Directive on Accounting Standards: Introduction – Government of Canada Accounting Handbook

Provides supplementary information that states the Government’s accounting choices and policies, and provides specific policies relevant to departmental financial statements and quarterly financial reports.
Date modified: 2017-04-01
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This document is part of the Appendix A of the Directive on Accounting Standards.

A. Objective

  1. The Government of Canada Accounting Handbook(GCAH) provides supplementary information that:
    • States the Government’s accounting choices, where options exist, under Public Sector Accounting Standards (PSAS);
    • Provides the Government’s accounting policies in the absence of specific PSAS; or,
    • Provides specific policies relevant to departmental financial statements or quarterly financial reports.

B. Context

  1. The Government of Canada uses financial information as a strategic business resource to support decision-making and management activities, policy development, program and service delivery and evidential needs, as well as for historical purposes and as an accountability mechanism.
  2. Parliament and Canadians expect the Government of Canada to be well managed, which includes reporting of financial and related non-financial information that is fairly presented in all material respects. Such information is expected to be relevant, reliable, comparable, understandable and clearly presented in a manner that maximizes its usefulness to those for whom the financial information is prepared. In addition, there is an expectation of transparency and accountability regarding how the government spends public funds to achieve results for Canadians.
  3. Government financial statements need to report the information required by users to help them make assessments and judgments concerning government financial operations and management (PS 1000.18). The information needed to aid understanding and assessments of government financial operations and to promote accountability extends beyond reporting surpluses and deficits. A government’s financial statements must provide information that describes liabilities and financial assets, its non-financial assets that are available for use in providing future services, the cost of using its economic resources in the delivery of services, as well as information about investing and financing activities and potential assets and liabilities (PS 1000.21). Standards are the concepts, conventions and postulates that provide principles to measure, recognize, present and disclose the financial information considered necessary for accountability and useful for decision making (PS 1000.05)
  4. The Government of Canada’s accounting policies for the government’s Consolidated Financial Statements and Departmental Financial Statements are based on Public Sector Accounting Standards and Public Sector Guidelines (PSAS). To ensure that the government and its component entities apply the appropriate accounting standards in a consistent manner, the GCAH, which has been issued by the Office of the Comptroller General of Canada, provides additional direction to supplement and support the application of PSAS. Along with PSAS, these parameters outline how transactions and other events are to be recognized, measured, presented and disclosed in government financial statements.

C. Limitations

  1. These standards are not intended to apply to immaterial or insignificant items or matters. Furthermore, in developing these standards, no rule of general application can be phrased to suit all circumstances or combinations of circumstances that may arise, nor is there any substitute for the exercise of professional judgment in the determination of what constitutes fair presentation or good practice in a particular case (Introduction to public sector accounting standard, .26-.27).
  2. The establishment of the Public Sector Accounting Handbook (PSAH) by the Public Sector Accounting Board is an evolutionary process which responds to changing information needs (Introduction to public sector accounting standard, .31). As a result, the OCG will assess proposed changes to PSAH on an ongoing basis and will determine whether the Directive on Accounting Standards or the GCAH require amendments.

D. Applicability of Canadian Public Sector Accounting Handbook (PSAH)

  1. The Summary of Applicability of PSAS(as seen below) provides details on which Public Sector Accounting Standards and guidelines (PSAS) are supported or supplemented by the GCAH. Where a policy choice, requirement, interpretation or other further direction has been issued to supplement PSAS, a listing of the additional direction available is provided. A list of PSAS is shown, together with a record of whether the standard:
    • Applies without additional policy choices, requirements or interpretation for both the Government of Canada Consolidated Financial Statements and Departmental Financial Statements;
    • Applies with additional policy choices, requirements or interpretation for the Government of Canada Consolidated Financial Statements; and
    • Applies with additional policy choices, requirements or interpretation for Departmental Financial Statements.

E. GCAH structure

  1. For ease of reference, the GCAH has been indexed to mirror the PSAH referencing system. Note that no supplementary information has been given for PSAH sections which are to be applied without additional policy choices, requirements or other supporting guidance.

    Title - “GC XXXX”
    • Numbering and naming will mirror PSAH structure and nomenclature for ease of reference (e.g. GC 3150 Tangible Capital Assets is supplementary to PS 3150).
    • Subject matters with no PSAH reference are included in the GC 4000/5000 series of the GCAH (e.g. GC 4100 Specified Purpose Accounts).
    Primary PSAH reference
    • Indicates the primary PSAH reference which applies
    Effective date
    • “This GCAH section takes effect on XXXX.” If applicable, “It replaces the version issued on XXXX.”
    Accounting direction
    • Text of accounting direction
    Other related references
    • Lists any additional references, such as other PSAH and GCAH sections

