A HIGHLIGHT OF THE DIFFERENCES
Scope
IPSAS
IPSAS applies to
 International organizations
 Public sectors
 National government
 Local government
 Other government agencies and
commissions
IFRS
IFRS applies to
 Government Business Entities
 Private sectors
Basis of Accounting
IPSAS
IPSAS allows
 Accrual Basis; or
 Cash Basis
IFRS
IFRS strictly uses
 Accrual basis
Financial Statement
Presentation
IPSAS 1
 A complete set of financial
statements comprises:
IAS 1
 A complete set of financial
statements comprises:
 Statement of financial position;
 Statement of financial position;
 Statement of financial performance;
 Income statement
 Statement of changes in net assets;
 Statement of changes in equity;
 Cash flow statement;
 Cash flow statement;
 A comparison of budget and accrual
 Statement of comprehensive
amounts;
 Notes to FS
income;
 Notes to FS
 Does not prohibit the use of extraordinary items
 Prohibits the use of extra-ordinary
items
Cash Flow Statement
IPSAS 2
IAS 7
 Changes in cash and cash
 Changes in cash and cash
equivalents are classified into
operating, investing and
financing activities.
 Operating activities can be
presented using either direct
or indirect method.
 If direct method is used,
IPSAS encourages entities to
disclose a reconciliation of
Surplus/Deficit and Cash
flows from operations
equivalents are classified
into operating, investing and
financing activities.
 Operating activities can be
presented using either direct
or indirect method.
Accounting Policies, Estimates
and Errors
IPSAS 3
IAS 8
 Changes in accounting
 Changes in accounting
estimates are treated currently
and prospectively
 Changes in accounting policy
are accounted for
retrospectively
 Correction of errors are
accounted for retrospectively
 Retrospective application
requires adjustment of
Accumulated Surplus/Deficit
estimates are treated
currently and prospectively
 Changes in accounting policy
are accounted for
retrospectively
 Correction of errors are
accounted for retrospectively
 Retrospective application
requires adjustment of
Retained Earnings
Effects of Changes in Foreign
Exchange Rates
IPSAS 4
IAS 21
 Foreign currency gains and
 Foreign currency gains and
losses are recognized in
surplus/deficit.
 Foreign currency translation
adjustments are recognized as
a separate component of net
assets.
losses are recognized in profit
or loss.
 Foreign currency translation
adjustments are recognized
as part of other
comprehensive income.
Borrowing costs
IPSAS 5
Two accounting treatments are
allowed:
 Expense model (benchmark
treatment); and
 Capitalization model
(alternative treatment)
IAS 23
 Borrowing costs are recognized
as expense when incurred.
 Borrowing costs related to a
qualifying asset shall be
included as part of the cost of
the asset.
Separate and Consolidated
Financial Statements
IPSAS 6
IAS 27 and IFRS 10
 Allows entities to use the
 Requires investment in
equity method to account for
controlled entities in the
separate financial statements
of controlling entities.
 Requires controlling entities
to disclose a list of significant
controlled entities in
consolidated financial
statements.
subsidiary to be accounted
for using the cost method in
the separate financial
statements.
 IAS 27 does not require this
disclosure.
Investment in Associates/ Joint
Venture
IPSAS 7 and 8
IFRS 11
 Investments in associates are
 Investments in associates are
accounted for using the
equity method.
 Investments in joint ventures
are accounted for using:
accounted for using the
equity method.
 Investments in joint ventures
are accounted for using
equity method
 Equity method; or
 Proportionate consolidation.
Revenue
IPSAS 9
IAS 18
 Title- Revenue from
 Title- Revenue
Exchange Transactions
 Revenue includes those that
arise from ordinary activities
and gains.
 Revenue is limited only to
those that arise from ordinary
activities.
Construction Contracts
IPSAS 11
 IPSAS 11 makes it clear that the
requirement to recognize an
expected deficit on a contract
immediately it becomes
probable that contract costs
will exceed total contract
revenues applies only to
contracts in which it is
intended at inception of the
contract that contract costs are
to be fully recovered from the
parties to that contract.
IAS 11
 Recognize loss immediately
when the total estimated cost
exceeds the total revenue from
the contract.
Inventory
IPSAS 12
IAS 2
 Inventories are required to be
 Inventories are required to be
measured at the lower of cost
and net realizable value.
 Inventories are required to be
measured at the lower of cost
and current replacement cost
where they are held for:
measured at the lower of cost
and net realizable value.
 Distribution at no charge; or
 Consumption in the production
process of goods to be
distributed at no charge
Leases
IPSAS 13
IAS 17
 Leases are classified into:
 Operating Lease; or
 Finance Lease
 Income or expense related to
 Leases are classified into:
 Operating Lease; or
 Finance Lease
 Income or expense related to
operating lease is recognized
on a straight line basis over
the lease term
operating lease is recognized
on a straight line basis over
the lease term
 Exposure draft on Leases is
expected to change the
accounting for leases.
