Landmark government accounting and reporting standards issued will provide taxpayers a more complete picture of local government finances



    TORONTO, March 6 /CNW/ - Local governments will provide a more
comprehensive picture of their financial position and results as new standards
requiring full accrual accounting are approved by the Public Sector Accounting
Board (PSAB) of the Canadian Institute of Chartered Accountants' (CICA).
    Full accrual accounting standards will require local governments to
account for the stock of capital assets, such as roads, bridges, sewage
treatment facilities and buildings, and their use in financial statements.
    "The move to full accrual accounting for local governments will provide
taxpayers, elected officials and administrators with better information and
will be a major improvement in their financial reporting. Most local
governments are capital asset intensive and their assets can be long-term in
nature -- consider a water system, for example. These new standards will
provide the foundation of financial information needed to understand the costs
of using capital assets in service delivery. It will promote ongoing asset
condition assessments and improved financial planning related to maintenance
and replacement needs," says Kent Kirkpatrick, Vice-Chair, PSAB and City
Manager for the City of Ottawa.
    Traditionally, local government financial statements have focused on
annual surplus or deficit. The new reporting standards provide for key
indicators such as net debt, accumulated surplus/deficit, annual
surplus/deficit, change in net debt and cash flows, all useful for assessing
financial position and results.
    "The new reporting model eliminates the one-dimensional focus on annual
surplus/deficit by requiring a more comprehensive set of indicators that will
be much more useful to the public and anyone having a stake in making sense of
the numbers. The new model allows us to look at the extent of capital assets a
local government has, its net debt, the cost of operations, and the sources
and uses of its cash resources in addition to annual results," said
Kirkpatrick.
    The new accounting and reporting standards come into effect January 1,
2009, though some governments have indicated their intention to apply them
sooner.
    Kirkpatrick said local governments have a lot of work to do. "Many local
governments do not have a complete inventory of what they own or the cost of
those assets when they were acquired. Completing the inventory, determining
cost or an estimate of it, and creating capital assets policies all needs to
be done before January 1, 2009."
    "Although it is a significant undertaking, in the long-run, local
governments and taxpayers will have better information for decision making,"
said Kirkpatrick.

    About PSAB

    The Public Sector Accounting Board (PSAB) serves the public interest by
setting standards and providing guidance for financial and other performance
information reported by the public sector. PSAB does this by establishing
independent, conceptually-based standards and other guidance through
consultation and communication, and contributing to the development of
internationally accepted standards. PSAB comprises twelve volunteer members
drawn from senior levels of government, including federal and provincial
auditors general, controllers, and deputy ministers, municipal finance
officials, academics and other experts in government reporting.

    The Canadian Institute of Chartered Accountants (CICA), together with the
CA institutes/ordre, represents approximately 71,000 CAs and 9,500 students in
Canada and Bermuda. The CICA conducts research into current business issues
and supports the setting of accounting, auditing and assurance standards for
business, not-for-profit organizations and government. It issues guidance on
control and governance, publishes professional literature, develops continuing
education programs and represents the CA profession nationally and
internationally.





For further information:

For further information: or to arrange an interview, contact Angela
Kooij, Manager, Media Relations, at (416) 204-3450, or by e-mail at
angela.kooij@cica.ca

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Canadian Institute of Chartered Accountants

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