Current situation

The Public Sector Accounting Board (PSAB) establishes generally accepted accounting principles (GAAP) for governments and government organizations in Canada. The PSAB has directed government business enterprises and government business-type organizations to follow GAAP for profit-oriented enterprises – in other words, they are to apply International Financial Reporting Standards. Other government organizations (OGOs), except government not-for-profit organizations (GNFPOs), have the option of selecting PSA standards or IFRS.

The PSA standards focus on accountability and the way that assets are used for current operations and future activities. They make a clear distinction between financial and non-financial assets and attempt to highlight how financial assets, service liabilities and non-financial assets are used to provide future services.

The following table indicates the applicable financial reporting framework by type of public sector entities: 

Federal, provincial, territorial &
local governments
Government Organizations
Government business
  • Main governments
  • Separate legal entity;
  • Delegated financial and operational authority;
  • Sells goods & services outside the reporting entity; and
  • Can maintain operations & meet liabilities from revenues received from outside the reporting entity
  • Normally without transferable ownership interests;
  • Organized & operated exclusively for a not-for-profit purpose; and
  • Has counterparts outside the public sector
  • Is not a government; and
  • Does not meet the criteria of a GBE, or GNFPO
PSA standards IFRS Standards for
NFPOs in the
PSA Handbook
PSA standards

Significant differences exist between IFRS and PSA standards in the following areas:

  • presentation of financial statements
  • disclosure
  • financial instruments
  • tangible capital assets and Intangible assets
  • retirement and post-employment benefits
  • segment disclosures

Deloitte Publications