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Click here to submit

Response Questionnaire

To be considered, comments must be received by

September 30, 2011

Update of Terminology

Exposure Draft

PSAB welcomes comments on all aspects of the Exposure Draft.

This form is not intended to constrain your response. Each text box will accommodate your full comments.

You are able to save and forward this form to others in your organization for review prior to submission.

Name: Don Saltis, CMA (Executive Financial Officer)

Organization: Manitoba Justice

E-mail: [email protected]

General comments:

None

1. Do you agree that the proposals clarify the applicability of standards and guidelines in the PSA Handbook to public

sector entities? If not, what alternative approach would you advocate and why?

Yes, I agree

2. Are there any additional matters that you feel may be relevant to this topic that need to be considered?

No


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Cliquez ici pour soumettre

Formulaire de rponsePour tre pris en considration,

les commentaires devront

tre reus d'ici le 30 septembre 2011

Rvision terminologiqueExpos-sondage

Le CCSP invite les intresss formuler des commentaires sur tous les aspects des principes proposs dans l'expos-sondage.

Ce formulaire ne vise pas restreindre votre rponse. Chaque bote de texte acceptera lintgralit

de vos commentaires. Vous pouvez sauvegarder le formulaire et lenvoyer, pour examen, dautres personnes de votre organisation avant de le soumettre.

Nom : M. Jean Monfet

Organisation : Direction gnrale des finances municipales - Ministre des Affaires municipales, des Rgions et de'

Courriel : [email protected]

Commentaires gnraux :

La prsente version de nos commentaires remplace celle transmise prcdemment 12h21 aujourd'hui 19 septembre.

1. tes-vous d'accord avec la proposition de clarifier le libell concernant l'applicabilit des normes et notesd'orientation du Manuel du secteur public aux entits du secteur public? Dans la ngative, quelle autre approcherecommanderiez-vous et pourquoi?

La rvision terminologique projete ferait en sorte que le secteur public dfini dans la Prface des normes comptablesdu secteur public comprendrait les gouvernements, les administrations locales et les organismes publics, ces derniers tantles organismes sous contrle dun gouvernement ou dune administration locale. La porte des normes du secteur publicexclurait les organismes qui sont contrls de faon partage par plus dun gouvernement ou plus dune administrationlocale. La raison invoque est que ces organismes constituent des partenariats et quil appartient plutt aux partenaires dedfinir les rgles comptables applicables un partenariat.

Nous sommes davis que lexclusion des partenariats de la porte des normes comptables du secteur public nest pasapproprie dun point de vue conceptuel et sera source de confusion.

Dans le schma dcisionnel Dtermination des PCGR appropris pour une organisation conu par le CCSP, la premirequestion pose est la suivante : Lorganisation est-elle sous le contrle du gouvernement? . En cas de rponse ngative cette question, il est indiqu ce qui suit : Le type dorganisation ne sinscrit pas dans le mandat du Conseil sur lacomptabilit dans le secteur public. Reportez-vous au Manuel de lICCA Comptabilit.

Pour sa part, la Prface du Manuel de lICCA Comptabilit vise les entits suivantes :- les entreprises ayant une obligation dinformation du public (Partie I IFRS ),- les entreprises capital ferm (Partie II),- les organismes sans but lucratif (Partie III),

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- les rgimes de retraite et davantages sociaux (Partie IV).

Aucune de ces catgories ne couvre les partenariats publics. Ceux-ci ne seraient donc viss ni par la Prface du Manuel dusecteur public ni par la Prface du Manuel de lICCA Comptabilit.

La problmatique voque concerne principalement les administrations locales. Le gouvernement fdral et lesgouvernements provinciaux tablissent rarement des partenariats entre eux.

Au Qubec, il existe 134 organismes municipaux constituant des partenariats, soit 11 conseils intermunicipaux de transportet 123 rgies intermunicipales. Ils exercent tous des comptences municipales, notamment le traitement etlassainissement des eaux, la gestion des dchets et des matires rsiduelles, la protection contre les incendies, la police etle transport en commun. Ces organismes ont t crs dans le cadre lgislatif municipal, la suite dune entente entremunicipalits partenaires. Ils satisfont pleinement aux caractristiques des entits du secteur public dfinies dans ledocument de consultation Caractristiques des entits du secteur public mis par le CCSP dans le cadre de la rvision ducadre conceptuel, notamment la caractristique suivante :

