What’s the Difference Between PSAB and ASNPO?

As you’re studying for CPA Canada CFE and PEP exams, outside of the commonly tested ASPE and IFRS topics, it’s also important to know the Public Sector Accounting Standards (PSAS) and the Accounting Standards for Not-for-Profit Organizations (ASNPO), as these are included in the CPA Canada Competency Map.

What’s PSAB?

The Public Sector Accounting Board (PSAB) is a Canadian organization responsible for establishing accounting standards for the government, crown corporations, and other public entities in Canada. Some examples are the federal, provincial, and municipal governments, such as the City of Toronto in Ontario, Canada. The City of Toronto would be required to report its financial statements, cashflows, and operational results following Public Sector Accounting Standards (PSAS).

The PSAB sets the PSAS, it helps to guide financial reporting to provide accountability and transparency to taxpayers and public funds. They are based on the principles of fund accounting, which emphasizes tracking and reporting funds separately for specific purposes or activities.

The PSAB standards are in the CPA Canada Handbook:

Is PSAB tested on CPA exams?

Public Sector Accounting standards are not typically tested on CPA Canada exams, so you shouldn’t spend too much study time here. However, some topics that could theoretically be tested include:

  • Introduction to the public sector accounting handbook (para’s: .02, .04-06, .09, .17).
  • Fund accounting principals
  • Accounting for government activities such as taxes and grants

What’s ASNPO?

ASNPO are the accounting standards specifically for not-for-profit (NPO) organizations in Canada, such as charities, associations, and clubs. NPOs can be organized and operated for social, educational, religious, health, or professional purposes, without the mission of earning a profit. For example, a community health center in a specific geographic location. These standards are developed by the Accounting Standards Board (AcSB), to meet the financial reporting needs of NPOs to provide transparency to stakeholders and donors (which are the key users).

The standards are in Part III of the CPA Canada Handbook:

They address items unique for NPO organizations, including contributions, collections held, and reporting controlled and related entities. Where items aren’t included in this section, you must refer to ASPE standards.

Is NPO tested on CPA exams?

NPOs have been tested previously, especially in Core 1 and CFE Day 3 cases, so it’s important you practice this standard. The ASNPO is also tested in MCQs of the Core 1 Module. Common AOs tested under these standards include:

  • 4400 F/S presentation
  • 4410 Contributions revenue rec.
  • 4420 Contributions receivable
  • 4433 Tangible capital assets
  • 4434 Intangible capital assets

For information on how to access both of these standards, check out this post where I discuss the CPA Canada Handbook.

Conclusion

In summary, PSAB focuses on establishing accounting standards tailored to public sector entities, like crown corporations, whereas ASNPO focuses on standards related to not-for-profit organizations, like charities. Each set of standards is custom designed to meet the distinct needs of the sectors and users. Both standards can theoretically be tested on the CPA Canada exams, though less likely for PSAS, and they are covered in the CPA Canada Handbook.

Extra resources

Extra resources are available in Gevorg’s review courses.