IFAC Public Sector Committee
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Transcript of IFAC Public Sector Committee
IFAC Public Sector CommitteeIFAC Public Sector Committee
International Public Sector Accounting International Public Sector Accounting Standards (IPSASs)Standards (IPSASs)
Presented byPresented byRonald J. PointsRonald J. Points
March 2003March 2003
PSC Members and PSC Members and ObserversObservers
IFAC-156 member bodies, 114 countriesIFAC-156 member bodies, 114 countries
PSC MembersPSC Members Australia (Chair), Argentina, Canada, France, Australia (Chair), Argentina, Canada, France,
Germany, Hong Kong, Mexico, The Netherlands, Germany, Hong Kong, Mexico, The Netherlands, New Zealand, Norway, South Africa, UK, USANew Zealand, Norway, South Africa, UK, USA
PSC ObserversPSC Observers ADB, European Commission, IASB, IMF, ADB, European Commission, IASB, IMF,
INTOSAI, OECD, World Bank, UNDPINTOSAI, OECD, World Bank, UNDP
Standards Development Standards Development ProgramProgram
Stds Program Established late 1996Stds Program Established late 1996Funded ADB, IFAC, IMF, UNDP, World Funded ADB, IFAC, IMF, UNDP, World
BankBankCompleting first stageCompleting first stageCommencing second stageCommencing second stage
Need for Public Sector Need for Public Sector Accounting Standards Accounting Standards
(IPSAS) (IPSAS)
Concern about quality/variability of Concern about quality/variability of governmental financial reportinggovernmental financial reporting– Lack of transparency/completenessLack of transparency/completeness– Not timelyNot timely
Need for IPSASs Need for IPSASs
Necessary element in strengthening the Necessary element in strengthening the governance framework and enhancing governance framework and enhancing transparencytransparency
Set appropriate minimum benchmarks :Set appropriate minimum benchmarks :- for discharge of accountability, transparency - for discharge of accountability, transparency
Provide framework against which audit Provide framework against which audit is undertakenis undertaken
Standards Project - ApproachStandards Project - ApproachUnderlying philosophy:Underlying philosophy:
– Promote adoption of an accrual basisPromote adoption of an accrual basis– Acknowledge wide use of cash basis and Acknowledge wide use of cash basis and
develop a Cash Basis Standarddevelop a Cash Basis Standard– Guidance on transition to accrual basisGuidance on transition to accrual basis– Adopt a “Due Process” Adopt a “Due Process” – Involve the fin. Reporting, budget, GFS/ESA Involve the fin. Reporting, budget, GFS/ESA
communitycommunity
(at least 4 months exposure for comment)(at least 4 months exposure for comment)
First Stage –First Stage – Progress to Progress to datedate
Objectives of First StageObjectives of First Stage Cash basis standardCash basis standard Guidance on transition to accrual Guidance on transition to accrual
accounting accounting Core set of accrual standards based on Core set of accrual standards based on
IASs where appropriateIASs where appropriate Identify public sector specific issues for Identify public sector specific issues for
consideration in later stagesconsideration in later stages
Cash Basis –Cash Basis – Progress to Progress to datedate
ED 9 Financial Reporting under Cash Basis ED 9 Financial Reporting under Cash Basis (comments closed Nov 2000 – 41 responses)(comments closed Nov 2000 – 41 responses)
Additional consultation by developing economies Additional consultation by developing economies (30 countries circulated(30 countries circulated))
PSC revised structure/contentPSC revised structure/content– Reduced requirements plus encouragementsReduced requirements plus encouragements– St. Receipts/PaymentsSt. Receipts/Payments– Report third party cash settlementsReport third party cash settlements– More flexibility in reporting formatMore flexibility in reporting format
IPSAS approved for issue (by end January 2003)IPSAS approved for issue (by end January 2003)
