IPSASB proposes changes in public sector accounting


The International Public Sector Accounting Standards Board released four proposals Thursday for improving various aspects of government accounting around the world.

The exposure draft documents deal with changes in the measurement of assets and liabilities in financial statements; measurement; property, plant and equipment; and non-current assets held for sale and discontinued operations.

The IPSASB, which is affiliated with the International Federation of Accountants, tries to improve financial reporting in the public sector with standards that can be applied in governments across the world. While the U.S. has its own standard-setters in the Federal Accounting Standards Advisory Board and the Governmental Accounting Standards Board, the IPSASB standards can be influential in improving government accounting, especially in countries without their own local standard-setter.

The exposure drafts of the proposed standards aim to provide straight-forward measurement principles through a measurement hierarchy, that apply throughout the International Public Sector Accounting Standards and align with the IPSASB’s Conceptual Framework; along with improved guidance clarifying the recognition and measurement of infrastructure and heritage assets that are property, plant and equipment; as well as a standard that fills a gap in the assets held for sale and discontinued operations.

“This package of EDs addresses a range of conceptual challenges and practical concerns identified by our constituents,” said IPSASB chair Ian Carruthers in a statement. “In particular, it provides guidance for the first time on how to address the problems arising from the unique characteristics of heritage and infrastructure assets. The underlying concepts and guidance proposed in this suite of EDs will underpin the IPSASB’s approach to measurement for many years. It is therefore essential the IPSASB hears the views of respondents on the guidance proposed in these EDs.”

Exposure Draft (ED) 76, Conceptual Framework Update: Chapter 7, Measurement of Assets and Liabilities in Financial Statements, would streamline the measurement principles in the IPSASB’s Conceptual Framework by getting rid of unused measurement bases and enhancing focus on those that are commonly used. The document proposes a clear measurement hierarchy to help stakeholders apply the principles in practice and aligns measurement concepts with the guidance provided in the standards.

ED 77, Measurement, proposes new guidance in a single standard to explain how commonly used measurement bases can be applied in practice. It brings in generic guidance on fair value for the first time, as well as proposes a public sector-specific current value measurement basis to address stakeholder views that a new measurement basis is required as an alternative to fair value for assets held for their operational capacity.

ED 78, Property, Plant, and Equipment, updates IPSAS 17,Property, Plant, and Equipmentby adding general measurement guidance and measurement options when accounting for assets within its scope, identifying the characteristics of and heritage and infrastructure assets, and proposing new guidance on how these kinds of public sector assets ought to be recognized and measured.

ED 79, Non-Current Assets Held for Sale and Discontinued Operations, aligns with IFRS 5,Non-Current Assets Held for Sale and Discontinued Operations,under International Financial Reporting Standards and proposes new guidance how to account for non-current assets that are classified as held for sale, when they meet specific criteria.

The IPSASB is asking for comments by Oct. 25, 2021. To access each exposure draft, an at-a-glance summary, and the request for information or to send a comment, visit www.ipsasb.org.

Courtesy of IFAC

Products You May Like

Articles You May Like

Ulta Beauty Trades Higher After Earnings
Amazon’s New Chips Coming for NVIDIA
JinkoSolar (JKS) and C.H. Robinson Worldwide (CHRW): 12/1/2022 Bull and Bear
Top Stock Picks for Week of November 28, 2022
Clearfield (CLFD) and Upstart (UPST): 11/28/2022 Bull & Bear

Leave a Reply

Your email address will not be published. Required fields are marked *