The IPSASB unanimously approved Exposure Draft (ED 69), Public Sector Specific Financial Instruments: Amendments to IPSAS 41, Financial Instruments. ED 69 provides guidance on how to account for several instruments the IPSASB has identified as unique to the public sector.

ED 69 will be published in August 2019 with a comment period until December 31, 2019.

Please register on the IPSASB website to ensure that you receive updates when this document and others are published:https://www.ifac.org/user/register

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The IPSASB unanimously approved ED 68,Improvements to IPSAS, 2019. The IPSASB excluded improvements related to the definition of a business and materiality in the IASB’s, Improvements to IFRS 2018. These Improvements might be considered in the future as separate narrow scope projects.
ED 68 will be published in July 2019 with a comment period until September 30, 2019.

Please register on the IPSASB website to ensure that you receive updates when this document and others are published:https://www.ifac.org/user/register

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Two guest speakers presented different perspectives on lessor accounting. The IPSASB directed the Leases Task Force to assess the rationale for departure from the lessor accounting requirements in IFRS 16,Leases. The Task Force will make recommendations to the IPSASB for consideration at the September 2019 meeting.

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The IPSASB approved a revised project brief for Infrastructure Assets.  Staff will develop a list of issues for review at the September 2019 IPSASB meeting taking account of discussion at the 2017 Public Sector Standard Setters Forum together with a proposed plan for addressing them in accordance with the project roadmap.

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The IPSASB decided that the distinction between operational and non-operational heritage assets is not useful for analyzing either the recognition or measurement of heritage assets. However, the usage of heritage assets could impact measurement. The IPSASB reviewed recognition, measurement and presentation issues raised in responses to the 2017 Consultation Paper,Financial Reporting for Heritage. Staff and the Task Force will provide a plan to the IPSASB at its September meeting, which identifies required heritage-related guidance, the potential impact on IPSAS, and prioritization and timing for delivery.

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The IPSASB approved the core text in Exposure Draft (ED) 70, Revenue with Performance Obligations, which addresses transactions where an entity earns revenue in exchange for goods or services, and also includes the public sector performance obligation approach. The IPSASB approved a list of examples, including public sector specific examples, to illustrate the principles in ED 70 and instructed staff to continue to develop disclosures, illustrative examples, and the basis for conclusions.

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The IPSASB confirmed that revenue that arises from transactions that are not a result of a binding arrangement shall be recognized when receivable. In September, the IPSASB will consider the relationship between performance obligations and present obligations and will further discuss when a liability of the resource recipient arises for enforceable arrangements that do not have performance obligations as defined in ED 70.

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The IPSASB confirmed its tentative decision in March to focus on transactions where entities transfer resources to recipients, without receiving goods or services in return. The IPSASB reviewed the Government Finance Statistics (GFS) Manual, concluding that the GFS definition of a transfer encapsulated the IPSASB’s thinking, and decided to base the scope of the ED on the GFS definition. The IPSASB also discussed how to address subsidies, appropriations, levies, subsequent measurement and examples in the ED.

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• A podcast highlighting key points of the June 2019 meeting is now available here.

• The next meeting of the IPSASB will be in Lisbon, Portugal from September 24-27, 2019. For more information, or to register as an observer, visit the IPSASB website.

Robust and lively discussions on key IESBA projects and significant national developments featured prominently in the IESBA’s meeting with national ethics standard setters from 14 jurisdictions in Paris last week.

In addition, the IESBA held a successful joint session with the International Auditing and Assurance Standards Board and national audit and ethics standard setters to explore enhancing trialogue and mutual engagement. The event also included a session on UK audit market developments and discussion on the developments from an international perspective.

During this visit, the IESBA and IAASB, in association with the French professional accountancy organizations, Compagnie Nationale des Commissaires aux Comptes and Conseil Supérieur de l'Ordre des Experts-Comptables, hosted a successful two-day international working conference. The conference drew more than 80 delegates who explored how the two standard-setting boards can best respond to the challenges related to less complex entities in their standard-setting activities.

While in Paris, IESBA representatives also met with members of the regulatory community, international organizations and firms, including Haut Conseil du commissariat aux comptes, European Securities and Markets Authority, and the Organisation for Economic Co-operation and Development, as part of its outreach activities.

