Transcript INTERNATIONAL FEDERATION OF ACCOUNTANTS

IPSASB
Financial Management Institute Public Sector
Management Workshop
International Federation of Accountants
International Public Sector Accounting
Standards Board (IPSASB)
Stuart Barr (Technical Advisor to Sheila Fraser –
INTOSAI)
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IPSASB
Overview of Session
• Introduce IFAC and IPSASB
• Discuss IPSASB’s mission and strategic themes
• Provide an overview of various projects under way
and planned
• Q&A
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IFAC
IPSASB
What is IFAC?
• Expanding organization – currently, 157 member bodies
and associates in 123 countries
• Represents over 2.5 million accountants in public practice,
education, government service, industry and commerce
• Sets standards for auditing & assurance, ethics, education
and public sector accounting
• Also issues guidance to support professional accountants in
business, small and medium practices, and developing
nations
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IPSASB
What is IPSASB?
• Standing IFAC Board
• Consists of 18 volunteer Members from around the world,
including two from Canada:
– 15 Members nominated through IFAC member bodies and 3
members serve as public members
– Experience and expertise in public sector financial reporting
– Ministries of finance, government audit institutions, public practice
and public members – but, they serve as individuals not as
representatives of their organization
• Issues and promotes benchmark guidance and facilitates the
exchange of information among its constituents
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IPSASB
Who is IPSASB? 2009 Membership
ChairW:
Mike Hathorn, Partner Moore Stephens, UK
Anne Owuor, Kenya Power & Lighting Co. Ltd
Deputy Chair:
Bharti Prasad, Deputy Comptroller and Auditor
Erna Swart, CEO, Accounting Standards Board, General, Delhi, India
South Africa
Ron Salole, Vice-President, Standards,
Canadian Institute of Chartered Accountants
Members:
Tadashi Sekikawa, Deloitte Touche Tohmatsu,
Peter Batten, Assistant Director, Treasury &
Japan
Finance, Victoria, Australia
David Bean, Director of Research and Technical Frans van Schaik, Deloitte Touche Tohmatsu,
The Netherlands
Accounting, GASB, USA
Ken Warren, The Treasury, New Zealand
Marie-Pierre Cordier, Cours des Comptes,
France
Public Members:
Yossi Izkovich, Chief Accountant, Ministry of Prof. Andreas Bergmann, Zurich University of
Finance, Israel
Applied Sciences, Switzerland
Dr. Hong Lou, Deputy Director-General,
Sheila Fraser, Auditor General, Government of
Treasury Dept., Ministry of Finance, Peoples
Canada
Republic of China
Prof. Stefano Pozzoli, Italy
Thomas Müller-Marqués Berger, Ernst &
Young, Germany
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IPSASB
How the IPSASB Works
• Generally holds 3 meetings per year
• Meetings are open to the public
• Transparent due process – available on IPSASB web
site at www.ifac.org/PublicSector :
– All meeting materials are publicly available
– Approved minutes are posted
– Project summaries are updated after each meeting
– Rules of the road for convergence projects
http://web.ifac.org/download/IPSASB_Process_Final_version_Oct_08.pdf
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IPSASB
Rules of the Road for Convergence Projects
IFRS
(Private Sector)
• Terminology
• Public sector guidance
•
1
Public sector issues
• Public sector examples
IPSASs
(Public
sector)
2
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IPSASB
Strategic Partnerships
The IPSASB receives assistance from various of its
constituents in developing its standards:
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Supported by Canadian, US and Swiss governments
United Nations – major adopter
IFAC – Developing Nations Committee
IASB
IMF
INTOSAI
National Standard Setters, including the CICA – provide
staff support
• World Bank and Development Banks (IADB, ADB)
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IPSASB
Keep up to date on IPSASB projects
•
IPSASB Project Pages – all IPSASB projects
http://www.ifac.org/PublicSector/
•
IFAC eNews – Free electronic newsletter
– Enroll at www.ifac.org
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IPSASB
The IFAC IPSASB Mission
To serve the public interest by developing
high quality accounting standards for use by
public sector entities around the world,
including international organisations, in the
preparation of general purpose financial
statements.
