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Report by International Public Sector
Accounting Standards Board (IPSASB)
Mike Hathorn
Chair
IPSASB
IFAC IPSASB
2IPSASB UPDATE
Overview
• Background
• Recent exposure drafts & pronouncements
• Revised strategic themes
• Current projects
• Proposed new projects
IFAC IPSASB
3IPSASB UPDATE
IFAC IPSASB
IPSASB• Develops International Public Sector Accounting
Standards (IPSASs) - cash and accrual
• 24 Accrual Basis IPSASs and a Comprehensive Cash
Basis IPSAS
• Facilitates convergence of national and international
public sector standards
• Financial support from World Bank, ADB, UN, EC,
Canadian, Chinese, NZ and Swiss governments, CICA
• Relocation to Toronto
IFAC IPSASB
4IPSASB UPDATE
IPSASB Process
• Meetings 3 times per year
• Open to the public
• Materials available to those registered
• Transparent consultative due process with minimum 4 month exposure periods
IFAC IPSASB
5IPSASB UPDATE
Available on the IPSASB Web Site:
• All IPSASs (24 accrual plus 1 cash basis)
– (including Spanish and French translations)
• All current Exposure Drafts and other publications
• IPSASB Meeting Highlights
• IPSASB E-Mail
• IPSASB Agenda Papers (before each meeting)
FREE OF CHARGE AT: WWW.IPSASB.ORG
IFAC IPSASB
6IPSASB UPDATE
IPSASB Members 2007
Accounting Profession -15 members
UK (Chair), Argentina, Australia, Canada, China, France, India, Israel, Japan, Mexico, Netherlands,New Zealand, Norway, South Africa, USA
Public Members -3
Italy, Switzerland, USA
ObserversADB, EU, IASB, IMF, INTOSAI, OECD, UN, UNDP, World Bank
IFAC IPSASB
7IPSASB UPDATE
Adoption
• UN System (28 bodies)
• OECD, NATO (21 bodies), EC, IFAC,
INTERPOL
• 58 countries have agreed processes or have a
project in place to adopt IPSASs or align with
IPSASs
IFAC IPSASB
8IPSASB UPDATE
Recent exposure drafts and pronouncements
• ED 32, “ Financial Reporting under the Cash Basis of
Accounting-Disclosure Requirements for Recipients of
External Assistance”.
• IPSAS 22, “Disclosures of Information about the General
Government Sector”
• IPSAS 23, “Revenue from Non-Exchange Transactions
(Taxes and Transfers)”
• IPSAS 24, “Presentation of Budget Information in
Financial Statements”
• Revision to 11 accrual basis IPSASs and revised Preface
IFAC IPSASB
9IPSASB UPDATE
IPSAS 23: Non-exchange Revenue
(1)
• IPSAS 23 issued in January 2007
• Key principles of ED 29 retained
• Some modifications of emphasis, presentation
and format in areas such as:
– Social security contributions
– In-kind services
– Transitional provisions
IFAC IPSASB
10IPSASB UPDATE
IPSAS 23: Non-exchange Revenue (2)
• Asset/liability approach
• Assets recognized from non-exchange transactions initially measured at fair value at date of acquisition
• Stipulations -conditions and restrictions
• Conditions - both performance and return obligations
– Unfulfilled conditions give rise to liabilities
• Five year transitional provision for taxes/Three years for other non-exchange transactions
IFAC IPSASB
11IPSASB UPDATE
Revised Strategic Themes
• Conceptual framework for public sector
• Public sector specific issues including
convergence with statistical bases where
appropriate
• IFRS convergence
• Promotion & communication
IFAC IPSASB
12IPSASB UPDATE
Conceptual Framework (1)
• Objective to develop a public sector conceptual
framework
• Collaborative project with National Standard-
Setters
• Divergence from IASB framework only where
necessary to reflect public sector differences
• Stand-alone framework will be more than an
interpretation
IFAC IPSASB
13IPSASB UPDATE
Conceptual Framework (2)
• IPSASB Co-ordination and Leadership
• Process: Consultation Papers followed by
omnibus ED
• Four groups of Consultation Papers
• First Consultation Papers late 2007/early 2008