IESBA staff has released an updated Q&A publication incorporating additional frequently asked questions. The publication is aligned to the restructured version of the revised Long Association provisions, which came into effect for audits of financial statements for periods beginning on or after December 15, 2018.

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At its March meeting, the IESBA also considered initial proposals for possible revisions to the fee-related provisions in the Code, in particular International Independence Standards Section 410, Fees.

The IESBA will progress these deliberations at its June 2019 meeting as well, including proposed changes to fee-related provisions in the Code.

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The IPSASB unanimously approved the Consultation Paper (CP), Measurement, which will be published in April 2019, and will be open for comment until September 30, 2019. The Consultation Paper includes an illustrative Exposure Draft (ED) which indicates the IPSASB’s current thinking on the scope and format of an IPSAS on Measurement. A full ED will be issued in due course.

Please register on the IPSASB website to ensure that you receive updates when this document and others are published: https://www.ifac.org/user/register

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The IPSASB reopened discussions on the Heritage project. The IPSASB considered the background to the project and the issues that had been raised by respondents to the 2017 Consultation Paper, Financial Reporting for Heritage. The project will focus on recognition, with measurement issues being considered in the complementary project on Measurement.

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The IPSASB adopted the working title Revenue from Performance Obligations, for the ED and tentatively approved it. The IPSASB clarified that the scope applies to binding arrangements with purchasers that include performance obligations. The IPSASB instructed staff to consider the approach to transactions where the collectability of consideration is not probable. Staff will continue work on non-authoritative illustrative examples to ensure that these are suitable for the public sector.

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In the context of public sector-specific transactions, the IPSASB confirmed that legislation and reductions in future funding are the two enforcement mechanisms to be included in the ED, Revenue from Performance Obligations. The IPSASB also noted that enforceability in a binding arrangement is a two-way relationship. In a revenue context, enforcement mechanisms relate to the purchaser’s ability to enforce the fulfilment of performance obligations by the resource recipient. The IPSASB instructed staff to consider alternative terms for ‘distinct’ in articulating the concepts of ‘distinct goods and services’ and ‘distinct promises’ for performance obligations. 

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The IPSASB considered the scope of the draft ED, Grants, Contributions and Other Transfers. The IPSASB tentatively agreed to adopt a narrower scope for the project, excluding commercial transactions. Staff were instructed to develop definitions for the transactions within this revised scope, and to consider the accounting treatment of contracts that are described as grants. Recognition, measurement and presentation requirements will be developed in parallel with the two Revenue EDs highlighted above.

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The IPSASB further considered its approach in light of the response to ED 64, Leases. The IPSASB directed the Leases Task Force to firstly assess the rationale for departing from the lessor accounting requirements in IFRS 16, Leases. The IPSASB will not consider the approach to concessionary leases until decisions have been made on lessor accounting. The Task Force will make recommendations to the IPSASB for consideration at the June 2019 meeting.

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The IPSASB reviewed the IPSAS-IFRS Alignment Dashboard, which reflects the extent of alignment with current International Financial Reporting Standards and identifies pronouncements that are public sector specific. The IPSASB directed some minor presentational changes.

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The IPSASB published its Strategy and Work Plan 2019-2023 in late February. At a time of increasing momentum for IPSAS adoption and implementation globally, the Strategy and Work Plan 2019-2023 sets out the Board's work intentions and priorities for the next five years. 

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• A podcast highlighting key points of the March 2019 meeting is now available here.

The next meeting of the IPSASB will be in Toronto, Canada from June 18-21, 2019. The IPSASB Consultative Advisory Group will meet on June 17, 2019 Toronto, Canada. For more information, or to register as an observer, visit the IPSASB website (www.ipsasb.org).

Hard to believe, but less than 6 months to go before the revised and restructured Code becomes effective! 
To support its roll-out, we’re holding two global 90 minute webinars suitable for any professional using, enforcing, teaching or engaging with the Code.

• Thursday March 28, 2019 at 7:00 AM EST; and
• Wednesday April 17, 2019 at 10:00 AM EST.

Additionally, learn more about the IESBA’s revised and restructured Code; and the importance of having an Ethics Code for professional accountants and earn yourself CPE credits!
For more and latest support materials, continue to check our dedicated webpage.

