IPSAS – International Public Sector Accounting …

1 IPSAS International Public Sector Accounting standards The International Public Sector Accounting standards (IPSASs) are high quality ac- comprehensively or appropriately dealt with in IFRS or for which there is no to date and that they are easy to use by preparers of Public Sector financial state- counting standards for use by Public Sector entities around the world. They govern related IFRS. ments. For this purpose, the IPSASB will carry out Biennial Improvement Projects. the Accounting by Public Sector entities, with the exception of Government Business This poster shall provide an overview of the standards and projects of the IPSASB. Enterprises (GBEs). IPSASs are developed by the International Public Sector Accoun- In order to draw a conclusion about the development of IPSASs, the IPSASB devel- as well as insights in an IPSAS conversion process. ting standards Board (IPSASB, an independent standard-setting board founded by oped its Process for Reviewing and Modifying International Accounting standards the International Federation of Accountants (IFAC)).

2 Board (IASB) Documents (see diagram below). The IPSASB will use the analysis re- For further information about IPSASs, EY has published an updated edition of our sulting from this process to determine whether identified Public Sector issues warrant guide to IPSAS , IPSAS Explained, A Summary of International Public Sector Account- The IPSASB addresses financial reporting issues of the Public Sector in two departures from the IASB document when developing the related IPSASB document. ing standards in 2012. This guide provides decision-makers in the Public Sector with different ways: on the one hand, the IPSASB develops IPSASs that are converged an overview of IPSASs and the International Public Sector Accounting standards with IFRS by adapting them to the Public Sector context. On the other hand, the One of the key strategic objectives of the IPSASB was to converge IPSASs to Interna- Board. For assistance with the mandatory disclosures please refer to our IPSAS .

3 IPSASB develops Public Sector specific IPSASs or Recommended Practice Guide- tional Financial Reporting standards (IFRS) developed by the IASB. In the future the disclosure checklist. lines which have no equivalent in IFRS. They deal with issues that have not been IPSASB will continually reassess the IPSASs to ensure that they are relevant and up standards and Projects of the IPSAS -Board 2014/2015. First-Time Adoption of Accrual Basis IPSASs Public Sector Combinations The Applicability of IPSASs to Government Business Enterprises and Other Public Sector Entities Public Sector Specific Financial Instruments Further and new projects of the IPSASB. Objective: Objective: Objective: Objective: After having finalized the Public Sector Conceptual based on an underlying IFRS. Five EDs have been issued The objective of this project is to provide appropriate Accounting guidance for the first-time adoption of accrual- To prescribe the Accounting treatment for entity combinations undertaken by Public Sector entities.

4 The objective of this project is to consider the current definition of Government Business As a result of this project there should be guidance developed for the Framework, the IPSASB will concentrate on further and they were open for comment until end of February basis IPSASs by Public Sector entities. Enterprises (GBEs) and whether the current Accounting treatment of GBEs is adequate. Accounting of Public Sector specific financial instruments. Public Sector specific issues. Among these projects 2014. Respective IPSASs should be approved in Decem- Issues: are: ber 2014. Issues: At first the Board intended to separate entity combinations from exchange transactions and entity combinations from Issues: Issues: The main issue in the development of an IPSAS is to identify appropriate transitional provisions in order to provide nonexchange transactions into two projects. It turned out that this is not practical and the IPSASB agreed that this project The IPSASB reconsiders the types of Public Sector entities for which it is developing IPSASs 28-30 already cover financial instruments.

5 However, this project Reporting Service Performance Information Emission Trading Schemes relief for first-time adopters. Other than in the private Sector , Public Sector entities may have previously applied should encompass all types of entity combinations which occur in the Public Sector . The transactions will be categorized as IPSASs. The focus is especially on GBEs. should focus on issues outside of the existing scope. Reporting of service performance information is an area The objective of the project is currently to learn more the cash basis of Accounting before adopting accrual IPSASs. Therefore, Public Sector entities might require being under common control or not under common control. The Accounting treatment is going to be developed accordingly. that has become increasingly topical and relevant to the about existing emissions trading schemes worldwide and specific transitional arrangements which consider these circumstances.

