This information paper considers the experiences of the United States of America in its movement to accrual accounting. It outlines the development of administrative arrangements for formal standards setting over 70 years at the local, state and federal government levels in the US and highlights key factors shaping the standards setting structure.

The International Public Sector Accounting Standards Board (IPSASB) of the International Federation of Accountants (IFAC) has issued an exposure draft (ED) designed to strengthen the disclosure of financial information about external assistance, such as emergency assistance and development aid received by governments and government agencies in developing and other countries.

ED 32, Financial Reporting under the Cash Basis of Accounting - Disclosure Requirements for Recipients of External Assistance, proposes that the financial statements of recipients of external assistance disclose the total amount of external assistance received, used, and available during the reporting period. These disclosures will increase the transparency of the financial statements of recipients and contribute to greater accountability by the recipients of such assistance. ED 32 also encourages a range of additional disclosures which will further enhance the usefulness of the financial statements in the assessment of the financial position of recipients and of their use of external assistance.

"ED 32 reflects an approach that enhances the accountability of financial statements, does not impose an inappropriate burden on reporting entities, and can be justified on a cost-benefit basis across a wide range of jurisdictions. While establishing basic accountability requirements, it is also responsive to the ability of individual recipients to comply with the proposed requirements," emphasizes IPSASB Chair Philippe Adhémar.

ED 32 was developed following consideration of responses that the IPSASB received to a previous exposure draft, ED 24, a document with the same title which was issued in February 2005. ED 32 proposes amendments to address constituents' concerns regarding the previous exposure draft.

"Respondents to the previous exposure draft, ED 24, expressed concern that many recipients of external assistance would find compliance with the proposed requirements onerous. ED 32 responds to those concerns by establishing an appropriate balance between required components and those which are encouraged. It has been developed after extensive consultation with our Consultative Group and other constituents," explains Mr. Adhémar.

Before a final International Public Sector Accounting Standard is approved, ED 32 will be field tested. The IPSASB has secured the support of key regional and international organizations for this testing.

How to Comment

Comments on the ED are requested by March 31, 2007. The ED may be viewed by going to https://www.ifac.org/EDs. Comments may be submitted by email to publicsectorpubs@ifac.org. They can also be faxed to the attention of the IPSASB Technical Director at +1 (212) 286-9570 or mailed to IFAC, 545 Fifth Avenue, 14th Floor, New York, NY 10017, USA. All comments will be considered a matter of public record and will ultimately be posted on IFAC's website.

About IFAC

IFAC is the worldwide organization for the accountancy profession dedicated to serving the public interest by strengthening the profession and contributing to the development of strong international economies. IFAC's current membership consists of approximately 160 professional accountancy bodies in 120 countries, representing more than 2.5 million accountants in public practice, education, government service, industry and commerce. In addition to setting international public sector financial reporting standards through the IPSASB, IFAC, through its independent standard-setting boards, sets ethics, auditing and assurance, and education standards. It also issues guidance to encourage high-quality performance by professional accountants in business.

Good afternoon ladies and gentlemen. My name is Ian Ball, and I am the CEO of IFAC. It is a pleasure to be here today to talk about government financial reporting, a topic that is of great importance to me and one that is certainly receiving attention from the media, the public and governments themselves.

For the majority of public sector entities, the costs of employee benefits have a major impact on financial performance and financial position. To assist governments and other public sector entities in appropriately accounting for these benefits, the International Public Sector Accounting Standards Board (IPSASB) of the International Federation of Accountants (IFAC) has issued an exposure draft (ED) of a proposed new International Public Sector Accounting Standard (IPSAS), ED 31, Employee Benefits.

"The proposed standard will contribute to more transparent and consistent accounting for employee benefits, which is essential to ensure responsible financial reporting by governments and other entities," emphasizes IPSASB Chair Philippe Adhémar. "The significance ofemployee benefits for the vast majority of public sector entities cannot be overestimated. The ED's requirements that entities account for obligations under public sector defined benefit plans and, when appropriate, recognize liabilities related to those obligations are particularly notable and may lead to important changes in existing practice for many public sector entities globally."

ED 31 is based on International Accounting Standard (IAS) 19, Employee Benefits, and addresses the four categories of employee benefits dealt with in IAS 19:

• Short-term employee benefits;
• Post-employment benefits;
• Other long-term employee benefits; and
• Termination benefits.

The proposed standard also deals with a number of issues of specific relevance to the public sector, including:

• Determining the risk-free discount rate to be applied for discounting obligations arising from post-employment benefits;
• The treatment of post-employment benefits provided through composite social security programs; and
• Mechanisms for the orderly implementation of the proposed standard in the public sector.

This ED was developed in accordance with one of the IPSASB's key strategic aims: promoting convergence with International Financial Reporting Standards (IFRSs) where the requirements of IFRSs are applicable to the public sector. It is also critical to the IPSASB's work to improve the quality of financial information reported by public sector entities around the world.

