Page 1 of 1

From: To:

Erik Peters <eppeters@sympatico.ca> <ed.psector@cica.ca>

Date: Wednesday, November 07, 2012 08:43PM Subject: Use of Appropriations

I agree with paragraph .09 of the exposure draft with the proviso that (a) or (b) should be consistently applied, unless that nature of the appropriation(s) changes to warrant departing from the originally chosen disclosure. The change in nature should be disclosed when a different alternative is chosen.

Best regards,

Erik Peters, FCA

https://webmail.cica.ca/mail/epsector.nsf/0/$new/?OpenDocument&Form=s_PrintMultiple... 11/8/2012

Click here to submit

Response Questionnaire
To be considered, comments must be received by

November 28, 2012 Use of Appropriations 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: Organization: E-mail: Armand Capisciolto, National Accounting Standards Partner BDO Canada LLP acapisciolto@bdo.ca

General comments: In general we are confused as to when this proposed standard would be applied. Our understanding is that the proposed standard would apply to departmental financial statements, however this is not clear from the scope of the proposed standard. We believe the scope should be clarified to make it clear that this standard does apply to consolidated government financial statements.

1.

Do you agree with the reporting alternatives set out in paragraph .09?

We do not agree that an accounting policy choice should be permitted. Our preference is that appropriations be reported in the reconciliation to the closing accumulated operating surplus or deficit.

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Montral, le 27 novembre 2012

Tim Beauchamp, directeur Comptabilit du secteur public 277, rue Wellington Ouest Toronto (Ontario) M5V 3H2

Monsieur, Vous trouverez ci-joint les commentaires du Groupe de travail technique Secteur public Comptabilit dans le secteur public de lOrdre des comptables professionnels agrs du Qubec concernant le projet de norme comptable Utilisation des crdits budgtaires . Nous vous serions reconnaissants de nous faire parvenir une copie de la traduction anglaise de nos commentaires. Veuillez prendre note que ni lOrdre des comptables professionnels agrs du Qubec, ni quelque personne que ce soit ayant particip la prparation des commentaires ne peuvent tre tenus responsables relativement son utilisation et ils ne sont tenus aucune garantie de quelque nature que ce soit dcoulant de ces commentaires, comme dcrit dans le dni de responsabilit joint la prsente. Veuillez agrer, Monsieur Beauchamp, lexpression de mes sentiments distingus.

Reprsentante du Groupe de travail technique Secteur public - Comptabilit dans le secteur public,

Annie Smargiassi CPA, CA

p. j.

Dni de responsabilit et commentaires

DNI DE RESPONSABILIT

Les documents prpars par le Groupe de travail technique Secteur public - Comptabilit dans le secteur public de lOrdre des comptables professionnels agrs du Qubec (Ordre) ci-aprs appels les commentaires, sont fournis selon les conditions dcrites dans la prsente, pour faire connatre leur opinion sur des noncs de principes, des documents de consultation, des exposs-sondages prliminaires ainsi que des exposs-sondages publis par le Conseil des normes comptables, le Conseil des normes daudit et de certification, le Conseil sur la comptabilit dans le secteur public, le Conseil sur la gestion des risques et la gouvernances et dautres organismes.

Les commentaires fournis par ce comit ne doivent pas tre utiliss comme substitut des missions confies des professionnels spcialiss. Il est important de noter que les lois, les normes et les rgles sur lesquelles sont mis les commentaires peuvent changer en tout temps et que, dans certains cas, les commentaires crits peuvent tre sujets controverse.

Ni lOrdre, ni quelque personne que ce soit ayant particip la prparation des commentaires ne peuvent tre tenus responsables relativement lutilisation de ces commentaires et ils ne sont tenus aucune garantie de quelque nature que ce soit dcoulant de ces commentaires. Les commentaires donns ne lient pas, par ailleurs, les membres du Groupe de travail technique Secteur public - Comptabilit dans le secteur public, lOrdre ou, de faon plus particulire, le Bureau du syndic de lOrdre.

La personne qui se rfre ou utilise ces commentaires assume lentire responsabilit de sa dmarche ainsi que tous les risques lis lutilisation de ceux-ci. Elle consent exonrer lOrdre lgard de toute demande en dommages-intrts qui pourrait tre intente par suite de toute dcision quelle aurait pu prendre en fonction de ces commentaires. Elle reconnat galement avoir accept de ne pas faire tat de ces commentaires reus via le Groupe de travail dans les avis exprims ou les positions prises.

COMMENTAIRES DU GROUPE DE TRAVAIL TECHNIQUE SECTEUR PUBLIC COMPTABILIT DANS LE SECTEUR PUBLIC DE LORDRE DES COMPTABLES PROFESSIONNELS AGRS DU QUBEC RELATIFS AU PROJET DE NORME COMPTABLE UTILISATION DES CRDITS BUDGTAIRES . MANDAT DU GROUPE DE TRAVAIL Le Groupe de travail technique Secteur public - Comptabilit dans le secteur public de l'Ordre des comptables professionnels agrs du Qubec a comme mandat notamment de recueillir et de canaliser le point de vue des praticiens exerant en cabinet et de membres uvrant dans les affaires, dans les services gouvernementaux, dans l'industrie et dans l'enseignement ainsi que le point de vue dautres personnes concernes uvrant dans des domaines dexpertise connexes.

