Tangible natural resources are generally understood to be resources such as mineral resources, water, and living organisms that are naturally occurring. They account for a significant proportion of the economic resources in many jurisdictions. However, governments often lack sufficient information on the monetary value of natural resources, and as a result, grant rights to these resources without regard to financial and environmental sustainability, or intergenerational fairness.
To address the gap in the IPSAS literature on accounting for natural resources, the International Public Sector Accounting Standards Board® (IPSASB®) issued a Consultation Paper (CP) in May 2022. The IPSASB continues to develop principles for the recognition and measurement of natural resources, with the targeted publication of an Exposure Draft (ED) in the second half of 2024. However, following feedback received on the CP concerning the lack of guidance on specific activities related to mineral resources, this is being addressed first with the release of ED 86 and ED 87 for public comment:
ED 86 proposes a standard on accounting for the costs incurred in the exploration and evaluation of mineral resources, based on the selection of an accounting policy specifying which expenditure should be recognized as exploration and evaluation assets. ED 86 is aligned with the private sector requirements in IFRS 6, Exploration for and Evaluation of Mineral Resources, with limited changes for the public sector context.
ED 87 proposes adding an authoritative appendix to IPSAS 12, Inventories. The proposed guidance clarifies when to capitalize or expense costs incurred to remove waste material in surface mining operations. ED 87 is aligned with the guidance in IFRIC 20, Stripping costs in the Production Phase of a Surface Mine, with limited changes for the public sector context.
“As the IPSASB’s broader Natural Resources project continues to break new ground, the current proposals address some of the gaps in the literature on mineral resources in response to stakeholders needs,” said IPSASB Chair Ian Carruthers. “There is more to come in 2024 from the Natural Resources project, but these EDs are an important first step to providing useful financial information and improved accountability by the public sector in this important area.”
How to Comment
To access the EDs and the summary At-a-Glance documents, or to submit a comment, visit the IPSASB website, www.ipsasb.org. Comments on the EDs are requested by May 31, 2024. The IPSASB encourages IFAC® members, associates, and regional accountancy organizations to promote the availability of these EDs to their members and employees.
About the IPSASB
The International Public Sector Accounting Standards Board (IPSASB) works to strengthen public financial management globally through developing and maintaining accrual-based International Public Sector Accounting Standards® (IPSAS®) and other high-quality financial reporting guidance for use by governments and other public sector entities. It also raises awareness of IPSAS and the benefits of accrual adoption. The Board receives support from the Asian Development Bank, the Chartered Professional Accountants of Canada, the New Zealand External Reporting Board, and the government of Canada. The structures and processes that support the operations of the IPSASB are facilitated by the International Federation of Accountants (IFAC). For copyright, trademark, and permissions information, please go to permissions or contact permissions@ifac.org.
About the Public Interest Committee
The governance and standard-setting activities of the IPSASB are overseen by the Public Interest Committee (PIC), to ensure that they follow due process and reflect the public interest. The PIC is comprised of individuals with expertise in public sector or financial reporting, and professional engagement in organizations that have an interest in promoting high-quality and internationally comparable financial information.
The IPSASB added Differential Reporting to its work program in March 2022, based on constituent responses to the 2021 Mid-Period Work Program Consultation. The aim of the project was to explore the potential development of an international differential reporting model. The first stage of any major standard-setting project is to conduct research and scoping activities.
ED 87 proposes adding an authoritative appendix to IPSAS 12, Inventories. The proposed guidance clarifies when to capitalize or expense costs incurred to remove waste material in surface mining operations. ED 87 is aligned with the guidance in IFRIC 20, Stripping costs in the Production Phase of a Surface Mine, with limited changes for the public sector context.
The Consultation is open for public comment until May 31, 2024. Comments must be submitted in English.
ED 86 proposes a standard on accounting for the costs incurred in the exploration and evaluation of mineral resources, based on the selection of an accounting policy specifying which expenditure should be recognized as exploration and evaluation assets. ED 86 is aligned with the private sector requirements in IFRS 6, Exploration for and Evaluation of Mineral Resources, with limited changes for the public sector context.
The IPSASB approved the final pronouncements IPSAS 50, Exploration for and Evaluation of Mineral Resources, and Stripping Costs in the Production Phase of a Surface Mine (Amendments to IPSAS 12). These new pronouncements provide guidance for public sector entities operating in extractive industries, with accounting guidance aligned with the private sector. They will be effective from January 1, 2027 with early adoption permitted, and are expected to be published in Q4 2024.
Angela Ryan became a member of the International Public Sector Accounting Standards Board (IPSASB) in January 2024. She was nominated by the New Zealand External Reporting Board.
Ms. Ryan is a principal accounting advisor for the New Zealand Treasury with over 17 years of experience in applying accrual accounting at the sovereign government level. This includes providing accounting policy advice on a range of issues affecting the Financial Statements of the Government of New Zealand.
Ms. Ryan has been actively involved in setting accounting standards in New Zealand for many years, both as a member and Deputy Chair of the External Reporting Board’s Accounting Standards Board until her term ended in December 2021. This will be Ms. Ryan’s second term on the IPSASB having been a member between 2015-2017, including Deputy Chair in 2017.
Ms. Ryan holds a Bachelor of Commerce and Administration from Victoria University of Wellington and is a fellow of the New Zealand Institute of Chartered Accountants.
Yacouba Traoré became a member of the International Public Sector Accounting Standard Board in January 2024. He was nominated by ONECCA-BF.
Mr. Traoré taught international accounting standards and regional public sector accounting standards for years in higher School Institutions. Practitioner with 25 years of experience, he serves private and public sector entities. He contributes on a regular basis to international standards setting through comments submission and standards setters' forum attendances.
Mr. Traoré is the chair of the Pan African Federation of Accountants (PAFA)'s Public Value Management Technical & Advisory Group since April 2022 and leads all that group activities. He is ONECCA-BF president and vice President of the National Accounting Council of Burkina Faso in charge of private and public sector accounting regulation and interpretation since October 2020.
Mr. Traoré sits in various professional accountancy organizations boards including PAFA, Féderation Internationale des Experts Comptes et Commissaires aux Comptes Francophones (FIDEF), the Conseil Permanent de la Profession Comptable (CPPC) an advisory council to the West African Monetary and Economic Union (WAEMU) and the Commission de Normalisation pour la Profession Comptable OHADA (CNPC OHADA) a regulatory body within the Harmonization of Business Law in Africa Organization (OHADA). He holds a chartered accountant degree namely Diplôme d'Expertise Comptable et Financière (DECOFI) and a master’s degree in finances, control & audit.
At its June meeting, the IPSASB continued its analysis of stakeholder feedback on Exposure Draft (ED) 91, Limited-Scope Updates to First-Time Adoption of Accrual Basis International Public Sector Accounting Standards (IPSAS). The Board aims to enhance the user-friendliness of the first-time adoption standard by improving navigation, clarifying core principles, and providing additional implementation guidance. The revised standard is expected to be presented for approval at the September 2025 meeting.
The Conceptual Framework for General Purpose Financial Reporting by Public Sector Entities (the Conceptual Framework) provides the International Public Sector Accounting Standards Board® (IPSASB®) with the concepts that underpin the development of International Public Sector Accounting Standards® (IPSASs®) and Recommended Practice Guidelines (RPGs).
