Directive on Accounting Standards

Provides the accounting, reporting, and recording framework for the Government of Canada’s consolidated financial statements, departmental financial statements, and quarterly financial reports.
Date modified: 2023-11-28

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1. Effective date

  • 1.1This directive takes effect on .
  • 1.2This directive and the Government of Canada Accounting Handbook (GCAH) replace the following Treasury Board policy instruments:
    • Treasury Board Accounting Standard 1.2: Departmental and Agency Financial Statements ()
    • Treasury Board Accounting Standard 1.3: Departmental and Agency Quarterly Financial Report ()
    • Treasury Board Accounting Standard 2.2: Materiality ()
    • Treasury Board Accounting Standard 3.1: Capital Assets ()
    • Treasury Board Accounting Standard 3.1.1: Software ()
    • Treasury Board Accounting Standard 3.2: Transfer Payments (Grants and Contributions) ()
    • Treasury Board Accounting Standard 3.4: Inventories ()
    • Treasury Board Accounting Standard 3.6: Contingencies ()
    • Policy on Accounting for Inventories ()
    • Policy on Allowances for Valuation of Assets and Liabilities ()
    • Directive on Contingencies ()
    • Directive on Recording Financial Transactions in the Accounts of Canada ()
    • Directive on Year-End Recording of Payables ()
    • Policy on Accounting for Non-Monetary Transactions ()

2. Authorities

  • 2.1This directive is issued pursuant to the authorities indicated in section 7 and subsections 9(1) and 37.1 of the Financial Administration Act.

3. Objectives and expected results

4. Requirements

  • 4.1The chief financial officer is responsible for the following:
    • 4.1.1Ensuring that departmental accounting policies are in accordance with the following:
      • Sector Accounting Standards and Public Sector Guidelines (PSAS) issued by the Public Sector Accounting Board of the Chartered Professional Accountants of Canada; and
      • Government of Canada Accounting Handbook (GCAH), which is referred to for supplementary information on:
        • government’s accounting choices, where options exist, under PSAS;
        • government’s accounting policies in the absence of specific PSAS; and
        • policies relevant to departmental financial statements or quarterly financial reports.
    • 4.1.2Ensuring that departmental financial statements are prepared on an accrual basis, in accordance with the relevant GCAH sections;
    • 4.1.3Ensuring that departmental quarterly financial reports are prepared for the first three quarters of the fiscal year in accordance with the special purpose financial reporting framework as stated in the relevant GCAH sections;
    • 4.1.4Consulting with the Office of the Comptroller General of Canada prior to engaging an external auditor to audit the departmental financial statements, except when required by legislation;
    • 4.1.5Developing and maintaining a departmental chart of accounts that:
      • in accordance with the Government-wide Chart of Accounts for Canada and is integrated with the departmental financial system; and
      • for financial reporting in accordance with the Policy on Results; and
    • 4.1.6Consulting first with the Office of the Comptroller General of Canada on interpretations of this directive that have a material effect on the financial statements.
  • 4.2The Receiver General for Canada is responsible for the following:
    • 4.2.1Maintaining the Government-wide Chart of Accounts for Canada and communicating to the financial community any changes made;
    • 4.2.2Providing implementation assistance, operational instructions and other guidance to departments regarding the Government-wide Chart of Accounts for Canada and government-wide coding; and
    • 4.2.3Performing quality assurance regarding the coding of transactions and the government-wide classification structure.

5. Roles of other government organizations

  • 5.1Not applicable

6. Application

7. References

8. Enquiries

  • 8.1Members of the public may contact Treasury Board of Canada Secretariat Public Enquiries regarding any questions about this directive.
  • 8.2Individuals from departments should contact their departmental corporate reporting group regarding any questions about this directive.
  • 8.3Individuals from a departmental corporate reporting group may contact Financial Management Enquiries for interpretation of this directive.

Appendix A: Standard on the Government of Canada Accounting Handbook

A.1 Effective date

  • A.1.1This standard takes effect on
  • A.1.2Public Sector Accounting Standards are continually evolving. As a result, standards are added, amended or deleted effective the dates noted in Section A.3 below.

