Treasury Board Accounting Standard 1.2 - Departmental and Agency Financial Statements

DATE: March 17, 2006

TO: Senior Financial Officers

The purpose of this note is to provide you with revised Treasury Board Accounting Standard (TBAS) 1.2 Departmental and Agency Financial Statements, which replaces the version issued in 2001, and to advise you of the reporting requirements for this year-end.  The 2005-2006 departmental financial statements are to be prepared in accordance TBAS 1.2.

A key change to the TBAS from the version distributed in September 2005 is that the statement of financial position now includes severance pay liability.  Guidance on the calculation and recording of this liability has already been distributed to Senior Full-Time Financial Officers.

Another change to the TBAS from the September 2005 version, is that it does not explicitly apply to revolving funds.  The difference in the spending authorities and specific reporting requirements for these entities may require that certain aspects of the financial statement model be tailored.  Separate guidance for revolving funds will be distributed this summer.  Revolving funds have the option to continue reporting under their existing model for the 2005-2006 year-end.

Departments are reminded that allowances or liabilities that have been devolved to them in 2005-06 should be reflected as an opening balance adjustment as of April 1, 2004 (where appropriate).  Departments are to restate their 2004-2005 financial statements.

If the 2005-06 financial statements will be the first statements made public, no mention of the prior period adjustment should be made in the statements.

Departments are reminded that starting with fiscal year 2005-2006, the financial statements are to be published in the Departmental Performance Report (DPR). Instructions on their publication will be included in the preparation guide for the 2005-2006 DPR.  To ensure the greatest quality of the financial statements prior to their release, departments are being provided with additional time this year-end prior to their finalization: 

• June 15^th, unsigned version of the financial statements (i.e. near final draft) to be submitted to the Office of the Comptroller General (OCG) for review.  Comments will be provided back to departments within a month of receipt. 
• August 15^th, final signed version to be submitted to the Office of Comptroller General

Departments are encouraged to provide earlier drafts of their financial statements without 2005-06 amounts, so that OCG can discuss any proposed changes with the department as early as possible.  

Departments that will have their 2005-2006 financial statements audited are to approach the Government Accounting Policy and Reporting division with any issues raised by their auditors on the application of the TBAS.

Two meetings have been scheduled to present in detail the changes to TBAS 1.2 and answer any questions. Departments have the option to send a representative(s) to either of the following meetings:

• Friday March 24^th, 2006 1:30 to 3:00 p.m.
• Wednesday March 29^th 1:30 to 3:00 p.m. 
• L'Esplanade Laurier, 8th Floor,
• East Tower, Boardroom E

Please forward the name(s) of any representative from your department/agency planning to attend and identify the date of the meeting selected to Chantal Lemyre at 957-2527 or Lemyre.Chantal@TBS-SCT.gc.ca. Questions on the TBAS and draft financial statements should also be forwarded to Chantal Lemyre.

c.c.: Senior Full-Time Financial Officers

Charles-Antoine St-Jean, CA
Comptroller General of Canada