A succinct, yet highly informative guide to IPSAS and their application
IPSAS Explained provides a concise summary of the International Public Sector Accounting Standards for practitioners needing to maintain compliance with ever-changing practices. Comprehensively updated to align with newly-accepted standards in key subject areas and including the latest iteration of the framework and improvement projects, this guide distills each standard into a useful and accessible format. Coverage of each IPSAS includes a brief overview of the basic principles behind it, as well as charts, graphs and tables that provide information at a glance.
Updated material includes discussion of the new IPSASB governance structure, including the Public Interest Committee and Consultative Advisory Group, as well as information on the current Exposure Drafts and the changes forthcoming from the Improvements Project. New sections on First-Time Adoption of Accrual Basis IPSAS, new consolidation standards and Service Performance Reporting bring practitioners completely up to date to help ensure full compliance.
Locate relevant IPSAS quickly and easily
Get up to date on newly adopted standards
Deepen conceptual understanding with graphical representations
Understand the operations of the IPSASB, as well as new and ongoing projects
The International Public Sector Accounting Standards Board is engaged in the ongoing process of bringing public sector accounting in line with the IPSAS, which largely align with the IFRS model: where an IFRS exists, it is either adopted directly or adjusted to be suitable for the public sector; where no relevant IFRS exists, the IPSASB issues an IPSAS. IPSAS Explained condenses and clarifies each IPSAS, providing context, background and practical guidance to help practitioners find the answers they need to comply.
EY is a global leader in assurance, tax, transaction and advisory services. Worldwide, our more than 247,000 people are united by our shared values and an unwavering commitment to quality. We make a difference by helping our people, our clients and our wider communities achieve their potential. Thomas Muller-Marques Berger (Stuttgart, Germany) is a partner at Ernst & Young GmbH and serves as the firm's Global Leader of International Public Sector Accounting. Thomas was a member of the International Public Sector Accounting Standards Board (IPSASB) from January 2009 to December 2014. In January 2016 he became the Inaugural Chair of the IPSASB's Consultative Advisory Group (CAG) and in that role actively participates in IPSASB meetings. In June 2017, he was elected as CAG Chair for a term of three years. Since January 2011 he has served as Chair of the Public Sector Group of Accountancy Europe (former F??d??ration des Experts Comptables Europ??en (FEE)). In that capacity, he is a standing observer of the Eurostat EPSAS Working Group and contributes to the work of the EPSAS Cells.
I. Introduction: General information about IPSASs and the IPSASB 1 1 The International Public Sector Accounting Standards Board 1 1.1 General information 1 1.2 Structure and organization of IPSASB 2 1.3 Objectives of the IPSASB 4 1.4 Governance and oversight of the IPSASB 5 1.5 Members of the IPSASB 7 1.6 The strategy and work plan of the IPSASB 8 2 International accounting standards for the public sector 10 2.1 Overview of international accounting standards for the public sector 10 2.2 History of the International Public Sector Accounting Standards 14 2.3 Applicability of the International Public Sector Accounting Standards 15 2.4 General purpose financial statements 16 2.5 Authority of the International Public Sector Accounting Standards.. 17 2.6 IPSASs for accrual basis of accounting and cash basis of accounting 19 2.7 Background to the application of international accounting standards for the public sector . 19 2.8 Provisions for the transition from the cash basis to the accrual basis of accounting 21 2.9 Procedures for developing accounting standards 22 2.10 Process for reviewing and modifying IASB documents 24 2.11 Process for considering GFS reporting guidelines during development of IPSASs . 