Government Strengthens Accounting Policies

Consistent with its ongoing efforts to have the most open and complete accounting policies possible, the government of Nova Scotia announced today, June 30, that it will complete its adoption of a recently revised section of the Public Sector Accounting Board Handbook.

"Four years ago, this government promised to implement full and open accounting policies. With the adoption of this new section, we will have completed the final step in the implementation of Generally Accepted Accounting Principles (GAAP)," said Finance Minister Neil LeBlanc.

Section 3250 of the public sector handbook deals with accounting for the government's obligation to provide its share of the future cost of health and life insurance benefits to members of the Public Service Superannuation Plan, Teachers Pension Plan and the Sydney Steel Corporation Superannuation Plan.

Although this obligation and its associated costs have always been present, prior to this year they were disclosed by way of a note to the financial statements. In the 2001-02 financial statements, Note 12 indicated that this obligation was $484.5 million. The changes mean that when the 2002-03 financial statements are completed and reported later this year the obligation will be included in the statements themselves.

Adoption of Section 3250 does not represent any new borrowing by the province and does not cause an addition to the province's total indebtedness. The obligation for retirement benefits will be incorporated into the calculation of net direct debt in the financial statements for 2002-03.