We believe that the primary basis of measurement should be historical cost and the standards should provide appropriate criteria to gauge when alternative bases of measurement might be appropriate. Specific Matter for Comment 2 Do you agree with the current value measurement bases for assets that have been identified in section 3? If not, please indicate which additional measurement bases should be included or which measurement bases should not be included in the Framework? We do not believe any current measurement base should be the primary base for government financial statements. However, we do agree that other measurement bases should be available for use in those situations where historical cost is not considered appropriate in depicting a useful statement of annual surplus deficit. There is a need to acknowledge the significance of public sector accounting standards to fiscal accountability frameworks and therefore potential impacts on fiscal policy decisions. The basis of reporting should reflect the economic substance of government’s activities and serve the public interest. There is a need to consider potential negative consequences in determining the appropriate approach. Specific Matter for Comment 3 Do you agree with the approaches proposed in section 4 for application of: The fair value measurement model to estimate the price at which a transaction to sell an asset would take place in an active, open and orderly market at the measurement date under current market conditions. If not, please give your reasons; and The deprival value model to select or confirm the use of a current measurement basis for operational assets. If not, please give your reasons. believes historical cost should be the primary basis of measurement for public sector financial reports. However, there are limited circumstances where deviation from historical cost (to fair market values or deprival values) may be appropriate. For example, if an asset is no longer in service and needs to be disposed of, an appropriate framework to achieve an exit value would be useful guidance. Specific Matter for Comment 4 Do you agree with the proposed measurement bases for liabilities in section 5? If not, please indicate which additional measurement bases should be included or which measurement basis should not be included in the Framework? We agree with the proposed measurement bases for liabilities. In Canada, the measurement bases for liabilities have always been conservative, with an objective of providing a fair presentation of the nature and extent of an entity’s obligations to other parties.
We believe that the primary basis of measurement should be historical cost and the standards should provide appropriate criteria to gauge when alternative bases of measurement might be appropriate. Specific Matter for Comment 2 Do you agree with the current value measurement bases for assets that have been identified in section 3? If not, please indicate which additional measurement bases should be included or which measurement bases should not be included in the Framework? We do not believe any current measurement base should be the primary base for government financial statements. However, we do agree that other measurement bases should be available for use in those situations where historical cost is not considered appropriate in depicting a useful statement of annual surplus deficit. There is a need to acknowledge the significance of public sector accounting standards to fiscal accountability frameworks and therefore potential impacts on fiscal policy decisions. The basis of reporting should reflect the economic substance of government’s activities and serve the public interest. There is a need to consider potential negative consequences in determining the appropriate approach. Specific Matter for Comment 3 Do you agree with the approaches proposed in section 4 for application of: The fair value measurement model to estimate the price at which a transaction to sell an asset would take place in an active, open and orderly market at the measurement date under current market conditions. If not, please give your reasons; and The deprival value model to select or confirm the use of a current measurement basis for operational assets. If not, please give your reasons. believes historical cost should be the primary basis of measurement for public sector financial reports. However, there are limited circumstances where deviation from historical cost (to fair market values or deprival values) may be appropriate. For example, if an asset is no longer in service and needs to be disposed of, an appropriate framework to achieve an exit value would be useful guidance. Specific Matter for Comment 4 Do you agree with the proposed measurement bases for liabilities in section 5? If not, please indicate which additional measurement bases should be included or which measurement basis should not be included in the Framework? We agree with the proposed measurement bases for liabilities. In Canada, the measurement bases for liabilities have always been conservative, with an objective of providing a fair presentation of the nature and extent of an entity’s obligations to other parties.
Ontario%20Response%20CF3%20Measurement.docx