RPG 2 provides guidance for preparing and presenting financial statement discussion and analysis. Financial statement discussion and analysis will assist users to understand the financial position, financial performance, and cash flows presented in the general purpose financial statements (“financial statements”).

RPG 1 provides guidance on reporting on the long-term sustainability of a public sector entity’s finances (“reporting long-term fiscal sustainability information”). It also provides information on the impact of current policies and decisions made at the reporting date on future inflows and outflows and supplements information in the general purpose financial statements (“financial statements”).

In “How accounting standards such as IPSASs will return the UK to growth,” Paul Williams reports how a senior member of ACCA’s Global Forum believes public sector finances will play a critical role both in economic recovery and preventing future crises. 

Podcast: IPSASB Chair Andreas Bergmann discusses highlights of the June 17-20, 2013, meeting in Toronto

:32 Chair's Overview
1:36 Update on Conceptual Framework elements
2:55 Recommended Practice Guidelines (RPG), Reporting on Long-term Sustainability of Public Finances
4:50 RPG, Financial Statement Discussion and Analysis
6:50 Other Key IPSASB Actions and Discussions
8:37 Chair's Closing Thoughts 

The International Federation of Accountants (IFAC), the global organization for the accountancy profession with 172 members and associates in 129 countries, and the Chartered Institute of Public Finance and Accountancy (CIPFA) today issued for public comment a Consultation Draft for an International Framework on governance in the public sector.

The draft Good Governance in the Public Sector encourages better service delivery and improved accountability by establishing a benchmark for good governance in the public sector.

“The function of good governance in public sector entities is to ensure that they act in the public interest at all times,” said IFAC CEO Fayez Choudhury. “This obligation forms the basis for this principles-based Framework and requires a strong commitment to integrity, ethical values, and the rule of law as well as openness and comprehensive stakeholder engagement.”

“The sovereign debt crisis underlined the fact that the public sector plays a major role in society. Public expenditure forms a significant part of gross domestic product and public sector entities are substantial employers and major capital market participants,” added CIPFA Chief Executive Steve Freer. “The impact and the nature of their outputs, as well as their financing through taxation, puts a premium on strong, effective governance.”

The Framework is not intended to replace national and sectoral public sector governance codes. Instead, it is designed as a reference document for those who develop and set national governance codes for the public sector when updating and reviewing their own codes. Where codes and guidance do not exist, the Framework provides a shared understanding of what constitutes good governance in the public sector and a powerful stimulus for positive action.

This Consultation Draft was developed after an initial review of relevant governance literature and with input from a group of representatives from relevant international organizations (the International Reference Group, which is listed in the Framework). Public sector representatives and other stakeholders are encouraged to respond to the proposed Framework to help improve its applicability to entities at all levels internationally.

How to Comment
CIPFA and IFAC invite all stakeholders to comment. To access the Consultation Draft and submit a comment, visit the Publications and Resources section of the IFAC website at www.ifac.org. Comments on the Consultation Draft are requested by September 16,2013.

Presenting at “The G-20 Agenda Under the Russian Chairmanship,” a high-level public-private sector conference organized by the Institute of International Finance in partnership with the Ministry of Finance of the Russian Federation, International Federation of Accountants Outgoing CEO Ian Ball called on Russia to use its G-20 Presidency to strengthen global financial stability by supporting adoption and implementation of International Public Sector Reporting Standards (IPSASs).

In particular, Ball called on the Russian Presidency to:

• Create a better understanding of the need to significantly enhance the quality of accounting by governments;
• Urge the Financial Stability Board (FSB) to adopt IPSASs as one of the core sets of standards; and
• Direct the FSB to research the effectiveness of different institutional arrangements for fiscal management and governance.

As early as 2007, IFAC stated that it “is concerned that the standards and regulations governing sovereign issuers are not of sufficient quality to protect investors and ensure the stability of capital markets.” Consistent with its past submissions to the G-20, IFAC calls for urgent research and action to address this critical, but neglected, component of the international financial system. The G-20 should actively encourage the adoption of accrual-based accounting and budgeting by governments and public sector institutions, which will promote greater transparency and accountability in public sector finances and allow for monitoring of government debt and liabilities for their true economic implications.

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 173 members and associates in 129 countries and jurisdictions, representing approximately 2.5 million accountants in public practice, education, government service, industry, and commerce.

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The International Public Sector Accounting Standards Board (IPSASB) today released for comment two Exposure Drafts related to its project to develop a Conceptual Framework for the general purpose financial reporting of public sector entities. The Conceptual Framework continues to be the IPSASB’s key strategic objective and is of fundamental importance to the future of global public sector standard setting.

Conceptual Framework Exposure Draft (ED) 2, Conceptual Framework for General Purpose Financial Reporting by Public Sector Entities: Elements and Recognition in Financial Statements, refines the issues highlighted in the Consultation Paper published in 2010 and reflects the IPSASB’s consideration of the responses to that Consultation Paper. Elements are the building blocks from which the financial statements are constructed.

The ED proposes definitions of eight elements: assets, liabilities, revenue, expenses, deferred inflows, deferred outflows, ownership contributions, and ownership distributions. It also proposes deferred inflows and deferred outflows as elements in order to distinguish the flows related to the reporting period from flows which relate to another reporting period. Deferred inflows and deferred outflows apply to flows that are provided for use in one or more specified reporting periods and are restricted to non-exchange transactions. The ED also considers how to deal with the uncertainty that can arise over the existence and measurement of elements.

Conceptual Framework Exposure Draft (ED) 3, Measurement of Assets and Liabilities in Financial Statements, identifies the measurement concepts that should guide the IPSASB in the selection of measurement bases for International Public Sector Accounting Standards. The ED stresses the importance of selecting measurement bases that meet the objectives of financial reporting-decision making and accountability. Many assets in the public sector are held for their operational capacity and, therefore, entry values that reflect the cost of purchase are likely to be adopted in many situations.

For liabilities that arise from obligations to provide goods and services to citizens and other eligible beneficiaries, the appropriate measurement basis will often be the cost of fulfillment—that is to say, the current cost of meeting the obligations represented by the liability.

“The Conceptual Framework continues to be IPSASB’s main priority and, when finalized, will underpin IPSASB’s standard-setting activities for many years to come,” said IPSASB Chair Andreas Bergmann. “These two Exposure Drafts propose concepts that deal with key aspects of the financial statements—the elements and the appropriate measurement bases. We strongly encourage all stakeholders to submit comments on the two Exposure Drafts.”

How to Comment
To access the Exposure Drafts and the At-a-Glance documents, which provide summaries of the two Exposure Drafts, or to submit a comment, visit the IPSASB website. Comments on the Exposure Drafts are requested by April 30, 2013. The IPSASB encourages IFAC members, associates, and regional accountancy bodies to promote the availability of these documents to their members and employees.

About the IPSASB
The IPSASB develops accounting standards and guidance for use by public sector entities. The structures and processes that support the operations of the IPSASB are facilitated by IFAC. The IPSASB receives support (both direct financial and in-kind) from the World Bank, the Asian Development Bank, the United Nations, and the governments of Canada, China, New Zealand, and Switzerland.

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. It is comprised of 167 members and associates in 127 countries and jurisdictions, representing approximately 2.5 million accountants in public practice, education, government service, industry, and commerce.

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This At-a-Glance is a summary of Conceptual Framework for General Purpose Financial Reporting by Public Sector Entities: Measurement of Assets and Liabilities in Financial Statements

This At-a-Glance is a summary of Conceptual Framework for General Purpose Financial Reporting by Public Sector Entities: Elements and Recognition in Financial Statements.