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PS 2700 Segmented Disclosures

Explore the key aspects of segmented disclosures for governmental financial statements including purposes, defining segments, bases of segmentation, policy compliance, required disclosures, and encouraged disclosures.

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PS 2700 Segmented Disclosures

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  1. PS 2700Segmented Disclosures TPFR Information Sessions Fall 2007

  2. Effective Date • Effective for fiscal years beginning on or after April 1, 2007 • For school boards: Effective for September 1, 2007 – August 31, 2008 • Earlier adoption is encouraged

  3. Purpose & Objectives • A government’s financial statements provide financial information at a highly aggregated level • Objectives of segment disclosure: • Identify the resources allocated to major activities • Make more informed judgements about the government and its major activities • Better understand how government is organized and how it discharges its accountabilities • Enhance transparency of financial reporting • Better understand the performance of segments

  4. Defining & Identifying Segments “ Distinguishable activity or group of activities of a government for which it is appropriate to separately report financial information…” Other factors to consider: - objectives of disclosing by segment; - whether the financial information is available; - expectations of the community and elected/appointed officials regarding key activities; - qualitative characteristics of financial reporting; - homogenous nature of activities, service delivery or recipients of the service

  5. Bases of Segmentation • Functional Classifications: • Health, education, defense, welfare • Instruction, administration, transportation, etc. • Service Line Segments: • Distinguished by outputs or achieving particular operating objectives • Elementary & secondary, regular vs continuing education • Accountability and Control Relationships • By Ministry, crown corporations or SUCH sector • Significant foundation

  6. Attributing Items to Segments • Directly attributable costs = attribute to segment • Not directly attributable costs: • Reasonable basis of allocation = allocate • No reasonable basis of allocation = not allocated • Arbitrary internal allocation = revisited

  7. Segment Acc. Policies & Changes in Segments “ Segment information should be prepared in accordance with the accounting policies adopted for preparing and presenting the summary the financial statements of the government”. PS 2700.22 “ …prior period segment data presented for comparative purposes should be restated to reflect the newly reported segment(s)…” PS 2700.24

  8. Required Disclosures • In notes or schedules about each segment: • Basis of identifying segments, nature of the segments and their activities, method used for significant allocations • Segment expense by major object or category • Segment revenue by source and type • Reconciliation between information disclosed for segments and consolidated information in the summarized financial statements

  9. Encouraged Disclosures • Assets by segment • Liabilities by segment • Tangible capital assets by segment • Additions to tangible capital assets by segment • Other significant elements of the financial statements by segment • Impact of changes in accounting policies

  10. Questions

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