1. Someone has issues with PSAB?
GFOA November 5, 2005
Someone has issues with PSAB?

2. A Useful Starting Point
“Problems are the price of progress. Don’t bring me anything but trouble. Good news weakens me.”
Charles F. Kettering

3. Two new “Troubles” (for now)
Funds and Reserves
Accounting for Tangible Capital Assets
A new Reporting Model
Implementation Issues

4. Funds and Reserves Final Handbook Section ( PSG-4) approved March 2004
Reason for project
confusion expressed by jurisdictions regarding presentation
to clarify existing standards as to whether these funds can be displayed on the statement of financial position

5. Funds and Reserves
Applies to federal, provincial and territorial governments
Does not apply to funds and reserves that are externally restricted. External restrictions are addressed in RESTRICTED ASSETS AND REVENUES, Section PS 3100.

6. Funds and Reserves Funds and reserves Variety of forms
Reflect a government's intentions to undertake certain future activities or to demonstrate compliance with legislation.
If supported by assets - meets the definition of designated assets set out in RESTRICTED ASSETS AND REVENUES, paragraph PS (c) - reporting only allowed in the notes and not on the statement of financial position.

7. Funds and Reserves
Separate reporting of funds and reserves not supported by assets = inconsistent with FINANCIAL STATEMENT PRESENTATION — FEDERAL, PROVINCIAL & TERRITORIAL GOVERNMENTS, Section PS 1200, and RESTRICTED ASSETS AND REVENUES, Section PS 3100
Therefore for ANY funds or reserves – only note disclosure permitted

8. Local Government Reporting Model
Background
1997 SOP and research studies
Task force recruited
Two meetings
Assess the applicability of senior model

9. Local Government Reporting Model
Approach
Assess the applicability of
- PS 1000 Concepts
- PS 1100 Objectives
- PS 1200 General Standards
- PS 3150 Tangible Capital Assets

10. Local Government Reporting Model
Issues
Asset/liability view
Budget comparison
Funds balances = disclosure?
Accumulated surplus/deficit = net assets
Annual surplus/deficit = revenues – expenses
Get 3150 out

11. Local Government Reporting Model
Financial assets – liabilities = FRR
Below FRR + non-financial assets (NFA)
Net assets = FRR + NFA
Other F/S explain changes in indicators

12. Statement of Financial Position
2002
2001
Financial Assets
10,912
10,348
Liabilities
18,262
19,171
Net Debt
(7,350)
(8,823)
Non-Financial Assets
7,360
7,457
Net Assets 10
(1,366)

13. Annual Results 2002 Budget Actual 2001 Revenues 14,277 16,322 16,854
Expenses (Depreciation, Inventories, Prepaids)
14,249
14,946
14,303
Annual Surplus 28
1,376
2,551
Opening Net Assets
(1,366)
(3,917)
Closing Net Assets
(1,338) 10

14. Change in Net Debt 2002 Budget 2002 Actual 2001 Actual Annual Surplus28
1,376
2,551
TCA Acquired
(294)
(250)
Depreciation
226
230
Net Prepaid Asset
(10)
(20)
Net Inventory
110
(222)
Change in Net Debt
(40)
1,473
2,376
Opening Balance
(8,823)
(11,209)
Closing Balance
(8,863)
(7,350)

15. Local Government Reporting Model
When
SOP fall of 2004
AED/PED spring 2005
Final fall of 2005