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We congratulate the International Auditing and Assurance Standards Board (IAASB) for issuing proposed Quality Management standards!
The proposed standards reinforce the need for firms to comply with the fundamental principles of ethics and independence requirements. They will make a meaningful contribution to enhanced audit quality.
We encourage all our stakeholders to provide their input to the IAASB’s exposure draft, which asks important questions about ethics and independence matters. The link below will take you to the IAASB’s consultation page. Make your voice heard!

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The IESBA’s proposed eCode will be a major new way of engaging with the Code of Ethics. At our last meeting the IESBA received a preview of its potential to provide users with a great experience that will also facilitate consistent application and enforcement.
We anticipate launching the e-Code’s first phase by June 2019, coinciding with the revised and restructured Code’s effective date.

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The IESBA^® approved Terms of Reference for its Technology Working Group. As part of a multi-phased approach, the Working Group will engage widely with its stakeholders to gather activity information, including in relation to artificial intelligence, robotic process automation, data analytics and big data.
We’re looking forward to the Working Group’s update at our next meeting in March 2019.

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On November 8, 2018, our Chair, Dr. Stavros Thomadakis, gave a keynote address in Sydney at the Accounting Professional & Ethical Standards Board (APESB) dinner. Celebrating great news that the Restructured International Code of Ethics has been incorporated into Aussie ethical standards, Stavros shared his thoughts about the Code’s essentials, its global positioning, and the challenges and opportunities faced by both standard setters and Code users.

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Read the minutes and working papers for all our IESBA meetings. They’re a great information source about project progress and how we support and protect the public interest.
The IESBA’s multi-stakeholder Consultative Advisory Group (CAG) meets a week before the board to provide strategic input on our meeting agenda materials, as well as our projects and initiatives more broadly. You can also read all the CAG’s minutes and working papers.

The IPSASB considered draft IPSAS 42, Social Benefits. The IPSASB made minor changes prior to approving IPSAS 42, which will be published in late January 2019. IPSAS 42 fills one of the last significant omissions in IPSASB’s literature. 

IPSAS 42 has an effective date of January 1, 2022. The IPSASB considered that this would allow sufficient time for preparers to make arrangements for the standard’s requirements. The effective date for IPSAS 42 is also intended to align with the effective date of application guidance on collective and individual services and emergency relief.

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The IPSASB considered draft Exposure Draft (ED) 67, Collective and Individual Services and Emergency Relief, which proposes application guidance to IPSAS 19, Provisions, Contingent Liabilities and Contingent Assets. Detailed discussion focused on emergency relief, with the Board distinguishing between emergency relief that is an ongoing activity of government, and emergency relief that responds to specific events. The IPSASB approved ED 67, which will be published in late January 2019.

ED 67 proposes that no provision for collective or individual services is recognized. Under certain circumstances emergency relief that responds to specific events may give rise to a provision. Entities apply IPSAS 19 in deciding whether to recognize a provision.

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The IPSASB discussed the responses to ED 66, Long-term Interests in Associates and Joint Ventures (Amendments to IPSAS 36, Investments in Associates and Joint Ventures) and Prepayment Features with Negative Compensation (Amendments to IPSAS 41, Financial Instruments).

The IPSASB approved the amendments proposed in ED 66 with no significant changes. The IPSASB also agreed to an effective date of January 1, 2022 in order to align with the effective date for IPSAS 41.

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The IPSASB supported the initial analysis of Public Sector Specific Financial Instruments (PSSFI) developed by its Financial Instruments Task Force. This analysis outlined which PSSFI meet the definition of a financial instrument in IPSAS 28, Financial Instruments: Presentation, for which non-authoritative guidance will be developed. Where an asset or liability does not satisfy the definition of a financial instrument, the Task Force will continue to evaluate the appropriate guidance for development.

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The IPSASB reviewed and modified newly developed application guidance for historical cost, replacement cost, fair value, and the cost of fulfillment. The IPSASB confirmed that it would issue a Consultation Paper including an outline ED, Public Sector Measurement. This will allow constituents to consider the IPSASB’s preliminary views on issues such as borrowing costs, transaction costs and fair value and to provide views on the format and structure of the envisaged IPSAS. 

