IFAC is pleased to respond to the IASB Request for Information (RFI) Comprehensive Review of the IFRS for SME standard.
One of IFAC’s key objectives is ‘Contributing to and promoting the development, adoption, and implementation of high-quality international standards’, which includes providing the global profession’s perspective. This response has been prepared following consultation across our broad constituent base.
The International Public Sector Accounting Standards Board (IPSASB) has welcomed the contribution from the ACCA (Association of Chartered Certified Accountants) to support its proposed development of a public sector specific sustainability reporting framework.
“ACCA’s contribution provides welcome support for our initiative to develop urgently-needed public sector specific sustainability reporting standards,” said Ian Carruthers, IPSASB Chair. “Despite strong stakeholder support for our proposals, our expertise in standard setting alone cannot take us over the finishing line. Financial support from the global community is essential if we are to equip governments with the quality standards necessary to report on their critical contributions to addressing the global climate emergency and other sustainability issues.”
Helen Brand, chief executive, ACCA said, “We are pleased to be the initial funders of the IPSASB's critical work to develop international sustainability reporting guidance that is fit for the public sector. The world's sustainability aspirations, including net zero and inclusive growth, will not be met without concerted government action and a robust reporting framework. ACCA believes that the IPSASB has the right international networks and due process to complete this sustainability work program. Alongside the investment, ACCA will be working closely with IFAC, the IPSASB, and our other public sector partners to advance the field of sustainability reporting for the public sector.”
The IPSASB announced last week that it is moving into a research and scoping phase for three potential initial public sector specific sustainability reporting projects and has called upon the global community for its help in securing the resources needed to begin guidance development.
To contribute financial or other support to the IPSASB for the development of global public sector specific sustainability reporting guidance, please email Ross Smith, IPSASB Program and Technical Director (rosssmith@ipsasb.org) or James Gunn, Managing Director, Professional Standards (jamesgunn@profstds.org).
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.
About ACCA
ACCA (the Association of Chartered Certified Accountants) is the global body for professional accountants. We’re a thriving global community of 241,000 members and 542,000 future members based in 178 countries and regions, who work across a wide range of sectors and industries. We uphold the highest professional and ethical values. We offer everyone everywhere the opportunity to experience a rewarding career in accountancy, finance and management. Our qualifications and learning opportunities develop strategic business leaders, forward-thinking professionals with the financial, business and digital expertise essential for the creation of sustainable organisations and flourishing societies. Since 1904, being a force for public good has been embedded in our purpose. In December 2020, we made commitments to the UN Sustainable Development Goals which we are measuring and will report on in our annual integrated report. We believe that accountancy is a cornerstone profession of society and is vital helping economies, organisations and individuals to grow and prosper. It does this by creating robust trusted financial and business management, combating corruption, ensuring organisations are managed ethically, driving sustainability, and providing rewarding career opportunities. And through our cutting-edge research, we lead the profession by answering today’s questions and preparing for the future. We’re a not-for-profit organisation. Find out more at accaglobal.com.
The IPSASB held its fourth meeting of the year in Toronto, Canada on December 6-9, 2022.
Advancing Sustainability Reporting
The IPSASB is taking its next step to advance sustainability reporting. The IPSASB will commence research and scoping of three potential public sector specific sustainability reporting projects pending securing the resources needed to begin guidance development. Learn more and how to get involved.
The Board approved an updated version of the IPSAS Conceptual Framework: Chapter 7, Measurement of Assets and Liabilities in Financial Statements. The IPSASB will use the updated version of Chapter 7 as part of its process of developing standards going forward.
The updated version of Chapter 7 will be published with the suite of measurement related guidance (IPSAS [X], Measurement, IPSAS [X], Property, Plant, and Equipment). The last piece of this suite of guidance, IPSAS [X], Measurement is planned for approval in March 2023.
ED 78, Property, Plant, And Equipment
The IPSASB approved IPSAS [X], Property, Plant, and Equipment. IPSAS [X] replaces IPSAS 17, Property, Plant, and Equipment and adds public sector guidance on heritage and infrastructure assets and aligns with the new measurement principles.
To align effective dates, IPSAS [X], Property, Plant, and Equipment is expected to be issued in the first half of 2023 together with the suite of measurement related guidance under development.
Measurement
The IPSASB reviewed a final draft of IPSAS [X], Measurement. The IPSASB clarified the concept of deemed cost, including its applicability to property, plant, and equipment held for operational capacity. The IPSASB decided to add a second phase to the Measurement project where it will evaluate the application of current operational value, for specific IPSAS not yet explicitly considered in the first phase Measurement project. The second phase will commence after the planned approval of IPSAS [X], Measurement in March 2023.
Other Lease–Type Arrangements
The IPSASB approved Exposure Draft (ED) 84, Concessionary Leases and Right-of-Use Assets In-kind (Amendments to IPSAS 43 and IPSAS 23). ED 84 will be published in January 2023 for a 4-month comment period, together with a Feedback Statement summarizing the IPSASB’s decisions and thinking related to the feedback received to the January 2021 Request for Information, Concessionary Leases and Other Arrangements Similar to Leases.