Pour chaque expos-sondage ou autre document tudi, les membres du Groupe de travail technique mettent leurs analyses en commun. Les commentaires ci-dessous refltent les points de vue exprims et, sauf indication contraire, ces commentaires ont fait l'objet d'un consensus parmi les membres du Groupe de travail ayant particips cette analyse.

Les commentaires formuls par le Groupe de travail ne font l'objet d'aucune sanction de l'Ordre. Ils n'engagent pas la responsabilit de celui-ci.

COMMENTAIRES GNRAUX Les membres ont not que ltendue dapplication de la norme propose serait trs limite. En effet, ils croient que, principalement, les seules entits qui pourraient tre vises au Qubec seraient les ministres et leurs organismes qui reoivent leur financement sous formes de crdits budgtaires, et pour lesquels des tats financiers vocation gnral sont prpars et vrifis. Il est par ailleurs important de souligner, quen pratique, peu de ces entits produisent des tats financiers vrifis. Ils sont davis que le CCSP devrait se concentrer davantage des projets importants qui touchent plus dentits, comme le cadre conceptuel.

COMMENTAIRES SPCIFIQUES

1.

tes-vous daccord avec les choix offerts au paragraphe .09 en ce qui a trait la

prsentation?

Les membres ne sont pas daccord avec les recommandations proposes. Ils indiquent que le manque de prescription au niveau de la prsentation des informations dans les tats financiers est susceptible de crer un manque duniformit et de comparabilit entre les entits vises ainsi que des enjeux lors du processus de consolidation. De plus, la recommandation nest pas consistante avec le paragraphe .13 de lanalyse des questions Utilisation des crdits budgtaires, qui indique que () la question est de savoir si les crdits doivent tre pris en compte dans le calcul de lexcdent ou du dficit de lexercice. Certains le font, dautres pas. Ladoption dune norme assurerait luniformit de linformation . AUTRES COMMENTAIRES SPCIFIQUES

Champ dapplication

Les membres se sont interrogs sur la rdaction du libell de lalina (a) du paragraphe .05 de la norme propose. Ils considrent que le texte propos, qui exclut du champ dapplication les

entits qui reoivent des transferts de ressources, porte confusion. De plus, ils croient que lalina (b) du paragraphe .05 nest pas ncessaire, puisquil est vident quune entit qui applique les IFRS (partie I du Manuel de lICCA), na pas appliquer les normes comptables du secteur public; de plus, cette mention nest prsente dans aucune des normes du secteur public actuellement. Ils proposent plutt le texte suivant :

.05 Le prsent chapitre ne sapplique pas aux transferts de ressources couverts dans le champ dapplication du chapitre SP 3410 Paiements de transferts.

Ils ont galement not que le paragraphe .04 propos nest pas ncessaire, car il est vident que les normes comptables du secteur public doivent tre appliques aux tats financiers usage gnral et que le chapitre ne sapplique qu une entit qui reoit des crdits budgtaire. De plus ces prcisions ne sont pas prsentes dans les autres normes du secteur public. Ils suggrent donc le retrait de ce paragraphe dans la norme propose.

Les membres ne sentendent pas sur les transferts couverts lalina (a) du paragraphe .03 et les transferts couverts lalina (a) du paragraphe .05. Ils ont indiqu que les libells des alinas sont similaires, quils portent confusion et quen consquence ils devraient tre rviss.

Comptabilisation

Les membres sont daccord avec les paragraphes .06 et .07 proposs.

Prsentation

Les membres sont daccord avec le paragraphe .08, leffet que lutilisation de crdits budgtaires doit tre prsente sparment dans les tats financiers, par contre aucun consensus na t dgag concernant la faon de la prsenter. Ils ont not quune harmonisation des mthodes de prsentation est ncessaire de faon maintenir une uniformit et une comparabilit entre les entits, notamment aux fins du processus de consolidation, mais ne se sont pas entendus sur la meilleure faon de le faire.

Ainsi, certains membres favorisent une prsentation des informations ltat des rsultats, de faon maintenir une cohrence avec les cadres conceptuels du Manuel de comptabilit pour le secteur public ainsi que de ceux des parties I III du Manuel de lICCA. Alors que dautres prfrent la prsentation dans le rapprochement avec lexcdent ou le dficit accumul de faon pouvoir prsenter les rsultats oprationnels, de faon distincte, de lutilisation des crdits budgtaires, ltat des rsultats et ainsi reflter la nature financement et non oprationnelle des crdits. Certains membres taient davis quune prsentation distincte ltat des rsultats pourrait permettre un compromis entre les lignes de penses releves.

