2017 was a landmark year for international standard setting for public sector financial reporting.

International Public Sector Accounting Standards Board (IPSASB) is the only international standard setter that caters for public sector financial reporting. It has the sole function of developing and promoting International Public Sector Accounting Standards (IPSAS) in order to advance public financial management worldwide. IPSASB has recently marked the 20th year of IPSAS standard setting and development.

It all began in 1986 as the IFAC Public Sector Committee, formed to cover all matters relating to the public sector. In the late 1990s, it began the IPSAS program that was to become its defining feature.

In 1997, the Committee developed the first accrual basis IPSAS. By 2003, some 20 accrual IPSAS had been issued, as well as a single standard on cash basis financial reporting for those jurisdictions that were not yet ready to implement accrual-basis reporting.

Initially, the IPSAS addressed areas where the differences between public and private sectors were not very significant. They were developed by referencing the International Accounting Standards (IAS), issued by the International Accounting Standards Board, which have now been subsumed within International Financial Reporting Standards (IFRS). The IAS’ main feature was that they used language that was less commercial and more appropriate to the public sector context.

However, from the start of the IPSAS project, it was clear that standards that cover public sector specific issues would be helpful, and indeed necessary. Formally reconstituted as the International Public Sector Accounting Standards Board, between 2004 and 2007 consultations were progressed relating to:

• assets that were not held to generate cash income;
• revenue (such as taxes and transfers) that does not arise from commercial exchanges;
• accounting for heritage assets; and
• accounting for government programs providing social benefits.

Although only some of these consultations resulted in standards, they attracted considerable interest and helped establish IPSASB as a thought leader in financial reporting matters.

At the same time, there were significant developments in private sector IFRS, and for a while IPSASB needed to play “catch-up” in updating its IPSAS standards to reflect new thinking and improvements. This had a particular benefit when the IPSASB formalized and made public its approach to maintaining alignment with IFRS when appropriate, and developing public sector-specific material in other cases.

Once the initial catch-up was complete, IPSASB progressed another major project: developing a conceptual framework setting out the foundational standard setting on general purpose public sector financial reporting. This addressed a number of problem areas in earlier standard-setting consultations, and laid the groundwork for IPSASB to address the key remaining public sector issues for which standards had not yet been developed. Each of these were, by their nature, quite difficult. But the recent and current IPSASB program includes projects on:

• Social Benefits
• Revenue & Non-Exchange Expenditure
• Heritage
• Financial Instruments (including public sector specific instruments)
• Public Sector Measurement; and
• Infrastructure Assets

As a champion of improved public financial management, the Chartered Institute of Public Finance and Accountancy (CIPFA) has supported these initiatives throughout. Along with members of other UK-based institutes, CIPFA members have been members and leaders of the IPSASB. IPSASB’s current Chair, Ian Carruthers, is also CIPFA’s Policy and Technical Director. In addition, CIPFA International’s Chair, Ian Ball, is a former chair of IFAC Public Sector Committee.

So Happy Birthday the IPSAS! We’re greatly looking forward to collaborating with you over the next 20 years to strengthen public financial management across the world.