A.2 Standard

A.3 Revisions since

Section Effective Date Nature of Revision
GC 2200 Related Party Disclosures New
GC 3420 Inter-entity transactions New
GC 3430 Restructuring Transactions New
GC 5200 Crown Corporations Quarterly Financial Report New – Only applicable to parent Crown corporations as defined in Section 83 of the Financial Administration Act
Government of Canada Accounting Handbook – Introduction Minor Revisions
GC 3050 Loans Receivable Minor Revisions
GC 3150 Tangible Capital Assets Minor Revisions
GC 3300/3310 Contingent Liabilities and Loan Guarantees Minor Revisions
GC 4500 Departmental Financial Statements Minor Revisions
All sections Minor Revisions
Government of Canada Accounting Handbook – Introduction Consequential amendments arising from new or revised sections
GC 2601 Foreign Currency Translation New
GC 3050 Loans Receivable Revision of significant concessionary terms threshold.
GC 3150 Tangible Capital Assets Revisions to software section.
GC 3260 Liability for Contaminated Sites New
GC 3280 Asset Retirement Obligations New
GC 3420 Inter-entity Transactions Consequential amendment arising from implementation of GC 3280
GC 3450 Financial Instruments New
GC 4500 Departmental Financial Statements Formalize requirement for Deputy Head and Chief Financial Officer signature on Statement of Management Responsibility

Appendix B: Definitions

accrual accounting (comptabilité d’exercice)
A basis of accounting that recognizes the effect of transactions and events on a department’s financial statements in the period(s) in which they occur, rather than in the period(s) in which the department uses its appropriation. This recognition occurs regardless of whether there has been a receipt or payment of cash or its equivalent. (Public Sector Accounting Standards, PS 1000.59)
appropriation (crédit)
Any authority of Parliament to pay money out of the Consolidated Revenue Fund. (Financial Administration Act section 2)
central financial management reporting system (CFMRS) (système central de gestion des rapports financiers (SCGRF))
The Public Services and Procurement Canada electronic system that stores summary departmental financial data according to the Government-wide Coding Structure.
chart of accounts (plan comptable)
A list of codes used to classify, record and report financial transactions. A departmental chart of accounts uses codes that aggregate to the codes found in the Government-wide Chart of Accounts.
expenditure (dépenses)
An amount charged against a departmental appropriation in the accounting period.
expenditure basis of accounting (appropriation accounting/modified cash/partial accrual accounting) (méthode de comptabilité axée sur les dépenses (comptabilité des crédits, comptabilité de caisse modifiée, comptabilité d’exercice partielle))
A basis of accounting that aligns with how Parliament authorizes departmental charging against an appropriation. Appropriation accounting differs in its presentation from accrual accounting in that transactions that do not require the use of an appropriation are not reported.
expense (charge)
Decreases in economic resources, either by way of decreases in assets or increases in liabilities, resulting from the operations, transactions and events of the accounting period (Public Sector Accounting Standards, PS 1000.49)
guarantees (garanties)
A promise to pay all or a part of the principal and/or interest on a debt obligation in the event of default by the borrower. A loan guarantee is a contingent liability of the government. (Public Sector Accounting Standards, PS 3310.03, PS 3310.04)
payable at year-end (créditeur en fin d’exercice)
  1. A debt incurred from work performed, goods received or services rendered before year-end; or
  2. A debt owing on, or before, year-end under a contract or similar arrangement; or
  3. An amount payable on, or before, year-end, resulting from transactions and events with other departments and Crown corporations. It also includes amounts payable as if they were debts under certain administrative arrangements, including memoranda of understanding with provincial, national or international entities and organizations. It also includes an amount payable under legislation in force at year-end.
respendable revenues (revenus disponibles)
A type of revenue that, once received, increases the departmental spending authority. A department requires specific authority from Parliament to respend revenues. Respending authority is derived from the Financial Administration Act (FAA), subsection 29.1(1); the FAA and an Appropriation Act, subsection 29.1(2); legislation specific to a department (e.g., enabling and/or program); or other specific legislation.
special purpose financial reporting framework (référentiel à usage particulier)
Accounting standards and guidance designed to meet the financial information needs of specific users as opposed to the common financial information needs of a wide range of users. (Introduction to public sector accounting standards .13)

© Her Majesty the Queen in Right of Canada, represented by the President of the Treasury Board, 2017,
ISBN: 978-0-660-09526-4

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