IPSASB
International Federation of Accountants
International Public Sector Accounting
Standards Board (IPSASB)
Andreas Bergmann: IPSASB Member
John Stanford : Deputy Technical Director
World Bank: May 2009
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.
IFAC IPSASB is providing the benchmark
World Bank: May 2009
IPSASB
IPSASB’s Current Pronouncements
• 26 Accrual Based IPSASs
• Majority primarily drawn from IAS/IFRS
• Public sector specific (or hybrid) e.g.
• IPSAS 21, “Impairment of Non-Cash-Generating
Assets”
• IPSAS 22, “Disclosure of Information about the
General Government Sector”
• IPSAS 23, “Revenue from Non-Exchange
Transactions”
• Cash Basis IPSAS, “Financial Reporting
under the CashWorldBasis
of
Accounting’
Bank: May 2009
IPSASB
Strong Evidence of Progress
• UN System (28 bodies)
• OECD, NATO (21 bodies), EC, IFAC,
INTERPOL
• Over 70 countries have agreed processes, have a
project in place to adopt IPSASs, align with
IPSASs or use IPSASs as a benchmark
World Bank: May 2009
IPSASB
Today… next year… 5 years on….
• Adopted/Adopting–Switzerland, S Africa, Ghana,
Philippines, Armenia, United Nations Systems +
We need to provide support
• Benchmark – Canada, US, Australia, NZ, UK
We must collaborate to encourage convergence
• Leadership and Promotion – India, China
We need to promote to encourage adoption
World Bank: May 2009
IPSASB
Implementing IPSASs
• Strong implementation of cash basis a solid first step
toward accrual accounting
• Consider adopting cash basis and ensure that
institutional framework supports this standard
• Plan adequately for transition to accruals
• Realistic timelines
• Help from experienced governments
World Bank: May 2009
IPSASB
Current IPSASB Strategic Themes
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Public sector conceptual framework
Public sector specific projects
IFRS convergence
Promotion and communications
World Bank: May 2009
IPSASB
Public Sector Conceptual Framework (1)
• Group 1 Consultation Paper (CP) June
2008
• Objectives & users
• Scope
• Reporting entity
• Qualitative characteristics
Preliminary analysis of 54 responses at May
2009 meeting
World Bank: May 2009
IPSASB
Public Sector Conceptual Framework (2)
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Headline points:
Overall: Positive support but in some cases
qualified-mostly over scope
Scope of financial reporting: Disquiet over nonfinancial service information and prospective
information
Users: Need for identification of priority group
Approach: Too responsive to private sector
(typically Europe)/departs too readily from IASB
approach (typically Australasia)
World Bank: May 2009
IPSASB
Public Sector Conceptual Framework (3)
• Phase 2 -Elements –CP late 2009
• Phase 3-Measurement- CP late 2009
• Phase 4: Concepts underpinning Cash Basisnot yet started
World Bank: May 2009
IPSASB
Conceptual Framework: Elements (1)
• Led by Canadian PSAB
Purpose
• Identification and defining elements of General Purpose
Financial Statements
Key Issues
• Is net assets/equity an element?
• Asset and liability approach v revenue and expense
approach
• Evaluation of comprehensive income approach
• Holding of right to tax giving rise to asset?
