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IFAC Public Sector Committee

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IFAC Public Sector Committee. International Public Sector Accounting Standards (IPSASs) ... issues and approaches that might be adopted in migration to accrual ... – PowerPoint PPT presentation

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Title: IFAC Public Sector Committee


1
IFAC Public Sector Committee
International Public Sector Accounting Standards
(IPSASs) Presented by Ronald J. Points March
2003
2
PSC Members and Observers
  • IFAC-156 member bodies, 114 countries
  • PSC Members
  • Australia (Chair), Argentina, Canada, France,
    Germany, Hong Kong, Mexico, The Netherlands, New
    Zealand, Norway, South Africa, UK, USA
  • PSC Observers
  • ADB, European Commission, IASB, IMF, INTOSAI,
    OECD, World Bank, UNDP

3
Standards Development Program
  • Stds Program Established late 1996
  • Funded ADB, IFAC, IMF, UNDP, World Bank
  • Completing first stage
  • Commencing second stage

4
Need for Public Sector Accounting Standards
(IPSAS)
  • Concern about quality/variability of governmental
    financial reporting
  • Lack of transparency/completeness
  • Not timely

5
Need for IPSASs
  • Necessary element in strengthening the governance
    framework and enhancing transparency
  • Set appropriate minimum benchmarks
  • - for discharge of accountability, transparency
  • Provide framework against which audit is
    undertaken

6
Standards Project - Approach
  • Underlying philosophy
  • Promote adoption of an accrual basis
  • Acknowledge wide use of cash basis and
    develop a Cash Basis Standard
  • Guidance on transition to accrual basis
  • Adopt a Due Process
  • Involve the fin. Reporting, budget, GFS/ESA
    community
  • (at least 4 months exposure for comment)

7
First Stage Progress to date
  • Objectives of First Stage
  • Cash basis standard
  • Guidance on transition to accrual accounting
  • Core set of accrual standards based on IASs where
    appropriate
  • Identify public sector specific issues for
    consideration in later stages

8
Cash Basis Progress to date
  • ED 9 Financial Reporting under Cash Basis
    (comments closed Nov 2000 41 responses)
  • Additional consultation by developing economies
    (30 countries circulated)
  • PSC revised structure/content
  • Reduced requirements plus encouragements
  • St. Receipts/Payments
  • Report third party cash settlements
  • More flexibility in reporting format
  • IPSAS approved for issue (by end January 2003)

9
CONSOLIDATED STATEMENT OF CASH RECEIPTS AND
PAYMENTS FOR YEAR ENDED 31 DECEMBER 200X
200X
Receipts/ (Payments) Controlled by entity
Payments by third parties
(In thousands of currency units)
RECEIPTS
Taxation
Income tax
X
-
-
X
Value-added tax
-
Property tax
X
X
-
Other taxes
-
X
Grants and Aid
X
X
International agencies
X
X
Other Grants and Aid
X
X
Borrowings
X
X
Proceeds from borrowings
Capital Receipts
X
-
Proceeds from disposal of plant equipment
Training activities
X
-
Receipts from trading activities
Total receipts
X
X
10
CONSOLIDATED STATEMENT OF CASH RECEIPTS AND
PAYMENTS FOR YEAR ENDED 31 DECEMBER 200X
200X
Receipts/ (Payments) Controlled by entity
Payments by third parties
(In thousands of currency units)
PAYMENTS
Operations
Wages, salaries and employee benefits
(X)
(X)
(X)
(X)
Supplies and consumables
(X)
(X)
Transfers
(X)
-
Grants
(X)
-
Other transfer payments
(X)
-
Capital Expenditures
Purchase/construction of plant equipment
(X)
(X)
-
Purchase of financial instruments
(X)
(X)
(X)
Loan and Interest Repayments
(X)
-
Repayment of borrowings
-
(X)
Interest payments
(X)
-
Other payments
(X)
(X)
Total payments
(X)
(X)
X
Increase/(Decrease) in Cash
X
Cash at beginning of year
X
N/A
Increase/(Decrease) in Cash
X
N/A
Cash at end of year
N/A
X
11
Transitional Guidance
  • Study 14 Transition To Accrual Basis of
    Accounting. Guidance for Governments and
    Government Entities
  • A Study (not-authoritative)
  • Provides guidance on issues and approaches that
    might be adopted in migration to accrual
  • Based on experiences in number of countries
  • Intend to update periodically
  • Released April 2002

