Directive on Accounting Standards: Introduction – Government of Canada Accounting Handbook

States the Government of Canada’s accounting choices and policies, and provides specific policies relevant to departmental financial statements and quarterly financial reports.
Date modified: 2023-11-28

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Note to reader

This document is part of the Appendix A of the Directive on Accounting Standards.

A. Objective

  1. The Government of Canada Accounting Handbook (GCAH) provides supplementary information that:
    • States the Government’s accounting choices, where options exist, under Public Sector Accounting Standards (PSAS);
    • Provides the Government’s accounting policies in the absence of specific PSAS; or,
    • Provides specific policies relevant to departmental financial statements or quarterly financial reports.

B. Context

  1. The Government of Canada uses financial information as a strategic business resource to support decision-making and management activities, policy development, program and service delivery and evidential needs, as well as for historical purposes and as an accountability mechanism.
  2. Parliament and Canadians expect the Government of Canada to be well managed, which includes reporting of financial and related non-financial information that is fairly presented in all material respects. Such information is expected to be relevant, reliable, comparable, understandable and clearly presented in a manner that maximizes its usefulness to those for whom the financial information is prepared. In addition, there is an expectation of transparency and accountability regarding how the government spends public funds to achieve results for Canadians.
  3. Government financial statements need to report the information required by users to help them make assessments and judgments concerning government financial operations and management (PS 1000.18). The information needed to aid understanding and assessments of government financial operations and to promote accountability extends beyond reporting surpluses and deficits. A government’s financial statements must provide information that describes liabilities and financial assets, its non-financial assets that are available for use in providing future services, the cost of using its economic resources in the delivery of services, as well as information about investing and financing activities and potential assets and liabilities (PS 1000.21). Standards are the concepts, conventions and postulates that provide principles to measure, recognize, present and disclose the financial information considered necessary for accountability and useful for decision making (PS 1000.05)
  4. The Government of Canada’s accounting policies for the government’s Consolidated Financial Statements and Departmental Financial Statements are based on Canadian Public Sector Accounting Standards and Public Sector Guidelines (collectively, “PSAS”)). To ensure that the government and its component entities apply the appropriate accounting standards in a consistent manner, the GCAH, which has been issued by the Office of the Comptroller General of Canada, provides additional direction to supplement and support the application of PSAS. Along with PSAS, these parameters outline how transactions and other events are to be recognized, measured, presented and disclosed in government financial statements.

C. Limitations

  1. These standards are not intended to apply to immaterial or insignificant items or matters. Furthermore, in developing these standards, no rule of general application can be phrased to suit all circumstances or combinations of circumstances that may arise, nor is there any substitute for the exercise of professional judgment in the determination of what constitutes fair presentation or good practice in a particular case (Introduction to public sector accounting standard, .26-.27).
  2. The establishment of the Public Sector Accounting Handbook (PSAH) by the Public Sector Accounting Board is an evolutionary process which responds to changing information needs. As a result, the OCG will assess proposed changes to the PSAH on an ongoing basis and will determine whether the Directive on Accounting Standards or the GCAH require amendments.

D. Applicability of Canadian Public Sector Accounting Handbook (PSAH)

  1. Section F. Summary of Applicability of PSAS provides details on which PSAS are supported or supplemented by the GCAH. Where a policy choice, requirement, interpretation or other further direction has been issued to supplement PSAS, a listing of the additional direction available is provided. A list of PSAS is shown, together with a record of whether the standard:
    • Applies without additional policy choices, requirements or interpretation for both the Government of Canada Consolidated Financial Statements and Departmental Financial Statements;
    • Applies with additional policy choices, requirements or interpretation for the Government of Canada Consolidated Financial Statements; and
    • Applies with additional policy choices, requirements or interpretation for Departmental Financial Statements.

E. GCAH structure

  1. For ease of reference, the GCAH has been indexed to mirror the PSAH referencing system. Note that no supplementary information has been given for PSAH sections which are to be applied without additional policy choices, requirements or other supporting guidance.

    Title - “GC XXXX”
    • Numbering and naming will mirror PSAH structure and nomenclature for ease of reference (e.g. GC 3150 Tangible Capital Assets is supplementary to PS 3150).
    • Subject matters with no PSAH reference are included in the GC 4000/5000 series of the GCAH (e.g. GC 4100 Specified Purpose Accounts).
    Primary PSAH reference
    • Indicates the primary PSAH reference that applies
    Effective date
    • “This GCAH section takes effect on XXXX.” If applicable, “It replaces the version issued on XXXX.”
    Accounting direction
    • Text of accounting direction
    Other related references
    • Lists any additional references, such as other PSAH and GCAH sections

