The International Public Sector Accounting Standards Board® (IPSASB®) has issued Exposure Draft (ED) 83, Reporting Sustainability Program Information—RPGs 1 and 3: Additional Non-Authoritative Guidance.
The International Public Sector Accounting Standards Board (IPSASB), developer of IPSAS®, international accrual-based accounting standards for the public sector, announced its new 2023 board members at its recent meeting in Portugal. The 2023 board will be a diverse, woman-majority group with members from around the world.
The new appointees to the IPSASB have been selected following a rigorous nominations and interview process involving the IFAC Nominating Committee and IPSASB leadership, overseen by the Public Interest Committee. The IFAC Board approved the recommended candidates.
The new Board members are:
Mrs. Nor Yati Ahmad (Malaysia),
Mr. Andrew van der Burgh (South Africa), and
Mr. Jona Wala (Kenya).
The re-appointed Board members are:
Dr. Kamira Muriel Sanchez Nicosia (Panama),
Mr. Scott Showalter (USA), and
Mrs. Patricia Siqueira Varela (Brazil).
“For the second year, the IPSASB will be a board comprising a majority of women for 2023,” said IPSASB Chair Ian Carruthers. “Diversity of Board membership is essential to ensure the delivery of high-quality standards that can strengthen public financial management globally. The appointment of new members from Africa and Asia will also be important to ensuring that our outputs meet the needs of an increasingly diverse group of users.”
The IPSASB also announced that Mr. Scott Showalter (USA) will assume the IPSASB Deputy Chair position for 2023. “I am extremely pleased that Scott has agreed to serve as my deputy. Scott brings a powerful combination of experience having served on the board since 2020 in addition to his experience as the former chair of Federal Accounting Standards Advisory Board where he completed his 10-year term in June 2019,” said Mr. Carruthers. “I also want to take this opportunity to thank outgoing members Lindy Bodewig, the current Deputy Chair, Christopher Nyong, and Ajith Ratnayake for their many important contributions to our work during their time with the Board. We are extremely grateful for their dedication and commitment.”
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.
The IPSASB held its third meeting of the year in Lisbon, Portugal on September 12-16, 2022.
Measurement
The IPSASB confirmed the principles related to Current Operational Value (COV) and discussed their practical application. The IPSASB will next focus on refining the COV definition and clarifying the drafting in the authoritative and non-authoritative text based on the decisions made in September.
The IPSASB completed its review of responses to ED 76, Conceptual Framework Update: Chapter 7, Measurement of Assets and Liabilities in Financial Statements. The IPSASB decided not to include replacement cost in an updated Chapter 7. The IPSASB also decided to retain the approach proposed in ED 76 whereby value in use is discussed in the context of impairment, but left to be defined in the relevant IPSAS.
ED 78, Property, Plant, And Equipment
The IPSASB completed its detailed review of the responses to ED 78, Property, Plant, and Equipment. The IPSASB agreed that the primary objective for why an entity holds an asset guides the selection of the measurement basis, and the measurement model shall be applied to the entire class of property, plant, and equipment.
Revenue and Transfer Expenses
The IPSASB finished discussing all principle-related Revenue and Transfer Expenses issues. In particular, the Board agreed to strengthen the consistency between the transfer expense accounting and presentation requirements with those throughout existing IPSAS. The IPSASB also reviewed the revised authoritative text of the draft Transfer Expenses IPSAS, which reflects the revised principles developed in previous meetings.
Reporting Sustainability Program Information
The IPSASB approved ED 83, Reporting Sustainability Program Information, which proposes additional guidance to RPG 1, Reporting on the Long-Term Sustainability of an Entity’s Finances, and RPG 3, Reporting Service Performance Information. The additional guidance proposes illustrative examples and implementation guidance to clarify the application of key concepts in the guidance to reporting on sustainability program information. ED 83 will be exposed for a 60-day period from the date of publication.
Other Lease–Type Arrangements
The IPSASB discussed the arrangements identified in the responses to the Request for Information, Concessionary Leases and Other Arrangements Similar to Leases. The IPSASB agreed these arrangements fell within the scope of existing IPSAS and decided to publish a feedback statement, or similar document, highlighting this guidance. The IPSASB decided the scope of IPSAS 43, Leases should not be expanded beyond contracts.
Differential Reporting
The IPSASB reviewed several differential reporting models. The different approaches adopted by various jurisdictions allowed the Board to gain a better understanding as to the various practices worldwide. The IPSASB will continue its research and follow developments as it looks to develop a differential reporting model that can be applied globally for the public sector.
Next Meeting
The next full meeting of the IPSASB will take place in December 2022 in Toronto, Canada. For more information, or to register as an observer, visit the IPSASB website.
