International Public Sector Accounting Standards

1 The UN ipsas Policy Framework United Nations Policy Framework for International Public Sector Accounting Standards Second Edition (Final Version). The UN ipsas Implementation Project Page 1 of 216. The UN ipsas Policy Framework Overview OVERVIEW. The United Nations is working towards the adoption of the International Public Sector Accounting Standards ( ipsas ) in tandem with the move to ipsas across the organizations of the United Nations System. The first set of ipsas -compliant financial statements for the United Nations Secretariat is scheduled for the fiscal year 1 July 2013 to 30 June 2014 for the peacekeeping operations and 1 January 2014 to 31 December 2014 for all other reporting entities of the Secretariat.

2 The UN ipsas Policy Framework is designed to support understanding of ipsas and, demonstrate how these Standards will be applied at the United Nations to give guidance in transitioning to ipsas and preparing ipsas -compliant financial statements. This UN ipsas Policy Framework considers and builds on the system-wide platform of ipsas -compliant policies and guidelines prepared to facilitate the harmonization of ipsas -compliant financial reporting across the United Nations system. The policy framework is designed to be applicable to all reporting entities of the UN Secretariat. Development of the First Edition of the UN ipsas Policy Framework Version 1 of the UN ipsas Policy Framework which was prepared by the UN ipsas Team was updated to Version 2 through a consultative process among internal stakeholders across the UN.

3 Secretariat. Version 2 was issued for final comments on 21 February 2012 and has been progressed through Version 3 to this Final Version incorporating, as appropriate, the final comments from all stakeholders including the Board of Auditors and the IAAC. Development of the Second Edition of the UN ipsas Policy Framework The Second Edition of the UN ipsas Policy Framework was produced as a result of issues emerging during the preparation of the Corporate Guidance documents which provide detailed guidance on the implementation of the ipsas policies; the Second Edition of the UN ipsas .

4 Policy Framework was also informed by a review of the first edition by external consultants and internal stakeholders. This Second Edition of the UN ipsas Policy Framework may be further refined and updated to a third edition as ipsas implementation progresses. Maria Eugenia Casar Assistant Secretary General, Controller 27 August 2013. The UN ipsas Implementation Project Page 2 of 216. The UN ipsas Policy Framework Overview PURPOSE. The UN ipsas Policy Framework is intended to establish policy and give guidance on the application of ipsas . It is not exhaustive and therefore should be used as a tool to complement the Standards and other professional Accounting pronouncements as applicable.

5 Professional Accounting judgment should be used in attaining ipsas compliance. The final authority for any ipsas area remains with the respective standard, issued by the International Public Sector Accounting Standards Board (IPSASB), and other accompanying implementation guidance issued by the Board. Should a conflict arise between this policy framework and the relevant ipsas standard, the requirements of the standard prevail. Concepts and definitions included in this policy framework, in some cases, represent extracts from the Handbook of International Public Sector Accounting Pronouncements 2011 Edition, published by the International Federation of Accountants (IFAC); credit is hereby extended to IFAC and the IPSASB.

6 This policy framework is intended for the United Nations internal purposes only. The UN ipsas Implementation Project Page 3 of 216. The UN ipsas Policy Framework Table of Contents TABLE OF CONTENTS. 1. The decision to adopt ipsas .. 13. 2. Impact and benefits of ipsas .. 14. 3. The ipsas 16. 4. Overview of ipsas Standards .. 18. 5. Format of the UN ipsas Policy Framework .. 22. 6. General Principles of Accounting Under ipsas .. 23. 1. ipsas 1 Presentation of Financial Statements .. 27. SUMMARY .. 27. STANDARD .. 27. UN DISCLOSURE .. 29. POLICY 30. 2. ipsas 2 Cash Flow Statements .. 31.

7 SUMMARY .. 31. STANDARD .. 31. UN DISCLOSURE .. 33. POLICY 33. 3. ipsas 24 Presentation of Budget Information in Financial Statements .. 34. SUMMARY .. 34. STANDARD .. 34. UN DISCLOSURE .. 35. POLICY 36. 4. ipsas 3 Accounting Policies, Changes in Accounting Estimates & Errors .. 38. The UN ipsas Implementation Project Page 4 of 216. The UN ipsas Policy Framework Table of Contents SUMMARY .. 38. STANDARD .. 38. UN DISCLOSURE .. 40. POLICY 41. 5. ipsas 6 Consolidated and Separate Financial Statements .. 43. SUMMARY .. 43. STANDARD .. 43. UN DISCLOSURE .. 44. POLICY 44. 6. ipsas 7 Investments in Associates.

8 46. SUMMARY .. 46. STANDARD .. 46. POLICY 46. 7. ipsas 8 Interests in Joint Ventures .. 47. SUMMARY .. 47. STANDARD .. 47. 8. ipsas 23 Revenue from Non-Exchange Transactions .. 50. SUMMARY .. 50. STANDARD .. 50. UN DISCLOSURE .. 54. POLICY 55. Revenue relating to pledges made in prior years; Project assets; Implementing partner 59. Transitional Provisions .. 60. The UN ipsas Implementation Project Page 5 of 216. The UN ipsas Policy Framework Table of Contents 9. ipsas 9 Revenue From Exchange Transactions .. 61. SUMMARY .. 61. STANDARD .. 61. UN DISCLOSURE .. 62. POLICY 62. Expenses & Liabilities.

9 64. 10. Expense recognition .. 65. SUMMARY .. 65. ipsas APPROACH .. 65. UN DISCLOSURE .. 70. POLICY 71. 11. ipsas 19 Provisions, Contingent Liabilities & Contingent Assets .. 73. SUMMARY .. 73. STANDARD .. 73. POLICY 79. 12. ipsas 25 Employee Benefits .. 81. SUMMARY .. 81. STANDARD .. 81. Short-Term Employee Benefits .. 81. Post-employment Benefits .. 82. Other Long-Term Employee Benefits .. 84. Termination Benefits .. 84. Entitlement .. 85. Actuarial calculations .. 85. The UN ipsas Implementation Project Page 6 of 216. The UN ipsas Policy Framework Table of Contents UN DISCLOSURE.

10 86. POLICY 88. 13. ipsas 17 Property, Plant & Equipment .. 100. SUMMARY .. 100. STANDARD .. 100. UN DISCLOSURE .. 106. POLICY 107. 14. ipsas 31 Intangible Assets .. 112. SUMMARY .. 112. STANDARD .. 112. UN DISCLOSURE .. 115. POLICY 116. 15. ipsas 12 Inventories .. 118. SUMMARY .. 118. STANDARD .. 118. UN DISCLOSURE .. 120. POLICY 120. 16. ipsas 21 Impairment of Non-Cash Generating Assets .. 122. SUMMARY .. 122. STANDARD .. 122. UN DISCLOSURE .. 124. POLICY 124. FINANCING, FINANCIAL INSTRUMENTS AND FOREIGN 125. 17. ipsas 13 Leases .. 126. The UN ipsas Implementation Project Page 7 of 216.