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The IPSASB approved the scope of a draft ED that will provide requirements and guidance for transactions within the scope of  IFRS 15, Revenue from Contracts with Customers, and transactions that can be addressed through the Public Sector Performance Obligation Approach (PSPOA). In its discussions, the IPSASB also clarified the definition of ‘a binding arrangement’ and considered the terminology in IFRS 15 from a public sector perspective, deciding that the term ‘purchaser’ should replace ‘customer’.  In light of this decision, Staff will consider a suitable title for the draft ED. 

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Grants and Transfers - Time Requirements
The IPSASB tentatively decided that transactions with enforceable mechanisms that can be activated by the resource provider should be accounted for under the PSPOA. Revenue arising from transactions that are not enforceable is to be recognized when the revenue is receivable by the recipient. The intentions and expectations of resource providers are to be communicated via enhanced display and disclosure. Staff will develop options for consideration at the March 2019 meeting. The IPSASB also decided to stop using the term ‘term requirements’, as it implies enforceability when there may be none.

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The IPSASB reviewed a roadmap for further development of the Leases project in light of responses to ED 64, Leases. The IPSASB decided:
a) To confirm the tentative decision made in September to adopt the lessee accounting requirements in ED 64, Leases, subject to decisions on lessor accounting and concessionary leases;
b) Not to publish lessee accounting requirements based on ED 64 in the near future; and
c) To create a Task Force to consider all the issues raised by respondents.

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The IPSASB approved its Strategy and Work Plan 2019-2023 and an accompanying Consultation Summary. Both documents are planned for publication in February 2019. The finalized Strategy and Work Plan communicates the IPSASB’s strategic objective and five underpinning themes, as well as its forward Work Plan for the 2019-2023 period. The Consultation Summary highlights the key changes resulting from the consultation process, including the action arising from both written submissions and feedback from four regional roundtables.

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A podcast highlighting key points of the December 2018 meeting is now available here.

The next meeting of the IPSASB will be in Washington D.C., USA from March 12-15, 2019. For more information, or to register as an observer, visit the IPSASB website.

Good progress was made on the landmark Social Benefits IPSAS with a view to approval in December. The IPSASB made important decisions on disclosures, including to require a breakdown of expenditure on material schemes, narrative about whether a scheme meets the insurance accounting criteria, and a description of the demographic and economic factors that influence the expenditure on a scheme. The Obligating Event approach has been renamed the General Approach.

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The IPSASB discussed a draft ED, Collective and Individual Services and Disaster Relief, proposing additional guidance to IPSAS 19, Provisions, Contingent Liabilities and Contingent Assets. The IPSASB agreed to include relevant definitions in IPSAS 19, and decided that the ED should cover emergency relief more broadly, not just disaster relief.

The IPSASB decided that the Public Sector Performance Obligation Approach could be applied to non-exchange grants and transfers. Staff will further consider when a liability should be recognized, what constitutes enforceability and develop examples.

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The IPSASB discussed the responses to ED 65, Improvements to IPSAS, 2018. The IPSASB agreed to most of the amendments proposed in ED 65, with little or no change. However, the IPSASB agreed to amend paragraph 76 of IPSAS 16, Investment Property, to provide guidance on measuring investment property under construction at fair value initially, rather than deleting the paragraph as proposed in the ED. The IPSASB also agreed to an effective date of January 1, 2021 for the new cash flow disclosure added to IPSAS 2, Cash Flow Statements. The IPSASB approved Improvements to IPSAS, 2018.

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The IPSASB decided on the approach for development of Exposure Draft (ED), Measurement. The ED will define major measurement bases and provide guidance on, and how to derive measures, under these bases. Individual IPSAS will specify where these measurement bases are to be used. Next steps include development of application guidance for historical cost, replacement cost, fair value, and the cost of fulfillment and identification of generic measurement-related disclosures. The majority of the text of IFRS 13, Fair Value Measurement, will be adopted as application guidance in IPSASB’s literature. The IPSASB also further developed the Consultation Paper (CP), Public Sector Measurement. 

