International Public Sector Accounting Standards (IPSASs) are a collection of accounting standards developed by the IPSAS Board (IPSASB) for use in the preparation of financial statements by public sector organisations across the world. These guidelines are based on the International Accounting Standards Board’s (IASB) International Financial Reporting Standards (IFRS) (IASB). National governments, regional governments (e.g., state, provincial, and territorial governments), municipal governments (e.g., city and town governments), and other governmental bodies employ these standards (e.g., agencies, boards, and commissions). Intergovernmental organisations and institutions frequently employ IPSASs.
IPSAS is now used to prepare financial accounts for 24 UN System Organisations, including the United Nations (UN), the World Health Organisation (WHO), the World Food Programme (WFP), the Organisation for Economic Co-operation and Development (OECD), the European Commission (EC), and others. For many years, UN System Organisations reported their financial results on a modified cash basis. UNSAS was the name given to this modified monetary system. The UNSAS might be categorised as modified cash or modified accrual, but the UN defined them as modified cash because they did not follow the accrual concept.
IPSASs, on the other hand, do not apply to government-owned businesses. The main goal of the International Public Sector Accounting Standards (IPSASs) is to improve the quality of general-purpose financial reporting which is made by public sector institutions, resulting in a decision made on the informed assessments of government resource allocation as well as increased transparency and accountability.It will also ensure that practice is consistent around the world.
International Federation of Accountants
The International Federation of Accountants (IFAC) is the world’s largest lobbying organisation for the accounting profession, primarily focusing on financial accounting and auditing. IFAC, founded in 1977, has over 175 members and affiliates in more than 130 countries and territories, representing over 3 million accountants working in public practice, industry, commerce, government, and academia.
The organisation promotes the creation, acceptance, and implementation of worldwide standards in accounting education, ethics, the public sector, and audit and assurance. It supports four independent standard-setting bodies that define worldwide standards in the areas of ethics, auditing and assurance, accounting education, and public-sector accounting. It also provides recommendations to encourage small and medium-sized companies’ accounting operations to do high-quality work.
The Monitoring Group, formed when it became clear that IFAC governance reform was needed, established an International Public Interest Oversight Board (PIOB) in February 2005 to ensure that the activities of IFAC and the independent standard-setting bodies it supports are responsive to the public interest.
The International Federation of Accreditation Commissions (IFAC) is not an accreditation body. IFAC membership is not earned by accreditation; instead, it is obtained through an application procedure that must be supported by at least two current IFAC member organisations. There are four Standard-Setting Boards in the IFAC:
- International Auditing and Assurance Standards Board (IAASB): The IAASB is an independent standard-setting body that develops International Standards on Auditing, which encompass a wide range of services provided by professional accountants worldwide, including auditing, review, other assurance, quality control, and related services.
- International Ethics Standards Board for Accountants (IESBA): The IESBA develops a Code of Ethics for Professional Accountants that all professional accountants worldwide must adhere to.
- International Accounting Education Standards Board (IAESB): The IAESB creates consistent rules for education, training, and CPD. These educational criteria must be taken into account by national professional accounting organisations when developing their educational programme
- International Public Sector Accounting Standards Board (IPSASB): The IPSASB creates IPSASs that are based on IFRSs.
IPSASB
The International Public Sector Accounting Standards Board (IPSASB) develops International Public Sector Accounting Standards (IPSASsTM) and Recommended Practice Guidelines (RPGs). To date, the IPSASB has published a Conceptual Framework for General Purpose Financial Reporting by Public Sector Entities, as well as 42 accrual-basis accounting standards (of which five have been repealed). According to the accrual basis of accounting, there are 37 standards in total. Aside from that, there is one cash basis of accounting standard, as well as the adoption of the International Public Sector Accounting Standard, all of which fall within the cash basis of accounting. IPSASs are authoritative and pertain to general-purpose financial statements (financial statements). The IPSASs that have been issued to date can be categorised as follows to facilitate research.