F. Summary of applicability of PSAS

Public Sector Accounting Standard Applies without additional policy choices or interpretation Applies with additional policy choices or interpretation for the Government of Canada Consolidated Financial Statements Applies with additional policy choices or interpretation for Departmental Financial Statements Accounting direction available in addition to PSAH
Introduction to Public Sector Accounting Standards Yes N/A N/A N/A
PS 1000 Financial statement concepts N/A Yes Yes
  • GC 1010 Financial Statement Concepts (Materiality)
PS 1100 Financial statement objectives N/A N/A Yes
  • GC 1100 Financial Statement Objectives
  • GC 4500 Departmental Financial Statements
PS 1150 Generally accepted accounting principals N/A Yes Yes
  • GC 1150 Generally Accepted Accounting Principles
  • GC 4500 Departmental Financial Statements
PS 1200 Financial statement presentation (PS 1201 Effective April 1, 2019) N/A Yes Yes
  • GC 1200 Financial Statement Presentation
  • GC 4500 Departmental Financial Statements
  • Year-end call letter issued by the Office of the Comptroller General of Canada.
PS 1300 Government reporting entity N/A Yes Yes
  • GC 1300 Government Reporting Entity
  • GC 4500 Departmental Financial Statements
PS 2100 Disclosure of accounting policies Yes N/A N/A N/A
PS 2120 Accounting changes Yes N/A N/A N/A
PS 2125 First-time adoption Yes N/A N/A N/A
PS 2130 Measurement uncertainty Yes N/A N/A N/A
PS 2200 Related party disclosures (Effective ) N/A N/A N/A
  • GC 4500 Departmental Financial Statements
  • Policy choices and interpretations for PS 2200 are under consideration.
PS 2400 Subsequent events N/A Yes Yes
  • GC 2400 Subsequent Events
  • Receiver General Manual - Chapter 15 Public Accounts Instructions
  • Receiver General Manual Chapter 16 - Letter of Representation Instructions
  • Year-end call letter issued by the Office of the Comptroller General of Canada
  • GC 4500 Departmental Financial Statements
PS 2500 Basic principles of consolidation N/A N/A Yes
  • GC 4500 Departmental Financial Statements
PS 2510 Additional areas of consolidation Yes N/A N/A N/A
PS 2600/2601 Foreign currency translation (Effective April 1, 2019) N/A N/A N/A
  • Policy choices and interpretations for PS 2601 are under consideration.
PS 2700 Segment disclosures N/A Yes Yes
  • GC 2700 Segmented Disclosures
  • GC 1200 Financial Statement Presentation
  • GC 4500 Departmental Financial Statements
PS 3040/3041 Portfolio investments (Effective April 1, 2019) Yes N/A N/A N/A
PS 3050 Loans receivable N/A Yes Yes
  • GC 3050 Loans Receivable
  • GC 3410 Transfer Payments
  • Policy on Transfer Payments
  • Interest and Administrative Charges Regulations
  • Debt Write-Off Regulations, 1994 (SOR / 94-602)
  • GC 3320 Contingent Assets
PS 3060 Government partnerships Yes N/A N/A N/A
PS 3070 Investments in government business enterprises Yes N/A N/A N/A
PS 3100 Restricted assets and revenues Yes N/A N/A N/A
PS 3150 Tangible capital assets N/A Yes Yes
  • GC 3150 Tangible Capital Assets
  • Interdepartmental Transfers - Capital Assets: A Supplement to the Financial Information Strategy (FIS) Manual
  • Future Asset Restoration Liability: A Supplement to the Financial Information Strategy (FIS) Manual
PS 3200 Liabilities Yes N/A N/A N/A
PS 3210 Assets (Effective ) N/A N/A N/A
  • Policy choices and interpretations for PS 3210 are under consideration.
PS 3230 Long-term Debt Yes N/A N/A N/A
PS 3250/3255 Retirement/Post-employment benefits N/A Yes Yes
  • GC 3250/3255 Retirement/Post-Employment Benefits
  • GC 4500 Departmental Financial Statements
  • Year-end call letter issued by the Office of the Comptroller General of Canada.
PS 3260 Liability for contaminated sites N/A N/A N/A
  • Remediation Liabilities Related to Contaminated Sites: A Supplement to the Financial Information Strategy (FIS) Manual
  • Policy choices and interpretations for PS 3260 are under consideration.
PS 3270 Solid waste landfill closure and post-closure liability Yes N/A N/A N/A
PS 3300/3310 Contingent liabilities/Loan guarantees N/A Yes Yes
  • GC 3300/3310 Contingent Liabilities and Loan Guarantees
  • Receiver General Manual, Chapter 15 Public Accounts Instructions
  • GC 4500 Departmental Financial Statements
PS 3320 Contingent assets Effective N/A Yes Yes
  • GC 3320 Contingent Assets
  • GC 3300/3310 Contingent Liabilities/Loan Guarantees
PS 3380 Contractual rights Effective N/A N/A N/A
  • Policy choices and interpretations for PS 3380 are under consideration.
PS 3390 Contractual obligations N/A Yes Yes
  • GC 3390 Contractual Obligations
  • Receiver General Manual, Chapter 15 Public Accounts Instructions
  • GC 4500 Departmental Financial Statements
PS 3410 Government transfers N/A Yes Yes
  • GC 3410 Government Transfers
  • GC 3050 Loans Receivable
  • Policy on Transfer Payments
  • Directive on Transfer Payments
PS 3420 Inter-entity transactions Effective N/A N/A N/A
  • GC 4500 Departmental Financial
  • Statements Policy choices and interpretations for PS 3420 are under consideration.
PS 3430 Restructuring transactions Effective April 1, 2018 N/A N/A N/A
  • Receiver General Manual Chapter 10 – 10.9.1 Accounting for the Effects of a Government Reorganization
  • Policy choices and interpretations for PS 3430 are under consideration.
PS 3450 Financial instruments Effective April 1, 2019 N/A N/A N/A
  • Policy choices and interpretations for PS 3450 are under consideration.
PS 3510 Tax revenue Yes N/A N/A N/A
PSG 2 – Leased tangible capital assets N/A Yes Yes
  • GC 3150 Tangible Capital Assets
PSG 4 – Funds and Reserves Yes N/A N/A N/A
PSG 5 – Sale-leaseback transactions Yes N/A N/A N/A
Non-PSAS sections
GCAH section Additional tools
GC 4100 Specified Purpose Accounts N/A
GC 4200 Inventories N/A
GC 4300 Non-Monetary Transactions N/A
GC 4400 Departmental Quarterly Financial Reports Illustrative Example
GC 4500 Departmental Financial Statements Illustrative Example
GC 5000 Recording Financial Transactions in the Accounts of Canada N/A
GC 5100 Payables at Year-End N/A
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