The International Public Sector Accounting Standards Board® (IPSASB®) has released for comment the Consultation Paper, Natural Resources.
This Consultation Paper is the IPSASB’s first step in developing guidance on the recognition, measurement, presentation, and disclosure of natural resources in the public sector. The IPSASB welcomes the views of constituents on the proposed guidance and other matters raised in the consultation paper.
The At-a-Glance summary document provides an overview of the Consultation Paper.
The International Public Sector Accounting Standards Board® (IPSASB®) has today released for comment Exposure Draft (ED) 82, Retirement Benefit Plans. This ED is intended to increase the transparency and accountability of public sector entities regarding multi-employer retirement benefit obligations. Stakeholder comments on ED 82 are sought by August 1, 2022.
“Retirement benefit obligations can represent a significant but often hidden liability for the public sector,” said IPSASB Chair Ian Carruthers. “The draft Standard requires public sector employee retirement benefit plans to provide a complete view of their financial activities, assets and obligations. This increased transparency is intended to result in stronger public financial management and better-informed decision making.”
In developing principles for the public sector, the private sector requirements in IAS 26 were used as the starting point. The IPSASB adapted IAS 26, based on experience from around the world, to ensure the unique characteristics of the public sector are reflected in the ED. In particular, it has reviewed the existing policy choices available in IAS 26 and proposes to remove those that are not appropriate for the public sector or are inconsistent with existing IPSAS.
Comments will be reviewed and discussed by the IPSASB alongside other feedback to help shape the final International Public Sector Accounting Standard (IPSAS™) related to Retirement Benefit Plans.
How to Comment To access the Exposure Draft, its summary At-a-Glance document, and the Request for Information or to submit a comment, visit the IPSASB website. Comments are requested by August 1, 2022. The IPSASB encourages IFAC members, associates, and Network Partners to promote the availability of this Consultation Paper 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 governments of Canada and New Zealand. 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.
Stakeholder comments on Exposure Draft (ED) 82 Sought by August 1, 2022
The International Public Sector Accounting Standards Board® (IPSASB®) has issued Exposure Draft (ED) 82, Retirement Benefit Plans.
The objective of this ED is to propose the accounting, presentation, and disclosure requirements for the financial statements of a retirement benefit plan. This should increase the transparency and accountability of public sector entities regarding obligations owed to public sector employees and other eligible participants who are members of the retirement benefit plan, and of any deficit in the plan.
The IPSASB held its first meeting of the year in New York on March 21-25, 2022.
Sustainability Reporting
The IPSASB approved its global consultation on developing a sustainability reporting framework for the public sector. The IPSASB plans to launch this pivotal consultation in early May, alongside its Natural Resources Consultation Paper and the IPSASB Mid-Period Work Program Consultation Feedback Statement.
Advancing public sector sustainability reporting is both important and urgent. The IPSASB is pleased to be able to lead the debate. Watch this space for launch details and how to get involved.
Mid-Period Work Program Consultation
The IPSASB agreed to add new projects to its 2022 work program:
Presentation of Financial Statements; Differential Reporting;
Reporting Sustainability Program Information; and
Advancing Public Sector Sustainability Reporting Consultation Paper.
As resources become available in 2022, work on the above projects will commence.
The landscape for IPSASB’s work has changed since the Mid-Period Consultation was published, resulting in fewer resources being available than originally anticipated. The IPSASB will continue to monitor work program progress and resource availability in 2023, to look for opportunities to commence work on the limited scope projects proposed in the Mid-Period Consultation, which were strongly supported by constituents.
Natural Resources
The IPSASB approved the Consultation Paper, Natural Resources, which will be published in May 2022, and will be open for comment until October2022. The Consultation Paper includes the IPSASB’s preliminary views on issues related to the recognition, measurement, presentation, and disclosure ofnatural resources, usingexamples of subsoil resources, water, and living resources.
The IPSASB approved the project roadmap, including issuing an Exposure Draft as the next output for this project. The IPSASB also decided to analyze the arrangements from the perspectives of both:
Parties to the arrangements; and
The consolidated financial statements and separate financial statements.
The IPSASB plans to discuss concessionary leases and leases for zero or nominal consideration at the June meeting.
Revenue and Transfer Expenses
The IPSASB agreed to use the term ‘compliance obligation’to describe an entity’s legally binding obligation arising from revenue transaction with a binding arrangement. The IPSASB furtherdiscussed the implications of internal and external factors on the subsequent measurement of assets arising from binding arrangements. The IPSASB also continued discussing principles related to transfer expenses accounting, focusing on the timing and recognitionof transfer expenses in transactions with binding arrangements, and the allocation of consideration to the transferor’s transfer rights.
Measurement
The IPSASB performed a detailedreview of the responses to ED 77, Measurement. Respondents strongly supported most of the ED proposals. The IPSASB agreed to move forward with the proposals related to Fair Value and Cost of Fulfillment, and thatdisclosure requirements should be included in the relevant IPSAS. The proposed principles related to historical cost and the measurement model policy choice are areas where further clarification is needed.
Conceptual Framework-Phase I
The IPSASB reviewed responses to ED 76, Conceptual Framework Update: Chapter 7, Measurement of Assets and Liabilities in Financial Statements. The IPSASB decided to retain the three-level classification proposed in ED 76. However, the term ‘Subsequent Measurement Framework’will be adopted rather than ‘Measurement Hierarchy’.