2022 Public Sector Standard Setters Forum
On 19-20 September, 2022, the IPSASB welcomed standard setters from around the world to its 4th Public Sector Standards Setters Forum hosted by the Order Certified Accountants (OCC) in Cascais, Portugal. Attendees collaborated to scope the IPSASB's new guidance projects, shape the IPSASB's next 5-year strategy, and engage in lively discussions around the advancement of sustainability reporting in the public sector and beyond. Thank you to our attendees, speakers, and fantastic host for bringing your energy and commitment to strengthening public sector accounting globally.
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, received strong overall engagement and feedback from stakeholders globally on the proposals in its recent Consultation Paper (CP), Advancing Public Sector Sustainability Reporting. The IPSASB launched its global consultation on developing a sustainability reporting framework for the public sector in May 2022 in response to stakeholder encouragement, including from the World Bank, and the consultation closed September 9, 2022.
The CP identified the drivers for public sector sustainability reporting as:
Global public interest;
Major economic, environmental, social and governance impacts; and
Capital markets significance.
A motivating factor behind the IPSASB’s launch of the CP was that global public sector specific sustainability reporting guidance is needed because of challenges in applying private sector guidance for public sector reporting given the differences in focus. With its many years of experience working with other global standard setters, including the International Accounting Standards Board to maximize alignment with its public sector guidance, the IPSASB therefore proposed in the CP that its experiences, processes and relationships would enable it to develop the necessary guidance efficiently and effectively.
An overview of the feedback received over the course of the open consultation, collected through the IPSASB’s regional roundtables and from written submissions, was presented at the IPSASB’s Public Sector Standard Setters Forum this week hosted by the Order of Certified Accountants (OCC) in Cascais, Portugal, attended by more than 100 delegates from 36 jurisdictions. In addition to supporting the main proposals, the feedback strongly encouraged collaboration between IPSASB and other international standard setters, particularly the International Sustainability Standards Board (ISSB) and the Global Reporting Initiative (GRI), in using its current processes to ensure that new guidance addresses public sector needs while maximizing consistency with sustainability frameworks globally.
IFRS Foundation Executive Director, Mr. Lee White, and GRI Chief Standards Officer, Mr. Bastian Buck, addressed the Forum, and both expressed a willingness by their organizations to collaborate with the IPSASB if it decides to take forward its public sector sustainability reporting initiative.
The IPSASB will continue to analyze the written submissions in detail, and to progress discussions with key stakeholders, including potential funders, in order to decide at its December 2022 meeting on whether to proceed in 2023 with the development of public sector sustainability reporting guidance.
While there has recently been significant progress towards the development of a global baseline for sustainability reporting in the private sector, public sector sustainability reporting has yet to move forward in the same way. Governments are significant in expenditure and employment terms in all jurisdictions, as well as in the global bond market. How and where they spend the money they raise through the taxes everyone pays will therefore be critical in successfully delivering the United Nation’s Sustainable Development Goals (SDGs), and making meaningful progress on climate change. As a result of expected differences in focus and coverage compared with the private sector, global public sector sustainability reporting guidance will be required to bring the necessary transparency and comparability to government activities in this important area.
In response to stakeholder demand, including from the World Bank, today the International Public Sector Accounting Standards Board® (IPSASB®) launched a global consultation on developing a sustainability reporting framework for the public sector. To kick-off the discussion, the IPSASB has issued its Consultation Paper, Advancing Public Sector Sustainability Reporting. Comments are requested by September 9, 2022.
“The IPSASB has the experience, processes, and relationships to develop global public sector sustainability reporting guidance efficiently and effectively,” said Ian Carruthers, IPSASB Chair. “We are ready to take on this responsibility, and the consultation paper we released today outlines how we would tackle this critical work through collaboration with others, and building on our 25 years of standard setting experience.”
The aim of the public consultation process is to evaluate the demand from stakeholders for global public sector specific sustainability reporting guidance, as well as the degree of support for IPSASB developing such guidance, the priority areas for coverage, and how this might be approached.
Serve as the standard setter for global public sector specific sustainability reporting guidance, drawing upon its experience, processes and global relationships.
Develop initial guidance focused on the topics of general disclosure requirements for sustainability-related information and climate-related disclosures by drawing on the initial work of the newly formed International Sustainability Standards Board in these areas.
Approach guidance development at an accelerated pace, with a potential for releasing initial guidance by the end of 2023.
To this end, strong stakeholder support and commitment are essential. The consultation paper lays out what the IPSASB believes is necessary to get started now, and the resources, including additional funding, required, to deliver public sector specific sustainability reporting guidance, in a timely manner.
How to Comment
Visit the IPSASB’s website to access the Consultation Paper. Comments are requested by September 9, 2022. 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.
This objective of this public consultation is to evaluate the demand from stakeholders for sustainability reporting guidance, as well as the degree of support for the IPSASB’s involvement in the process, the priority areas for guidance, and how this might be approached.
