The International Public Sector Accounting Standards Board^® (IPSASB^®) has released a Consultation Paper (CP), Natural Resources, which considers the issues relating to the recognition, measurement, and presentation of natural resources by public sector entities.

Natural resources are generally understood to be resources such as sunlight, air, water and land that exist without the actions of humankind. They account for a significant proportion of the economic resources in many jurisdictions. However, governments often lack sufficient information on the monetary value of natural resources, and as a result, grant rights to these resources without regard to financial and environmental sustainability, or intergenerational fairness.

Currently, there is no explicit International Public Sector Accounting Standard (IPSAS™) guidance on accounting for natural resources in their original state. The IPSASB is now working to address this gap. The first phase of its work focuses on the financial reporting of tangible, naturally occurring resources, including subsoil resources, water, and living resources, which are in their natural state. This consultation paper is the first project output, and considers whether natural resources can be recognized as assets in general purpose financial statements or should be disclosed in broader financial reports.

“The issue of accounting for natural resources is important for the public sector in most jurisdictions. The recognition and measurement of natural resources impacts not only on financial reporting, but also potentially for many governments on policy decisions and public financial management.” said IPSASB Chair Ian Carruthers. “This consultation paper is the IPSASB’s first step in developing guidance for this important area.”

The IPSASB welcomes comments on all the matters discussed in this Consultation Paper by October 17, 2022. Feedback on the CP will guide the IPSASB in determining the approach to developing an Exposure Draft on the topic which will in turn shape a final IPSAS related to Natural Resources.

How to Comment

To access the Consultation Paper, Natural Resources, or to submit a comment, visit the IPSASB website. The IPSASB encourages IFAC members, associates, and Network Partners to promote the availability of this Consultation Paper to their members and employees.

About the IPSASB

The International Public Sector Accounting Standards Board (IPSASB) works to strengthen public financial management globally through developing and maintaining accrual-based International Public Sector Accounting Standards® (IPSAS®) and other high-quality financial reporting guidance for use by governments and other public sector entities. It also raises awareness of IPSAS and the benefits of accrual adoption. The Board receives support from the Asian Development Bank, the Chartered Professional Accountants of Canada, the New Zealand External Reporting Board, and the governments of Canada and New Zealand. The structures and processes that support the operations of the IPSASB are facilitated by the International Federation of Accountants (IFAC). For copyright, trademark, and permissions information, please go to permissions or contact permissions@ifac.org.

About the Public Interest Committee

The governance and standard-setting activities of the IPSASB are overseen by the Public Interest Committee (PIC), to ensure that they follow due process and reflect the public interest. The PIC is comprised of individuals with expertise in public sector or financial reporting, and professional engagement in organizations that have an interest in promoting high-quality and internationally comparable financial information.

Elevating Ethics and Independence Standards for a Complex World summarizes the IESBA's accomplishments for 2020 and 2021. The Report includes the final message from Dr. Stavros Thomadakis in his role as IESBA Chairman and showcases the significant progress that the IESBA has made on behalf of the public interest. It also provides an overview of the IESBA’s extensive stakeholder outreach efforts and information about the Board’s partnership with IFAC to promote awareness, adoption, and effective implementation of the Code. 

The International Auditing and Assurance Standards Board (IAASB) today released non-authoritative guidance, The Fraud Lens – Interactions Between ISA 240 and Other ISAs. The guidance illustrates the relationship and linkages between International Standard on Auditing (ISA) 240, The Auditor’s Responsibilities Relating to Fraud in an Audit of Financial Statements, and other ISAs when planning and performing an audit engagement and reporting thereon.

The IAASB recently approved a project proposal to revise ISA 240 to enhance or clarify an auditor’s responsibilities on fraud in an audit of financial statements. In the interim, this non-authoritative guidance illustrates how extant ISA 240 is to be applied in conjunction with the full suite of ISAs. As part of the project, additional non-authoritative guidance may be developed to further support the implementation and application of the proposed revised standard, once developed.

This non-authoritative guidance illustrates the relationship between International Standard on Auditing (ISA) 240, The Auditor’s Responsibilities Relating to Fraud in an Audit of Financial Statements, and other ISAs when planning and performing an audit engagement and reporting thereon. It also illustrates how ISA 240 is currently applied in conjunction with the full suite of ISAs.

The document below provides a detailed explanation of how Figure 2 in the Consultation Paper, Natural Resources, was developed.

The Mid Period Work Program Consultation Summary (Consultation Summary) reflects the IPSASB’s deliberations and decisions related to the responses received to the 2021 Mid Period Work Program Consultation. The Consultation Summary highlights the process followed in deciding what projects to add, and the IPSASB’s basis for those decisions.

The projects added to the 2022 IPSASB Work Program are:

-       Presentation of Financial Statements;