5. CADRE DE FONCTIONNEMENT ET CADRE FINANCIER TABLIS PAR VOIE LGISLATIVE (EXIGENCES LGALES) - Les entitsdu secteur public doivent respecter les lois et dmontrer quelles les respectent, en ne se contentant pas de sengager dansdes activits lgales, mais en se conformant aussi leur cadre de fonctionnement et leur cadre financier, dont leslments sont dfinis dans la lgislation ou en dcoulent. La conformit ces cadres est obligatoire, et lobligation derendre compte du respect de lesprit et de la lettre de ces cadres fait partie intgrante des exigences. Toutes les activits

des gouvernements et des organismes publics (y compris la nature et ltendue des charges et des dpenses) et lefinancement de ces activits sont tablis dans la lgislation. La transparence et la reddition de comptes au regard desengagements et des politiques dfinis dans la lgislation sont des lments essentiels de linformation financire dusecteur public.

Les organismes municipaux constituant des partenariats ont au Qubec une obligation lgale de reddition de comptes aumoyen dtats financiers usage gnral. En vertu des normes de certification canadiennes (NCA), le rapport de lauditeurindpendant sur des tats financiers usage gnral doit obligatoirement rfrer un rfrentiel comptable reconnu cetgard. Lexclusion de ces organismes de la porte dapplication de lun ou lautre des deux manuels de comptabilit delICCA, lesquels constituent les seuls cadres rfrentiels possibles pour tablir des tats financiers usage gnral,empcherait les auditeurs indpendants de produire un rapport daudit conformment aux NCA.

Tous ces organismes appliquent dj le Manuel du secteur public. Compte tenu de leurs caractristiques intrinsques et de

la nature de leurs activits, il serait appropri quil continue den tre ainsi lavenir. De plus, les municipalits quichoisissent dexercer elles-mmes les comptences prcdemment numres, plutt que de les confier des partenariatstablis avec dautres municipalits, rendent compte de la gestion des activits en question conformment aux normescomptables du secteur public. Rendre compte de telles activits diffremment selon quelles soient exerces en partenariatou non ne serait pas logique et compliquerait inutilement le processus de consolidation en cas de partenariat.

Par ailleurs, ces organismes ne peuvent tre dfinis comme organismes sans but lucratif (OSBL). Ils ne peuvent treconsidrs comme OSBL du secteur priv, car ils exercent des comptences municipales. Ils ne peuvent non plus treconsidrs comme des OSBL du secteur public, car la dfinition de tels OSBL implique quils aient des homologues dans lesecteur priv, ce qui ne sapplique pas dans leur cas.

Afin dviter que les partenariats publics tombent dans un vide normatif, nous recommandons que la dfinitiondorganisme public dans la Prface des normes comptables du secteur public soit modifie ainsi : Les organismes publics

sont des organismes qui sont sous le contrle dun gouvernement ou dune administration locale, ou qui sont contrls defaon partage par plus dun gouvernement ou plus dune administration locale . Un tel largissement de la dfinitiondorganisme public engloberait les partenariats publics sans avoir y faire rfrence expressment dans la porte desnormes. Quun organisme public soit contrl intgralement ou de faon partage ne modifie aucunement sa nature et sescaractristiques intrinsques. Il devrait appliquer le mme rfrentiel comptable dun point de vue conceptuel.

Il va sans dire que le schma dcisionnel mentionn prcdemment devrait aussi tre modifi en consquence.

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2. Y a-t-il, selon vous, d'autres lments se rapportant ce sujet qui devraient tre pris en considration?


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September 30, 2011


Exposure Draft




Name: Melanie Joseph, C.A., Senior Manager, National Accounting Standards

Organization: BDO Canada LLP


General comments:

Overall, we agree with the proposals in the Exposure Draft.



Yes we agree.


Since reference to government partnerships is removed, we would suggest that the introduction state "By definition, a

government partnership is not controlled by a government and the basis of GAAP to be used by a government partnership

is not dictated by the PSAB Handbook, but instead is determined by the partners." A footnote to explain that PS3060

addresses how to account for a government partnership in a GRE not how a government partnership accounts for

transactions in its financial statements would also be useful.


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September 30, 2011


Exposure Draft




Name: Dick Meanwell

Organization: Alberta Education


General comments:



Yes, except that I think the new paragraph .05 of the Introduction is still confusing. I think it should say "...apply to all public

sector entities unless specifically...". If it stays as "all governments" then it can be argued they don't apply to school boards,

for example.



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Formulaire de rponsePour tre pris en considration,

les commentaires devront

tre reus d'ici le 30 septembre 2011

Rvision terminologiqueExpos-sondage

Le CCSP invite les intresss formuler des commentaires sur tous les aspects des principes proposs dans l'expos-sondage.

Ce formulaire ne vise pas restreindre votre rponse. Chaque bote de texte acceptera lintgralit

de vos commentaires. Vous pouvez sauvegarder le formulaire et lenvoyer, pour examen, dautres personnes de votre organisation avant de le soumettre.

Nom : Andr Miville, CA, directeur gnral de la pratique professionnelle

Organisation : Contrleur des finances

Courriel : [email protected]

Commentaires gnraux :

De faon gnrale, nous croyons que cela rendra plus claire la porte de certaines normes et les entits vises par leurapplication.

1. tes-vous d'accord avec la proposition de clarifier le libell concernant l'applicabilit des normes et notesd'orientation du Manuel du secteur public aux entits du secteur public? Dans la ngative, quelle autre approcherecommanderiez-vous et pourquoi?

Nous sommes d'accord de modifier le libell des normes concernes par le prsent expos-sondage afin de clarifier leurapplicabilit aux diverses entits du secteur public.

2. Y a-t-il, selon vous, d'autres lments se rapportant ce sujet qui devraient tre pris en considration?

L'expos-sondage manque de prcision, puisqu'il fait seulement mention des chapitres concerns, sans indication prcisedes remplacements. En effet, il est seulement spcifi que ces derniers seront faits aux endroits o il convient de le faire.

titre d'exemple, le terme gouvernement ne doit pas tre systmatiquement chang dans le chapitre SP 1300 Primtre comptable . La liste exhaustive des modifications aurait permis de s'assurer de la cohrence des modificationsproposes.


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September 30, 2011


Exposure Draft




Name: Stuart Barr

Organization: Office of the Auditor General of Canada


General comments:



Yes, we agree that the changes proposed will clarify the applicability of standards and guidelines in the PSA Handbook to

public sector entities. We however would like to provide the following two additional comments.

In addition to the changes proposed to the Introduction to the PSA Handbook, we suggest that paragraph 05 be revised to

replace the word "governments" by "public sector entities".

In certain cases, depending on the context of the term being replaced, changing the existing terminology may require

more than a simple insertion of the term public sector entity as currently proposed in the exposure draft. More specifically

in Section PS 1300 (paragraphs 02 and 07), it will be important to maintain the distinction between a "public sector entity"

and a public sector entity in its capacity as a reporting entity (i.e., a "public sector reporting entity").


Section PS 1300 currently defines the government [or public sector] reporting entity as comprising the organizations that

are controlled by the government [or by the public sector entity]. While the control model is the primary reporting entity

model in the public sector, others may exist. The IPSASB and the IASB have recently recognized this in recent exposure

drafts (December 2010 IPSASB Conceptual Framework Exposure Draft 1 and March 2010 IASB Exposure Draft Conceptual

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Framework for Financial Reporting: The Reporting Entity) by not limiting the composition of a reporting entity to a group

of entities under common control. IPSASB recognizes that other public sector groups such as a government ministry,

sector of activity, or program may also be considered group reporting entities. The IASB proposes to clarify that a reporting

entity can include more than one entity or it can be a portion of a single entity and acknowledges the situation where

combined financial statements which include information about two or more commonly controlled entities may be

produced. This view is also consistent with CAS 600 special considerations audits of group financial statements which

does not confine a group as being a parent/subsidiary relationship.

As part of its ongoing conceptual framework project, we recommend that PSAB revisit its definition of a public sector

reporting entity and take into consideration current changes being proposed at the international level.


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September 28, 2011

Tim Beauchamp

Director, Public Sector Accounting

277 Wellington Street West

Toronto, Ontario M5V 3H2

Dear Mr. Beauchamp,

RE: Update of Terminology Exposure Draft

Thank you for the opportunity to provide comments on the Update of Terminology Exposure Draft.

We support the attempt to standardize the terminology used throughout the PSA Handbook and

believe this standardization can serve to clarify the applicability of PSA standards and guidelines.

However, as described below, we object to the introduction of the term public sector entity.

