International Federation of Accountants

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Dec 13, 2013 (3 years and 8 months ago)

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IPSASB

World Bank: May 2009

International Federation of Accountants


International Public Sector Accounting
Standards Board (IPSASB)

Andreas Bergmann: IPSASB Member

John Stanford

: Deputy Technical Director



IPSASB

The IFAC IPSASB Mission




To serve the public interest by developing h
igh
quality accounting standards for use by public
sector entities around the world, including
international organisations, in the preparation of
general purpose financial statements.



IFAC IPSASB is providing the benchmark


World Bank: May 2009



IPSASB

IPSASB’s Current Pronouncements


26 Accrual Based IPSASs


Majority primarily drawn from IAS/IFRS


Public sector specific (or hybrid) e.g.


IPSAS 21, “Impairment of Non
-
Cash
-
Generating
Assets”


IPSAS 22, “Disclosure of Information about the
General Government Sector”


IPSAS 23, “Revenue from Non
-
Exchange
Transactions”


Cash Basis IPSAS, “Financial Reporting
under the Cash Basis of Accounting’



World Bank: May 2009

IPSASB

Strong Evidence of Progress



UN System (28 bodies)


OECD, NATO (21 bodies), EC, IFAC,
INTERPOL


Over 70
countries have agreed
processes,
have a
project in place to adopt
IPSASs,
align with
IPSASs or use IPSASs as a benchmark

World Bank: May 2009



IPSASB

Today… next year… 5 years on….


Adopted/Adopting

Switzerland, S Africa, Ghana,
Philippines, Armenia
, United Nations Systems +

We need to provide support


Benchmark


Canada, US, Australia, NZ,
UK

We must collaborate to encourage convergence


Leadership and Promotion


India, China


We need to promote to encourage adoption


World Bank: May 2009



IPSASB

Implementing IPSASs


Strong implementation of cash basis a solid first step
toward accrual accounting


Consider adopting cash basis and ensure that
institutional framework supports this standard


Plan adequately for transition to accruals


Realistic timelines


Help from experienced governments



World Bank: May 2009



IPSASB

Current IPSASB Strategic Themes


Public sector conceptual framework


Public sector specific projects


IFRS convergence


Promotion and communications

World Bank: May 2009



IPSASB

Public Sector Conceptual Framework (1)


Group 1 Consultation Paper (CP) June
2008


Objectives & users


Scope


Reporting entity


Qualitative characteristics

Preliminary analysis of 54 responses at May
2009 meeting



World Bank: May 2009

IPSASB

Public Sector Conceptual Framework (2)




Headline points:


Overall:

Positive support but in some cases
qualified
-
mostly over scope


Scope of financial reporting:

Disquiet over non
-
financial service information and prospective
information


Users:

Need for identification of priority group


Approach:

Too responsive to private sector
(typically Europe)/departs too readily from IASB
approach (typically Australasia)



World Bank: May 2009

IPSASB

Public Sector Conceptual Framework (3)


Phase 2
-
Elements

CP late 2009



Phase 3
-
Measurement
-

CP late 2009



Phase 4: Concepts underpinning Cash Basis
-
not yet started




World Bank: May 2009

IPSASB

Conceptual Framework: Elements (1)


Led by Canadian PSAB

Purpose


Identification and defining elements of General Purpose
Financial Statements

Key Issues


Is net assets/equity an element?


Asset and liability approach v revenue and expense
approach


Evaluation of comprehensive income approach


Holding of right to tax giving rise to asset?