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IPSASB
What the IFAC IPSASB Does
The IPSASB achieves its objectives by:
• Issuing International Public Sector Accounting
Standards (IPSASs)
• Publishing other documents which provide guidance
on issues and experiences in financial reporting in
the public sector
• Promoting their acceptance and the international
convergence to these standards
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IPSASB
IPSASB Publications
• 26 IPSASs for accrual-basis financial statements
– Including French and Spanish translations
• Cash Basis IPSAS
• 6 Exposure Drafts (EDs) for comment
• 1 ED approved at May 2009 meeting (Annual
Improvements to IPSASs)
• 14 Studies
Downloadable free of charge at:
http://www.ifac.org/Store/Category.tmpl?Category=Public%20Sector%20
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Accounting
IPSASB
What are the IPSASs?
• The IPSASs represent international best practice in
financial reporting by public sector entities
• In many jurisdictions, the application of the requirements of
IPSASs will enhance the accountability and transparency of
the financial reports prepared by governments and their
agencies
• High-quality financial reporting and financial management
by international organizations and governments worldwide
is vital to economic growth and stability for both developed
and developing countries - this is particularly important
now because of the global economic crisis
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IPSASB
Public Sector Studies
• 14 studies issued to date
• Most recent – Transition to the Accrual Basis of
Accounting: Guidance for Governments and
Government Entities
– This Study is intended to assist governments and
government entities wishing to migrate to the accrual
basis of accounting in accordance with IPSASs
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IPSASB
Strong Evidence of Progress
• Adoption of IPSASs to date:
– UN System (28 bodies), including UN World Food
Program
– OECD, NATO (21 bodies), EC, IFAC, INTERPOL
– Swiss Government
– Government of Israel
– Government of South Africa
– Over 70 countries have agreed processes or have a
project in place to adopt IPSASs or align with IPSASs
– BRIC countries committed to adopt
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IPSASB
IPSASB Strategic Themes
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Public sector conceptual framework
IFRS Convergence
Public sector specific projects
Promotion, communications and outreach
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IPSASB
Public Sector Conceptual Framework
• Series of interrelated papers
• Phase 1 Consultation Paper (CP) issued Sept 2008 that addressed:
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scope of the financial statements
objectives & users of general purpose financial statements
reporting entity
qualitative characteristics of financial information
• Phase 2 CP to address:
– definition & recognition of elements of financial assets (e.g., assets,
liabilities, revenues and expenses)
• Phase 3 CP to address the measurement bases consistent with the
objectives of financial reporting, the qualitative characteristics of
financial information and the recognition criteria
• In May 2009, the IPSASB discussed the responses to CP1 as well as
preliminary drafts of CP2 and CP3
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IPSASB
Conceptual Framework (cont’d)
• This is not a convergence project
– The IPSASB is not bound by the timetable and principles in the
IASB project
• The conceptual framework will help answer
questions such as:
– Is the recent North American intervention to save GM an
investment of the governments?
– Is it a public sector entity because of public ownership?
– Is it something else?
– If it belongs on the relevant governments’ books on what basis and
at what amount should it be measured?