Further, the proposed wording of paragraphs .03 and .05 does not sufficiently alleviate existing

confusion. Changes to paragraph .05 are recommended.

Finally, the Exposure Draft does not contain the information respondents need in order to give full

consideration to the issue. The sections omitted from the update need to be explained and a black

line copy of the proposed changes should be provided.

1. Do you agree that the proposals clarify the applicability of standards and guidelines in the PSAHandbook to public sector entities? If not, what alternative approach would you advocate and

why?

No, we do not believe the current proposal provides sufficient clarity regarding the applicability of

standards and guidelines in the PSA Handbook to public sector entities. The intent of this ExposureDraft is to develop terminology that will clarify the applicability of PSA standards to not only

governments, but to government organizations as well. To accomplish this, the present Exposure

Draft proposes to introduce a new term, public sector entity, which will encompass both

governments and government organizations and will replace the stand alone use of the word

government throughout the PSA Handbook. While we appreciate the attempt to clarify the

applicability of PSA standards to government organizations, we do not believe the introduction of an

additional term is the best way to achieve this objective. The same result is accomplished by simply

PO Box 187

1723 Hollis Street

Halifax, NS B3J 2N3

(902) 424-7021

[email protected]

Department of FinanceGovernment Accounting

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adding or government organization to each appearance of the word government, as appropriate.

Introducing the concept of a public sector entity is unnecessary when one can simply say a

government or government organization to convey the same meaning. The implementation of the

new term forces readers to grasp yet another definition and thus adds an unnecessary layer of

complexity. Further confusion could also result because the term public sector entity often has

broad connotations that stretch beyond the scope of what is intended in the Exposure Draft.

Within the PSA Handbook, there are standards that apply to:

governments only, government organizations only, both governments and government organizations (on a stand alone basis); and governments and government organizations as a combined entity

Specific terminology is needed to articulate these different spheres of applicability. We propose that

the following expressions be applied consistently throughout the PSA Handbook as the context

dictates:

Applicability Terminology

Governments only government

Government organizations only government organization

Both governments and government organizations on a stand alone

basis

government or

government organization

Governments and government organizations as a combined entity government reporting

entity

Further to the above, we believe the manner in which the Introduction is worded leaves some

confusion regarding which entities should apply PSA standards. Paragraph .03 reads "For purposes

of applying these standards, public sector refers to federal, provincial, territorial, and local

governments and government organizations." This statement could inadvertently lead one to believe

that all government organizations (i.e., all organizations controlled by the government) apply PSA

standards. This, of course, is not the case as some government organizations apply IFRS.

We believe the following amendment to paragraph .05 in the Introduction will alleviate this

confusion:

.05 These standards apply to all governments and government organizations unless:

a) The entity is a government business enterprise, as defined in paragraph .10;b) The entity is an other government organization that, after giving consideration to paragraph

.09, has chosen to follow IFRS; or

c) Applicability is specifically limited in individual sectionssuch as:i. FIRST-TIME ADOPTION BY GOVERNMENT ORGANIZATIONS, Section PS

2125, which applies only to government organizations

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ii. SEGMENT DISCLOSURES, Sections PS 2700, in which government organizationsare encouraged to provide segment disclosures when their operations are diverse

enough to warrant such disclosures;

iii. TAX REVENUE, Section PS 3510, which applies only to governments; andiv. Sections PS 4200 to 4270 which are applicable only to government-not-for-profit

organizations

2. Are there any additional matters that you feel may be relevant to this topic that need to beconsidered?

Yes. We believe that respondents need two key pieces of additional information in order to give full

deliberation to the proposed changes. First, the Exposure Draft lists a number of sections that are

not being updated because the impact of the change requires further consideration. The rationale

supporting the omission of these standards should be provided so that respondents can assess

whether these same considerations need to be applied to sections that will be updated as part of this

Exposure Draft.

Second, in order to properly assess the impact of the proposed changes, we need more detail

regarding the exact updates that will be made to affected sections and guidelines. Presently, the

Exposure Draft claims that replacements will be made where appropriate. The where

appropriate terminology is vague and leaves one unable to assess whether the changes truly are

suitable. For example, Section 1300 is one of the sections to be updated. However, there are

numerous instances in this standard where replacement of reporting entity with public sector

entity would be inappropriate. As mentioned above, some PSA standards will be applicable to

governments only, some to government organizations only, some to both governments and

government organizations, and some to the combined government reporting entity. In order to assess

whether changes accurately capture these different applicability scenarios, respondents need accessto a complete and detailed list (black line copy) of the proposed changes. While this may be

cumbersome to compile, we are not in a position to offer a final opinion until we know exactly where

replacements will be made.