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:
The International Public Sector Accounting Standards Board® (IPSASB®) has today released for comment Exposure Draft (ED) 82, Retirement Benefit Plans. This ED is intended to increase the transparency and accountability of public sector entities regarding multi-employer retirement benefit obligations. Stakeholder comments on ED 82 are sought by August 1, 2022.
“Retirement benefit obligations can represent a significant but often hidden liability for the public sector,” said IPSASB Chair Ian Carruthers. “The draft Standard requires public sector employee retirement benefit plans to provide a complete view of their financial activities, assets and obligations. This increased transparency is intended to result in stronger public financial management and better-informed decision making.”
In developing principles for the public sector, the private sector requirements in IAS 26 were used as the starting point. The IPSASB adapted IAS 26, based on experience from around the world, to ensure the unique characteristics of the public sector are reflected in the ED. In particular, it has reviewed the existing policy choices available in IAS 26 and proposes to remove those that are not appropriate for the public sector or are inconsistent with existing IPSAS.
Comments will be reviewed and discussed by the IPSASB alongside other feedback to help shape the final International Public Sector Accounting Standard (IPSAS™) related to Retirement Benefit Plans.
How to Comment To access the Exposure Draft, its summary At-a-Glance document, and the Request for Information or to submit a comment, visit the IPSASB website. Comments are requested by August 1, 2022. 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.
Stakeholder comments on Exposure Draft (ED) 82 Sought by August 1, 2022
To contribute to and promote the development, adoption, and implementation of high-quality international standards, the International Federation of Accountants (IFAC) launched a new digital platform, Pathways to Accrual, providing a central access point to resources helpful for governments and other public sector entities planning and undertaking a transition from cash to accrual accounting including adopting and implementing International Public Sector Accounting Standards (IPSAS).
Pathways to Accrualbuilds upon the work of the International Public Sector Accounting Standards Board (IPSASB)’s Study 14, Transition to the Accrual Basis of Accounting: Guidance for Governments and Government Entities with updated content and a modernized presentation with easier navigation.
To equip public sector entities with tools for a carefully considered and smooth transition, Pathways to Accrual:
Outlines the benefits and implications of adopting and implementing accrual accounting including IPSAS;
Lays out the fundamentals to quality public financial management (PFM), essential for effective and efficient delivery of public services, transparent public finances, and trust between government and citizens;
Explores multiple transition pathways for incremental implementation of accrual;
Identifies the main tasks associated with recognition of assets, liabilities, revenues, and expenses, including issues and challenges associated with the identification of, as well as measurement of, those elements in financial statements;
Gives practical suggestions, guidance, and case studies based on the experience of other entities and jurisdictions; and
Provides links to other useful guidance and resources to help entities make the best decisions for their unique circumstances.
The platform was developed by IFAC with content provided by the Chartered Institute of Public Finance and Accountancy (CIPFA) and feedback from the International Public Sector Standards Board (IPSASB) and international community stakeholders.
"The benefits are clear: accrual accounting improves transparency, decision-making, and accountability in the public sector, but the path forward is less apparent," said IFAC CEO Kevin Dancey. "Pathways to Accrual will help accountants and public sector entities seize the opportunity of transitioning to accrual accounting by equipping them with the tools necessary to forge their own unique paths towards sound public financial management."
“There is significant accrual adoption and implementation activity underway across all regions of the world,” said Ian Carruthers, International Public Sector Accounting Standards Board (IPSASB) Chair. “By 2025, 50% of the jurisdictions in the 2021 International Public Sector Accountability Index are forecast to report on accrual basis, and Pathways to Accrual will be instrumental in supporting both these transitions and the many others planned for subsequent years.”
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.
Pathways to Accrual provides resources to implement the whole system approach to quality Public Financial Management (PFM) necessary to transition from cash to accrual with maximum benefit
IPSAS 43 is based on International Financial Reporting Standard (IFRS®) 16, Leases, developed by the International Accounting Standards Board (IASB®). For lessees, IPSAS 43 introduces a right-of-use model that replaces the risks and rewards incidental to ownership model in IPSAS 13, Leases. For lessors, IPSAS 43 substantially carries forward the risks and rewards incidental to ownership model in IPSAS 13.
IPSAS 43 has an effective date of January 1, 2025. Earlier application is permitted in certain circumstances.
“IPSAS 43, Leases will improve the transparency of lease accounting in the public sector, while maintaining alignment with IFRS,” said IPSASB Chair Ian Carruthers. “Having a three-year period to apply IPSAS 43 provides public sector entities time to prepare for the new requirements and allows for learning to be drawn from the private sector experience in applying IFRS 16.”
The publication of IPSAS 43 completes the IPSASB’s first phase of work on Leases. The IPSASB will continue its work by considering additional public sector specific issues in its Other Lease-Type Arrangements project.
How to Access To access IPSAS 43, Leases, its 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 IPSAS 43, Leases 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.