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IPSASB
IFRS Convergence
• Target date December 31, 2009 for IFRS as
at December 31, 2008
• Major projects to be completed:
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Financial instruments
Intangible assets
Entity combinations
Agriculture
• Renewed focus on regular liaison with IASB
(Chair, Vice-Chair, Public Member)
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IPSASB
IFRS Convergence EDs Approved
• Four Exposure Drafts (EDs) were approved at
IPSASB’s February 2009 meeting:
– ED 36 – Agriculture (IAS 41)
– ED 37 – Financial Instruments: Presentation (IAS
32)
– ED 38 – Financial Instruments: Recognition and
Measurement (IAS 39)
– ED 39 – Financial Instruments: Disclosures (IFRS
7)
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IPSASB
IFRS Convergence EDs Approved
(cont’d)
• Two EDs were approved out-of-session and issued
in May:
– ED 40 – Intangible Assets (IAS 38)
– ED 41 – Entity Combinations from Exchange
Transactions (IFRS 3)
All the EDs are available at:
http://www.ifac.org/PublicSector/ExposureDrafts.php
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IPSASB
Financial Instruments
• The IPSASB’s quick response in converging these
standards recognizes the important public sector role in
addressing the global economic crisis
• Convergence with IFRS 7, IAS 32 and IAS 39
– Changes made only to address specific public sector issues (e.g., in
ED 39, additional disclosures proposed for concessionary loans)
• The IPSASB has just issued a press release indicating it
will proceed with developing these standards – any changes
made by the IASB will be addressed in due course
• ED response date: July 31, 2009
• Staff contact: [email protected]
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IPSASB
Agriculture
• IAS 41 convergence
– Minor changes in terminology
– Inclusion of non-exchange transactions
– Scope excludes biological assets held for the
supply of services
• ED response date: June 30, 2009
• Staff contact: [email protected]
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IPSASB
Intangible Assets
• IAS 38 convergence
– Incorporates SIC-32 guidance for web site costs
– Does not address powers to grant rights and to
tax
• ED response date: August 15, 2009
• Staff contact: [email protected]
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IPSASB
Entity Combinations
• Two projects
• Entity Combinations from Exchange Transactions
– IFRS 3 Convergence
– ED response date: August 15, 2009
• Entity Combinations from Non-Exchange
Transactions
– Public sector specific project (e.g., recent government
interventions)
– Work is under way
• Staff contact: [email protected]
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IPSASB
Public Sector Specific Projects
• Long-term fiscal sustainability
• Review of cash basis standard
• Service concession arrangements (SCAs)
• Social benefits
• Heritage assets
See IPSASB project pages for additional details and
contact information
http://www.ifac.org/PublicSector/Projects.php#InProgress
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IPSASB
Long-term Fiscal Sustainability
• Increased importance in light of public sector
interventions to respond to the global economic
crisis
• The IPSASB discussed a draft Consultation Paper
(CP) at its May 18-21, 2009 meeting
• Project will consider issues including:
– Defining what is meant by “fiscal sustainability”
– Explaining why it is important
– Exploring how it can be reported in GPRS, including what
indicators should be reported
• Staff contact: [email protected]
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IPSASB
Review of Cash Basis IPSAS
• Primary objective is to identify the major technical
issues that public sector entities in developing
economies have encountered, or are anticipated to
encounter, in implementing the standard
– The IPSASB will then consider whether to modify the Standard in
light of these difficulties and/or whether to provide further
guidance on its application
• The review will also identify whether additional
reporting requirements should be added to the
standard
• Staff contact: [email protected]
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IPSASB
Service Concession Arrangements
• CP issued in March 2008
• Respondents expressed broad support for the proposed
views in the CP
– Although it uses a control-based approach as IFRIC 12 to determine if the
grantor should recognize an asset, it is not a convergence project
• Work is under way to develop an ED that will:
– Define an SCA
– Determine when to report the property as an asset using a control-based
approach
– Provide accounting and reporting guidance and examples in a variety of
scenarios, including when the control criteria are not met
– Give guidance on accounting for and reporting guarantees, contingent
liabilities and contingent assets related to SCAs
• Staff contact: [email protected]
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IPSASB
Promoting Acceptance of the IPSASs
• Members and staff are involved in ongoing and
extensive promotion, communications and
outreach activities both within their own
jurisdictions and internationally to promote the
IPSASs
• Widespread adoption is our ultimate goal
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IPSASB
Looking Ahead
• Completion of convergence initiative and
completion of the conceptual framework will allow
increased focus on public sector issues
– Improve consistency, transparency and
accountability in financial reporting among
public sector entities
– Improve harmonization between statistical and
accrual bases of accounting
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IPSASB
Key Challenges for IPSASB
• Meeting target for IFRS Convergence
• Growing demand for standards in light of the
global financial crisis
• Credibility of IPSASB – Board/staff
• Completion of Conceptual Framework
• Continuing relevance to public sector
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IPSASB
International Federation of Accountants
www.ifac.org
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