25 2.12 Current projects of the IPSASB........ 25 3 IPSASB s Conceptual Framework for General Purpose Financial Reporting by Public Sector Entities 28 3.1 Background 28 3.2 Key characteristics of the public sector 30 3.3 Role and authority of the Framework 30 3.4 Objectives and users of general purpose financial reporting 31 3.5 Qualitative characteristics 32 3.6 Reporting entity 33 3.7 Elements in the financial statements 34 3.8 Recognition in financial statements 36 3.9 Measurement of assets and liabilities in financial statements 37 3.10 Presentation in GPFRs 44 II. Costs versus benefits of implementing accrual accounting in the public sector 47 1 Cost-benefit assessments for implementation 47 2 Summary of expected benefits and positive impacts of implementing IPSASs 48 3 Expected costs of implementing IPSASs 51 4 Expected challenges of IPSAS implementation 53 III. International developments in public sector accounting 57 1 Africa 57 1.1 Current situation in Africa 57 1.2 Reform movements underway in Africa 59 1.3 Outlook . 64 2 Europe 65 2.1 Current situation in Europe 65 2.2 Reform movements underway in Europe 68 2.3 Current status of the EPSAS project 70 2.4 EPSAS framework and governance 72 3 Latin America and the Caribbean 75 3.1 Current situation in Latin America and the Caribbean 75 3.2 Reform movements underway in LAC 76 3.3 Outlook 82 IV. Overview of accrual basis IPSASs 85 IPSAS 1: Presentation of Financial Statements 85 IPSAS 2: Cash Flow Statement 92 IPSAS 3: Accounting Policies, Changes in Accounting Estimates and Errors 97 IPSAS 4: The Effects of Changes in Foreign Exchange Rates 102 IPSAS 5: Borrowing Costs 105 IPSAS 6: Consolidated and Separate Financial Statements 108 IPSAS 7: Investments in Associates 114 IPSAS 8: Interests in Joint Ventures 118 IPSAS 9: Revenue from Exchange Transactions 122 IPSAS 10: Financial Reporting in Hyperinflationary Economies 127 IPSAS 11: Construction Contracts 129 IPSAS 12: Inventories . 133 IPSAS 13: Leases 138 IPSAS 14: Events after the Reporting Date 144 IPSAS 15: Financial Instruments: Disclosure and Presentation 148 IPSAS 16: Investment Property 149 IPSAS 17: Property, Plant and Equipment 155 IPSAS 18: Segment Reporting 163 IPSAS 19: Provisions, Contingent Liabilities and Contingent Assets 166 IPSAS 20: Related Party Disclosures 172 IPSAS 21: Impairment of Non-Cash-Generating Assets 175 IPSAS 22: Disclosure of Information About the General Government Sector 180 IPSAS 23: Revenue from Non-Exchange Transactions (Taxes and Transfers) 183 IPSAS 24: Presentation of Budget Information in Financial Statements 190 IPSAS 25: Employee Benefits 195 IPSAS 26: Impairment of Cash-Generating Assets 205 IPSAS 27: Agriculture 211 IPSAS 28: Financial Instruments: Presentation 216 IPSAS 29: Financial Instruments: Recognition and Measurement 219 IPSAS 30: Financial Instruments: Disclosures 225 IPSAS 31: Intangible Assets 229 IPSAS 32: Service Concession Arrangements: Grantor 236 IPSAS 33: First-time Adoption of Accrual Basis International Public Sector Accounting Standards (IPSASs) 246 IPSAS 34: Separate Financial Statements 253 IPSAS 35: Consolidated Financial Statements 257 IPSAS 36: Investments in Associates and Joint Ventures 263 IPSAS 37: Joint Arrangements 268 IPSAS 38: Disclosure of Interests in Other Entities 272 IPSAS 39: Employee Benefits 283 IPSAS 40: Public Sector Combinations 287 Cash Basis IPSAS: Financial Reporting Under the Cash Basis of Accounting 294 V. Recommended Practice Guidelines (RPGs) 301 RPG 1: Long-Term Sustainability of an Entity s Finances 301 RPG 2: Financial Statement Discussion and Analysis 306 RPG 3: Reporting Service Performance Information 310 VI. Exposure Drafts and Consultation Papers 315 1 Exposure Drafts 315 1.1 ED 61, Amendments to Financial Reporting under the Cash Basis of Accounting (the Cash Basis IPSAS) 315 1.2 ED 62, Financial Instruments 317 2 Consultation Papers . 319 2.1 Recognition and Measurement of Social Benefits 319 2.2 Public Sector Specific Financial Instruments 324 2.3 Heritage 326 2.4 Accounting for Revenue and Non-Exchange Expenses 328 Further reading . 340