12
Accrual - Progress to Date
  • Study 11 Governmental Financial Reporting
  • Accrual Basis IPSASs
  • 20 IPSASs issued
  • identified in attachment at end of slides

13
IPSASs and Exposure Drafts
  • All IPSASs
  • All current Exposure Drafts
  • PSC Update - on most recent PSC meeting
  • Key PSC meeting papers
  • AVAILABLE FREE OF CHARGE AT
  • WWW.IFAC.ORG

14
Process Developments 2002
  • Consultative Groups (CG)
  • Regional Workshops in conjunction with each PSC
    meeting
  • Translations IASB Process for French,
    Spanish,
  • National Bodies for others
  • Steering Committees (SC)
  • Project Advisory Panels (PAP)

15
PSC Work Program 2003
  • Public Sector Specific Issues identified in first
    stage
  • Steering Committees
  • Non-exchange Revenue
  • Social Policy Obligations
  • Budget Reporting (2003)
  • Accounting for Development Assistance (cash
    basis)
  • Impairment of government assets

16
PSC Work Program 2003
  • GFS/ESA 95 and IPSAS Harmonization
  • Heritage Assets
  • Monitor IAASB - ongoing
  • Care and Maintenance of IPSASs
  • Monitor national developments on Public Sector
    Conceptual Framework

17
Non-Exchange Revenue SC
  • Project developing an IPSAS to account for
    revenues excluded from scope of IPSAS 9
  • Taxes, Grants, Transfers
  • SC met in June and Nov 2002
  • Members from Canada, Australia, China, Czech
    Republic, FEE, France, New Zealand, Sweden, South
    Africa, UK, USA

18
Social Policy Obligations SC
  • Developing an IPSAS on accounting for provisions
    relating to obligations for social policy
    obligations e.g. pensions, health care,
    education
  • SC met in in July and Nov 2002
  • Members from New Zealand, Australia, Canada,
    China, FEE, IMF, Pakistan, Sweden, UK

19
Budget Reporting Project
  • Directed at enhancing budget reporting in the
    public sector
  • Stage 1 Research paper identifying
  • best practice in budget reporting
  • relationship with PSC mandate
  • Steering Committee to be established in 2003,
    chaired by PSC Member from USA

20
ATTACHMENT
  • Cash Basis IPSAS
  • Cash Basis IPSAS Financial Reporting under the
    Cash Basis of Accounting
  • Approved for issue (end January 2003)
  • Comprehensive Cash Basis IPSAS
  • Includes requirements and encouragements
  • Transition from Cash to Accrual
  • Study 14 Transition to Accrual Basis of
    Accounting
  • Issued in April 2002
  • to provide guidance

21
ATTACHMENT
  • Accrual Basis IPSASs Issued
  • IPSAS 1 Presentation of Financial Statements
  • IPSAS 2 Cash Flow Statements
  • IPSAS 3 Net Surplus or Deficit for the Period,
    Fundamental Errors and Changes in
    Accounting Policies
  • IPSAS 4 The Effects of Changes in Foreign
    Exchange Rates
  • IPSAS 5 Borrowing Costs
  • IPSAS 6 Consolidated Financial Statements and
    Accounting for Controlled Entities

22
ATTACHMENTAccrual IPSAS (cont.)
  • IPSAS 7 Accounting for Investments in Associates
  • IPSAS 8 Financial reporting of Interests in Joint
    Ventures
  • IPSAS 9 Revenue from Exchange Transactions
  • IPSAS 10 Financial Reporting in
    Hyperinflationary Economies
  • IPSAS 11 Construction Contracts
  • IPSAS 12 Inventories
  • IPSAS 13 Leases

23
ATTACHMENTAccrual IPSASs (cont.)
  • IPSAS 14 Events After the Reporting Date
  • IPSAS 15 Financial Instruments Disclosure and
    Presentation
  • IPSAS 16 Investment Property
  • IPSAS 17 Property, Plant and Equipment
  • IPSAS 18 Segment Reporting
  • IPSAS 19 Provisions, Contingent Liabilities and
    Contingent Assets
  • IPSAS 20 Related Party Disclosures
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