Assets
IPSAS 12—Inventories
IPSAS 13—Leases IPSAS
16—Investment Property IPSAS
17— Property, Plant and Equipment
IPSAS 21— Impairment of Non-Cash Generating Assets
IPSAS 26— Impairment of Cash-Generating Assets
IPSAS 27— Agriculture
IPSAS 31— Intangible Assets
Liabilities
IPSAS 32— Service Concession Arrangement: Grantor
IPSAS 39— Employee Benefits
Revenues
IPSAS 9— Revenue from Exchange Transactions
IPSAS 11— Construction Contracts
Expenses
IPSAS 5— Borrowing Costs
IPSAS 19— Provisions, Contingent Liabilities and Contingent Assets
IPSAS 23— Revenue from Non-Exchange Transactions (Taxes and Transfers)
IPSAS 39— Employee Benefits
IPSAS 42— Social Benefits
Financial Instruments
IPSAS 28— Financial Instruments: Presentation
IPSAS 29—Financial Instruments: Presentation: Recognition and Measurement
IPSAS 30—Financial Instruments: Disclosures
IPSAS 41—Financial Instruments
Consolidation and Public Sector Combination
IPSAS 34— Separate Financial Statements
IPSAS 35— Consolidated Financial Statements
IPSAS 36— Investments in Associates and Joint Ventures
IPSAS 37— Joint Arrangements
IPSAS 38— Disclosure of Interests in Other Entities
IPSAS 40— Public Sector Combinations
Presentation
IPSAS 1— Presentation of Financial Statements
IPSAS 2— Cash Flow Statements
IPSAS 3— Accounting Policies, Changes in Accounting Estimates and Errors
IPSAS 4— The Effects of Changes in Foreign Exchange Rates
IPSAS 10— Financial Reporting in Hyperinflationary Economies
IPSAS 14— Events After the Reporting Date
IPSAS 18—Segment Reporting
IPSAS 20—Related Party Disclosures
IPSAS 22— Disclosure of Financial Information About the General Government Sector
IPSAS 24— Presentation of Budget Information in Financial Statements
Adopting IPSAS for the First Time
IPSAS 33 The First Time Adoption of Accrual Basis International Public Sector Accounting Standards
Additionally, the IPSASB has published three Recommended Practice Guidelines, as well as an Introduction to the Recommended Practice Guidelines. RPGs are announcements that outline best practices for creating general-purpose financial reports (GPFRs) for non-financial statements. RPGs, unlike IPSAS, do not impose requirements. RPGs are now used for all GPFR declarations that aren’t financial statements. The level of assurance (if any) to which information should be submitted is not specified in RPGs. So far, the following RPGs have been released:
- RPG 1 – Reporting on the Long-term Sustainability of an Entity’s Finances
- RPG 2 – Financial Statement Discussion and Analysis
- RPG 3 – Reporting Service Performance Information
The Applicability of IPSAS
It applies to the general-purpose financial reports of national, regional, state/provincial, and municipal governments.
- Government ministries, departments, programmes, boards, commissions, and agencies;
- Public sector social security funds, trusts, and statutory bodies;
- and international governmental organisations are all included.
Public Sector Entities’ Uses of General-Purpose Financial Statements
Most public-sector organisations exist to provide services to the public, rather than to generate profits and return on investment for investors. As a result, financial condition, financial performance, and cash flows alone are insufficient to assess the performance of such companies thoroughly. Users can utilise the general-purpose financial reports (GPFRs) to get information for accountability and decision-making. They give knowledge on topics such as:
– Resources accessible to the entity for future spending, as well as any limits or conditions that may apply;
– The amount and timing of future cash flows required to service and repay existing claims to the entity’s creditors; – The extent to which management has discharged its responsibilities for safekeeping and managing the entity’s resources; – The amount and timing of future cash flows required to service and repay existing claims to the entity’s creditors.
– The extent to which it adheres to established budgets and other regulating authorities.
– Expectations for service delivery and other activities in future periods, as well as the long-term consequences of decisions and activities made during the reporting period;
– efficiency and effectiveness of services provided by the entity to its constituents; and
– improvement or deterioration in the entity’s ability to provide services compared to the previous period.
Characteristics of Reporting Entities in the Public Sector
A government or other public sector institution, programme, or identified area of activity (hereinafter referred to as an entity or public sector entity) that prepares GPFRs is referred to as a public sector reporting entity. A public sector reporting entity can be comprised of two or more distinct entities that submit GPFRs as if they were a single entity. This type of reporting entity is known as a group reporting entity.
- The entity’s primary goal is not to make a profit.
- The entity’s primary goal is not to make a profit.
- The Importance of the Appropriated and Approved Budget.
- Protracted Government Programs.
- Rather than their ability to create cash flows, the primary purpose for retaining assets is for their service potential.
- The Role of Public Sector Entities in Regulation.
Information’s Qualitative Characteristics in GPFRs
Financial and non-financial data regarding economic and other events are presented in GPFRs. The traits that make the information contained in GPFRs relevant to users and help fulfil financial reporting objectives are the qualitative characteristics of the information included in GPFRs. Relevance, faithful representation, understandability, timeliness, comparability, and accuracy are the qualitative aspects of information included in GPFRs of public sector institutions.
Information Constraints in GPFRs
- The Materiality,
- Cost-benefit, and
- Striking an appropriate balance between the qualitative and quantitative;
All typical constraints on information are included in GPFRs.
Users of Financial Statements for General Purposes
The goal of general-purpose financial statements is to meet the information demands of service receivers, resource suppliers, and representatives of these users, such as:
- citizens,
- ratepayers and taxpayers,
- residents,
- donor agencies of members of parliament and members of the legislature,
- lenders, along with the others that provide resources to, or are benefiting from, the services.
Financial Statement Elements
Financial statements are composed of elements, which serve as their building blocks. They are wide social groups with similar economic features. The following are the six aspects that are important for GFPR by public sector entities:
- Assets: An asset is a resource that the entity now controls as a result of a previous transaction.
- Liabilities: A liability is an entity’s present obligation to repay a resource outflow that occurred in the past.