Informations fournir

Les membres sont en accord avec les paragraphes .12 .15 proposs.

Dispositions transitoires

Les membres sont davis que le paragraphe .16 devrait prciser si lapplication des recommandations devrait se faire de faon prospective ou rtrospective (avec ou sans retraitement), sans ncessiter lapplication du chapitre SP 2120 Modifications comptables. Ils ont dmontr une prfrence pour lapplication rtrospective avec retraitements, dans le contexte de cet expos-sondage.

Click here to submit

Response Questionnaire
To be considered, comments must be received by

November 28, 2012 Use of Appropriations 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: Organization: E-mail: Ron Williams (Comptroller General of Finance) Government of Newfoundland and Labrador rwilliams@gov.nl.ca

General comments:

1.

Do you agree with the reporting alternatives set out in paragraph .09?

The Province disagrees with the reporting alternatives set out in paragraph .09. As in our previous comments to the Statement of Principles, Use of Appropriations, the Province does not support the need for a separate standard on accounting for the use of appropriations. It is the Provinces view that appropriations should not be accounted for in the financial statements since appropriations are only a budgetary authority or limit to spend and as such are not in themselves economic events that should be recognized in financial reporting. It is the Provinces view that rather than the inclusion of appropriations in either the surplus/deficit or accumulated surplus/ deficit, the disclosure of a reconciliation between the amounts recognized in the financial statements to the amounts appropriated would be more useful to help users to assess whether an entity was operating within the fiscal constraints imposed upon it by appropriation.

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Grant Thornton LL 12th Floor 50 Bay Street Toronto, ON M5J 2Z8

November 28, 2012 Mr. Tim Beauchamp, CA Director, Public Sector Accounting Standards Accounting Standards Board 277 Wellington Street West Toronto, Ontario M5V 3H2 via: ed.psector@cica.ca

T +1 416 366 4240 F +1 416 360 4944 www.GrantThornton.ca

Raymond Chabot Grant Thornton LLP Suite 2000 National Bank Tower 600 De La Gauchetire Street West Montral, Qubec H3B 4L8 T + 514 878 2691 F + 514 878 2127 www.rcgt.com

Dear Mr. Beauchamp:

Subject: Exposure Draft: Appropriations (September 2012)

Grant Thornton LLP and Raymond Chabot Grant Thornton LLP (we) would like to thank you for the opportunity to provide comments on the Public Sector Accounting Standards Board (PSAB) Exposure Draft Appropriations (ED). We have the following responses to your question and additional comments below: 1. Do you agree with the reporting alternatives set out in paragraph .09? No, we disagree with the reporting alternatives set out in paragraph .09. We believe that appropriations should be shown as revenue in the statement of operations for the following reasons: As defined in the proposed standard, a government transfer is an appropriation. Under PS3410 Government Transfers, a transfer is recorded as a revenue or expense and not as an adjustment to accumulated surplus. It does not make sense to treat these similar items differently since the only difference is that in one case, for example, an entity receives money and spends it on an expense out of its own accounts and in the other case, an entity may use an amount from the governments own bank accounts (assigned to it through an appropriation) to spend on the same expense. Having two very different methods of accounting significantly reduces comparability of financial statements between one entity to another (for example, a library board from one province to another); this choice will add to user confusion. We dont believe the added disclosure will help users understand the differences between the two methods or help reduce the incomparability. Treating an appropriation as an equity transaction introduces a concept that is not one of the elements of financial statements listed in Section 1000 Financial Statement Concepts.

Chartered Accountants Member of Grant Thornton International Ltd

We argue that the appropriation must be one of the elements in Section 1000. We think the revenue element is the best definition of the transaction as it is an increase in economic resources for the entity due to a contribution from the government to the entity. Additional comments Below we also have a number of comments on specifics in the standards that did not fall under the question asked in the ED: We would recommend that .03(a) be removed because it is immediately scoped out of the section in paragraph .05(a). We would recommend that paragraph .05 be moved immediately after paragraph .02 and then be followed by paragraph .03(b). This ordering will better convey what appropriations are included in the standard since paragraph .03(b) is the only item that scopes an entity into this standard. We believe the standard as written will be very confusing to preparers trying to ascertain if it is applicable to them. In order for public sector entities to assess whether this section has applicability to them, we propose that the standard needs to better define the terminology in the standard. Paragraph .03(b) uses the term consolidated revenue fund; while, this term may have meaning for some governments, it does not for many other entities applying public sector accounting standards. The Board needs to define the term consolidated revenue fund as the term fund itself can have many different meanings for entities. Since paragraph .03(b) is essentially the item that determines if an entity has an appropriation within the scope of the standard, we strongly advise the Board to provide an example of a situation that would fall under PS3410 Government Transfers versus one that would fall under the proposed standard or, at a minimum, provide an example situation that would fall under this standard. We understand, from our discussions with staff at the CICA, that the intent was to capture ministries and internal departments that prepare separate financial statements under public sector accounting standards and instead of receiving actual monetary transfers from the government have the authority to use money from the governments own bank accounts to pay for expenses associated with their ministries or departments. We would suggest that this intent was not evident from the proposed standard itself. We believe public sector entities will have a hard time determining the applicability of this standard to them. We believe that paragraph .04(b) should be removed. Special reports are addressed in the Canadian Auditing Standards and are often, in practice, prepared in accordance with nonGAAP requirements. Other sections of the PSAB Handbook do not plan exceptions for special reports that would be prepared in accordance with non-GAAP requirements. We believe that this standard should only address requirements for financial statements that are prepared under PSAB, as any other standard. Paragraph .05(a) as it is currently worded implies that an entity that receives any actual transfers of resources is entirely scoped out of the Section. We believe the intent of the

