Update on IFAC International Public Sector Accounting Standards Board

1
Update on IFAC International Public Sector
Accounting Standards Board

• Liz Cannon, Assistant Director
• Technical and International, CIPFA

2
Agenda

• A reminder of what IPSASB is and the role it
  plays
• Recent activity EDs issued
• Current ongoing projects

3
IPSASB

• IPSASB was the IFAC Public Sector Committee was
  renamed in 2004
• Its role is unchanged
• Part of IFAC 163 member bodies from 119
  countries
• Current resource constraints limit progress
• Issues cash and accrual IPSASs

4
IPSASB

• IPSASB Members 2005
• France (Chair), UK (Deputy Chair), Australia,
  Argentina, Canada, Germany, India, Israel, Japan,
  Malaysia, Mexico, New Zealand, Norway, South
  Africa, USA
• In 2006, two public members to be added
• IPSASB Observers
• ADB, EU, IASB, IMF, INTOSAI, OECD, World Bank,
  UN, UNDP

5
IPSASB processes

• Transparent due process
• Meetings in public and papers on the web
• Exposure drafts 4 months to comment
• Consultative Group
• Regional Seminars
• Project Advisory panels
• Exposure drafts at least 4 months for comment

6
IPSASB Recent Activity

• Exposure Drafts
• ED 24 External Assistance
• ED 25 Equal authority of paragraphs in IPSASs
• ED 26 Amendments to 11 IPSASs
• ED 27 Budget Reporting
• ED 28 General Government Disclosures

7
ED 24 External Assistance

• Cash basis comment period closed in June 2005
• Encouraged by OECD and multilateral banks
• Harmonise requirements, reduce compliance costs
• 30 responses still coming in
• Concerns disclosures too onerous
• Concerns donors not providing information
• Before moving forward further field tests by
  donors and recipients

8
ED 25 Equal Authority

• All IPSAS paragraphs have the same authority
• Black letter paragraphs set out matters of
  principle

9
ED 26 Amendments to IPSASs

• Part of convergence project with IASs issued by
  the IASB at December 2003 as part of its general
  improvements project
• Resources preclude continuation of this project
  any further for now

10
ED 27 Budget reporting

• Applies to public sector entities which are
  required (by legislation, other authority) to
  disclose budgets
• To discharge accountability/enhance transparency
• Disclose original and final budget by major class
• Disclose actual outcome and compare to budget for
  which held accountable
• Reconciliation to General Purpose Financial
  Statements

11
ED 28 General Government Disclosures

• Issued as part of programme to support
  convergence of IPSASs and statistical bases of
  reporting
• Many similarities but also differences between
  accounts
• The ED tries to explain the differences so as to
  make them clearer for users
• Disclosure not required - rules for governments
  that elect to disclose information about GGS

12
IPSASB ProjectNon-Exchange Revenue

• Invitation to Comment 2003
• Assets and Liabilities Approach
• Issues include recognition of in-kind services
  and liabilities arising from conditions
• Includes transfers (e.g. grants, fines,
  donations, debt forgiveness) and taxes

13
IPSASB ProjectNon-Exchange Revenue

• Extensive analysis of stipulations and
  liabilities, and distinction between conditions
  restrictions
• Focus on sacrifice of resources
• Differs from UK focus on control of the
  condition

14
IPSASB ProjectNon-Exchange Revenue

• In-Kind Services
• Recognition permitted but not required
• Differs from UK ASB SoP draft which considers
  whether services would otherwise be purchased
• Differentiation of tax expenditures and tax
  expenses and prohibition of offsetting of tax
  expenses
• Exposure Draft likely late 2005/early 2006

15
IPSASB Projects Social Policy Obligations
Pensions

• Invitation to Comment 2003
• Sub-projects for general social policies and
  pensions
• Employee benefits outside primary scope
  applicability of IAS 19 to public sector to be
  considered in November 2005

16
IPSASB Project Social Policy Obligations

• When do present obligations arise for social
  benefits?
• Cash Transfers On satisfaction of all key
  eligibility criteria
• Individual Goods/Services - - - ditto - - -
• Collective Goods/Services On delivery
• Staying Alive/Continuing Existence will often be
  a key recognition criteria but not a measurement
  attribute
• Draft ED to be considered in November

17
IPSASB Project Pensions

• Preliminary distinction between pensions where
  contributions are relevant to benefits paid and
  those where there is no relationship
• Similar approach as social policy obligations re
  recognition criteria and liabilities
• Further consideration to be given in November

18
International Public Sector Accounting
Standards Board

• Any Questions?
• Liz Cannon, Assistant Director
• Technical and International, CIPFA