Events after Reporting Date
IPSAS 14
IAS 10
 Events after the reporting
 Events after the reporting
date are classified into
date are classified into
 Adjusting event; and
 Adjusting event; and
 Non-adjusting event
 Non-adjusting event
 IPSAS 14 notes that where the
going concern assumption is
no longer appropriate, entity
should determine the impact
of this change on the carrying
value of assets and liabilities
recognized in the financial
statements
 If going concern assumption
is no longer appropriate, IFRS
5 shall be applied (PIC)
Financial Instruments
IPSAS 28, 29 and 30
IFRS 9
 Financial assets are classified
 Financial assets are classified
into:
into:
 Financial assets at FVPL
 Financial assets at FVPL
 Available for sale
 Financial assets at amortized
 Held to maturity
 Loans and receivables
costs
Investment Property
IPSAS 16
IAS 40
 Investment property is a real
 Investment property is a real
property that is held by an
entity for capital
appreciation, for rental, or
both.
 Property held to provide a
social service and which also
generates cash inflows is not
an investment property.
property that is held by an
entity for capital
appreciation, for rental, or
both.
Property, Plant and Equipment/
Intangible Assets
IPSAS 17 and IPSAS31
 IPSAS does not require or
prohibit the recognition of
heritage assets.
 PPE and Intangible assets may
be accounted for using either:
Cost model; or
 Revaluation model

 Revaluation increases and
decreases are offset on a class of
asset basis
IAS 16 and IAS 38
 No guidance is provided on how
to account for heritage assets.
 PPE and Intangible assets may
be accounted for using either:
Cost model; or
 Revaluation model

 Revaluation increases and
decreases may only be matched
on an individual item basis
Agriculture
IPSAS 27
IAS 41
 The definition of
 IAS 41 does not deal with
“agricultural activity”
includes transactions for the
distribution of biological
assets at no charge or for a
nominal charge.
 IPSAS 27 requires entities to
provide a quantified
description of each group of
biological assets.
such transactions.
 IAS 41 encourages, but does
not require, entities to
provide a quantified
description of each group of
biological assets
Segment Reporting
IPSAS 18
 IPSAS 18 does not specify
quantitative thresholds that
must be applied in
identifying reportable
segments.
IFRS 8
 Guidance is provided on
which segments are
reportable.
Impairment of non-cash
generating assets
IPSAS 21
IAS 36
 IPSAS 21 deals with the
 IAS 36 deals with the
impairment of non-cashgenerating assets.
 IPSAS 21 measures the value
in use of a non-cashgenerating asset as the
present value of the asset’s
remaining service potential
using a number of
approaches.
 Impairment testing is
applied to individual assets.
impairment of non-financial
assets.
 IAS 36 measures the value in
use of a non financial asset as
the present value of future
cash flows from the asset.
 IAS 36 uses the concept of
cash generating unit.
Impairment of cash generating
assets
IPSAS 26
 IPSAS 26 does not apply to
cash-generating assets
carried at revalued amounts.
at the reporting date.
 Goodwill is outside the scope
of IPSAS 26.
IAS 36
 IAS 36 does not exclude from
its scope assets carried at
revalued amounts.
 IAS 36 includes extensive
requirements and guidance
on the impairment of
goodwill.
IPSAS 23- Revenue from Nonexchange transactions
 Non-exchange transactions are transactions wherein an
entity either receives value from another entity without
directly giving approximately equal value in exchange.
 An entity shall recognize an asset in respect of taxes when
the taxable event occurs and the asset recognition criteria
are met.
 Taxation revenue shall be determined at a gross amount. It
shall not be reduced for expenses paid through the tax
system
IPSAS 24- Presentation of
Budget Information in FS
 An entity shall present a comparison of the budget
amounts either as a separate additional financial
statement or as additional budget columns in the
financial statements currently presented in accordance
with IPSAS
Service Concession Arrangements
IPSAS 32- Grantor
IFRIC 12- Operator
 The grantor recognizes a service
 The operator either recognizes a
concession asset and either a
financial liability or unearned
revenue.
 A financial liability is recognized
to the extent that the grantor has
an unconditional contractual
right to pay cash or another
financial asset.
 An unearned revenue is
recognized to the extent that the
grantor gives the grantor a right
to charge users for the public
service.
financial asset or an intangible
asset.
 A financial asset is recognized to
the extent that the operator has
an unconditional contractual
right to receive cash or another
financial asset.
 An intangible asset is recognized
to the extent that the operator
receives a right or license to
charge users for the public
service.
Cash basis
 Basic financial statements shall include:
 Statement of Cash Receipts and Payments
 Explanatory Notes
 Comparison of Budget and Actual
 IPSAS encourages entities to disclose accrual basis
information.
-End of PresentationTHANK YOU!!!