6 One of the main questions is to whether define GBEs and if this is the case how should GBEs The main issue is to consider Accounting for Public Sector specific finan- enhancement of Public Sector accountability. The objec- to discuss Accounting issues related to emissions trading Among other issues it requires the clarification on (a) how to treat consolidation differences, (b) whether valuations of trans- be defined. cial instruments such as monetary gold, currency and coin in circulation tive of this project is to use a principles-based approach schemes. It is intended to issue a CP in mid-2015. Some transitional provisions are already provided by the existing IPSASs and the project will reconsider these ferred items should be at carrying value or at fair value, (c) whether, when there was merely a reorganization, Papers: or statutory receivables and payables. to develop a consistent framework for reporting service provisions and bundle them in one standard.

7 Revaluation was acceptable in Public Sector circumstances, and (d) whether triggering tools used for impairment In June 2014 the Consultation Paper (CP) was approved by the IPSASB. The CP will have an Papers: performance information of Public Sector programs and In mid-2014 the IPSASB has undertaken a Public consul- calculations would be applicable. The IPSASB intends to differ between two categories of transitional provisions. The first category of relief will not exposure period of four months. It is intended to issue a CP by the end of 2014 or at the beginning of 2015. services that focuses on meeting the needs of users. It is tation on the IPSASB's work program for 2015-2019. impact fair presentation, whereas the use of the second category will not allow fair presentation. Most recently the Board discussed an Issues Paper and a review of the responses to the June 2012 Consultation Paper. intended to publish a RPG in the second half of 2015.

8 The number of additional projects which will be initiated as well as the specific projects will be discussed in detail Papers: Papers: in December 2014 with the intention to finally decide on Revision of IPSASs 6-8. ED 53, First Time Adoption of Accrual Basis IPSAS (October 2013). ED 41, Entity Combinations from Exchange Transactions (May 2009). Consultation Paper, the work program following to those discussions. The objective of this project is to revise the IPSASs 6-8. It is intended to approve the final IPSAS in December 2014. Public Sector Combinations (June 2012). It is intended to issue an ED in the first half of 2015. to maintain alignment with IFRS for standards that are Social Benefits Overview of the Conceptual Framework for General Purpose Financial Reporting by Public Sector Entities IPSASB s Conceptual Framework contains eight chapters and a preface Expected IPSAS -Board Agenda Schedule 2014/2015. Objective: Objective: IASB's framework project: The objective of the project is to develop requirements and guidance on Accounting The Public Sector Conceptual Framework is applicable to the preparation and The IASB is proposing changes to the concepts and definitions in its Frame- Titel Approved Dec 14 Mar 15 June 15 Sept 15 Dec 15.

9 For social benefits by identifying the circumstances and manner in which expenses presentation of general purpose financial reports (GPFRs) of Public Sector work. In July 2013 the IASB published a Discussion Paper addressing possible and liabilities of certain social benefits of governments arise. entities. changes to the Conceptual Framework. The next step of the IASB is to issue an Preface Preface to the Conceptual Framework for Financial Reporting September 2014 Reporting Service Performance Information RPG RPG CP = Consultation Paper ED = Exposure Draft Exposure Draft. The IPSASB is monitoring progress on that project. Issues: Background: Chapter 1 Role and Authority of the Conceptual Framework December 2012 Improvements (biennially) IPSAS IPSAS = International Public Sector Accounting One of the main issues is the definition of social benefits and their sub-categories. The framework should make explicit the concepts that underpin financial Chapter 2 Objectives and Users of General Purpose of Financial Reporting December 2012 Public Sector Combinations ED ED standards The project aims to align the definitions and classifications with GFS where possible.

10 Reporting in the Public Sector . RPG = Recommended Practice The CP should address concepts and principles for the Accounting of social benefits Against this background the IPSASB's framework project was initiated Chapter 3 Qualitative Characteristics December 2012 First time Adoption of Accural Basis IPSASs IPSAS Guideline and seeks respondents' views as to whether these were equally applicable to cash transfers and social transfers in kind (phased approach). in late 2006. The framework itself is not a standard its primary purpose is to assist the IPSASB in developing new or revised pronouncements and Chapter 4 Reporting Entity December 2012 Revision of IPSASs 6-8 IPSAS . * The initial phase of this The project shall determine when a liability and an expense have to be recognized as to assist preparers of GPFRs applying IPSASs. Chapter 5 Elements in Financial Statements September 2014 Government Business Enterprises ED.