1. Transfer Payment and Financial Reporting Branch Ministry of Education PS 2700 Segmented Disclosures TPFR Information Sessions Fall 2007

2. 2 Transfer Payment and Financial Reporting Branch Ministry of Education 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. 3 Transfer Payment and Financial Reporting Branch Ministry of Education 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. 4 Transfer Payment and Financial Reporting Branch Ministry of Education 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. 5 Transfer Payment and Financial Reporting Branch Ministry of Education 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. 6 Transfer Payment and Financial Reporting Branch Ministry of Education 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. 7 Transfer Payment and Financial Reporting Branch Ministry of Education 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. 8 Transfer Payment and Financial Reporting Branch Ministry of Education 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. 9 Transfer Payment and Financial Reporting Branch Ministry of Education 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. 10 Transfer Payment and Financial Reporting Branch Ministry of Education Questions