Chartered Accountants Member of Grant Thornton International Ltd

paragraph was to state that appropriations that are government transfers are scoped out of the section and not those public sector entities receiving the government transfer are themselves scoped out of the standard in its entirety. Such may have appropriations other than government transfers which would still require them to follow the proposed standard with respect to those appropriations. Paragraph .06(b) required an eligible transaction to have occurred in order for an appropriation to be recognized. We recommend that the term eligible transaction be defined in the standard. The standard did not recommend retroactive or prospective adoption. We propose retroactive adoption. If you wish to discuss our comments or concerns, please contact Melanie Joseph, CA (Melanie.Joseph@ca.gt.com, 416-607-2736) or Stephane Landry (landry.stephane@rcgt.com, 418-647-5008). Yours sincerely,

Grant Thornton LLP Melanie Joseph, CA

Raymond Chabot Grant Thornton LLP Stephane Landry, CPA auditor, CA

Chartered Accountants Member of Grant Thornton International Ltd

Click here to submit

Response Questionnaire
To be considered, comments must be received by

November 28, 2012 Use of Appropriations 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: Organization: E-mail: Greg MacBeth Office of the Auditor General - Manitoba greg.macbeth@oag.mb.ca

General comments: I am replying on behalf of the Office of the Auditor General - Manitoba. My comments are from the perspective of the public sector within our jurisdiction.

1.

Do you agree with the reporting alternatives set out in paragraph .09?

We do not agree with providing two reporting alternatives for the use of appropriations. We believe the use of appropriations should be reported in the the statement of operations of the entity when determining operating surplus or deficit for the year. This is consistent with the reporting treatment when the entity receives actual transfers of resources.

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PO Box 187 1723 Hollis Street Halifax, NS B3J 2N3 (902) 424-7021 wilesm@gov.ns.ca

Department of Finance
Government Accounting

November 28, 2012

Tim Beauchamp Director, Public Sector Accounting 277 Wellington Street West Toronto, Ontario M5V 3H2

Dear Mr. Beauchamp, RE: Use of Appropriations Exposure Draft Thank you for the opportunity to provide comments on the Use of Appropriations Exposure Draft. Our thoughts on the proposed standard are below.

1. Do you agree with the reporting alternatives set out in paragraph .09? Yes. 2. Other Comments: In our response to the Use of Appropriations - Statement of Principles, we argued that the final standard needed to address circumstances in which funding is accessed prior to the approval of the related appropriation. This usually happens close to the fiscal year end when an entity incurs expenses that are in excess of its initial appropriation. We recommended that the standard should allow appropriations revenue to be recognized provided there is a demonstrated historical practice of issuing the authority subsequent to year end. Contrary to this recommendation, the recognition criteria in the Exposure Draft would not allow an asset to be recognized for anticipated future appropriations. The Issues Analysis argues that an anticipated future appropriation does not have the essential characteristics of an asset. The passing of legislation subsequent to the fiscal period end would not create an existing condition or situation at the financial statement date that would allow the recognition of an asset. We agree that the passing of legislation subsequent to the fiscal period end would not be an existing condition or situation at the financial statement date that would allow the recognition of an asset. Instead, we are suggesting that the existing condition or situation that would allow recognition of an asset is the fact that funding has been accessed. As a result, we argue that an asset is acquired, and should be recognized at the time the funding is accessed, irrespective of

whether or not the authority to spend is in place. This is especially true when there is a demonstrated historical practice of issuing the authority subsequent to year end because, in these cases, it is clear that the receipt of funding is not dependent on the enactment of the necessary authority (i.e., the authority is not a prerequisite for gaining access to the benefit of the funding). When historical practice proves that expenditures can be incurred without the pre-requisite spending authority, the authority no longer serves as a barrier to gaining control of the asset. As such, the reporting entity acquires an asset simply by virtue of its ability to access the funding and should recognize appropriations revenue at that time. This concludes our thoughts on the Use of Appropriations Exposure Draft. We would be pleased to discuss any questions or comments you may have with respect to this letter. To do so, please contact Jill Devanney (devannjl@gov.ns.ca), Rob Bourgeois (bourgere@gov.ns.ca), or the undersigned.