Transfer Expenses and Revenue
The IPSASB completed a detailed review of the core text, application guidance, bases for conclusions, and implementation guidance sections in the draft Revenue IPSAS and draft Transfer Expenses IPSAS. In addition, the IPSASB agreed on the list of illustrative examples for both draft IPSAS, and confirmed the proposed approach to finalize amendments to other IPSAS in preparation for the expected approval of both draft standards at the March 2023 meeting.
The IPSASB reviewed four specific matters for comment related to assets and liabilities in ED 81, Conceptual Framework Update, Chapter 3, Qualitative Characteristics and Chapter 5, Elements in Financial Statements. The IPSASB decided, as proposed in ED 81, to:
Adopt the revised definitions of a liability and an asset;
Include restructured guidance that aligns with the components of the liability definition and new guidance on the transfer of resources; and
Adopt the rights-based approach to the guidance on resources in the definition of an asset.
Presentation of Financial Statements
The IPSASB discussed research and scoping activities related to the project on Presentation of Financial Statements, added in 2022 as a result of the Mid-Period Work Program Consultation. The research activities included an update on the feedback received from attendees at the 4th International Public Sector Standards Setters Forum held in September 2022. Research and scoping activities will continue as part of the process to develop and approve a detailed project brief, which is expected to be approved in 2023.
Next Meeting
The next full meeting of the IPSASB will take place in March 2023 in Washington D.C. USA. For more information, or to register as an observer, visit the IPSASB website.
The threats to the world and its citizens from climate change are well publicized. Yet, despite significant government influence over the global economy, there is no internationally recognized public sector reporting framework to guide how they measure and report their critical contributions to addressing the global climate emergency. Reporting on climate change is one of the most important issues in sustainability reporting, which also encompasses environmental, social and governance issues.
At its December meeting, in light of the urgency of this issue, the International Public Sector Accounting Standards Board (IPSASB) decided to commence the scoping of three potential public sector specific sustainability reporting projects pending securing the resources needed to begin guidance development.This decision builds on IPSASB’s 25 years of public sector standard setting experience as well as the strong global stakeholder support for the proposals in its Consultation Paper, Advancing Public Sector Sustainability Reporting.
“Public sector-specific sustainability reporting guidance would encourage transparency, allowing governments to be held accountable for the long-term impacts of their interventions, and enabling better-informed decision-making,” said Ian Carruthers, IPSASB Chair. “The feedback we’ve received from stakeholders around the world is clear: the public sector needs its own specific sustainability reporting framework and the IPSASB should lead its development. But in addition to our existing expertise, it is a fact that we will need additional support, both financial and otherwise, from the global community before we can take on the development of global guidance that would equip the public sector with the tools necessary to report on climate change and other sustainability issues.”
The IPSASB’s immediate action will be to establish a Sustainability Task Force to lead this first critical phase of research and scoping. The Board’s prioritized research topics are:
General Requirements for Disclosure of Sustainability-related Financial Information,
Climate-Related Disclosures, and
Natural Resources – Non-Financial Disclosures (in parallel with the development of financial reporting guidance proposed in its Consultation Paper, Natural Resources).
Resources are needed to support the IPSASB’s program of activity and stakeholder engagement, and to begin guidance development. To contribute financial or other support to the IPSASB for the development of global public sector specific sustainability reporting guidance, please email Ross Smith, IPSASB Program and Technical Director (rosssmith@ipsasb.org) or James Gunn, Managing Director, Professional Standards (jamesgunn@profstds.org).
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.
Building on strong stakeholder support, the international public sector standard setter takes the next step in advancing public sector sustainability reporting pending securing the resources needed to begin guidance development
Insights from IFAC’s Professional Accountants in Business Advisory Group
At its September 2022 hybrid meeting, IFAC’s Professional Accountants in Business (PAIB) Advisory Group considered key trends impacting businesses and public sector organizations globally, as they confront and navigate increasingly complex and interconnected challenges in the current uncertain environment.
The Invitations for Applications are open to all individuals and interested organizations, including those representing investors and the corporate governance community, regulatory bodies, national standard setters, audit practitioners, professional accountancy organizations and public sector organizations, and those in academia. Individuals may also make nominations on their own behalf.
These vacancies are exciting opportunities for experienced individuals from diverse backgrounds to contribute to the evolving multi-stakeholder and multi-cultural composition of each board. Importantly, there is a tremendous opportunity to contribute to safeguarding the proper functioning of financial markets and economies worldwide. Successful candidates take part in the IAASB´s efforts to gain further global acceptance of its standards to have high-quality audit and assurance as a foundational element of trustworthy financial and sustainability information.
About the IAASB The International Auditing and Assurance Standards Board develops auditing and assurance standards and guidance for use by all professional accountants under a shared standard-setting process involving the Public Interest Oversight Board, which oversees the activities of the IAASB, and the IAASB Consultative Advisory Group, which provides public interest input into the development of the standards and guidance. The structures and processes that support the operations of the IAASB are facilitated by the International Federation of Accountants (IFAC). For copyright, trademark, and permissions information, please go to permissions or contact permissions@ifac.org.
