This special event will include contributions from His Royal Highness The Prince of Wales who will open the event, sharing his thoughts on why the finance and accounting community has such an important role in tackling climate change.
During the event, A4S and CFOs from the COP26 Principal Partners will explore the role of the finance community in driving climate action in the run up to this year’s UN Climate Conference (COP26).
The IPSASB approved its Mid-Period Work Program Consultation. This consultation seeks constituent feedback on which projects the IPSASB should prioritize as its resources become available. The IPSASB will hold several regional virtual outreach events during the consultation period to directly engage with constituents.
The consultation is expected to be published in July 2021 with a 4-month comment period. Watch for the consultation for the full details on the IPSASB’s proposals.
Improvements to IPSAS 2021
The IPSASB approved Exposure Draft (ED) 80, Improvements to IPSAS, 2021, which includes both general improvements and IFRS related improvements to IPSAS. General improvements consist of proposals for minor amendments to IPSAS identified by stakeholders. IFRS related improvements consist of proposals for minor amendments to IPSAS sourced from recent IFRS improvements and narrow scope amendment projects.
ED 80 is expected to be published in July 2021 with a 60-day comment period.
Natural Resources
The IPSASB reviewed the draft Consultation Paper (CP) and considered the general description of natural resources. The IPSASB discussions focused on the overall approach to determining the recognition, measurement, and disclosure of items which fit into this general description of natural resources, and those that do not, as well as how the description relates to the specific topics included in the CP. The IPSASB also discussed the description, recognition, measurement, and disclosure of water.
Revenue and Transfer Expenses
The IPSASB continued its discussions on Revenue and Transfer Expenses topics identified during its review of responses to the Exposure Drafts. Based on discussions, the IPSASB decided to retain the current definition of a binding arrangement, with minor revisions, and clarified specific considerations when assessing enforceability of a binding arrangement. The IPSASB also discussed the definition of a liability in the context of the ongoing projects.
Amendments to IPSAS 5, Borrowing Costs (Non-Authoritative Guidance)
The IPSASB approved IPSAS 5, Borrowing Costs – Non-Authoritative Guidance, which reaffirms the IPSASB’s decision to maintain the accounting policy choice to capitalize or expense borrowing costs directly attributable to a qualifying asset. The non-authoritative guidance added includes implementation guidance and illustrative examples to clarify how to determine the extent to which borrowing costs can be capitalized.
The main issues discussed related to prudence and materiality. The IPSASB decided not to adopt prudence as a separate qualitative characteristic (QC). Prudence will be discussed as a reinforcement of neutrality in the context of the QC of faithful representation.
The IPSASB also decided to add obscuring information to omitting and misstating information as factors that can influence the objectives of financial reporting - discharging accountability and decision making. Obscuring information by, for example, including immaterial disclosures can impair understandability.
Accounting and Reporting by Retirement Benefit Plans
The IPSASB decided the scope and the concept of a reporting entity in the Accounting and Reporting by Retirement Benefit Plans ED should be consistent with IAS 26, Accounting and Reporting by Retirement Benefit Plans. The IPSASB also decided the ED should require retirement benefit plans to prepare a statement of financial position, a statement of change in net assets available for benefits, a cash flow statement, notes to the financial statements and information on the changes of pension obligations.
Next Meeting
The next full-meeting of the IPSASB will take place virtually in September, 2021. For more information, or to register as an observer, visit the IPSASB website (www.ipsasb.org)
As the drive toward a global system for sustainability-related reporting continues, investors, regulators and policymakers are turning their attention to the important role of assurance in ensuring high-quality reporting. With the growing importance of—and reliance on—sustainability information, low-quality assurance is an emerging investor protection and financial stability risk.
We applaud the Commission’s leadership in prompting this important conversation. A building blocks approach provides the architecture for a global system that enables comprehensive corporate reporting for capital markets while also addressing country-specific requirements. As policymakers consider the best way forward for crafting an emerging global system for climate and other sustainability-related disclsures, support from the U.S.
IFAC's Financial Statements are prepared in accordance with International Public Sector Accounting Standards (IPSAS) and include an independent auditor’s report.