How to Comment

The IPSASB has identified a number of issues of particular significance to the public sector and is particularly keen to obtain constituents' views on how the ED deals with these issues. Comment on these and other issues raised in the ED are requested by February 28, 2007. It may be viewed by going to https://www.ifac.org/EDs. Comments may be submitted by email to publicsectorpubs@ifac.org. They can also be faxed to the attention of the IPSASB Technical Director at +1 (212) 286-9570 or mailed to IFAC, 545 Fifth Avenue, 14th Floor, New York, NY 10017, USA. All comments will be considered a matter of public record and will ultimately be posted on IFAC's website.

About IFAC

IFAC is the worldwide organization for the accountancy profession dedicated to serving the public interest by strengthening the profession and contributing to the development of strong international economies. IFAC's current membership consists of approximately 160 professional accountancy bodies in 120 countries, representing more than 2.5 million accountants in public practice, education, government service, industry and commerce. In addition to setting international public sector financial reporting standards through the IPSASB, IFAC, through its independent standard-setting boards, sets ethics, auditing and assurance, and education standards. It also issues guidance to encourage high-quality performance by professional accountants in business.

The International Public Sector Accounting Standards Board (IPSASB) of the International Federation of Accountants (IFAC) is working to improve both the quality and uniformity of financial information reported by public sector entities around the world. In pursuit of this objective, the IPSASB has issued an exposure draft (ED) of a proposed International Public Sector Accounting Standard (IPSAS), ED 30, Impairment of Cash-Generating Assets. The majority of public sector entities globally operate for the purposes of delivering services to citizens.The IPSASB has already addressed assets which are held and operated primarily for the purposes of service delivery when it issued IPSAS 21, Impairment of Non-Cash-Generating Assets, in December 2004. ED 30 deals with cash-generating assets held and operated by public sector entities, which are not Government Business Enterprises.

"IPSAS 21 deals with the impairment of non-cash-generating assets and directed readers to International Accounting Standard 36 for guidance on the impairment of cash-generating assets. However, our constituents indicated that it would be useful if IPSASs included further guidance dealing with the impairment of cash-generating assets. The issuance of this proposed standard responds to that view," says IPSASB Chair Philippe Adhémar.

How to Comment

Comments on the ED are requested by February 28, 2007. It may be viewed by going to https://www.ifac.org/EDs. Comments may be submitted by email to publicsectorpubs@ifac.org. They can also be faxed to the attention of the IPSASB Technical Director at +1 (212) 286-9570 or mailed to IFAC, 545 Fifth Avenue, 14th Floor, New York, NY 10017, USA. All comments will be considered a matter of public record and will ultimately be posted on IFAC's website.

About IFAC

IFAC is the worldwide organization for the accountancy profession dedicated to serving the public interest by strengthening the profession and contributing to the development of strong international economies. IFAC's current membership consists of approximately 160 professional accountancy bodies in 120 countries, representing more than 2.5 million accountants in public practice, education, government service, industry and commerce. In addition to setting international public sector financial reporting standards through the IPSASB, IFAC, through its independent standard-setting boards, sets ethics, auditing and assurance, and education standards. It also issues guidance to encourage high-quality performance by professional accountants in business.

Canada is showing its support for the work of the International Public Sector Accounting Standards Board (IPSASB), an independent standard-setting body of the International Federation of Accountants (IFAC), in two significant ways: The Treasury Board of Canada is providing funding of US$200,000 per year for five years and the Canadian Institute of Chartered Accountants (CICA) has agreed to provide, at its expense, a dedicated professional to support the IPSASB. Beginning this month, some of the IPSASB's staff, including its new Technical Director, Stephenie Fox, will be located in an office in Toronto, Canada.

The IPSASB focuses on the accounting and financial reporting needs of national, regional and local governments, related governmental agencies, and the constituencies they serve through the development of high quality International Public Sector Accounting Standards. Canada's actions demonstrate the increasing recognition of the importance of these standards.

"These standards are the foundation for better, more transparent and more responsible financial reporting by government," states IFAC Chief Executive Ian Ball. "Citizens in all countries have a right to understand how the government manages the financial resources that have been entrusted to it. By addressing such issues as the application of accrual accounting to the public sector, or accounting for social policy obligations or for tax revenues, these standards help to enhance the accountability of governments."

"We very much appreciate the commitment of the Canadian Government and the CICA to the IPSASB. Together with our Canadian partners and others throughout the world, the IPSASB can continue to improve financial reporting in the public sector and thus contribute to better financial decision making and financial management by governments," states IFAC President Graham Ward, CBE, MA, FCA.

