Directive on Accounting Standards: Introduction – Government of Canada Accounting Handbook
Note to reader
This document is part of the Appendix A of the Directive on Accounting Standards.
A. Objective
- 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
- 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.
- 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.
- 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)
- The Government of Canada’s accounting policies for the government’s Consolidated Financial Statements and Departmental Financial Statements are based on Canadian Public Sector Accounting Standards and Public Sector Guidelines (collectively, “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
- 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).
- 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. As a result, the OCG will assess proposed changes to the 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)
- Section F. Summary of Applicability of PSAS provides details on which 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
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 that 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 the Public Sector Accounting Handbook | Yes | N/A | N/A | Introduction and Summary of Applicability of PSAS – Government of Canada Handbook |
| 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 |
| PS 1150 Generally accepted accounting principals | N/A | Yes | Yes | GC 1150 Generally Accepted Accounting Principles |
| PS 1201 Financial statement presentation | N/A | Yes | Yes | GC 1201 Financial Statement Presentation |
| PS 1300 Government reporting entity | N/A | Yes | Yes | GC 1300 Government Reporting Entity |
| 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 | N/A | Yes | Yes | GC 2200 Related Party Disclosures |
| PS 2400 Subsequent events | N/A | Yes | Yes | GC 2400 Subsequent Events |
| 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 2601 Foreign currency translation | N/A | N/A | N/A | GC 2601 Foreign Currency Translation. |
| PS 2700 Segment disclosures | N/A | Yes | Yes | GC 2700 Segmented Disclosures |
| PS 3041 Portfolio investments | Yes | N/A | N/A | N/A |
| PS 3050 Loans receivable | N/A | Yes | Yes | GC 3050 Loans Receivable |
| PS 3060 Interests in 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 |
| PS 3160 Public private partnerships (effective April 1, 2023) | Policy choices and interpretations PS 3160 are under consideration. | |||
| PS 3200 Liabilities | Yes | N/A | N/A | N/A |
| PS 3210 Assets | Yes | N/A | N/A | N/A |
| 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 |
| PS 3260 Liability for contaminated sites | N/A | N/A | N/A | GC 3260 Liability for contaminated sites |
| PS 3280 Asset Retirement Obligations | N/A | N/A | N/A | GC 3280 Asset Retirement Obligations |
| PS 3300-3310 Contingent liabilities/Loan guarantees | N/A | Yes | Yes | GC 3300-3310 Contingent Liabilities and Loan Guarantees |
| PS 3320 Contingent assets | N/A | Yes | Yes | GC 3320 Contingent Assets |
| PS 3380 Contractual rights | Yes | N/A | N/A | N/A |
| PS 3390 Contractual obligations | N/A | Yes | Yes | GC 3390 Contractual Obligations |
| PS 3400 Revenue (Effective April 1, 2023) | N/A | N/A | N/A | Policy choices and interpretations for PS 3400 are under consideration |
| PS 3410 Government transfers | N/A | Yes | Yes | GC 3410 Government Transfers |
| PS 3420 Inter-entity transactions | N/A | Yes | Yes | GC 3420 Inter-entity transactions |
| PS 3430 Restructuring transactions | N/A | Yes | Yes | GC 3430 Restructuring transactions |
| PS 3450 Financial instruments | N/A | N/A | N/A |
|
| 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 |
| PSG-8 Purchased intangibles (Effective April 1, 2023) | Policy choices and interpretations for PSG-8 are under consideration |
| 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 | GC 4400 Guideline: Illustrative Quarterly Financial Report |
| GC 4500 Departmental Financial Statements | GC 4500 Guideline: Illustrative Departmental Financial Statements |
| GC 5000 Recording Financial Transactions in the Accounts of Canada | N/A |
| GC 5100 Payables at Year-End | N/A |
| GC 5200 Crown Corporations Quarterly Financial Report | GC 5200 Guideline: Illustrative Crown Corporations Quarterly Financial Report |