In 2025, governments in 50% of jurisdictions will report on an accrual basis, according to a report released today by the International Federation of Accountants (IFAC) and the Chartered Institute of Public Finance and Accountancy (CIPFA). The report was drawn from the International Public Sector Financial Accountability Index, which captures current and future use of public financial reporting bases and frameworks by governments around the world.
The 2021 Index Status Report, which captures information from 165 jurisdictions, finds that while 30% of their governments reported on an accrual basis in 2020 (an increase of 6% since 2018), 50% will report on accrual by the end of 2025. Africa, Asia, and Latin America and the Caribbean will lead the projected increase in accrual adoption over the coming five years.
By providing a comprehensive view of government finances, accrual reporting helps ensure that expenditure of public funds is transparent, public officials are held accountable, and future liabilities are recognized officially and planned for properly. With governments under more financial strain than ever following the huge levels of pandemic-related expenditure, understanding the overall picture and making the best use of the remaining resources is crucial to long-term recovery. In addition to the support of regional and international organizations, effective implementation of accrual accounting relies on the skills of public sector accountants to interpret the richer, more comprehensive data; as more governments move to accrual, the need for need for public sector accountants will increase correspondingly.
“Accrual-based accounting is essential in helping governments mitigate corruption, improve trust and transparency, and deliver desired outcomes that their communities deserve and need in the post-pandemic world,” said Rob Whiteman, Chief Executive of CIPFA.
Public financial reporting frameworks are developed in various ways, with many using International Public Sector Accounting Standards (IPSAS). IPSAS provide high quality financial reporting guidance for governments and other public bodies around the world, in order to improve their consistency and transparency. 57% of governments that reported on an accrual basis in 2020 used IPSAS directly, indirectly, or as a reference point. By the end of 2025, nearly three-quarters (73%) of governments that report on accrual will use IPSAS in one of these three ways.
“This continuing shift from cash to accrual reporting in the public sector, and increased usage of IPSAS in particular, will be crucial to governments globally in making the tough choices they face following the pandemic. Professional accountants have a critical role to play in delivering the full potential benefits for citizens worldwide in terms of decision making, transparency, and accountability,” said Kevin Dancey, IFAC CEO.
IFAC and CIPFA plan to expand the Index progressively in terms of both coverage and information depth and provide periodic status reports throughout this crucial uptake period for accrual financial reporting globally.
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 more than 175 members and associates in more than 130 countries and jurisdictions, representing almost 3 million accountants in public practice, education, government service, industry, and commerce.
About CIPFA
CIPFA, the Chartered Institute of Public Finance and Accountancy, is the professional body for people in public finance. CIPFA shows the way in public finance globally, standing up for sound public financial management and good governance around the world as the leading commentator on managing and accounting for public money.
Joint report by IFAC and CIPFA forecasts 50% of jurisdictions globally will report on an accrual basis by 2025
This non-authoritative First-time Implementation Guide will help practitioners understand and implement the requirements of the International Standard on Quality Management (ISQM) 2, Engagement Quality Reviews. It will help practitioners and firms successfully plan and implement the standards by the effective date, December 15, 2022.
It does not amend or override the International Standard on Quality Management (ISQMs), the texts of which alone are authoritative. Reading the publication is not a substitute for reading the ISQMs.
This non-authoritative First-time Implementation Guide may help stakeholders understand the requirements of the International Standard on Quality Management (ISQM) 1, Quality Management for Firms that Perform Audits or Reviews of Financial Statements, or Other Assurance or Related Services Engagements, and implement the standard in the manner intended.
Firms are required to have systems of quality management designed and implemented in accordance with ISQM 1 by December 15, 2022.
The International Auditing and Assurance Standards Board (IAASB) today released two guides to help stakeholders implement its suite of quality management standards. The guides will help stakeholders understand the standards and properly implement the requirements in the manner intended:
The IAASB will also issue an implementation guide for International Standard on Auditing 220 (Revised), Quality Management for an Audit of Financial Statements, in Q3. The suite of quality management standards come into effect on December 15, 2022.
These publications do not amend or override the International Standards on Quality Management (ISQMs), the texts of which alone are authoritative. Reading the publications are not a substitute for reading the ISQMs.
The IAASB encourages all practitioners to plan early for appropriate implementation, given the potential impact of the changes to firms’ systems of quality management.
Guides Provide a Pathway to a Robust, Effective Quality Management System