Regards,

Suzanne Wile, CA Executive Director, Government Accounting Nova Scotia Department of Finance

Click here to submit

Response Questionnaire
To be considered, comments must be received by

November 28, 2012 Use of Appropriations 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: Organization: E-mail: Stuart Barr, Assistant Auditor General Office of the Auditor General of Canada stuart.barr@oag-bvg.gc.ca

General comments: We support the Board's efforts to develop additional guidance for parliamentary appropriations in general because of their unique characteristics compared to other types of government funding. In addition to our responses to the specific question provided below, we have the following comments that we wish to bring to the attention of PSAB. Scope: We observe that the scope of PS 3410 and the proposed standard on use of appropriations are inconsistently defined; PS 3410 has been written based on the substance of the transaction in question, whereas the appropriations ED appears to apply to entities that access funding directly through the CRF under the authority of appropriations. We suggest paragraphs 4 and 5 of the proposed standard be modified to refer to transactions of public sector entities rather than public sector entities to better align the scope communication of the two standards. We do not see the need for paragraph 4(b) and suggest its removal. The paragraph appears redundant because it is already understood that standards issued by PSAB form part of a general purpose framework normally applied to general purpose financial statements. Statement of cash flow: The ED does not explicitly address how appropriations managed through the CRF may or may not impact the statement of cash flow. Paragraph 10 simply states that the format of the cash flow statement may need to be modified. This guidance is in our view insufficient. Paragraphs 56 to 58 of the issues analysis state that non cash transactions should be omitted from cash flow. An interpretation of these paragraphs could be that appropriations should be omitted from cash flows. This would result in a negative cash balance on the cash flow statement if appropriations are not presented but expenditures funded by such appropriations are. We recommend that the new standard on the use of appropriations provides clear guidance around presentation on the statement of cash flow.

In our view, the ED does not adequately direct how appropriations are, or are not, shown on the cash flow statement and the associated implications of these decisions for the closing cash position reported. Where expenditures funded by appropriations are presented as cash outflows and the expenditure was financed directly from the CRF under an authority to spend, it is difficult to find a rationale for not recording the related appropriation authorized and used as a cash inflow since the source and use of the cash were under the control of the reporting entity in the period. Disclosure requirements: We agree with the disclosure requirements proposed in the ED; however in our view the disclosure requirements should apply to appropriations of all types, irrespective of whether they are physical transfers of cash or direct accessing of funds through the CRF. Typically, federal recipients of appropriations made through cash transfers provide these disclosures voluntarily as it is understood this information is useful for users of the financial statements. We therefore encourage the Board to expand the scope of the disclosure requirements to also apply to appropriations made through cash transfers. Omitting these disclosure requirements from PS 3410 while adding them to the new standard may suggest that these disclosure requirements are not necessary for appropriations made through cash transfers, which in our view would be an unwanted consequence. We find that the wording in paragraph 14 is not clear. The term amounts funded might be interpreted as meaning amounts authorized or amounts used as the language in the paragraph is not consistent. We suggest the use of consistent terms to refer to amounts authorized, amounts used and amounts reported/recognized. We also question what the interaction will be, if any, between the requirement in PS 1201 to have budget figures presented on the face of the statement of operations and the reconciliation disclosures as proposed in the ED.

1.

Do you agree with the reporting alternatives set out in paragraph .09?

We do not agree with providing two reporting alternatives for the use of appropriations for the reasons outlined below. The proposed standard should direct reporting that best reflects the substance of appropriations and best meets the objectives of financial reporting established in the conceptual framework. Offering a recognition choice for similar transactions is arbitrary and will create unnecessary inconsistency and comparability issues in public sector financial reporting in Canada. While divergent practices have emerged over time, we do not see this current reality as a persuasive argument supporting a choice in recognition. We support the reporting of the use of appropriations in the statement of operations as we agree with PSABs view that the economic substance of appropriations is more in the nature of an income item similar to a government transfer and reporting them on the statement of operations is consistent with FINANCIAL STATEMENT OBJECTIVES, Section PS 1100. Appropriations typically fund annual ongoing operations and are not in substance equity infusions. IPSASB defines equity infusions in IPSAS 1 paragraph 7 as: Contributions [] that establish a financial interest in the net assets/equity of an entity, which conveys entitlement to distributions of (a) future economic benefits, or (b) any excess of assets over liabilities in the event of wound up, and/or can be sold, exchanged, transferred, or redeemed. This is not the scenario contemplated by appropriations. Reporting the use of appropriations as an element of the reconciliation to the closing accumulated operating surplus or deficit is, in our view, inconsistent with the elements of financial statements presented in PS 1000 and is inconsistent with the recognition requirements of PS3410: The four elements of government financial statements include: assets, liabilities, revenues, and expenses. PS 1000 does not address the concept of transactions flowing directly through accumulated operating surplus or deficit, something that is clear from the result of the financial instruments project and the presentation of remeasurement gains and losses. Similarly PS 1201.012 does not address the concept of recognizing amounts directly in accumulated operating surplus or deficit.

