Orientation Session on
International Public Sector
Accounting Standards (IPSAS)
September 1, 2009
What is IPSAS and Why Adopt It
UN Board of Auditors considers the implementation IPSAS as the single most
important aspect in the UNs Management Reform (letter to the Secretary
General, December 2008)
What is IPSAS:
• set of independently developed accounting standards considered as best
practice for the public sector organizations
• Used to define the presentation of financial statements
Why IPSAS:
• Provide consistent application of accounting principles throughout the UN
system
• UNSAS unable to keep pace with changing accounting developments or
methodologies
• Improves accountability and transparency through IPSAS compliant
financial statements
What is IPSAS and Why Adopt It
Why IPSAS (continue):
• Improves the extent to which financial policies, regulations and rules,
business practices and procedures respond to the needs of the
organization
What is IPSAS and Why Adopt It
International Public Sector Accounting Standards (IPSAS)
– IPSAS « target » is not a specific country or international organization.
IPSAS is « worldwide ».
– At least 70 countries have either adopted or are in process of adopting
IPSAS for part or all of their public sectors
– Most of the international organizations are taking IPSAS as a reference
What is IPSAS and Why Adopt It
International Public Sector Accounting Standards (IPSAS)
– IPSAS is developed by Public Sector for Public Sector.
– IPSAS is based on IFRS (accounting standards for private sector) but is
adapted (when necessary) to Public sector specificities
– Examples of specificities are: taxes (for governments), contributions
from member countries (for international organization) or grants
What is IPSAS and Why Adopt It
International Public Sector Accounting Standards (IPSAS)
– IPSAS is focused on accounting and is not for budget. Similar to IPSAS,
accounting standards are for example US GAAP for US companies, IFRS
for European companies
– IPSAS has 26 standards (2 volumes, 1200 pages)
• IPSAS 1. Presentation of Financial Statements
• IPSAS 15. & IAS 39 Financial Instruments
• IPSAS 2. Cash Flow Statements
• IPSAS 16. Investment property
• IPSAS 3. Accounting Policies, Changes in Accounting Estimates
and Errors
• IPSAS 17. Property, plant & Equipment
• IPSAS 4. The effects of changes in Foreign Exchange rates
• IPSAS 5. Borrowing costs
• IPSAS 6. Consolidated Financial Statements and Accounting for
Controlled Entities
• IPSAS 7. Investments in associates
• IPSAS 8. Financial reporting in Joint Ventures
• IPSAS 9. Revenue from Exchange Transactions
• IPSAS 18. Segment Reporting
• IPSAS 19. Provisions, contingent liabilities & contingent assets
• IPSAS 20. Related party disclosures
• IPSAS 21. Impairment of Non Cash-generating assets
• IPSAS 22. Disclosure of financial information about the general
government sector
• IPSAS 23. revenue from non-exchange transactions
• IPSAS 10. Financial Reporting in Hyperinflationary Economies
• IPSAS 24
statements
• IPSAS 11. Construction contract
• IPSAS 25 Employee benefits
• IPSAS 12 Inventories
• IPSAS 26 Impairment of Cash-generating assets
• IPSAS 13 Leases
• IAS 38 Intangible Assets
• IPSAS 14 Events After the Reporting Date
Presentation
of
budget
information
in
financial
Standard Setting Process
NOTES:
International Federation of
Accountants (IFAC)
International Accounting
Standards Board (IASB)
International Accounting
Standards (IAS/IFRS)
International Public Sector
Accounting Standards
Board
(IPSASB)
1. The IASB is an independent
accounting standard setting body. It
is committed to developing a single
set of global accounting standards.
The IASB cooperates with national
standard setting bodies to achieve
convergence in accounting standards
around the world.
2. The International Federation of
Accountants (IFAC) is the global
organization of the accounting
profession. One of its key missions is
to establish and promote adherence
to high quality standards, such as
IPSAS.
3. The IPSASB is one of many boards
of the IFAC. It focuses on the
accounting and financial reporting
needs of the public sector – including
national and regional governments,
government related agencies and the
constituencies that they serve.
International Public Sector
Accounting Standards
(IPSAS)
United Nations Systemwide Organizations
IPSAS Project Governance Structure & Working Groups
Chief Executive Board
High Level Committee on
Management
IPSAS Project
Governance Structure
Finance and Budget Network
Task Force – Accounting Standards
[represented by all UN Organizations]
IPSAS Steering Committee (system wide)
[Membership: UN, UNDP, UNICEF, UNHCR, WFP, WHO,
FOA, IAEA, UNIDO & PSASB]
UN System-Wide IPSAS Project Team
NY Focus Group
[UN, UNDP, UNFPA, UNICEF, UNOPS, PAHO, ICAO]
Geneva, Vienna and Rome Focus Groups
Working
Groups
Application of IPSAS in the UN
IPSAS
Organization
Specific
UN System
Wide
Deals with concepts, definitions and accounting principles
UN System Wide Approved Policies
and Guidance
Accounting and Finance
•Accounting Manuals
• Further decisions on accounting policies
•Chart of accounts and respective “posting
rules” (the debits and credits)
•PPE Management & oversight
•Detailed Procedures,
Guidelines and Manuals for PPE
management
Configured/Integrated IT systems: fixed asset register,
procurement module (supply chain) & finance module
Presentation of Material
Presentation of Material
Topic
Welcoming Remarks
Introduction and Delivery Principle
Revenue Recognition
Fixed Assets
[break]
Inventory
Employee Benefits
Presentation of Financial Statements
Closing Remarks
Time
3:00 – 3:15 (15 min)
3:15 – 3:30 (15 min)
3:30 – 4:00 (30 min)
4:00 – 4:30 (30 min)
4:30 – 4:45 (15 min)
4:45 – 5:05 (20 min)
5:05 – 5:25 (20 min)
5:25 – 5:55 (30 min)
Organization
UNFPA
UNFPA
UNFPA
UNOPS
Presenter
Subhash Gupta
Jim Notaro
Uday Dayal
Vitaly Vanshelboim
UNICEF
UNDP
UNDP
Warwick White
Helen Hall
Helen Hall
Jim Notaro
Delivery Principle for Good and Services
Under UNSAS - expenditures are recorded
when a PO for goods or a contract for services
is issued.
Under IPSAS - expenses are recorded when
goods are received or consumed, where
control has been transferred or services
rendered.
- effectively eliminates encumbrances accounting
- more in line with results based management
- tightens procurement practices
- less POs brought forward to following year