We would be pleased to discuss any questions or comments you many have with respect to this

letter. To do so, please contact Jill Devanney ([email protected]), Rob Bourgeois

([email protected]), or the undersigned.

Regards,

Suzanne Wile, CA

Executive Director, Government Accounting

Nova Scotia Department of Finance

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September 30, 2011


Exposure Draft




Name: Terry Paton, Provincial Comptroller

Organization: Ministry of Finance, Government of Saskatchewan


General comments:

Thank you for the opportunity to comment on the above Exposure Draft (ED). We do not agree with the proposed changes

as we have two concerns relating to the ED. The proposal within the ED states that, "where appropriate", the existing

terminology will be replaced. "Where appropriate" is subject to judgement and this process does not provide us the

opportunity to review the changes and the implications. We recommend PSAB provide a detailed summary of the

changes. We do agree, in principle, with the proposed terminology change.

Our second concern is the exclusion of some sections of the PSA Handbook from the update with no explanation why they

are not being updated provided within the ED. This will lead to inconsistent terminology within the Handbook and will beconfusing for many users.



No. As stated in the general comments, the exclusion of some sections from the update may cause confusion for users

trying to determine the applicability of the standards. We would advocate the update include all sections of the Handbook

to ensure the applicability of the standards in the PSA Handbook are clear. For example, the revised guidance provided in

the ED in paragraph .05 of the Introduction conflicts with the guidance in the Purpose and Scope sections of some of the

excluded sections.


No.

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Finance Comptrollers Division Comptrollers Office

715 401 York AvenueWinnipeg, Manitoba R3C 0P8Phone: 945-4919Fax: 948-3539E-mail: [email protected]

September 29th

, 2011

Mr. Tim Beauchamp, DirectorPublic Sector Accounting277 Wellington Street WestToronto, OntarioM5V 3H2

Dear Mr. Beauchamp:

Re: Update of Terminology Exposure Draft

Thank you for the opportunity to respond to the exposure draft.

As requested, the Province of Manitoba (Province) has responded to your specific questions in the ExposureDraft (ED).

1. Does the Province agree the proposals clarify the applicability of standards and guidelines in the PSAHandbook to public sector entities? If not, what alternative approach would the Province advocate and why?

The number of organizations required to follow Public Sector Accounting (PSA) standards has increasedtremendously in 2011. The Province agrees it was necessary to clarify the applicability of the PSAstandards. The replacement of terms such as governments, public sector reporting entity, entity andreporting entity by the single term public sector entity does imply to readers that recommendations applyequally to both governments and government organizations.

The footnote to Introduction.05 points out that PSA standards apply equally to governments and governmentorganizations with some exceptions. As this is of such fundamental importance to understanding PSAstandards, consideration should be given to include the entire footnote in the main body of the Introductionto Public Sector Accounting Standards. This would make it even clearer to practitioners that most PSAstandards apply equally to governments and government organizations. It would also highlight in one areaof the Handbook which standards only apply to governments, government organizations and not-for-profitorganizations.

2. Are there any additional matters that the Province feels may be relevant to this topic that needs to beconsidered?

The Province has noted the terminology for a number of sections will not be updated until after furtherconsideration. Some sections are being reviewed as part of the Concepts Underlying FinancialPerformance. The review of the other sections should be completed as soon as possible in order to avoidfuture confusion and errors.

The Province is currently not aware of additional matters that may need to be considered.

Yours truly,

Original Signed by

Betty-Anne Pratt, CAProvincial ComptrollerOn Behalf of the Province of Manitoba

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Deloitte & Touche LLP

2 Queen Street East

Suite 1200Toronto ON M5C 3G7

Canada

Tel: 416-601-6150

Fax: 416-601-6151

www.deloitte.ca

September 29, 2011

Mr. Tim Beauchamp, Director

Public Sector Accounting

The Canadian Institute of Chartered Accountants

277 Wellington Street West

Toronto, ON M5V 3H2

Dear Mr. Beauchamp,

Re: Update of Terminology

We appreciate the opportunity to respond to the Exposure Draft on Update of Terminology, and have noted our

comments below.