CONSOLIDATED STATEMENT OF CASH RECEIPTS AND PAYMENTS FORYEAR ENDED 31 DECEMBER 200X
(In thousands of currency units)
Receipts/(Payments)Controlled by entity
Payments by third parties
200X
RECEIPTS
TaxationIncome tax
Value-added taxProperty tax
Other taxes
Grants and AidInternational agencies
Other Grants and Aid
BorrowingsProceeds from borrowings
Capital ReceiptsProceeds from disposal of plant & equipment
Training activitiesReceipts from trading activities
Total receipts
XX
XX
--
-
-
X -
X
X
X
X
X
X
X X
X -
X -
X X
CONSOLIDATED STATEMENT OF CASH RECEIPTS AND PAYMENTS FORYEAR ENDED 31 DECEMBER 200X
(In thousands of currency units)
Receipts/(Payments)Controlled by entity
Payments by third parties
200X
PAYMENTS
OperationsWages, salaries and employee benefits
Supplies and consumables
TransfersGrantsOther transfer payments
Total payments
(X)(X)
(X)
(X)(X)
(X)
(X)(X)
(X)
--
-
Capital ExpendituresPurchase/construction of plant & equipment
Purchase of financial instruments
(X)
(X)
(X) -(X)
(X)Loan and Interest Repayments
Repayment of borrowings
Interest payments
(X)
(X)(X) -
-
-
Other payments (X) (X)
Increase/(Decrease) in Cash
(X) (X)
X
Cash at beginning of year X
Increase/(Decrease) in Cash X
Cash at end of year X
X
N/A
N/A
N/A
Transitional GuidanceTransitional Guidance
Study 14 “Transition To Accrual Basis of Study 14 “Transition To Accrual Basis of Accounting. Guidance for Governments and Accounting. Guidance for Governments and Government Entities” Government Entities” – A Study (not-authoritative)A Study (not-authoritative)– Provides guidance on issues and approaches that might be Provides guidance on issues and approaches that might be
adopted in migration to accrualadopted in migration to accrual– Based on experiences in number of countriesBased on experiences in number of countries– Intend to update periodicallyIntend to update periodically
Released April 2002Released April 2002
Accrual - Progress to DateAccrual - Progress to Date
Study 11 Study 11 – – Governmental Financial Governmental Financial ReportingReporting
Accrual Basis IPSASs:Accrual Basis IPSASs:20 IPSASs issued20 IPSASs issued
– identified in attachment at end of slidesidentified in attachment at end of slides
IPSASs and Exposure IPSASs and Exposure DraftsDrafts
All IPSASsAll current Exposure Drafts PSC Update - on most recent PSC
meetingKey PSC meeting papers
AVAILABLE FREE OF CHARGE AT:
WWW.IFAC.ORG
Process Process – Developments 2002+– Developments 2002+
Consultative Groups (CG)Consultative Groups (CG)
Regional Workshops in conjunction with each Regional Workshops in conjunction with each PSC meetingPSC meeting
TranslationsTranslations – IASB Process for French, – IASB Process for French, Spanish, Spanish,
– National Bodies for others National Bodies for others
Steering Committees (SC) Steering Committees (SC) Project Advisory Panels (PAP)Project Advisory Panels (PAP)
PSC Work PSC Work ProgramProgram 2003+ 2003+
Public Sector Specific Issues identified in first Public Sector Specific Issues identified in first stagestage
Steering Committees Steering Committees – Non-exchange RevenueNon-exchange Revenue
– Social Policy ObligationsSocial Policy Obligations
– Budget Reporting (2003)Budget Reporting (2003)
Accounting for Development Assistance (cash Accounting for Development Assistance (cash basis)basis)
Impairment of government assetsImpairment of government assets
PSC Work PSC Work ProgramProgram 2003+ 2003+
GFS/ESA 95 and IPSAS HarmonizationGFS/ESA 95 and IPSAS Harmonization
Heritage AssetsHeritage Assets
Monitor IAASB - ongoingMonitor IAASB - ongoing
Care and Maintenance of IPSASsCare and Maintenance of IPSASs
Monitor national developments on Public Monitor national developments on Public Sector Conceptual Framework Sector Conceptual Framework
Non-Exchange Revenue SCNon-Exchange Revenue SC
Project developing an IPSAS to account for Project developing an IPSAS to account for revenues excluded from scope of IPSAS 9revenues excluded from scope of IPSAS 9– Taxes, Grants, Transfers …Taxes, Grants, Transfers …