• Constructive obligations
World Bank: May 2009
IPSASB
Public Sector Specific Projects
• Social benefits –now being developed with
Conceptual Framework elements component
• Long-term fiscal sustainability
• Service concessions- grantor perspective
• Narrative reporting and non-financial
performance reporting (service delivery and
accomplishments)-decision to be made
based on response from Conceptual
Framework
World Bank: May 2009
IPSASB
Long-Term Fiscal Sustainability (1)
• Catalyst- lack of consensus on timing and extent of
liabilities re: social benefits
• Fiscal sustainability a significant feature of public
reporting in many jurisdictions
• View that financial reporting needs to include
prospective information but some reservations
• Limited involvement of accountants
• Task Force formed to develop proposals
World Bank: May 2009
IPSASB
Long-Term Fiscal Sustainability (2)
• Distillation of complex and voluminous information
• Ambiguity whether fiscal sustainability reports are general
purpose financial reports
• US Financial Statements include:
• Statement of Social Insurance incl. 75 year
projections for Medicare & Social Security
• US FASAB propose:
• Broader Statement of “Long-Term Fiscal
Projections of US Government”
• Mandating a prospective financial statement may be
premature
World Bank: May 2009
IPSASB
IFRS Convergence (1)
• Target date December 31, 2009 of IFRS @
December 31, 2008
• Clear and publicly available guidelines on
departures from IFRS- Rules of the Road
• Recently issued EDs
• ED 36, “Agriculture”
• ED 37, “Financial Instruments: Presentation”
• ED 38,”Financial Instruments: Recognition and
Measurement”
• ED 39, “Financial Instruments: Disclosure”
World Bank: May 2009
IPSASB
Financial Instruments: Approach
• Retain core text of IAS 32, IAS 39 & IFRS 7
• Public sector issues & modifications:
• Financial guarantee contracts issued at nil or
nominal consideration not to be treated as insurance
contracts
• Concessionary loans: expensing of difference
between transaction price and fair value
• Financial guarantees at nil or nominal consideration:
should mathematical models be used where active
market not evident or default to IPSAS 19?
• Additional disclosures for concessionary loans
World Bank: May 2009
IPSASB
IFRS Convergence (2)
• Also issued:
• ED 40, “Intangible Assets”
• ED 41, “Entity Combinations from Exchange
Transactions”
• Consultation concluded:
• ED 35.”Borrowing Costs”
• Renewed focus on relationship with IASB
• Bi-annual member level meetings
• More regular attendance at IPSASB meetings
World Bank: May 2009
IPSASB
Cash Basis Review (1)
• Cash Basis IPSAS first issued in 2003
• Structure
• Part 1: Requirements
• Part 2: Encouraged Additional Disclosures
• Further disclosure requirements subsequently
added
• Comparison of Budgets and Actuals (2006)
• External Assistance (2007)
World Bank: May 2009
IPSASB
Cash Basis Review (2)
• Format of Review
• Task Force chaired by Deputy Chair and main
staff support former IPSASB Technical Director
• Members include representatives from:
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World Bank
IFAC DNC
OECD
ADB
IADB
IMF
World Bank: May 2009
IPSASB
Cash Basis Review (3)
Purpose is to identify:
• Technical challenges in implementation requiring
modification
• Additional reporting requirements
• Encouraged disclosures that should become
mandatory
Approach :
• Development of survey
• Interviews with key Finance/Treasury Staff
World Bank: May 2009
IPSASB
Promotion Communication Outreach
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Proactive rather than reactive
More focused
Improvement of leadership credentials
Widespread adoption is ultimate goal
Accra, Ghana in 2007 – a highlight in outreach and an example
of what must be possible – a Seminar hosted by the Vice
President of Ghana and TV and Press coverage to the whole
of West Africa!
World Bank: May 2009
IPSASB
Partnership Working
• World Bank and Development Banks – External
Assistance and Cash Basis Review
• IMF – Fiscal Sustainability & Statistical
Convergence
• OECD-Fiscal Sustainability & Statistical
Convergence
• IFAC – DNC – Cash Basis Review
• IASB – Service Concessions and Conceptual
Framework
• National Standard Setters - Conceptual Framework
World Bank: May 2009
IPSASB
Translation
• 2007 Handbook translated into Spanish and French
version being finalized
• IASC Foundation
• QA Panels
• French panel co-ordinated by former Chair
• Spanish panel co-ordinated by former member
• Costly process
• E-News translated into Spanish and French in-house
• Other translations in accordance with IFAC
translation policy
World Bank: May 2009
IPSASB
International Federation of Accountants
www.ifac.org
World Bank: May 2009