 PS3410 does not provide an alternative to record appropriations involving a transfer of monetary assets directly in accumulated surplus or deficit. Any new standard on the use of appropriations should be developed within the current conceptual framework and, given that some entities will account for appropriations following PS3410 and others the new standard on appropriations, we would expect consistency in recognition requirements. We note that certain federal government organizations that historically presented appropriations as an adjustment to accumulated surplus or deficit have started to report the use of appropriations on the statement of operations within the determination of net cost of operations in fiscal 2011-12. We are puzzled by PSABs decision to offer in the exposure draft two reporting alternatives given its support of the income approach to accounting for the use of appropriations and the fact that its conceptual framework currently does not recognize the existence of an equity element. We find the arguments made by those respondents who did not agree with the original proposal in the invitation to comment to treat the use of appropriations as revenue are not persuasive and we believe PSAB was successful in paragraphs 29 to 40 of the issue analysis paper at rebutting them. We encourage PSAB to reconsider its original proposal to record appropriations used as income, which is in our view the only approach that is consistent with the current conceptual framework.

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Click here to submit

Response Questionnaire
To be considered, comments must be received by

November 28, 2012 Use of Appropriations 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: Organization: E-mail: Darwin Bozek Alberta Treasury Board and Finance - Office of the Controller darwin.bozek@gov.ab.ca

General comments: Thank you for the opportunity to comment. We commend the Board for proposing two alternative approaches to presenting the use of appropriations in order to address the different accountability and budgeting practices of various jurisdictions. We have the following comments: 1. Paragraph .07 - In some jurisdictions, the recipient entity is able to carry forward the authority under an appropriation to a subsequent fiscal year to be used subject to meeting certain criteria. Disclosure of such an ability may be useful information to the users of the entity's financial statements. 2. Paragraph .15 - In some jurisdictions, exceeding the appropriation authority for one year may lead to encumbrance of the authority for a subsequent fiscal year. Disclosure of this type of encumbrance may be useful in the financial statements of the entity concerned.

1.

Do you agree with the reporting alternatives set out in paragraph .09?

As stated earlier, we agree with the flexibility provided.

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Cliquez ici pour soumettre

Formulaire de rponse
Pour tre pris en considration, les commentaires devront parvenir le 28 novembre 2012 au plus tard.

Utilisation des crdits budgtaires Expos-sondage

Le CCSP invite les intresss formuler des commentaires sur tous les aspects des principes proposs dans lexpos-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 : Organisation : Courriel : Andr Miville, CPA, CA et Vicky Lizotte, CPA, CA Contrleur des finances du Qubec andre.miville@cf.gouv.qc.ca et vicky.lizotte@cf.gouv.qc.ca

Commentaires gnraux : notre avis, ce projet n'est pas prioritaire pour les parties prenantes. titre d'exemple, pour le gouvernement du Qubec, un seul organisme du gouvernement ayant accs du financement en vertu de crdits budgtaires produit des tats financiers usage gnral vrifis, et de ce fait, devra appliquer la norme propose. galement, plusieurs normes importantes sont en cours d'analyse ou d'laboration par le CCSP, notamment celle sur le cadre conceptuel. En consquence, nous sommes d'avis que le CCSP devrait privilgier d'utiliser ses ressources sur les problmatiques comptables qui touchent l'ensemble des gouvernements et entits du secteur public plutt que d'laborer cette norme ayant une porte trs limite. Par ailleurs, il est primordial, comme spcifi au paragraphe .19 du document ANALYSE DES QUESTIONS , qu'aucune entit ne soit oblige de prparer et de prsenter des tats financiers usage gnral. De plus, la norme propose nous apparat incomplte sans les diverses explications incluses au document ANALYSE DES QUESTIONS. L'ajout d'explications et d'exemples sur les diffrents traitements possibles notamment au niveau des crdits pour l'acquisition, le dveloppement ou l'amlioration d'immobilisations corporelles aiderait clarifier le texte et l'application uniforme. Sans ces ajouts, les diffrentes entits utilisant les crdits ne comptabiliseront pas ncessairement les transactions relatives aux immobilisations corporelles de la mme faon. Ainsi, l'objectif d'uniformit des traitements comptables utiliss, tel que spcifi aux paragraphes .04 et .17 du document d'analyse, pourrait ne pas tre atteint avec la norme propose. tout le moins, si ces lments ne sont pas spcifis la norme, ils devraient tre inclus dans la base des conclusions. Cependant, si le CCSP dcide, malgr tout, de continuer dvelopper cette norme, la version franaise du paragraphe .03a) devra tre reformule pour reflter adquatement la version anglaise. Ainsi, il faudrait remplacer le terme socit distincte par entit juridique distincte , afin de ne pas faire rfrence aux socits d'tats mais bien des entits juridiques distinctes. galement, le paragraphe .05a) devrait rfrer la dfinition du paragraphe .03a) car le lien entre ces deux paragraphes

nest pas clair, notamment pour les gouvernements o les crdits budgtaires ne sont pas verss directement aux entits. Enfin, le paragraphe .05b) n'est pas ncessaire puisque la Prface du Manuel de comptabilit de l'ICCA pour le secteur public prcise clairement au paragraphe .06 que les entreprises publiques doivent se conformer aux normes qui sont applicables aux entreprises ayant une obligation d'information du public.