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The IPSASB considered the terminology in IFRS 15, Revenue from Contracts, from a public sector perspective. The IPSASB decided that the term ‘binding arrangement’ should replace ‘contract’. However the terms ‘consideration and exchange’ and ‘goods and services’ will be retained. Staff will provide alternatives to ‘customer’. Explanatory text will note that the ‘expected cost plus margin method’ for estimating stand-alone selling prices can be used for goods and services that are provided on a cost-recovery basis. The Board decided that the ability to reduce future funding would be included as a potential enforcement mechanism.

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The IPSASB considered the responses to ED 64, Leases for the first time. There was overall support for ED 64’s proposal for the ‘right-of-use model’ on lessee accounting. The IPSASB tentatively decided to adopt the model in the IPSAS on Leases. The IPSASB acknowledged the diversity and complexity of constituents’ views on the proposals on lessor accounting and concessionary leases and decided to extend the timeline of the project in order to allow a detailed discussion of all the issues raised by respondents.

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The IPSASB supported the approach, which its Financial Instruments Task Force is following for Public Sector Specific Financial Instruments. This involves the development of non-authoritative guidance in the core Financial Instruments standards where the transaction meets the definition of a financial instrument in IPSAS 41, Financial Instruments, and  non-authoritative guidance outside the core Financial Instruments standards where that definition is not met. Following a face-to-face Task Force meeting in October 2018, Task Force recommendations will be presented to the IPSASB at future meetings.  

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The 2018 Handbook of International Public Sector Accounting Pronouncements is now available for electronic download on the IPSASB website. The 2018 Handbook includes the revised Cash Basis IPSAS. Hard copy editions will be available for purchase in November.

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The IPSASB discussed feedback received on the Strategy and Work Plan 2019-2023 consultation; including input from the four regional roundtables and the 53 formal comment letters submitted. Overall, the IPSASB concluded that the inclusive approach followed in developing the consultation proposals, and the open outreach process using roundtables during the consultation period, have contributed to the strong support for key proposals. The IPSASB will continue to work to finalize the Strategy and Work Plan 2019-2023 by discussing it with the Consultative Advisory Group and The Public Interest Committee over the next month, and will look to approve the Strategy and Work Plan at its December 2018 meeting. 

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The IPSASB seeks nominations from individuals, or representatives from organizations, interested in serving as a member of the IPSASB Consultative Advisory Group (CAG). Nominations are due by October 31, 2018. More information on the role of the CAG and the types of skills and experience nominees should have can be found here: https://www.ipsasb.org/cagnom

A podcast highlighting key points of the September 2018 meeting is now available:

• Audio version
• Video version

The next meeting of the IPSASB will be in Kuala Lumpur, Malaysia from December 4-7, 2018. The CAG will meet on December 3, 2018, also in Kuala Lumpur. For more information, or to register as an observer, visit the IPSASB website.

In January 2018, IFAC released Focusing on Performance, which raises awareness of the importance good corporate governance practices and principles for PAOs. This new article series features PAO stories from across the globe on the importance of adapting governance arrangements to drive performance while considering current and past governance arrangements.

Read first-hand experiences from PAOs in Barbados, the Bahamas, Kosovo, and the Cayman Islands on key issues such as succession planning, balancing board and executive management responsibilities, and committee restructuring. Stay tuned for more stories coming from the Philippines, Costa Rica and more!

Don’t forget these additional resources to help support your PAO’s good governance review and planning:

• Establishing Governance: A Guide for PAOs
• Focusing on Performance: Principles for Effective PAO Governance
• Supporting Accountants in Business: Self-Assessment Tool for PAOs
• United, Connected, and Aligned: How the Distinct Roles of Internal Audit and the Finance Function Drive Good Governance

Does your PAO have experience driving corporate governance reforms to enhance performance? Let us know—we would love to showcase your work in action!