"The Canadian offer is significant in that it will strengthen the IPSASB's capacity to deal with its priorities on public sector specific issues, including public/private arrangements and a conceptual framework, as well as convergence with other standards," states Philippe Adhémar, IPSASB Chair. "An important IPSASB goal is to promote the acceptance and use of its standards worldwide, and significant progress has been made in this area. For example, the United Nations recently approved a resolution calling for its agencies to adopt the standards. The European Commission and Organisation for Economic Co-operation and Development have also adopted the standards, and the World Bank has indicated its support for their use by governmental entities."

"We are very pleased to have IPSASB based in Toronto. It is a huge vote of confidence in Canada's standard-setting abilities," says Kevin J. Dancey, FCA, CICA President and CEO. "It is through initiatives like this that the CA profession demonstrates its leadership and the increasingly important role it plays on the international stage in terms of establishing best practices and guidance for improved financial reporting."

For more information about the IPSASB and to download its standards and other guidance free-of-charge, visit its home page on the IFAC website at https://www.ifac.org/publicsector.

IFAC is the worldwide organization for the accountancy profession dedicated to serving the public interest by strengthening the profession and contributing to the development of strong international economies. Its current membership consists of approximately 160 professional accountancy bodies in 120 countries, representing more than 2.5 million accountants in public practice, education, government service, industry and commerce. In addition to setting international public sector financial reporting standards through the IPSASB, IFAC, through its independent standard-setting boards, sets international standards of ethics, auditing and assurance, and education. It also issues guidance to encourage high-quality performance by professional accountants in business.

The General Assembly of the United Nations (UN) has approved a financial management reform program that calls for the adoption of International Public Sector Accounting Standards (IPSASs) by the UN. The adoption of IPSASs is viewed as critical to maintaining and enhancing the credibility, transparency, and authority of the financial processes and transactions of the United Nations.

"The reform program enables, for the first time, the UN and its many agencies to have a comprehensive and consistent view of their financial position and performance. This will, in turn, enable the UN to manage more effectively, and to be fully accountable for, the resources entrusted to it," states IFAC President Graham Ward.

IPSASs are developed by the International Public Sector Accounting Standards Board, an independent standard-setting body within the International Federation of Accountants (IFAC). The standards set out the requirements for financial reporting by governments and other public sector organizations. The standards may be downloaded from the IFAC website at https://www.ifac.org/store.

As a result of the UN's decision to use IPSASs, the UN will move from a system of modified accrual to full accrual, which provides a more comprehensive financial picture.

Chief Executive Ian Ball states: "Public sector entities, such as the United Nations, that have undertaken a financial management reform program incorporating full accrual financial reporting are better able to manage their finances, and demonstrate by their actions their commitment to transparency."

The President of the United Nations General Assembly, H.E. Mr. Jan Eliasson, issued a Statement on the Adoption of the Resolution on Management Reform in which he said: "...We have taken a step to make the Organization more efficient and effective. We have begun consolidating a culture of accountability, transparency and integrity in the Secretariat (of the UN)."

IFAC is the worldwide organization for the accountancy profession dedicated to serving the public interest by strengthening the profession and contributing to the development of strong international economies. IFAC's current membership consists of approximately 160 professional accountancy bodies in 120 countries, representing more than 2.5 million accountants in public practice, education, government service, industry and commerce. In addition to setting public sector accounting standards through the IPSASB, IFAC, through its independent standard-setting boards, also sets international standards on ethics, auditing and assurance, and education. It also issues guidance to encourage high-quality performance by professional accountants in business.

Stephenie Fox, CA, has been named Technical Director for the International Public Sector Accounting Standards Board (IPSASB), an independent standard-setting board of the International Federation of Accountants (IFAC). Ms. Fox, who will be based in Toronto, Canada, will assume the position on September 1.

Ms. Fox has extensive experience in public sector accounting standard setting and in working with all levels of government, in addition to having worked with public accounting firms. She most recently served as a Senior Reviewer for the Canadian Public Accountability Board. Prior to this, she worked for over twelve years as a Principal of the Public Sector Accounting Standards Board of the Canadian Institute of Chartered Accountants. While in this position, she participated on the steering committee for the IPSASB's project on non-exchange revenue.

"Stephenie's technical expertise and strong communications and leadership skills will be of great assistance to the IPSASB as it continues its work of developing financial reporting standards for governments worldwide," states Ian Ball, IFAC Chief Executive. "In this way, she will play a key role in improving the quality of financial reporting and financial management of public sector entities."

Stephenie Fox takes over from Paul Sutcliffe who is retiring as full-time Technical Director. Mr. Sutcliffe will continue to work for the IPSASB on specific projects as a Senior Advisor on a part-time basis. The IPSASB focuses on the accounting and financial reporting needs of national, regional, and local governments, related governmental agencies, and the constituencies they serve. A primary goal of the IPSASB is to achieve convergence in financial reporting between different governments, with the private sector, and between financial reporting and economic statistics.