1. Do you agree that the proposals clarify the applicability of standards and guidelines in the PSA Handbook to

public sector entities? If not, what alternative approach would you advocate and why?

We generally agree that the proposals contained within this Exposure Draft clarify the applicability of standards

and guidelines in the PSA Handbook to public sector entities. However, in some cases verbatim replacement of

existing terminology does not achieve its intended outcome. For example, PS 1300.02 currently reads as

follows:

"The standards are intended to apply to the financial statements of the federal, provincial, territorial and local

governments. Each of these governments is a separate financial reporting entity and would be excluded from the

financial reporting entity of any other government."

If the existing terminology is replaced as suggested by the framework outlined in the Exposure Draft, PS

1300.02 would read as follows:

"The standards are intended to apply to the financial statements of the federal, provincial, territorial and local

public sector entities. Each of these public sector entities is a separate financial reporting entity and would be

excluded from the financial reporting entity of any other public sector entity."

The revised wording would appear to imply that there is no consolidation of one public sector entity into

another public sector entity. However, a number of government organizations are consolidated by federal,provincial or local governments. For example, generally a hospital or regional health authority is part of the

financial reporting entity of the province in which it operates.

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The Canadian Institute of Chartered AccountantsSeptember 29, 2011

Page 2


This exposure draft also proposes an amendment to theIntroduction to public sector accounting standards

which, through footnote 1, clarifies that only government not-for-profit organizations (GNFPOs) are permitted

to follow Sections PS 4200 to PS 4270. In order to provide clarity and avoid confusion, we recommend that PS1150.03(c) {reproduced below} be amended to confirm that that PS 4200 to PS 4270 is a primary source of

GAAP for GNFPOs.

PS 1150.03(c): Primary sources of GAAP are, in descending order of authority:

(i) standards in Sections PS 1201-PS 3510;

(ii) Public Sector Guidelines; and

(iii) appendices and illustrative material of those pronouncements described in (i)-(ii) above.

Similarly, this exposure draft also proposes an amendment to theIntroduction to public sector accounting

standards, which, through footnote 1, clarifies the applicability of PS 2700, Segment disclosures for

government organizations. As PS 2700 is within the scope of this exposure draft, updated terminology within

PS 2700 could create confusion with respect to the applicability of PS 2700 for government organizations. Inorder to avoid confusion, we recommend that an amendment, similar to the amendment to the Introduction to

public sector accounting standards be made to PS 2700, Segment disclosures, as well.

Finally, we noted that PS 1201, Financial statement presentation, was excluded from the scope of this exposure

draft however, given the number of additional government organizations that will be adopting PSA standards

for the first time, consideration should be given to preparing the applicable terminology updates and additional

illustrative examples that reflect financial presentation of government organizations, specifically for topics such

as the statement of cash flows and the new statement of remeasurment gains and losses, which will be

applicable for all government organizations transitioning to PSA standards.

We would be pleased to discuss any questions or comments you many have with respect to this letter. To do so,

please contact Paula Jesty (416-643-8787), Cindy Veinot (416-643-8752) or the undersigned.

Yours truly,

Thomas Kay

National Professional Practice Director

Deloitte & Touche LLP

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September 30, 2011


Exposure Draft




Name: Ron Williams, CA (Comptroller General of Finance)

Organization: Government of Newfoundland and Labrador


General comments:



While the amendment is to clarify the applicability of the PSA standards and guidelines to public sector entities; it remains

necessary to ensure the integrity of the guidance in preparing government financial statements. As such, "government" is

considered a necessary distinction to be made at times in the context of the PSA Handbook. To achieve applicability of the

PSA Handbook to government organizations, it is not necessary to remove all references to "government", "public sector

reporting entity", "entity" or "reporting entity" and replace them with the term "public sector entity". These proposals

create concern and potential confusion rather than clarify the applicability of the standards and guidelines. However, the

amendment to 1000.03 that removes reference to government partnerships and school boards is considered appropriate.

The Exposure Draft is very high level. While it would be a lengthy document if all changes were provided (strike through

and substitution of wording), the lack of detail gives the appearance that due diligence has not been completed. Any

review that merely searches and substitutes the proposed wording would reveal many references where the revisionwould not be appropriate. In particular, it would become difficult to distinguish between a public sector entity and the

consolidated reporting entity. As well, references within the current standards that have different transitional provisions

for governments and government organizations would be problematic as a result of proposed amendment.

