
Reference
Comments
Reference
Comments
Long-term
debt
PS 3230
3210
Under the CICA Handbook –
Accounting, debt reacquired but not
cancelled is shown separately as a
deduction from the relative liability.
Contingent
liabilities
PS 3300
3290
There are comparable requirements to
those in the PSA Handbook.
Financial
guarantees
PS 3310
Under the PSA Handbook, debt issued
by a government that is specifically for
and subsequently loaned to a
government business enterprise is
presented on a net basis.
Debt reacquired but not cancelled
(included in investments) is disclosed.
Externally restricted sinking funds set
aside to retire its long-term debt are
deducted from debt obligations or
reported on the statement of financial
position.
Under the PSA Handbook, a contingent
liability is recognized when it is likely a
future event will confirm a liability has
been incurred and the amount can be
reasonably estimated. A contingent
liability is derecognized when settled or
otherwise extinguished, or when the
existence of a liability at the financial
statement date is unlikely.
Under the PSA Handbook, a provision
for loss on loan guarantees is
established when a loss is likely, taking
into account the amount recoverable
from the borrower and the realization
of security. Changes to the provision
for losses is charged or credited to the
statement of operations. Other
guarantees are accounted for in
accordance with Section PS 3300.
3290,
3855 and
AcG-14
Under the CICA Handbook –
Accounting, some guarantees are
treated as financial instruments and
fair valued on inception and on a goforward basis while other financial
guarantees are accounted for on a
consistent basis with contingencies.
Page 40 of 45
Summary Comparison of CICA Public Sector Accounting (PSA) Handbook and
CICA Handbook – Accounting, as of June 30, 2011
Subject
Contractual
obligations
Asset
retirement
obligations
PSA Handbook
CICA Handbook – Accounting
Reference
Reference
Comments
The PSA Handbook defines contractual 3280
obligations as obligations of a
government to others that will become
liabilities in the future when the terms
of those contracts or agreements are
met. Information, including a
description of their nature and extent
and timing of the related expenditures,
is disclosed for those significant in
relation to the current financial
position or future operations.
PS 3200, There is no specific standard on asset
3110
PS 3260 retirement obligations in the PSA
and
Handbook. The general requirements
PS 3270 of a liability do apply.
Standards do exist in the PSA
Handbook on how to account for and
report the liability for closure and postclosure care of a solid waste landfill site
and how to account for and report the
liability for the remediation of
contaminated sites in government
financial statements.
PS 3390
Highlighted
Difference(s)
Comments
There are comparable requirements to
those in the PSA Handbook.
The CICA Handbook – Accounting
defines an asset retirement obligation
(related to an on-going operation) as a
legal obligation associated with the
retirement of a tangible long-lived
asset that an entity is required to
settle. The CICA Handbook –
Accounting addresses the recognition,
measurement, and disclosure of
liabilities for asset retirement
obligations and the associated asset
retirement costs.
Page 41 of 45
Summary Comparison of CICA Public Sector Accounting (PSA) Handbook and
CICA Handbook – Accounting, as of June 30, 2011
Subject
Reserves
PSA Handbook
CICA Handbook – Accounting
Highlighted
Difference(s)
Reference
Comments
Reference
Comments
PS 3100
and
PSG-4
Under the PSA Handbook, externally
restricted inflows are reported as a
liability and recognized as revenue in
the period in which the resources are
used for the purpose specified.
Additional disclosure is provided on
internally restricted entities. When a
government chooses to provide
information about any funds or
reserves, it does so only in the notes
and schedules and not on the
statement of financial position.
3260
Under the CICA Handbook –
Accounting, a reserve is limited to an
amount that, though not required to
meet a liability or contingency known
or admitted or a decline in value that
has already occurred as at the balance
sheet date, has been appropriated
from retained earnings or other surplus
at the discretion of management or
pursuant to the requirements of a
statute. Reserves are shown as part of
shareholder’s equity.