1.

tes-vous d'accord avec les choix offerts au paragraphe .09 en ce qui a trait la prsentation?

Nous sommes en dsaccord. Nous sommes d'avis que l'utilisation des crdits budgtaires ne devrait pas tre prsente l'tat des rsultats car il s'agit de financement. Par ailleurs, tel que mentionn notre rponse l'nonc de principe de fvrier 2012, nous croyons que la comparaison du budget et des rsultats rels l'tat des rsultats est adquate et suffisante pour les lecteurs des tats financiers. Malgr tout, si le CCSP dcide de publier une norme sur l'utilisation des crdits budgtaires, une seule faon de prsenter cette utilisation devrait tre prconise. Un choix impliquera que deux entits semblables ne prsenteront pas l'information financire de faon uniforme. Donc, de par la possibilit de ce choix et le manque d'information concernant notamment les crdits pour l'acquisition d'immobilisations, le projet de norme ne rpond pas aux objectifs d'uniformit des traitements comptables que s'est fix le CCSP dans son document sur l'analyse des questions, notamment aux paragraphes .04 et .17.

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KPM G LLP National Assurance and Professional Practice Suite 4600 Bay Adelaide Centre 333 Bay Street Toronto ON M 5H 2S5

Telephone (416) 777-8500 Fax (416) 777-8360 w w w .kpmg.ca

Mr. Tim Beauchamp Director, Public Sector Accounting 277 Wellington Street West Toronto, Ontario M5V 3H2 ed.psector@cica.ca November 28, 2012 Dear Mr. Beauchamp Appropriations Exposure Draft Thank you for the opportunity to provide comments on the Appropriations exposure draft. We have formatted our comments in response to the question posed in the exposure draft. We have also provided other comments that relate the application of this standard. 1. Do you agree with the reporting alternatives set out in paragraph .09? We have no comments on the reporting alternatives. Other comments This section applies to appropriations but excludes, in paragraph 5, public sector entities that receive actual transfers of resources as they are directed to apply the government transfers section 3410. Boards and commissions, including public libraries, public transit and police services boards, are controlled by local government. Many boards prepare separate financial statements on an annual basis for the use of their individual boards, the controlling local government and the general public. These organizations are funded by the local municipality and that funding may, or not may, be provided by a transfer of resources. Often the decision to centralize the accounting and banking is made by the local government to ensure the process is efficient and effective. In many cases, any excess /deficiency of revenue over expenditures is maintained by the Board for use/funding in the subsequent year. We do not agree that the accounting for the funding of these organizations (either as a government transfer or an appropriation) should be different as a result of an operational decision with respect to the most efficient method of maintaining their accounting records. We would suggest that this section doesnt apply to local governments.

(M ember firm legal name), a (member firm jurisdiction and legal structure), is the (jurisdiction) member firm of KPM G International, a Sw iss cooperative.

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Thank you for this opportunity to provide our comments. If you require any provide further clarification of our comments please contact Janet Allan at 416-777-3749. Yours very truly,

KPMG LLP Chartered Accountants

Wayne Morgan Office of the Auditor General of Alberta Edmonton, Alberta

November 23, 2012

Tim Beauchamp, Director Public Sector Accounting 277 Wellington Street West Toronto, Ontario

Dear Mr. Beauchamp, Our response to PSAB Exposure Draft Appropriations is below. General comments: We agree with the proposed standard as it allows flexibility to best achieve fair presentation of the substance of the appropriations. Presentation as part of accumulated surplus or deficit best reflects that appropriations are closer to a type of financing but still retains some of the concept that they are similar to revenue derived from operations. Do you agree with the reporting alternatives set out in paragraph .09? Yes, we agree. These reporting alternatives are appropriate. The standard may clarify that entities may report amounts received under appropriations on a net basis, rather than a gross basis. Entities may both receive an appropriation but also collect monies on behalf of the same entity they receive the appropriation from e.g. receiving an appropriation for expenses but also submitting to a general revenue fund taxes or fees collected by that entity. While these are not appropriations as defined, and this does change the scope of the standard, some discussion of these in the standard and provision for their presentation on a net basis with the appropriations should be included. Thank you for the opportunity to comment. Sincerely,

Wayne Morgan, PhD, CA, CISA

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Formulaire de rponse
Pour tre pris en considration, les commentaires devront parvenir le 28 novembre 2012 au plus tard.