IFAC is the worldwide organization for the accountancy profession dedicated to serving the public interest by strengthening the profession and contributing to the development of strong international economies. IFAC's current membership consists of approximately 160 professional accountancy bodies in 120 countries, representing more than 2.5 million accountants in public practice, education, government service, industry and commerce. IFAC, through its independent standard-setting boards, sets international standards on ethics, auditing and assurance, education, and public sector accounting. It also issues guidance to encourage high-quality performance by professional accountants in business.

The International Public Sector Accounting Standards Board (IPSASB) of the International Federation of Accountants (IFAC) has released an information paper on the experiences of the United States (US) in its transition to accrual accounting, entitled The Road to Accrual Accounting in the United States of America.

"Adoption of accrual-based accounting by public sector entities increases the accountability and transparency of their financial reports and provides better information for planning and management purposes. This paper provides valuable insights for jurisdictions currently in the process of migration from the cash basis to the accrual basis or those considering adoption of the accrual basis," says IPSASB Chairman Philippe Adhémar.

The challenges for entities moving to the accrual basis include both development and implementation issues. They also include the establishment of appropriate institutional arrangements and mechanisms to promote, manage and assist in the transition. The IPSASB paper notes the development of administrative arrangements for formal standards setting at the local, state and federal government levels in the US and highlights key factors shaping the standards-setting structure. It also provides input on the US federal government reporting model.

The paper was prepared by David Bean, Director of Research and Technical Activities at the Governmental Accounting Standards Board (GASB) and technical advisor to the US member on the IPSASB, and staff at the GASB. The Road to Accrual Accounting in the United States of America can be downloaded from the IFAC online bookstore at https://www.ifac.org/store.

IFAC is the worldwide organization for the accountancy profession dedicated to serving the public interest by strengthening the profession and contributing to the development of strong international economies. Its current membership consists of over 160 professional accountancy bodies in 120 countries, representing more than 2.5 million accountants in public practice, education, government service, industry and commerce. In addition to setting international public sector financial reporting standards through the IPSASB, IFAC, through its independent standard-setting boards, sets ethics, auditing and assurance, and education standards. It also issues guidance to encourage high-quality performance by professional accountants in business.

The International Public Sector Accounting Standards Board (IPSASB) of the International Federation of Accountants (IFAC) is working to improve both the quality and uniformity of financial information reported by public sector entities around the world. In pursuit of this objective, the IPSASB has issued a Consultation Paper entitled Accounting for Heritage Assets under the Accrual Basis of Accounting. The Consultation Paper includes a Discussion Paper, Heritage Assets: Can Accounting Do Better?, recently published by the United Kingdom's Accounting Standards Board (ASB).

Accounting for heritage assets is an area of particular interest for governments and public sector entities worldwide. Many assets of significant cultural, artistic and historical importance and outstanding natural beauty are controlled by public sector entities, including items and sites which are emblematic of particular nations. Diverse approaches to accounting for heritage assets have been developed by different standard-setters worldwide.

"The IPSASB recognizes the need to develop at an international level requirements and guidance on accounting for heritage assets and to harmonize those requirements across national jurisdictions," says IPSASB Chair Philippe Adhémar.

So that it can use its resources efficiently, the IPSASB has decided to benefit from the development work of some national standard setters, where possible, as a starting point in its approach to particular topics. The UK ASB Discussion Paper is a case in point. The proposals in the paper do not necessarily reflect the views of the IPSASB. However, they do suggest potential solutions to challenges in accounting for heritage assets that are likely to be faced in many jurisdictions reporting on the full accrual basis or in the process of migrating to that basis. The IPSASB Consultation Paper provides the international financial reporting community with the opportunity to respond to approaches that are being considered by the national standard setter. Responses received will be considered by the IPSASB as it commences its own due process.

How to Comment

Comments are requested by June 30, 2006. The Consultation Paper may be viewed by clicking here. Comments may be submitted by email to publicsectorpubs@ifac.org. They can also be faxed to the attention of the IPSASB Technical Director at +1 (212) 286-9570 or mailed to IFAC, 545 Fifth Avenue, 14th Floor, New York, NY 10017, USA. All comments will be considered a matter of public record.

About IFAC

IFAC is the worldwide organization for the accountancy profession dedicated to serving the public interest by strengthening the profession and contributing to the development of strong international economies. IFAC's current membership consists of over 160 professional accountancy bodies in 120 countries, representing more than 2.5 million accountants in public practice, education, government service, industry and commerce. In addition to setting international public sector financial reporting standards through the IPSASB, IFAC, through its independent standard-setting boards, sets ethics, auditing and assurance, and education standards. It also issues guidance to encourage high-quality performance by professional accountants in business.