SC met in June and Nov 2002SC met in June and Nov 2002 Members from: Canada, Australia, China, Members from: Canada, Australia, China,
Czech Republic, FEE, France, New Zealand, Czech Republic, FEE, France, New Zealand, Sweden, South Africa, UK, USASweden, South Africa, UK, USA
Social Policy Obligations Social Policy Obligations SCSC
Developing an IPSAS on accounting for Developing an IPSAS on accounting for provisions relating to obligations for provisions relating to obligations for social policy obligations: e.g. pensions, social policy obligations: e.g. pensions, health care, educationhealth care, education
SC met in in July and Nov 2002SC met in in July and Nov 2002Members from: New Zealand, Australia, Members from: New Zealand, Australia,
Canada, China, FEE, IMF, Pakistan, Canada, China, FEE, IMF, Pakistan, Sweden, UKSweden, UK
Budget Reporting ProjectBudget Reporting Project
Directed at enhancing budget reporting in the Directed at enhancing budget reporting in the public sectorpublic sector
Stage 1: Research paper identifyingStage 1: Research paper identifying– best practice in budget reportingbest practice in budget reporting– relationship with PSC mandaterelationship with PSC mandate
Steering Committee to be established in Steering Committee to be established in 2003, chaired by PSC Member from USA2003, chaired by PSC Member from USA
ATTACHMENTATTACHMENT
Cash Basis IPSAS Cash Basis IPSAS Cash Basis IPSASCash Basis IPSAS Financial Reporting under the Financial Reporting under the
Cash Basis of AccountingCash Basis of Accounting Approved for issue (end January 2003)Approved for issue (end January 2003) Comprehensive Cash Basis IPSASComprehensive Cash Basis IPSAS Includes requirements and encouragements Includes requirements and encouragements
Transition from Cash to AccrualTransition from Cash to AccrualStudy 14 Study 14 Transition to Accrual Basis of Accounting Transition to Accrual Basis of Accounting Issued in April 2002Issued in April 2002 to provide guidanceto provide guidance
ATTACHMENTATTACHMENTAccrual Basis IPSASs IssuedAccrual Basis IPSASs Issued
IPSAS 1 IPSAS 1 Presentation of Financial StatementsPresentation of Financial Statements
IPSAS 2 IPSAS 2 Cash Flow StatementsCash Flow Statements
IPSAS 3 IPSAS 3 Net Surplus or Deficit for the Period, Net Surplus or Deficit for the Period, Fundamental Errors and Changes in Fundamental Errors and Changes in
Accounting Accounting Policies Policies
IPSAS 4 IPSAS 4 The Effects of Changes in Foreign Exchange The Effects of Changes in Foreign Exchange Rates Rates
IPSAS 5 IPSAS 5 Borrowing CostsBorrowing Costs
IPSAS 6 IPSAS 6 Consolidated Financial Statements and Consolidated Financial Statements and Accounting for Controlled Entities Accounting for Controlled Entities
ATTACHMENTATTACHMENTAccrual IPSAS (cont.)Accrual IPSAS (cont.)
IPSAS 7 IPSAS 7 Accounting for Investments in AssociatesAccounting for Investments in Associates
IPSAS 8 IPSAS 8 Financial reporting of Interests in Joint VenturesFinancial reporting of Interests in Joint Ventures
IPSAS 9 IPSAS 9 Revenue from Exchange TransactionsRevenue from Exchange Transactions
IPSAS 10 IPSAS 10 Financial Reporting in HyperinflationaryFinancial Reporting in Hyperinflationary Economies Economies
IPSAS 11 IPSAS 11 Construction Construction ContractsContracts
IPSAS 12 IPSAS 12 InventoriesInventories
IPSAS 13 IPSAS 13 LeasesLeases
IPSAS 14 IPSAS 14 Events After the Reporting DateEvents After the Reporting Date
IPSAS 15 IPSAS 15 Financial Instruments: Disclosure and Financial Instruments: Disclosure and PresentationPresentation
IPSAS 16 IPSAS 16 Investment PropertyInvestment Property
IPSAS 17 IPSAS 17 Property, Plant and EquipmentProperty, Plant and Equipment
IPSAS 18 IPSAS 18 Segment ReportingSegment Reporting
IPSAS 19 IPSAS 19 Provisions, Contingent Liabilities and Provisions, Contingent Liabilities and Contingent AssetsContingent Assets
IPSAS 20 IPSAS 20 Related Party DisclosuresRelated Party Disclosures
ATTACHMENTATTACHMENTAccrual IPSASs (cont.)Accrual IPSASs (cont.)