• ED: 2011
• Full framework: 2012
IFAC IPSASB
14IPSASB UPDATE
Conceptual Framework (3)
Group 1 Consultation Papers
• Objectives of financial reporting (United
Kingdom ASB)
• Scope of financial reporting (South African ASB)
• Qualitative Characteristics (Norway NIPA)
• Reporting Entity (Australian AASB)
IFAC IPSASB
15IPSASB UPDATE
Service Concessions
• Collaborative project involving NSS and Other
Bodies, including the OECD
• Primary resources to be provided by US GASB
• IFRIC Interpretation (IFRIC 12) deals only with
operators
• Survey
• Close collaboration with IASB/IFRIC (IFRIC
representative on subcommittee)
IFAC IPSASB
16IPSASB UPDATE
Likely New Projects for Initiation in 2007
• Firm decision to be made at March 2007 IPSASB Meeting
– Heritage Assets
– Financial Instruments
– Business Combinations
– Fair value
– Non-current Assets Held for Sale and Discontinued
Operations
– Updating of existing IPSASs
International Federation of Accountants
www.ifac.org
IFAC IPSASB
18IPSASB UPDATE
ATTACHMENTS
IFAC IPSASB
19IPSASB UPDATE
Budget Reporting
• IPSAS 24 “Presentation of Budget Information in
Financial Statements” accrual basis
• Amendments to Cash Basis IPSAS – additional
section 1.10 “Presentation of Budget Information in
Financial Statements”
IFAC IPSASB
20IPSASB UPDATE
Budget Reporting
• Prior – budget information comparison encouraged
only if on same basis
• Entities making budgets publicly available (does not
require public availability)
• Basis of preparation does not need to be the same
• Comparison is on the basis of the budget
• Effective date January 1 2009 – earlier adoption
encouraged
IFAC IPSASB
21IPSASB UPDATE
Budget Reporting
• Comparison of actual amounts to both original and final budget (separate financial statement if not same basis)
• Explanation of material differences - financial statements or x-ref public documents
• Reconciliation of budget based actual with financial statement actual when bases differ
• Explanation of differences between original and final budget - financial statements or x-ref public documents
IFAC IPSASB
22IPSASB UPDATE
Disclosure of External
Assistance (Cash Basis)
• OECD and Multilateral Development Banks -harmonize/reduce compliance costs
• Differing views
• Approved revised ED:
– required and encouraged disclosures
– field testing ED
IFAC IPSASB
23IPSASB UPDATE
Social Policy Obligations
• Reservations over extent of liability recognized &
mirroring of existing approaches
• Reservations reinforced by majority view in FASAB
Preliminary Issues Paper
• Change of approach to presentation and disclosure
(would exclude recognition)
• Present obligation for cash transfers when all
eligibility criteria have been met
IFAC IPSASB
24IPSASB UPDATE
Social Policy Obligations
• Disclosed liability: present value of future cash
flows to all eligible participants at reporting date
• No present obligation in respect of individual goods
and services (e.g. education and health)
• Not a fiscal sustainability statement
• Acknowledgement of importance of fiscal
sustainability statements and will be addressed
initially in conceptual framework project
• Approach early step - not last word
IFAC IPSASB
25IPSASB UPDATE
Heritage Assets
• Currently no requirement to recognize
• If recognize, disclose based on IPSAS 17
• Permitted to use IPSAS 17 measurement approach
• Range of Responses to February 2006 Consultation Paper
• Project brief to March meeting
• Separate ED/Standard or amendment to IPSAS 17?
IFAC IPSASB
26IPSASB UPDATE
General Improvements Project
• December 2003 - IASB’s Improvements Project –
reduce or eliminate alternative, redundancies and
conflicts
• Deal with some convergence issues
• Black and grey letters equal authority
• Clarify hierarchy
• Make other improvements