Constructive obligations



World Bank: May 2009

IPSASB



World Bank: May 2009

Public Sector Specific Projects



Social
benefits

now being developed with
Conceptual Framework elements component


Long
-
term
fiscal
sustainability


Service concessions
-

grantor perspective


Narrative reporting and non
-
financial
performance reporting (service delivery and
accomplishments)
-
decision to be made
based on response from Conceptual
Framework

IPSASB

Long
-
Term Fiscal Sustainability (1)


Catalyst
-

lack of consensus on timing and extent of
liabilities re: social benefits


Fiscal sustainability a significant feature of public
reporting in many jurisdictions


View that financial reporting needs to include
prospective information
but

some reservations


Limited involvement of accountants


Task Force formed to develop proposals



World Bank: May 2009

IPSASB

Long
-
Term Fiscal Sustainability (2)


Distillation of complex and voluminous information


Ambiguity whether fiscal sustainability reports are general
purpose financial reports


US Financial Statements include:


Statement of Social Insurance incl. 75 year
projections for Medicare & Social Security


US FASAB propose:


Broader Statement of “Long
-
Term Fiscal
Projections of US Government”


Mandating a prospective financial statement may be
premature








World Bank: May 2009

IPSASB




IFRS Convergence (1)


Target date December 31, 2009 of IFRS @
December 31, 2008


Clear and publicly available guidelines on
departures from IFRS
-

Rules of the Road


Recently issued EDs



ED 36, “Agriculture”


ED 37, “Financial Instruments: Presentation”


ED 38,”Financial Instruments: Recognition and
Measurement”


ED 39, “Financial Instruments: Disclosure”



World Bank: May 2009

IPSASB

Financial Instruments: Approach


Retain core text of IAS 32, IAS 39 & IFRS 7


Public sector issues & modifications:


Financial guarantee contracts issued at nil or
nominal consideration not to be treated as insurance
contracts


Concessionary loans: expensing of difference
between transaction price and fair value


Financial guarantees at nil or nominal consideration:
should mathematical models be used where active
market not evident or default to IPSAS 19?


Additional disclosures for concessionary loans



World Bank: May 2009

IPSASB

IFRS Convergence (2)


Also issued:


ED 40, “Intangible Assets”


ED 41, “Entity Combinations from Exchange
Transactions”


Consultation concluded:


ED 35.”Borrowing Costs”


Renewed focus on relationship with IASB


Bi
-
annual member level meetings


More regular attendance at IPSASB meetings



World Bank: May 2009

IPSASB

Cash Basis Review (1)


Cash Basis IPSAS first issued in 2003


Structure


Part 1: Requirements


Part 2: Encouraged Additional Disclosures


Further disclosure requirements subsequently
added


Comparison of Budgets and Actuals (2006)


External Assistance (2007)





World Bank: May 2009

IPSASB

Cash Basis Review (2)


Format of Review


Task Force chaired by Deputy Chair and main
staff support former IPSASB Technical Director


Members include representatives from:


World Bank


IFAC DNC


OECD


ADB


IADB


IMF



World Bank: May 2009

IPSASB

Cash Basis Review (3)

Purpose is to identify:


Technical challenges in implementation requiring
modification


Additional reporting requirements


Encouraged disclosures that should become
mandatory

Approach :


Development of survey


Interviews with key Finance/Treasury Staff



World Bank: May 2009

IPSASB



World Bank: May 2009

Promotion Communication Outreach


Proactive
rather than reactive


More focused


Improvement of
leadership credentials


Widespread adoption is
ultimate
goal

Accra
,
Ghana in 2007


a highlight in outreach and an example
of what must be possible


a Seminar hosted by the Vice
President of Ghana and TV and Press coverage to the whole
of West Africa!

IPSASB

Partnership Working



World Bank and Development Banks


External
Assistance and Cash Basis Review


IMF


Fiscal Sustainability & Statistical
Convergence


OECD
-
Fiscal Sustainability & Statistical
Convergence


IFAC


DNC


Cash Basis Review


IASB


Service Concessions and
Conceptual
Framework


National Standard Setters
-

Conceptual
Framework





World Bank: May 2009

IPSASB

Translation


2007 Handbook translated into Spanish and French
version being finalized


IASC Foundation


QA Panels


French panel co
-
ordinated by former Chair


Spanish panel co
-
ordinated by former member


Costly process


E
-
News translated into Spanish and French in
-
house


Other translations in accordance with IFAC
translation policy





World Bank: May 2009

IPSASB

International Federation of Accountants

www.ifac.org


World Bank: May 2009