• New Syllabus for Institute of Chartered Accountants (Ghana)
  ICAG launched a newly revised syllabus for its professional examinations. The revisions reflect changing trends in the global economy and professional educational and align with the revised International Education Standards’ requirements. Key highlights of the new syllabus>>
• A Quality Alliance: Uniting for Quality Assurance Reviews in Panama
  The Colegio de Contadores Públicos Autorizados de Panamá has been a driving force in establishing Panama’s Quality Alliance, a voluntary QA review mechanism. Read CCPAP’s QA review journey in English and Spanish>>
• Brazil Enhances Transparency and Accountability with Convergence of IPSAS
  The Federal Accounting Council has forged a partnership with the National Treasury Secretariat to implement a conceptual framework for the convergence of Brazilian standards with International Public Sector Accounting Standards. Through the partnership, it is expected that Brazil will fully adopt and implement IPSAS by 2024. Learn more about Brazil’s progress (in Portuguese)>>
• Malaysian Institute of Accountants Launches Technology Blueprint
  MIA launched its MIA Digital Technology Blueprint at its inaugural AccTech Conference 2018. The guidance and the conference are both part of the institute’s ongoing initiatives to future-proof the Malaysian accountancy profession and provide more value to the ecosystem.

A Future-ready Accountancy Profession
As professional accountants and PAOs are preparing for the future, there is an emphasis on implementing a comprehensive, integrated approach to international accountancy education to equip current and future professional accountants with the skills, capabilities and ethical foundation required for a rapidly changing environment. IFAC has been speaking out on this topic alongside partners such as the Institute of Chartered Accountants of the Caribbean, the PAO Development Committee, the World Bank, and the Interamerican Accounting Association

Greater Cooperation, Greater Growth
IFAC continues to convene key groups and partake in knowledge-sharing opportunities in order to identify, debate, and seek solutions to key issues and challenges. In 2018, IFAC continued to advocate for greater collaboration between PAOs and firms in Asia-Pacific, amongst PAOs in the Western Balkans, and among accountant generals, auditor generals, and PAOs in Sub-Saharan Africa. By leveraging and sharing global experiences and resources, the accountancy profession worldwide will continue to be strengthened.

Albania, Belarus, Croatia, Ecuador, Georgia, Haiti, Mexico, Paraguay, Suriname, Uruguay, Ukraine, and Zimbabwe: 2018 has been a busy year for engagement and efforts to strengthen and develop PAOs and advance economies. Meetings with key accountancy stakeholders, such as PAOs, regulators, universities, and audit oversight entities, in these countries have been essential in furthering national accountancy regulations alignment with international standards and best practices. 2018 will close out with meetings and events in Australia, Guatemala, Mozambique, Sri Lanka, and the UK.

The International Code of Ethics for Professional Accountants (including International Independence Standards) is now completely rewritten, easier to use, navigate and enforce. Beyond its new structure, the new Code brings together substantive revisions to ethics and independence provisions and clarifies how professional accountants should apply the conceptual framework to comply with the fundamental principles of ethics, and where applicable, be independent. The new Code will be effective June 2019.

Does your PAO want to proactively reproduce, share, and/or translate the revised Code in advance of the effective date? Submit a permissions request here!

• PAO Development Committee Meeting, October, New York, US
• Compliance Advisory Panel Meeting, October, New York, US
• PAO Forum, October, Colombo, Sri Lanka
• World Congress of Accountants, November 2018, Sydney, Australia—register today!

• IFAC Statements of Membership Obligations
• Submit a Permissions Request

The IFAC Quality & Development Team supports IFAC member organizations’ efforts to adopt and implement international standards (thus improving SMO fulfillment) and build the capacity of the global accountancy profession.

The team manages the Member Compliance Program and the membership admission process, PAO Capacity Building Program, including the PAO Development Committee, Accountability. Now. and sustainable accountancy development efforts. The Member Compliance Program is overseen by the Compliance Advisory Panel and the Public Interest Oversight Board as one of IFAC’s public interest activities.
Questions? Contact us at compliance@ifac.org.

The effective date for the International Code of Ethics for Professional Accountants (including International Independence Standards) (the Code) is less than a year away. Check out our dedicated webpage for the latest resources and tools to support its adoption and implementation, including, Bases for Conclusions, PowerPoint Slides, and videos describing the Code’s key aspects.

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The topics of non-assurance services and professional skepticism were on the table in four well-attended global roundtables held in Washington DC, USA (June 11); Paris, France (June 15); Tokyo, Japan (July 12); and Melbourne, Australia (July 16). More than 150 senior representatives of our stakeholders provided great feedback, which helped inform the development of project proposals on those topics.

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We’re excited! Download the PDF or order your print copies of the 2018 edition of the IESBA handbook, which contains the entire revised and restructured Code, including the revised inducement provisions that were released in July 2018.