Utilisation des crdits budgtaires Expos-sondage

Le CCSP invite les intresss formuler des commentaires sur tous les aspects des principes proposs dans lexpos-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 : Organisation : Courriel : Michel Samson, CPA, CA vrificateur gnral par intrim Vrificateur gnral du Qubec michel.samson@vgq.qc.ca

Commentaires gnraux : 1- Notion de entits du secteur public Avec le projet du CCSP sur la rvision terminologique du Manuel du secteur public, nous nous questionnons savoir ce quinclut la notion dentit du secteur public. Fait-on rfrence des entits juridiques distinctes seulement? Nous croyons que linclusion de cette notion devrait tre reporte avec ladoption du projet de rvision terminologique. 2- Dfinition de crdits budgtaires Nous recommandons d'liminer le paragraphe 3a) pour les raisons suivantes : Lalina a) laisse entendre quune entit pourrait recevoir directement un transfert de ressources du gouvernement. Quest-ce qui distingue alors lalina a) du paragraphe 3 du prsent expos-sondage de la notion de transfert dans le SP 3410.

Nous croyons que ce paragraphe pourrait crer une ambigut tant dans lesprit des prparateurs des tats financiers que dans celui des auditeurs car lalina a) du paragraphe 3 est en contradiction avec lalina b) du paragraphe 5 qui fait mention que le chapitre ne sapplique pas aux entits du secteur public qui reoivent effectivement un transfert de ressource car ces dernires appliquent le SP 3410.

3- Comptabilisation En premier lieu, nous vous soulignons que la traduction franaise n'est pas la mme que celle du paragraphe SP3410 .28 a) i). On devrait traduire "enabling autority" par pouvoir habilitant au lieu d'autorisation habilitante. Nous suggrons l'ajout du paragraphe suivant aprs le paragraphe 7 afin de favoriser une comprhension commune de la norme par l'ensemble des intervenants du secteur public : "La comptabilisation de l'utilisation des crdits budgtaires ne limite pas la comptabilisation des oprations admissibles.

Ainsi, si l'entit a dpass les limites de ses autorisations, elle fournira l'information requise en vertu du SP 1201.135 et du prsent paragraphe 15."

4- Constatation des crdits pour les dpenses en capital Une problmatique se pose pour la constatation des crdits pour les dpenses en capital (immobilisations). Le fait de constater en revenus lensemble des crdits utiliss pour lachat de limmobilisation vient crer en excdent dans la premire anne et une srie de dficit sur plusieurs exercices. Nous croyons que lexpos-sondage devrait ajouter une norme de prsentation pour concilier lexcdent et cet excdent investi en immobilisations.

5- Information fournir En ce qui concerne le paragraphe 14 et 15, nous croyons quil devrait tre obligatoire de faire les rapprochements suggrs afin de fournir linformation ncessaire la comprhension de la comptabilisation des crdits dans lexercice. De plus, des rapprochements fournissent des informations importantes pour la reddition de compte de lentit auprs des utilisateurs de ses tats financiers. 1. tes-vous d'accord avec les choix offerts au paragraphe .09 en ce qui a trait la prsentation?

Nous ne sommes pas en accord avec le choix de prsentation dans le paragraphe 9 de lexpos-sondage. Pour nous, lutilisation des crdits budgtaires devraient tre prsente aux revenus dans ltat des rsultats. Notre position est conforme au cadre conceptuel en vigueur actuellement dans le secteur public et favorise la comparabilit d'une entit l'autre. Le fait doffrir le choix aux prparateurs des tats financiers pour les crdits budgtaires fait en sorte que cela cre une disparit avec les critres de constatations des paiements de transfert dans le chapitre SP 3410. De plus, la constatation dans le rapprochement avec lexcdent ou le dficit accumul li aux activits donne une prsentation qui vient recrer en quelque sorte la notion de surplus dapport du chapitre SP 3800 qui a t retir rcemment du manuel. Nous considrons donc que le choix propos par l'expos-sondage cre un recul par rapport cette comptabilisation et que cette position n'est pas soutenue par la norme SP1201.

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Finance

Comptrollers Division

Comptrollers Office 715 401 York Avenue Winnipeg, Manitoba R3C 0P8 Phone: 945-4919 Fax: 948-3539 E-mail: betty-anne.pratt@gov.mb.ca

November 28, 2012 Mr. Tim Beauchamp, Director Public Sector Accounting 277 Wellington Street West Toronto, Ontario M5V 3H2 Dear Mr. Beauchamp: Re: Exposure Draft Use of Appropriations Thank you for the opportunity to comment on the Exposure Draft (ED) Use of Appropriations. The Province of Manitoba (Province) is pleased that section .04 in the ED clearly addresses our primary concern. The recommendations on appropriations do not apply to departments that do not produce general purpose financial statements. The scope of the recommendations in the ED was described much clearer than in the Statement of Principles. The Province agrees with the recognition criteria for appropriations, their presentation in the financial statements, and the disclosure of the amounts used and authorized. We appreciate the opportunity to comment on this ED. If you have any questions or concerns related to this comments please contact the undersigned.

Yours truly,

Betty-Anne Pratt, CA Provincial Comptroller On Behalf of the Province of Manitoba