International Public Sector Accounting Standards Board IPSASB UPDATE

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International Public Sector Accounting Standards
Board (IPSASB)UPDATE
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IPSASB Members 2006

• Accounting Profession
• France (Chair), UK (Deputy Chair), Australia,
  Argentina, Canada, India, Israel, Japan,
  Malaysia, Mexico, New Zealand, Netherlands,
  Norway,
• South Africa, USAPublic Members
• Prof A Bergman (Switzerland), Prof S. Pozzoli
  (Italy),
• Mr J. Peace (USA)
• IPSASB Observers
• ADB, EU, IASB, IMF, INTOSAI, OECD,
• World Bank, UN, UNDP

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IPSASB Work Program

• 3 priority categories
• 1st Public sector specific issues (including
  cash and accrual basis issues)
• 2nd Continue convergence with IFRSs where
  appropriate
• 3rd Convergence with statistical bases where
  appropriate
• Current resource constraints limit progress on
  some aspects of the program.

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Pronouncements / Publications

• 21 accrual Standards (based on IASs issued as at
  August 97 where appropriate)
• Comprehensive Cash Basis IPSAS
• (ED 24 proposes an addition to cash requirements)
• Studies, Research Reports and Invitations to
  Comment (ITCs)
• See Attachment for IPSASs, EDs, Research Reports

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Exposure Drafts (ED) on Issue

• ED 24Cash Basis External Assistance-comments 15
  June 05
• ED 25 Amendment to the Preface to IPSASs (by 31
  Jan 06)
• ED 26 Improvements to IPSASs (by 31 Jan 06)
• ED 27 Presentation of Budget Information in
  Financial Statements (by 10 Feb 06)
• ED 28 Disclosure of Financial Information About
  the
• General Government Sector (by 10 Feb 06)
• ED 29 Revenue from Non Exchange Transactions
• (including Taxes and Transfers) (by 30 June
  06)
• Some details follow

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Papers for Issue - March

• Consultation Paper Accounting for Heritage
  Assets Under the Accrual Basis of Accounting
• - Input on UK-ASB paper from international
• community
• - Input to IPSASBs own project
• Occasional Paper - The Road to Accrual Accounting
  in the USA

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Available on the IPSASB Web Site

• All IPSASs
• (including Spanish and French translations)
• All current Exposure Drafts and ITCs
• IPSASB Update on most recent IPSASB meeting
• IPSASB meeting papers (before each meeting)
• FREE OF CHARGE AT WWW.IPSASB.ORG

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ED 24 Disclosure of External Assistance(Cash
Basis) (1st Priority Project)

• At request of OECD and Multilateral Development
  Banks to harmonize/reduce compliance costs
• Comment period closed June 05 - 30 responses
• Differing views-some ED 24 too onerous, others
  not
• Availability of information? - Donors need to
  provide
• Follow up with Consultative Group, OECD, and with
  donors in member countries re field
  test/additional input
• March 06 IPSASB consider strategy to progress
• - Consider mandatory and encouraged sections?

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ED 2526 Improvements to IPSASs (2nd Priority
Project)

• Issued in September 2005 for comment by Jan 31,
  06
• ED 25 - Black and grey letters to have equal
  authority
• ED 26 - Improve 11 IPSASs.
• See attachment for IPSASs included
• Based on improved IASs as at Dec 03
• Restructuring of IPSASs, remove some options
• Clarify hierarchy
• Clarify certain requirements

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ED 27 Presentation of budget information in Fin.
Statements (1st Priority Project)

• Applies to public sector entities required to
  make publicly available their approved budgets
• Applies for cash basis and accrual basis
• To discharge accountability/enhance transparency
• Disclose original and final budget by major class
• Disclose actual (on budget basis)
• Reconcile to key amounts in GPFS
• IPSASB start consider responses March 06

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ED 28 Disclosure of Fin. Info about the General
Government Sector (GGS) (3rd Priority Project)

• Applies to whole of government accrual basis
• Disclosure not required but Rules if elect to
  disclose - apply IPSASs except IAS 6
  Consolidation
• Support convergence with statistical basis
• Disaggregate Gov Consolidated Fin Statements
• GGS as defined in statistical reporting bases
• Reconcile GGS to the GPFS
• Does not require/preclude reconcilation to GFS
• IPSASB start consider responses March 06

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ED 29- Non Exchange Revenue (1st Priority Project)

• Deals with Taxes and Transfers including Gifts,
  Donations, and Fines
• Adopts an Assets and Liabilities approach
• Major issues
• - fair value for initial recognition of assets
  acquired in a non-exchange transaction
• - Conditions on transfers a liability?
• - Tax expenditure, expenses paid through tax
  system
• - reliable estimate of accrued tax revenue

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Work in progressSocial Policy Obligations (1st
Priority Project)

• Social policy obligations split project
• Develop ED social benefits other than pensions
  and similar benefits
• Develop ED on pensions and similar benefits
• Welfare pensions
• Contributory pensions
• Exploring liability is amount due and payable
• with additional disclosures of PV information
• Consider if issue both together in 06

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Other Active Projects (1st Priority Project)

• Service concession arrangements (public-private
  partnerships)
• Subcommittee monitor IFRIC developments)
• IPSASB Concerns with IFRIC
• Grantors not dealt with
• Limited range of arrangements within scope
• Notion of control encompasses regulatory control
• Explore joint project with National Standards
  Setters

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Other Active Projects (1st Priority Project)

• Applicability of IAS 19 to public sector - issue
  ED late 06
• Heritage Assets
• Conceptual framework for Public Sector
• consider IPSASB strategy - March
• subcommittee monitoring IASB project
• Impairment of cash generating assets (based on
  IAS 36)

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Work Program 2006

• Other projects to progress in 2006, subject to
  resources
• Review implementation of Cash Basis IPSAS
• Budget reporting prospective information
• Develop IPSASs based on IFRSs
• Performance reporting Stats basis IFRS
• Non-financial performance reporting
• Operations review

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IPSASB Funding and resources

• Ongoing Issues
• funding
• ensuring staff resources
• strengthening liaison with constituents
• ensuring input from preparers and users around
  the world
• communicating the message

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International Federation of Accountantswww.ifac.
org
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ATTACHMENT 1 IPSASB Due Process

• Exposure Drafts at least 4 months comment
• Open meetings, agenda materials on web
• Steering Committees (SC) ITCs for comment
• Project Advisory Panels (PAP) input to IPSASB
• Consultative Group (CG)
• Regional Seminars/round table discussions in
  conjunction with each IPSASB meeting

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ATTACHMENT 2 Accrual IPSASs

• ( Identifies IPSASs currently being improved)
• IPSAS 1, Presentation of Financial Statements
• IPSAS 2, Cash Flow Statements
• IPSAS 3, Net Surplus or Deficit for the Period,
  Fundamental Errors and Changes in
  Accounting Policies
• IPSAS 4, The Effects of Changes in Foreign
  Exchange Rates
• IPSAS 5, Borrowing Costs
• IPSAS 6, Consolidated Financial Statements and
  Accounting for Controlled Entities

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ATTACHMENT 2 Accrual IPSASs (cont.)

• IPSAS 7, Accounting for Investments in
  Associates
• IPSAS 8, Financial Reporting of Interests in
  Joint Ventures
• IPSAS 9, Revenue from Exchange Transactions
• IPSAS 10, Financial Reporting in
  Hyperinflationary Economies
• IPSAS 11, Construction Contracts
• IPSAS 12, Inventories

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ATTACHMENT 2 Accrual IPSASs (cont.)

• IPSAS 13, Leases
• IPSAS 14, Events After the Reporting Date
• IPSAS 15, Financial Instruments Disclosure
  and Presentation
• IPSAS 16, Investment Property
• IPSAS 17, Property, Plant and Equipment

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ATTACHMENT 2 Accrual IPSASs (cont.)

• IPSAS 18, Segment Reporting
• IPSAS 19, Provisions, Contingent Liabilities
  and Contingent Assets
• IPSAS 20, Related Party Disclosures
• IPSAS 21, Impairment of Non-cash-generating
  Assets

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ATTACHMENT 2 (cont.) Recent Research
Reports/Consultation Papers

• Budget Reporting (May 04)
• Comparison between GPFS and GFS/SNA (January 05)
• Heritage Assets under the Accrual Basis of
  Accounting (March 06)
• The Road to Accrual Accounting in the United
  States of America (March 06)