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One year on, the agenda for our 2^nd annual joint session builds on the promise of the first—enhanced IESBA and IAASB connectivity and coordination that better serves the public interest. Incoming CEO of IFAC, Kevin Dancey, will be our guest speaker.

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• December 3-5, 2018: IFAC Offices, New York
• March 11 - 13, 2019: IFAC Offices, New York
• June 17 - 20, 2019: TBC
• September 16 - 19, 2019: AICPA Offices, New York
• December 3 - 6, 2019: IFAC Offices, New York

Read the minutes and working papers for all our IESBA meetings. They’re a great information source about project progress and how we support and protect the public interest.

The IESBA’s multi-stakeholder Consultative Advisory Group (CAG) meets a week before the board to provide strategic input on our meeting agenda materials, as well as our projects and initiatives more broadly. You can also read all the CAG’s minutes and working papers.

The Chair of the IPSASB Consultative Advisory Group (CAG) provided an overview and update of the June 18, 2018 CAG meeting held in Toronto. The CAG meeting agenda, papers and presentations are available online here.

The IPSASB reviewed the recommendations developed by the Financial Instruments Task Force to address the responses to ED 62, Financial Instruments. The IPSASB agreed that the recommendations addressed the concerns raised by stakeholders and approved IPSAS 41, Financial Instruments. IPSAS 41 will have an effective date of January 1, 2022. 

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The IPSASB discussed responses to ED 63, Social Benefits, beginning with its scope and definitions. The IPSASB noted that while respondents generally supported the scope of ED 63, a number considered that some definitions of key terms need to be clearer. The IPSASB agreed to retain the scope proposed in ED 63, but to clarify some definitions. In particular, the definition of social benefits will refer to cash transfers. In the context of non-exchange expenses a definition of collective services will also be developed.

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The IPSASB continued to review other issues raised by respondents to ED 63, Social Benefits. The IPSASB agreed that the insurance approach should remain optional. The IPSASB will not develop mandatory requirements for financial sustainability reporting.

On recognition and measurement, there was roughly equal support for both the proposals in ED 63 and the Alternative View. The IPSASB agreed to proceed on the basis of the proposals in ED 63 and will further discuss the possibility of post implementation reviews more broadly.

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The IPSAB decided that, in dealing with commercial-style transactions, there are no major public sector issues that warrant departure from IFRS 15, Revenue from Contracts with Customers. As a result, the only changes that will be made are to terminology. IFRS 15 introduces some new definitions, and the IPSASB discussed how to incorporate these into a new IPSAS in order to ensure that the definitions reflect the public sector context. The IPSAS that is being developed will replace IPSAS 9, Revenue from Exchange Transactions and IPSAS 11, Construction Contracts.

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The IPSASB decided to proceed with the Public Sector Performance Obligation Approach for transactions with performance obligations, which do not have the characteristics to be accounted for under an IPSAS IFRS 15- aligned standard. The Board agreed that Steps 1 and 2 of the performance obligation approach model will require careful consideration, as these steps drive the rest of the five-step model.

Application of the PSPOA to non-exchange expenses depends on whether the transferor entity has an asset for the services, which the recipient will provide. The IPSASB will discuss this issue further at its September meeting.

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The IPSASB agreed to include guidance on accounting for social contributions in an amended IPSAS 23, Revenue from Non-Exchange Transactions (Taxes and Transfers). Social contributions and similar compulsory levies will be accounted for using the same principles as taxation revenue.

Following discussion, the IPSAB decided not to amend the existing discretionary recognition requirements in IPSAS 23 for services in-kind. The IPSASB decided to add an encouragement for entities to disclose qualitative information on volunteer services received.

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The IPSASB confirmed that no liability to the public for collective services arises prior to the delivery of those services. The IPSASB agreed to provide guidance on this issue through a narrow scope amendment adding application guidance to IPSAS 19. The IPSASB also agreed to extend this guidance to universally accessible services.

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The IPSASB provided instructions on development of a flow chart on the subsequent measurement of assets. A table of equivalence comparing and contrasting terms from IPSAS, International Valuation Standards, and the Government Finance Statistics Manual will be further developed. The IPSASB directed the Financial Instruments Task Force to provide a recommendation on public sector modifications to IFRS 13, Fair Value Measurement, so that requirements and guidance from IFRS 13 can be included in a future ED, Measurement. The IPSASB held a preliminary discussion on the subsequent measurement of liabilities.

