International Public Sector Accounting Standards Board IPSASB Technical Program Update

1
International Public Sector Accounting Standards
Board (IPSASB) Technical Program Update
World Congress of Accountants Istanbul, Turkey,
November 2006 Philippe Adhémar IPSASB Chair
2
Presentation Overview

• Background
• Current Status of IPSAS Program
• Likely Future Developments
• Update on recent IPSASB meeting (Nov 06)

3
IPSASB - Established November 2004

• IPSASB established as a Board of IFAC in Nov.
  2004 (previously Public Sector Committee
  established in 1986)
• IPSASB mandate
• Issue IPSASs in own right to
• enhance accountability, transparency and
  relevance of financial reporting
• Provide resource for national bodies to use
• Promote adoption/convergence to IPSASs
• Issue other documents to provide guidance on
  issues

4
IPSASB Members 2006

• Accounting Profession (15 members)
• France (Chair), UK (Deputy Chair), Australia,
  Argentina, Canada, India, Israel, Japan,
  Malaysia, Mexico, New Zealand, Netherlands,
  Norway,
• South Africa, USA
• Public Members (3 members)
• From Switzerland, Italy, USA
• IPSASB Observers
• ADB, EU, IASB, IMF, INTOSAI, OECD,
• UN, UNDP, World Bank

5
IPSASB Current Work Program

• Standards Program established late 1996 by PSC
• Primary focus on accrual basis, but also
  develop/support Cash Basis IPSAS
• Current Program has 3 priority categories
• 1st Public sector specific issues
• 2nd Convergence with IFRSs where appropriate
• 3rd Convergence with statistical bases where
  appropriate
• Progress on priorities subject to resource
  constraints

6
IPSASB Transparent Due Process

• Consultative documents - for comment
• Exposure drafts at least 4 months for comment
• Meetings in public, agenda materials on web
• Steering Committees and Task Forces
• Project Advisory Panels (PAP) input to IPSASB
• Consultative Group (CG)
• Regional Seminars/round table discussions in
  conjunction with each IPSASB meeting

7
Current Status of ProgramPronouncements
/Publications on Issue

• 21 accrual IPSASs
• IPSAS 22 on Disclosure of Fin. Information about
  the General Government Sector (GGS) - approved
  for issue
• Comprehensive Cash Basis IPSAS
• A number of Exposure Drafts, Studies, Research
  Reports, Invitations to Comment, etc on issue

8
Recent Exposure Drafts (ED)

• ED 24 Cash BasisDisclosures about External
  Assistance Received - revised ED approved
• ED 25 Amendment to the Preface to IPSASs -
  approved
• ED 26 Improvements to IPSASs - in process
• ED 27 Presentation of Budget Information in
  Financial Statements-
  anticipate approval Nov. 2006
• ED 28 Disclosure of Financial Information About
  the
• General Government Sector - IPSAS approved
• ED 29 Revenue from Non Exchange Transactions
• (including Taxes and Transfers)consider
  responses Nov 06

9
Other Recent Publications

• Accounting for Heritage Assets Under the Accrual
  Basis of Accounting (Issued February 2006)
• consider responses Nov 06
• Occasional Paper The Road to Accrual
• Accounting in the USA (Issued March 2006)
• Research Report on IPSASs and statistical bases
• of financial reporting (Issued January 2005)
• Research Report Budget Reporting (Issued May
  2004)

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Available on the IPSASB Web Site

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

11
Update on status of key EDs and Projects

• Given time available focus on only key projects
  and some major developments
• Status of all IPSASB projects available from the
  IPSASB website (WWW.IPSASB.ORG)
• See IPSASB Updates
• See IPSASB meeting minutes

12
ED 24 Disclosure of External Assistance(Cash
Basis)

• Actioned at request of OECD and Multilateral
  Development Banks
• Comment period closed June 05 - 30 responses
• Differing views - many concerned ED 24 too
  onerous
• Will donors provide information necessary
• IPSASB followed up with Consultative Group, OECD,
  and with donors re field test/additional input
• Revised ED approved for issue in final quarter
  2006
• Includes required and encouraged disclosures
• ED will be field tested during exposure period

13
ED 25 26 Improvements to IPSASs (accrual
basis)

• ED 25 black and grey letters have equal
  authority - approved and IPSASB will implement
  progressively
• ED 26 - improve 11 accrual IPSASs (see
  attachment)
• Based on improved IFRSs as at Dec 03, includes
• Restructuring of IPSASs, remove some options
• Elevate hierarchy of guidance
• Clarify certain requirements
• Approved IPSAS 1, 3, 4
• Anticipate approve remainder in Nov 06

14
ED 27 Presentation of budget information in Fin.
Statements (Cash and Accrual Basis)

• IPSAS in progress - for approval at Nov. 06
  meeting
• Applies to public sector entities which make
  publicly available their approved budgets
• To discharge accountability/enhance transparency
• Disclose original and final budget by major class
• Disclose actual/execution (on budget basis)
• Reconcile to key amounts in Fin. St.
• Explain budget basis, period, scope

15
ED 29 Revenue from Non-Exchange Transactions
(accrual basis)

• Comments period ended June 30 2006
• Deals with Taxes, and Transfers including Gifts,
  Donations, and Fines on accrual basis
• Adopts an assets and liabilities approach
• Meeting Nov. 06 Consider responses and draft
  IPSAS
• Major Issues likely to be
• Conditions on transfers a liability?
• Tax expenditure and expenses paid through tax
  system
• Reliable estimate of accrued tax revenue

16
Social Policy Obligations (accrual basis)

• WIP ED under development
• Meeting Nov. 06 Consider draft ED
• Draft ED deal with social security pensions and
  other social benefits (monetary benefits and
  goods and services). Will propose
• Liability when satisfy eligibility criteria
• Amount of liability is accrued amount of next
  payment, unless legislation/regulation specifies
  otherwise

17
Other Projects in Process

• Currently approved for issue in final quarter
  2006
• ED 30 Impairment of Cash Generating Assets
• ED 31 Employee Entitlements
• (These EDs based on IFRSs where appropriate for
  public sector)
• Consider comments on Consultation Paper Nov 2006
• Heritage assets
• Agreed for action in 2007
• Review of implementation issues re Cash Basis
  IPSAS

18
Significant Developments

• Additions to the work program for action late
  2006 as collaborative projects with national
  standards setters and similar organizations
• Conceptual Framework for Public Sector
• Public-Private Partnerships (Service concession
  arrangements)

19
IPSASB Longer Term Strategy

• IPSASB reviewing its longer term strategy
• IPSASB discussions to continue but future
  priorities
• Conceptual Framework
• Other public sector specific projects, including
  convergence with statistical basis if appropriate
  
• IFRS convergence
• Other activities - promotions/communications

20
IPSASB Funding and resources

• Funding developments
• Canadian government support
• Other funders - update
• Staff resources update
• relocation of IPSASB to Toronto
• IPSAS adoption
• UN, OECD, NATO, EC, IFAC, INTERPOL
• A number of countries in process
• (see update on IPSASB website)

21
International Federation of Accountantswww.ifac.
org
22
Attachment IPSASs included in ED 26
improvements

• IPSAS 1, Presentation of Financial 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 6, Consolidated Financial Statements and
  Accounting for Controlled Entities
• IPSAS 7,Accounting for Investments in
  Associates
• IPSAS 8,Financial Reporting of Interests in
  Joint Ventures
• IPSAS 12,Inventories
• IPSAS 13,Leases
• IPSAS 14,Events After the Reporting Date
• IPSAS 16, Investment Property
• IPSAS 17, Property, Plant and Equipment