MAJOR DIFFERENCE BETWEEN
IPSAS & IFRS
Revenue
Public sector entities may derive revenues from exchange or nonexchange transactions.
IPSAS 23 on revenue from non-exchange transactions serves to
accommodate transactions in which public sector entities receive
taxes and transfers (cash or non-cash) without directly giving
approximately equal value in exchange, or giving value to another
entity without directly receiving approximately equal value in
exchange.
MAJOR DIFFERENCE BETWEEN
IPSAS & IFRS
Revenue
Exchange transactions, on the other hand, are transactions in which
one entity receives assets or services, or has liabilities
extinguished, and directly gives approximately equal value
(primarily in the form of cash, goods, services, or use of assets) to
another entity in exchange (see IPSAS 9).
For public sector entities the distinction between nonexchange and
exchange transactions is often necessitated as these entities will
often have a combination of both types of revenue transactions.
MAJOR DIFFERENCE BETWEEN
IPSAS & IFRS
Revenue
IPSAS 23 calls for public sector entities to analyse the inflow of
resources and states that the entity can recognize an asset arising
from a non-exchange transaction when it gains control of
resources that meet the definition of an asset and satisfy the
recognition criteria.
IPSAS & IFRS
Presentation of budget information in financial statements
IPSAS 24 on the presentation of budget information in financial
statements requires a comparison between the budgeted amount
MAJOR DIFFERENCE BETWEEN
and the actual amounts arising from execution of the budget to
be included in the financial statements of public sector entities
which are required to, or choose to, make publicly available the
approved budget for which they are held publicly accountable.
IPSAS & IFRS
Presentation of budget information in financial statements
IPSAS 24 requires that public sector entities reporting under IPSAS
disclose an explanation of any material differences between the
budget and actual amounts. Applying IPSAS 24 shall strengthen
transparency and comparability between budget and actual
amounts as reporting in the financial statements.
MAJOR DIFFERENCE BETWEEN
IPSAS & IFRS
Disclosure of financial information
IPSAS 22 on the disclosure of financial information about the general
government sector establishes requirements for preparing and
presenting information about the general government sector (GGS).
The standard is only applied to a government’s consolidated financial
statements.
Information disclosed in accordance with this standard disaggregates
those consolidated financial statements according to the GGS
boundaries as specified in statistical bases of financial reporting. The
standard does not permit reporting entities to consolidate information
about entities that are not subject to common control
MAJOR DIFFERENCE BETWEEN
IPSAS & IFRS
Income taxes.
Public sector entities are assumed to be generally exempt from
income taxes; thus, International
Accounting Standards (IAS)12 ,In comeT axes, hasn o equivalent in
IPSAS. However, the latter provides that if the public sector entity
is liable for tax (which is considered an unlikely event), the entity
can refer to the guidance in IAS 12 in accounting for the tax.
IPSAS & IFRS
Control
MAJOR DIFFERENCE BETWEEN
IFRS 10, Consolidated Financial Statements; IFRS 11, Joint
Arrangements; and IFRS 12, Disclosures of Interests in Other Entities,
took effect in 2013. However, IPSAS is still based on the previous
standards of IAS 27, Consolidated and Separate Financial Statements;
IAS 28, Investments in Associates;a ndI AS 31,In terestin Joint
Ventures. The definition of control under IFRS 10 is very different from
the one in IAS 27; thus, the manner of determining control may be
different for a profitoriented entity applying IFRS from that of a public
sector entity applying IPSAS.
IPSAS & IFRS
Service Potential as a recognition criterion is another point of
difference between IFRS and IPSAS. This concept is not referred to
in the IFRS, which considers “economic benefit” as a major
MAJOR DIFFERENCE BETWEEN
recognition criterion. The service potential concept is
incorporated in the definition of the public sector entity’s assets,
liabilities, income and expenses and is an indicator of an asset’s
capacity to provide goods and services to the public, in
accordance with the entity’s mandate.
IPSAS & IFRS
Impairment of non-cash-generating assets
The accounting for impairment of non-cashgenerating assets under
IPSAS is also different as there are no equivalent transactions
under IFRS.
MAJOR DIFFERENCE BETWEEN
IPSAS also caters for both impairment of cash and non-cash
generating assets. IFRS assumes that all assets will be cashgenerating.
IPSAS, on the other hand, assumes that the majority of a public
sector entity’s assets can be non-cash generating. IPSAS 21
Impairment of Non-cashgenerating Assets provides specific
guidance on how to determine the value-in-use of such assets.
IPSAS & IFRS
Share-based payments
IPSAS eliminated the concepts that are considered peculiar in the
private sector, such as accounting for share-based payments and
the requirement to disclose earnings per share. In cases that such
MAJOR DIFFERENCE BETWEEN
concepts are applicable to the public sector entities, these entities
should refer to the relevant IFRS