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The IPSASB decided to replace the IPSAS-IFRS Tracking Table with the IPSAS-IFRS Alignment Dashboard as a standing agenda item. The IPSASB decided to adopt provisionally the term ‘alignment’ instead of ‘convergence’ in the context of standards drawn from IFRS but will make a final decision at its September meeting, when reviewing the comments on the Strategy and Work Plan consultation.

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Audio podcasts highlighting key points of the June 2018 IPSASB and IPSASB CAG meetings are now available:

• IPSASB
• IPSASB CAG

The next meeting of the IPSASB will be in Toronto, Canada from September 18-21, 2018.  For more information, or to register as an observer, visit the IPSASB website.

Exposure Draft, Improvements to IPSAS, 2018: Comments are due by July 15, 2018

The IPSASB discussed responses to the Consultation Paper (CP), Accounting for Revenue and Non-Exchange Expenses. For Revenue, the IPSASB agreed that a converged IFRS 15, Revenue from Contracts with Customers, should be developed to replace IPSAS 9, Revenue from Exchange Transactions, and IPSAS 11, Construction Contracts. It was also decided that IPSAS 23, Revenue from Non-Exchange Transactions (Tax and Transfers), should be revised. 

Staff will also further develop the Public Sector Performance Obligation Approach for discussion at the June 2018 meeting. Accounting for capital grants and services in-kind was also discussed. 

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The IPSASB discussed responses to the IPSASB’s preliminary views on non-exchange expenses in the Revenue and Non-Exchange Expenses CP, and noted the views on interactions with other projects. The IPSASB directed staff to further develop key definitions, as well as the Public Sector Performance Obligation Approach from an expenses perspective, for consideration at the next meeting.

Staff presented the responses to the proposals on non-contractual receivables and payables. The IPSASB agreed to discuss these again when further progress has been made on other issues.

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Staff presented on Exposure Draft (ED) 63, Social Benefits, highlighting key issues that are expected to be relevant to the Non-Exchange Expenses project. The IPSASB noted in particular that the definitions of social benefits, universally accessible services and collective services were critical and would need to be discussed at the June meeting.

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The IPSASB approved ED 65, Improvements to IPSAS, 2018, which includes both IPSAS-specific improvements as well as others to maintain convergence with IFRS. This latter group draws on the IASB’s recent improvements and narrow scope amendment projects as well as recent IFRICs.

A second ED incorporating IASB amendments related to IFRS 9 was also approved and will be issued once the IPSASB’s new Financial Instrumentsstandard is issued.

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The IPSASB reviewed draft wording for several sections of the ED, Measurement, and the first three chapters of the CP, Public Sector Measurement. The IPSASB formed a preliminary view that borrowing costs related to the acquisition, construction, or production of qualifying assets should be expensed. 

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The IPSASB reviewed responses to ED 62, Financial Instruments, and respondents strongly supported the principles in the ED on classification, impairment and hedging. Respondents primarily requested further clarity on the application of these principles to complex transactions. 

The IPSASB agreed that the Financial Instruments Task Force should consider the issues raised by respondents and propose changes, where appropriate, to the draft standard. The Task Force’s recommendations will be considered at the June IPSASB meeting.

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James Gunn, Managing Director, Professional Standards, summarized the key discussions with the Public Interest Committee (PIC) on February 28 in Paris, France.

Further information on past meetings of the PIC and an overview of their activities can be found on their website. The agenda for the most recent meeting can be accessed here.

An audio podcast highlighting key points of the March 2018 meeting is now available.

The next meeting of the IPSASB will be in Toronto, June 19-22, 2018. For more information, or to register as an observer, visit the IPSASB website.

Exposure Draft 63, Social Benefits: Comments are due by March 31, 2018.

The IPSASB Proposed Strategy and Work Plan 2019-2023: Comments are due by June 15, 2018. 

The IPSASB Consultative Advisory Group will meet in Toronto, Canada on June 18, 2018.

Exposure Draft 64, Leases: Comments are due by June 30, 2018.