International Public Sector Accounting Standard® (IPSAS) 46 provides new guidance in a single standard addressing how commonly used measurement bases should be applied in practice. It brings in generic guidance on fair value for the first time, and introduces current operational value, a public sector specific current value measurement basis addressing constituents’ views that an alternative current value measurement basis to fair value is needed for certain public sector assets.
To implement the International Sustainability Standards Board’s (ISSB’s) standards and jurisdictional standards and regulatory requirements, organizations must ensure effective oversight arrangements to deliver high quality, cost effective and decision useful reporting. As reporting and assurance of sustainability-related disclosure evolves, audit committees have a critical role to play in expanding their existing oversight responsibilities for financial reporting and compliance to sustainability-related disclosures.
Because many professional accountants serve on and are accountable to audit committees, the International Federation of Accountants (IFAC), has released Key Questions for Audit Committees Overseeing Sustainability-Related Disclosureto prepare audit committees with effective questions to ask when overseeing sustainability and ESG related disclosures.
The key questions for audit committees cover:
Roles and responsibilities across the organization
Data collection, processes and controls
What’s being reported?
Audit and assurance
“Professional accountants serving on boards and audit committees play critical roles in the oversight of sustainability-related disclosures, and this release will help prepare audit committees step up their roles to advance sustainability,” said Kevin Dancey, IFAC CEO. “We also encourage professional accountancy organizations (PAOs) to utilize these key questions to help their members stay up to date with, and prepare for, expanding oversight responsibilities in relation to sustainability.”
About IFAC IFAC is the global organization for the accountancy profession dedicated to serving the public interest by strengthening the profession and contributing to the development of strong international economies. IFAC is comprised of 180 members and associates in 135 countries and jurisdictions, representing more than 3 million accountants in public practice, education, government service, industry, and commerce.
IFAC releases new placemat to guide audit committees to oversee sustainability-related disclosure
The International Public Sector Accounting Standards Board® (IPSASB®) has issued International Public Sector Accounting Standard® (IPSAS) 48, Transfer Expenses. IPSAS 48 provides accounting guidance for transfer expenses, which account for a significant portion of expenditures for many public sector entities.
The International Public Sector Accounting Standards Board® (IPSASB®), developer of IPSAS®, international accrual-based accounting standards for use by governments and other public sector entities around the world has issued an integrated package of measurement-related pronouncements comprising:
The three pronouncements provide simplified, more consistent guidance addressing key conceptual challenges and practical implementation issues identified by the public sector community by introducing:
Straight-forward principles for initial and subsequent measurement, that apply throughout IPSAS and align with the Conceptual Framework; and
Enhanced property, plant, and equipment guidance that also clarifies the recognition and measurement of infrastructure and heritage assets.
“These important pronouncements provide clear and consistent foundational principles for the measurement of public sector assets,” said IPSASB Chair Ian Carruthers. “In addition, IPSAS 45 includes guidance on the recognition and measurement of heritage and infrastructure assets, which addresses their unique characteristics.”
The updates to Chapter 7 of the Conceptual Framework streamline the measurement principles by eliminating unused measurement bases and enhancing focus on those that are commonly used. The new subsequent measurement framework will help constituents apply the principles in practice and aligns measurement concepts with the guidance provided in IPSAS.
IPSAS 45 replaces IPSAS 17, Property, Plant, and Equipment by adding current operational value as a measurement basis in the updated current value model for assets within its scope, identifying the characteristics of heritage and infrastructure assets, and adding new guidance on how these important types of public sector assets should be recognized and measured.
IPSAS 46 provides new guidance in a single standard addressing how commonly used measurement bases should be applied in practice. It brings in generic guidance on fair value for the first time, and introduces current operational value, a public sector specific current value measurement basis addressing constituents’ views that an alternative current value measurement basis to fair value is needed for certain public sector assets.
The effective date for both IPSAS 45 and IPSAS 46 is January 1, 2025, with earlier application permitted. Updates to the Conceptual Framework are effective when published.
How to Access
To access the Conceptual Framework Update: Chapter 7, Measurement of Assets and Liabilities in Financial Statements, IPSAS 45, Property, Plant, and Equipment, and IPSAS 46, Measurement, their summary At-a-Glance document, and webcast visit the IPSASB website. The IPSASB encourages IFAC members, associates, and Network Partners to promote the availability of these pronouncements 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.
Updated Conceptual Framework Chapter is effective immediately. IPSAS 45 and IPSAS 46 have an effective date of January 1, 2025. Earlier application is permitted.