The IPSASB decided to include fair value as defined in ED 76 and to delete market value. The IPSASB instructed staff to further analyze the case for deletionof net selling price, cost of release and assumption price.
Non-Current Assets Held for Sale and Discontinued Operations
The IPSASB approved IPSAS 44, Non-current Assets Held for Sale and Discontinued Operations with an effective date of January 1, 2025. IPSAS 44 aligns with IFRS 5, Non-current Assets Held for Sale and Discontinued Operations and provides the accounting requirements for assets held for sale and provides presentation and disclosure requirements for discontinued operations. IPSAS 44 is expected to be published in May 2022.
ISS Update
The IPSASB discussed the work done by the statistical community in updating the International Statistical Standards(ISS) and the IPSASB’s role in that process. The IPSASB also reviewed the new IPSAS-ISS Alignment Dashboard, which will be a standing agenda item for future meetings and captures the IPSASB’s long standing work to reduce unnecessary differences with statistical standards to make IPSAS information useful for statistical compilation purposes. The IPSASB discussed the importance of IPSAS-ISS alignment from both conceptual and practical perspectives.
Next Meeting
The next full meeting of the IPSASB will take place in June 2022. For more information, or to register as an observer, visit the IPSASB website (www.ipsasb.org).
The International Public Accounting Standards Setting Board (IPSASB) welcomed the release of the new Pathways to Accrual, a digital platform with resources designed to help governments and other public sector entities planning and undertaking the transition from cash to accrual accounting including adopting and implementing International Public Sector Accounting Standards (IPSAS). The platform was developed by the International Federation of Accountants (IFAC) with content provided by the Chartered Institute of Public Finance and Accountancy (CIPFA) and feedback from IPSASB and other international stakeholders.
With additional, easy to navigate digital content, Pathways to Accrual builds upon the IPSASB’s publication Study 14, Transition to the Accrual Basis of Accounting: Guidance for Governments and Government Entities.
“There is significant accrual adoption and implementation activity underway across all regions of the world,” said Ian Carruthers, International Public Sector Accounting Standards Board (IPSASB) Chair. “By 2025, 50% of the jurisdictions in the 2021 International Public Sector Accountability Index are forecast to report on accrual basis, and Pathways to Accrual will be instrumental in supporting both these transitions and the many others planned for subsequent years.”
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 governments of Canada and New Zealand. 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.
ED 81 is the second exposure draft resulting from the limited scope project to revise the Conceptual Framework in specified areas. ED 81 proposes updates to the chapters of the Conceptual Framework dealing with the attributes of financial information that make financial reporting useful-qualitative characteristics-and the building blocks of financial statements-elements.
In developing its proposals, the IPSASB has considered the Board’s experience in applying the Framework to the development and maintenance of International Public Sector Accounting Standards (IPSAS), as well as recent developments in international thinking about conceptual issues.
“Since its publication in 2014 the Conceptual Framework has been the cornerstone of IPSASB’s global standards delivery activity” said IPSASB Chair Ian Carruthers. “The ED 81 proposals are intended to address issues that have emerged in the Framework’s application in practice, so that it remains central to global public sector financial reporting.”
The ED 81 proposals include:
Clarifying the role of prudence in public sector financial reporting;
Revised definitions of an asset and a liability;
Clarifying what constitutes a transfer of resources when determining whether an entity has a liability; and
Restructuring guidance on liabilities to improve clarity for users of the Framework.
The IPSASB welcomes the views of respondents on the proposed amendments to the Conceptual Framework.
How to Comment To access the Exposure Draft, its summary At-a-Glance document, or to submit a comment, visit the IPSASB website. Comments are requested May 31, 2022. The IPSASB encourages IFAC members, associates, and Network Partners to promote the availability of this Exposure Draft 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 governments of Canada and New Zealand. 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.
Stakeholder Comments on Exposure Draft 81 Sought by May 31, 2022
IPSAS 43 is based on International Financial Reporting Standard (IFRS®) 16, Leases, developed by the International Accounting Standards Board (IASB®). For lessees, IPSAS 43 introduces a right-of-use model that replaces the risks and rewards incidental to ownership model in IPSAS 13, Leases. For lessors, IPSAS 43 substantially carries forward the risks and rewards incidental to ownership model in IPSAS 13.
IPSAS 43 has an effective date of January 1, 2025. Earlier application is permitted in certain circumstances.
“IPSAS 43, Leases will improve the transparency of lease accounting in the public sector, while maintaining alignment with IFRS,” said IPSASB Chair Ian Carruthers. “Having a three-year period to apply IPSAS 43 provides public sector entities time to prepare for the new requirements and allows for learning to be drawn from the private sector experience in applying IFRS 16.”
The publication of IPSAS 43 completes the IPSASB’s first phase of work on Leases. The IPSASB will continue its work by considering additional public sector specific issues in its Other Lease-Type Arrangements project.
How to Access To access IPSAS 43, Leases, its summary At-a-Glance document, and webcast, visit the IPSASB website. The IPSASB encourages IFAC members, associates, and Network Partners to promote the availability of IPSAS 43, Leases 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 governments of Canada and New Zealand. 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.
Conceptual Framework Update: Chapter 3, Qualitative Characteristics and Chapter 5, Elements in Financial Statements
The objective of ED 81 is to update Chapter 3, Qualitative Characteristics, and Chapter 5, Elements of Financial Statements, of the Conceptual Framework, in light of:
