Transcript Strategy Presentation

IFAC Public Sector Committee
International Public Sector Accounting
Standards (IPSASs)
Presented by
Ronald J. Points
March 2003
PSC Members and
Observers

IFAC-156 member bodies, 114 countries

PSC Members
Australia (Chair), Argentina, Canada, France,
Germany, Hong Kong, Mexico, The
Netherlands, New Zealand, Norway, South
Africa, UK, USA

PSC Observers
ADB, European Commission, IASB, IMF,
INTOSAI, OECD, World Bank, UNDP
Standards Development
Program

Stds Program Established late 1996
 Funded ADB, IFAC, IMF, UNDP, World
Bank
 Completing first stage
 Commencing second stage
Need for Public Sector
Accounting Standards
(IPSAS)

Concern about quality/variability of
governmental financial reporting
– Lack of transparency/completeness
– Not timely
Need for IPSASs

Necessary element in strengthening the
governance framework and enhancing
transparency
 Set appropriate minimum benchmarks :
- for discharge of accountability, transparency

Provide framework against which audit
is undertaken
Standards Project - Approach

Underlying philosophy:
– Promote adoption of an accrual basis
– Acknowledge wide use of cash basis and
develop a Cash Basis Standard
– Guidance on transition to accrual basis
– Adopt a “Due Process”
– Involve the fin. Reporting, budget, GFS/ESA
community
(at least 4 months exposure for comment)
First Stage – Progress to
date
Objectives of First Stage
 Cash basis standard
 Guidance on transition to accrual
accounting
 Core set of accrual standards based on
IASs where appropriate
 Identify public sector specific issues for
consideration in later stages
Cash Basis – Progress to
date

ED 9 Financial Reporting under Cash Basis
(comments closed Nov 2000 – 41 responses)

Additional consultation by developing economies
(30 countries circulated)
 PSC revised structure/content
– Reduced requirements plus encouragements
– St. Receipts/Payments
– Report third party cash settlements
– More flexibility in reporting format
 IPSAS approved for issue (by end January 2003)
CONSOLIDATED STATEMENT OF CASH RECEIPTS AND PAYMENTS FOR
YEAR ENDED 31 DECEMBER 200X
200X
(In thousands of currency units)
Receipts/
(Payments)
Controlled
by entity
Payments by
third parties
RECEIPTS
Taxation
Income tax
Value-added tax
Property tax
Other taxes
-
X
X
X
X
-
X
Grants and Aid
International agencies
Other Grants and Aid
X
X
X
X
X
X
Borrowings
Proceeds from borrowings
X
X
Capital Receipts
Proceeds from disposal of plant & equipment
X
-
Training activities
Receipts from trading activities
X
-
X
X
Total receipts
CONSOLIDATED STATEMENT OF CASH RECEIPTS AND PAYMENTS FOR
YEAR ENDED 31 DECEMBER 200X
200X
(In thousands of currency units)
PAYMENTS
Operations
Wages, salaries and employee benefits
Supplies and consumables
Receipts/
(Payments)
Controlled
by entity
(X)
(X)
Payments by
third parties
(X)
(X)
(X)
Transfers
Grants
Other transfer payments
Capital Expenditures
Purchase/construction of plant & equipment
Purchase of financial instruments
(X)
(X)
(X)
-
(X)
(X)
(X)
(X)
-
(X)
Loan and Interest Repayments
Repayment of borrowings
Interest payments
(X)
(X)
-
(X)
(X)
-
Total payments
(X)
(X)
Increase/(Decrease) in Cash
X
(X)
(X)
X
Cash at beginning of year
Increase/(Decrease) in Cash
Cash at end of year
X
X
Other payments
X
N/A
N/A
N/A
Transitional Guidance

Study 14 “Transition To Accrual Basis of
Accounting. Guidance for Governments and
Government Entities”
– A Study (not-authoritative)
– Provides guidance on issues and approaches that might be
adopted in migration to accrual
– Based on experiences in number of countries
– Intend to update periodically
Released April 2002
Accrual - Progress to Date

Study 11 – Governmental Financial
Reporting
Accrual Basis IPSASs:
 20 IPSASs issued
– identified in attachment at end of slides
IPSASs and Exposure
Drafts

All IPSASs
 All current Exposure Drafts
 PSC Update - on most recent PSC
meeting
 Key PSC meeting papers
AVAILABLE FREE OF CHARGE AT:
WWW.IFAC.ORG
Process – Developments 2002+

Consultative Groups (CG)

Regional Workshops in conjunction with each
PSC meeting
 Translations – IASB Process for French,
Spanish,
– National Bodies for others

Steering Committees (SC)
 Project Advisory Panels (PAP)
PSC Work Program 2003+
Public Sector Specific Issues identified in first
stage

Steering Committees
– Non-exchange Revenue
– Social Policy Obligations
– Budget Reporting (2003)

Accounting for Development Assistance (cash
basis)

Impairment of government assets
PSC Work Program 2003+

GFS/ESA 95 and IPSAS Harmonization

Heritage Assets

Monitor IAASB - ongoing

Care and Maintenance of IPSASs

Monitor national developments on Public
Sector Conceptual Framework
Non-Exchange Revenue SC

Project developing an IPSAS to account for
revenues excluded from scope of IPSAS 9
– Taxes, Grants, Transfers …

SC met in June and Nov 2002
 Members from: Canada, Australia, China,
Czech Republic, FEE, France, New Zealand,
Sweden, South Africa, UK, USA
Social Policy Obligations
SC

Developing an IPSAS on accounting for
provisions relating to obligations for
social policy obligations: e.g. pensions,
health care, education
 SC met in in July and Nov 2002
 Members from: New Zealand, Australia,
Canada, China, FEE, IMF, Pakistan,
Sweden, UK
Budget Reporting Project
Directed at enhancing budget reporting in the
public sector
 Stage 1: Research paper identifying
– best practice in budget reporting
– relationship with PSC mandate

Steering Committee to be established in
2003, chaired by PSC Member from USA
ATTACHMENT
Cash Basis IPSAS
Cash Basis IPSAS Financial Reporting under the
Cash Basis of Accounting
 Approved for issue (end January 2003)
 Comprehensive Cash Basis IPSAS
 Includes requirements and encouragements
Transition from Cash to Accrual
Study 14 Transition to Accrual Basis of Accounting
 Issued in April 2002
 to provide guidance
ATTACHMENT
Accrual Basis IPSASs Issued
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
ATTACHMENT
Accrual IPSAS (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
IPSAS 13 Leases
ATTACHMENT
Accrual IPSASs (cont.)
IPSAS 14 Events After the Reporting Date
IPSAS 15 Financial Instruments: Disclosure and
Presentation
IPSAS 16 Investment Property
IPSAS 17 Property, Plant and Equipment
IPSAS 18 Segment Reporting
IPSAS 19 Provisions, Contingent Liabilities and
Contingent Assets
IPSAS 20 Related Party Disclosures