Further, in relation to PS 1300 Government Reporting Entity, it is unclear if the amendment would change the title of the

section. If the terminology "public sector reporting entity" is to be removed, it appears difficult to reflect a reporting entity

of a public sector entity. While there is merit to a reporting entity of a government organization, such a change does not

clearly reflect the determination of the government reporting entity (GRE). It is important to note and reflect that this is the

standard which determines if a government organization is controlled by government and to be included within the GRE.

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In addition, paragraph .02 reflects the different levels of government (federal, provincial, territorial and local government)

and indicates that each government is a separate financial reporting entity from another government. As this is a unique

characteristic of government that is the result of the constitutional structure of Canada, it is necessary to reference

"government(s)".

As the proposals would be a significant change, requesting comment at this time appears premature; it also raises

questions as to why it would be problematic to consider the change to all sections. In providing no explanation beyond

the fact that further consideration is required only adds to the perception that this amendment is premature. Further,

approving the proposals at this point gives credence that the additional sections would have to follow in the same manner.

In order to provide due process to this amendment, it should be exposed for all sections at the same time.

One of the sections excluded is PS 3410 Government Transfers. It is questioned whether such a standard relating to a

unique aspect for government can even be presented without the use of the term "government(s)". In relation, the

excluded sections which relate to financial statement concepts, objectives and presentation, are currently being reviewed

as a part of the Concepts Underlying Financial Performance Project. The PSAB should defer this amendment until that

Project is complete as it may identify concerns. In relation, Consultation Paper (CP) 1 issued by the Conceptual Framework

Task Force is entitled "Characteristics of Public Sector Entities"; however, it is to be noted that the detail of the CP uses the

reference of government more heavily than public sector entity. As such, it supports the position that government(s) is a

necessary distinction to be made at times in the context of the PSA Standards.

It is our position that it may be better to reflect application of standards through the definition of public sector in the

Introduction of the PSA HB (par.03) that includes the difference levels of government and government organizations. Thiswould indicate application of the PSA Handbook to these entities and still retain the flexibility to use "government(s)" as

considered appropriate. If such application needs to be expressed in relation to the scope of each section, then the

appropriate amendments should be made.

Overall, the presentation of this Exposure Draft appears to put the onus on those preparing comments to determine areas

where substitution will not be appropriate. At this point, it is difficult to support amendments without seeing the specific

details. Such a change to the PSA Handbook would require an amendment that would be beyond a simple search and

replace and it would have to be considered in relation to all standards at the same point in time. There is concern that a

general substitution will not retain the intent of the concepts and principles and guidance of the PSA Handbook.


No.


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September 30, 2011


Exposure Draft




Name: Wayne Morgan

Organization: Office of the Auditor General of Alberta


General comments:



We generally agree. However, we encourage PSAB to not issue this as a standard until it determines its approach for those

sections indicated as not being updated (i.e. 1000, 1100, etc.) and updates this exposure draft accordingly. In our view it is

difficult to comment on the impact of this change without seeing the impact on PS 1000, PS 1100, PS 1201, PS2400, PS

3050, PS 3310, and PS 3410. All changes should be done together so the full impact is apparent.


We would like to see clarification of the definition of governmental units and the applicability of specific standards to

governmental units, including ministries, departments, agencies, boards, commissions, offices, foundations, funds, serviceorganization, programs, etc. Currently, any organization within the government reporting entity might be considered a

governmental unit, following the definition in 2500 (we note 3060 narrows the definition). This may lead to uncertainty in

application; for example, for transactions between government organizations and governmental units, within the

government reporting entity. To illustrate, under 3410 a transfer from a governmental ppppppppunit to a government

organization may be considered revenue, while PS 1000.47 directs that transfers from other governmental units would not

be considered revenue.

Paragraph .05 footnote is unnecessary, given that it already says unless specifically limited in individual sections. As well,

government units could perhaps provide segment disclosures or in substance have taxing authority, making the specific

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reference in the footnote to governments problematic.

As the impact of terminology changes on other Handbook sections are developed, care should also be taken to exclude

governmental units that prepare financial statements from the net debt model currently required for governments.

Replacing the reference with public sector entity might lead to application of this requirement to governmental units as

PS1201 is updated. The net debt model does not appear relevant below the summary financial statements of government,

as governmental units will report incomplete information on government net debt and/or the government assets or

revenues available to discharge this debt.


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