F. Summary of applicability of PSAS

Public Sector Accounting Standard Applies without additional policy choices or interpretation Applies with additional policy choices or interpretation for the Government of Canada Consolidated Financial Statements Applies with additional policy choices or interpretation for Departmental Financial Statements Accounting direction available in addition to PSAH
Introduction to the Public Sector Accounting Handbook Yes N/A N/A Introduction and Summary of Applicability of PSAS – Government of Canada Handbook
PS 1000 Financial statement concepts N/A Yes Yes GC 1010 Financial Statement Concepts (Materiality)
PS 1100 Financial statement objectives N/A N/A Yes GC 1100 Financial Statement Objectives
PS 1150 Generally accepted accounting principals N/A Yes Yes GC 1150 Generally Accepted Accounting Principles
PS 1201 Financial statement presentation (PS 1202 effective 1 April, 2026) N/A Yes Yes GC 1201 Financial Statement Presentation
PS 1300 Government reporting entity N/A Yes Yes GC 1300 Government Reporting Entity
PS 2100 Disclosure of accounting policies Yes N/A N/A N/A
PS 2120 Accounting changes Yes N/A N/A N/A
PS 2125 First-time adoption Yes N/A N/A N/A
PS 2130 Measurement uncertainty Yes N/A N/A N/A
PS 2200 Related party disclosures N/A Yes Yes GC 2200 Related Party Disclosures
PS 2400 Subsequent events N/A Yes Yes GC 2400 Subsequent Events
PS 2500 Basic principles of consolidation N/A N/A Yes GC 4500 Departmental Financial Statements
PS 2510 Additional areas of consolidation Yes N/A N/A N/A
PS 2601 Foreign currency translation N/A Yes Yes GC 2601 Foreign Currency Translation
PS 2700 Segment disclosures N/A Yes Yes GC 2700 Segmented Disclosures
PS 3041 Portfolio investments Yes N/A N/A N/A
PS 3050 Loans receivable N/A Yes Yes GC 3050 Loans Receivable
PS 3060 Interests in partnerships Yes N/A N/A N/A
PS 3070 Investments in government business enterprises Yes N/A N/A N/A
PS 3100 Restricted assets and revenues Yes N/A N/A N/A
PS 3150 Tangible capital assets N/A Yes Yes GC 3150 Tangible Capital Assets
PS 3160 Public private partnerships Yes N/A N/A N/A
PS 3200 Liabilities Yes N/A N/A N/A
PS 3210 Assets Yes N/A N/A N/A
PS 3230 Long-term Debt Yes N/A N/A N/A
PS 3250–3255 Retirement/Post-employment benefits N/A Yes Yes GC 3250–3255 Retirement/Post-Employment Benefits
PS 3260 Liability for contaminated sites N/A Yes Yes GC 3260 Liability for contaminated sites
PS 3280 Asset Retirement Obligations N/A Yes Yes GC 3280 Asset Retirement Obligations
PS 3300-3310 Contingent liabilities and Loan guarantees N/A Yes Yes GC 3300-3310 Contingent Liabilities and Loan Guarantees
PS 3320 Contingent assets N/A Yes Yes GC 3320 Contingent Assets
PS 3380 Contractual rights Yes N/A N/A N/A
PS 3390 Contractual obligations N/A Yes Yes GC 3390 Contractual Obligations
PS 3400 Revenue N/A Yes Yes GC 3400 Revenue
PS 3410 Government transfers N/A Yes Yes GC 3410 Government Transfers
PS 3420 Inter-entity transactions N/A Yes Yes GC 3420 Inter-entity transactions
PS 3430 Restructuring transactions N/A Yes Yes GC 3430 Restructuring transactions
PS 3450 Financial instruments N/A Yes Yes
  • GC 3450 Financial Instruments
  • GC 3450 Guideline: Guidance on Embedded Derivatives
PS 3510 Tax revenue Yes N/A N/A N/A
PSG-2 Leased tangible capital assets N/A Yes Yes GC 3150 Tangible Capital Assets
PSG-4 Funds and Reserves Yes N/A N/A N/A
PSG-5 Sale-leaseback transactions Yes N/A N/A N/A
PSG-8 Purchased intangibles N/A Yes Yes GCG-8 Purchased Intangibles
Non-PSAS sections
GCAH section Additional tools
GC 4100 Specified Purpose Accounts N/A
GC 4200 Inventories N/A
GC 4300 Non-Monetary Transactions N/A
GC 4400 Departmental Quarterly Financial Reports GC 4400 Guideline: Illustrative
Quarterly Financial Report
GC 4500 Departmental Financial Statements GC 4500 Guideline: Illustrative
Departmental Financial Statements
GC 5000 Recording Financial Transactions in the Accounts of Canada N/A
GC 5100 Payables at Year-End N/A
GC 5200 Crown Corporations Quarterly Financial Report GC 5200 Guideline: Illustrative
Crown Corporations Quarterly Financial Report
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