Accounting Standards Effective January 1, 2018

Starting January 1, 2018, new accounting standards will be in effect for municipalities. The new standards are as follows:

  • Related Party Disclosures, Section PS 2200: defines a related party and establishes disclosures required for related party transactions. It is expected that reasonable efforts will be made to identify related party transactions. This may include adopting policies and procedures designed to ensure that these transactions are appropriately identified, measured and disclosed in the financial statements. However, not all transactions are reportable under this Section. See below resources for more information on these changes.
  • Assets, Section PS 3210: provides guidance on applying the definition of assets and establishes disclosure standards for assets. Assets are defined as economic resources controlled by a government as a result of past transactions or events and from which future economic benefits are expected to be obtained.
  • Contingent Assets, PS 3320: defines and establishes disclosure standards on contingent assets. Contigent assets are defined as possible assets arising from existing conditions or situations involving uncertainty. That uncertainty will ultimately be resolved when one or more future events not wholly within the public sector entity's control occurs or fails to occur. Resolution of the uncertainty will confirm the existence or non-existence of an asset.
  • Contractual Rights, PS 3380: defines and establishes disclosure standards on contractual rights. Contractual rights are defined as rights to economic resources arising from contracts or agreements that will result in both an asset and revenue in the future.
  • Inter-Entity Transactions, PS 3420provides guidance on how to account for and report transactions between public sector entities that comprise a government’s reporting entity (i.e. inter-entity transactions) from the perspective of both the provider and the recipient.


MFOA has compiled a collection of resources that will assist municipalities in understanding the new changes. See below for resources and short descriptions.

Directive on Accounting Standards: PS 3320 Contingent Assets - Government of Canada
The federal government directive on PS 3320 - Contingent Assets. Click here for more information.
2016 Consolidated Financial Statements for the Municipality of Colwood, BC.
This document provides an example of how a municipality has communicated to date about the incoming new standards. See page 5 onward for the municipality's notes on new sections.

2017 Public Sector Accounting Standards Update - Deloitte
This document provides some thoughtful questions municipal finance staff should be asking themselves about the new standards.

2017 PSAS Update - Deloitte
(Adobe PDF File)
Public Sector Accounting Standards (PSAS) Update 2017 - BDO
A summary of the new standards provided by BDO Canada.

2017 PSAS Update - BDO
(Adobe PDF File)
Advisor Alert—Sections PS 2200 Related Party Disclosures & PS 3420 Inter-entity Transactions - Grant Thornton
A thorough look into both related party disclosures and inter-entity transactions.


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