CICA Handbook Section 3461 - Financial Analysis and ...

Ministry of Education
Transfer Payments and
Financial Reporting Branch
Ministère de l’Éducation
Direction des paiements de transfert
et des rapports financiers
21 st Floor, Mowat Block 21 e étage, édifice Mowat
900 Bay Street 900, rue Bay
Toronto, Ontario M7A 1L2
Toronto, Ontario M7A 1L2
Tel.: (416) 325-2034 Tél. (416) 325-2034
Fax: (416) 325-2007 Téléc. (416) 325-2007
Email: Wayne.Burtnyk@edu.gov.on.ca Courriel: Wayne.Burtnyk@edu.gov.on.ca
Ontario
2001: SB 12
MEMORANDUM TO:
FROM:
Directors of Education
Secretaries of School Authorities
Wayne Burtnyk
DATE: June 19, 2001
SUBJECT: Employee Future Benefits (CICA Handbook section 3461)
In March 1999, the Canadian Institute of Chartered Accountants released new recommendations for
accounting for employee future benefits. The recommendations are to apply to fiscal years beginning on
or after January 1, 2000.
The new recommendations provide a consistent accounting and reporting framework for all employee
future benefits including:
• pension plans
• other retirement benefits such as life insurance and supplemental health care
• post–employment benefits such as severance payments, long and short-term disability benefits,
salary continuation, supplementary unemployment benefits, job training and counseling
• compensated absences such as parental or disability leaves, sabbaticals and accumulating sick
days that vest or are paid without illness-related absence
• termination benefits
• retirement gratuities
In December 2000, the Workplace Safety and Insurance Board (WSIB) sent a letter to Schedule 2 school
boards concerning the accounting for and funding of WSIB related employee insurance payments. The
WSIB recommended that school boards consult with their public auditor concerning the inclusion of the
estimated liability calculated by the WSIB for future “in force” pensions and other items, on the board’s
balance sheet.
We have consulted with the WSIB and the School Boards’ Cooperative Inc (SBCI) to apprise them of
the Ministry of Education position regarding the accounting for the estimated WSIB amount.
Because of the magnitude of implementing this new standard for all employee future benefits (including

-2-
the WSIB amount) and its funding implications, school boards will NOT be required to adopt the
accounting provisions of section 3461 in the board’s 2000-01 financial statements or in the board’s
2001-02 estimates. However, boards will be required to disclose in the notes to the 2000-01 financial
statements, an actuarial estimate or other reasonable basis estimating the effect, had the board adopted
the new accounting standard for all employee future benefits. Further information on this topic will be
included in the instructions to the 2000-01 financial statements.
Should you have any questions concerning the above please contact Marie Li at (416)-326-0201 or your
Ministry finance officer.
Wayne Burtnyk
Director
Transfer Payments and Financial Reporting Branch
c.c.
Superintendents of Business and Finance
Mary Krawchuk, Assistant Director, Schedule 2 Industry Sector, WSIB
Brian Brown, General Manager and Actuary, SBCI