EQUITY
Definition
Share capital
Capital
transactions
1000
As the PSA Handbook supports the
preparation of summary financial
statements of governments, there is no
need to define equity as there is no
ownership.
There are no specific requirements in
3240
the PSA Handbook.
There are no specific requirements in
the PSA Handbook.
3610
The CICA Handbook – Accounting
defines equity/net assets as the
ownership interest in the assets of a
profit-oriented enterprise after
deducting its liabilities.
The CICA Handbook – Accounting
establishes requirements for disclosure
of share capital and the acquisition and
redemption of shares.
The CICA Handbook – Accounting
specifies that capital transactions, of
which examples are provided, are
excluded from the determination of net
income and shown separately in the
statement to which they relate.
Page 42 of 45
Reserves are
presented in the
notes and
schedules and
not on the
statement of
financial position
under the PSA
Handbook.
Summary Comparison of CICA Public Sector Accounting (PSA) Handbook and
CICA Handbook – Accounting, as of June 30, 2011
Subject
Earnings per
share
PSA Handbook
CICA Handbook – Accounting
Highlighted
Difference(s)
Reference
Comments
Reference
Comments
There are no specific requirements in
the PSA Handbook.
3500
The CICA Handbook – Accounting
defines earnings per share as the
amount of earnings attributable to
each common share. The CICA
Handbook – Accounting specifies the
method of calculation and the
presentation and disclosure
requirements for earnings per share.
Page 43 of 45
Summary Comparison of CICA Public Sector Accounting (PSA) Handbook and
CICA Handbook – Accounting, as of June 30, 2011
Subject
PSA Handbook
CICA Handbook – Accounting
Reference
Reference
Comments
Highlighted
Difference(s)
Comments
OTHER TOPICS
Hedge
accounting
Life insurance
enterprises
PS 2600
and
PS 2601
For fiscal periods beginning prior to
April 1, 2015 for governments and
prior to April 1, 2012 for government
organizations, the PSA Handbook
provides the option to designate a
foreign currency hedging relationship
through the use of synthetic
instrument accounting. Hedge
accounting is optional when specific
requirements are met at the inception
and throughout its term. Hedge
accounting of anticipated transactions
is not addressed.
For fiscal periods beginning on or after
April 1, 2015 for governments and on
or after April 1, 2012 for government
organizations, hedge accounting is no
longer permitted under the PSA
Handbook.
There are no specific requirements in
the PSA Handbook.
3865
Under the CICA Handbook –
Accounting, hedging relationships
directed at exposure to a particular risk
exposure are categorized as fair value
hedges, cash flow hedges or hedges of
a net investment in a self sustaining
foreign operation. Hedge accounting is
optional when specific requirements
are met at the inception and
throughout its term. Anticipated future
transactions may be designated as a
hedged item in a hedging relationship.
4211
The CICA Handbook – Accounting
establishes requirements for certain
specialized transactions and activities
carried on by life and health insurance
enterprises.
Page 44 of 45
There are more
limited
opportunities for
hedge
accounting to be
used in the PSA
Handbook
compared with
the CICA
Handbook –
Accounting.
Summary Comparison of CICA Public Sector Accounting (PSA) Handbook and
CICA Handbook – Accounting, as of June 30, 2011
Subject
Not-for-profit
organizations
3
PSA Handbook
CICA Handbook – Accounting
Reference
Comments
Reference
PS 4200
to
PS 4270
For fiscal periods beginning on or after 4400 to
April 1, 2012 for government not-for4470
profit organizations, the PSA Handbook
deals with matters that are unique to
not-for-profit organizations. 3
Highlighted
Difference(s)
Comments
Similar standards are included in the
CICA Handbook – Accounting.
In conjunction with the AcSB, PSAB is currently undertaking a project to review accounting standards that apply only to not-for-profit organizations. For
further information, click here.
Page 45 of 45