- Revenue: Increases in revenue in the entity’s net financial position, excluding increases due to ownership.
- Expense: Expenses are deducted from the entity’s net financial position, with the exception of declines resulting from ownership distributions.
- Ownership contributions: Ownership contributions are inflows of resources to a company from third parties acting as owners, which establish or increase the firm’s net financial position.
- Ownership distributions: Ownership distributions are the outflows of resources from a company that are transferred to third parties in their role as owners, thereby returning or diminishing their interest in the entity’s net financial condition.
Net Financial Position, Other Resources, and Other Obligations: Recognising economic phenomena not captured by the elements defined above may be necessary in some circumstances to ensure that the financial statements provide information that is useful for a meaningful assessment of an entity’s economic performance and financial position. In certain circumstances, the IPSASs may require or permit the recognition of additional resources or responsibilities as other resources or obligations, which are items added to the six elements mentioned above. After adding other resources and subtracting other obligations indicated in the statement of financial position, the net financial position is the difference between assets and liabilities.
Surplus or Deficit for the Period: The difference between the income and expenses recorded on the statement of financial performance represents the entity’s surplus or deficit for the period.
The Process of Recognition and De-Recognition
Recognition is the process of incorporating and including an item that meets the definition of an element and can be measured in a way that achieves the qualitative characteristics while taking into account the constraints on information included in GPFRs in the amounts displayed on the face of the appropriate financial statement. The financial accounts include all things that meet the recognition requirements. The following are the conditions for recognition:
- An item meets an element’s definition; and
- Can be assessed in a method that achieves qualitative features while taking into account information restrictions.
Accounting regulations, notes, and other explanatory details do not affect the failure to identify objects that fulfil the definition of an element and the recognition requirements. Disclosure, on the other hand, can reveal information on objects that fulfil many but not all of the properties of an element’s definition. Items that fulfil the criteria of an element but cannot be measured in the way that is necessary can also be disclosed. Derecognition is the process of determining whether changes have occurred since the previous reporting date that warrant removing a previously recognised element from the financial statements, and if so, deleting the item. The same criteria are utilised for derecognition as for initial recognition when evaluating ambiguity regarding the presence of an element.
Measurement
The purpose of measurement is to identify the measuring bases that most properly represent the entity’s cost of services, financial capacity, and operational capacity, so that it can be held accountable and make informed choices. For all transactions, events, and circumstances, there is no single measuring basis (or combination of bases).
Assets’ Measurement Bases
The following are some of the most common asset measurement bases:
Historical Cost: The cash or cash equivalents, or the value of the other consideration supplied, or an entry, entity-specific value, provided to acquire or develop an asset at the moment of acquisition.
Market Value: The amount for which an asset may be transferred in an arm’s length transaction between educated, willing parties.
Replacement Cost: At the reporting date, replacement cost is the most cost-effective way for an entity to replace an asset’s service potential, which includes the amount it would receive from its disposal or sale at the end of its useful life.
Net selling Price: After subtracting the expenses of sale, the net selling price is the amount that the entity may earn from the sale of the asset; and
Value in Use: The present value to the entity of the asset’s remaining service potential or capacity to provide economic benefits if it is used, as well as the net amount that the entity will get from its disposal at the end of its useful life.
Liabilities Measurement Bases
The following are some of the most popular measuring bases for liabilities:
Historical Cost:
The consideration received to assume an obligation, which is the value of the other consideration received at the time the responsibility or obligation is incurred or cash or cash equivalents, is referred to as historical cost.
Cost of Fulfilment:
The entity will pay the costs of fulfilling the commitments indicated by the liability, provided that it does so in the most cost-effective manner possible.
Market Value:
In an arm’s-length transaction, the market value for liabilities is the price at which the liability might be resolved between educated, willing parties.
Cost of Release:
The cost of a quick withdrawal from an obligation is referred to as the cost of release.
Assumption Price:
Assumption price is the amount that an entity would rationally accept in exchange for assuming an existing liability; and
Cost of Release:
The cost of release is the amount that either the creditor will accept in settlement of its claim or a third party would charge to accept the transfer of the liability from the obligor.
Financial Statement Components
Complete financial statements set made or prepared in accordance with IPSASA includes:
– a statement of financial position;
– a statement of financial performance;
– a statement of changes in net equity or assets;
– a cash flow statement;
– A comparison of budget and actual numbers, either as a distinct extra financial statement or as a budget column in the financial statements, when the company makes its approved budget publicly available;
– Comments, which provide a description of key accounting policies as well as other explanatory notes; and
– Comparative information with respect to the period that precedes.
Features of IPSAS Financial Statements in General
Fair Presentation and Compliance: Financial statements must accurately and in compliance with IPSAS depict an entity’s financial situation, cash flows and financial performance. Fair presentation requires the accurate depiction of the impacts of transactions, other events, and situations in accordance with the definitions and recognition standards for assets, liabilities, income, and expenses. The implementation of IPSAS, along with any additional information required, is expected to result in financial statements that are presented fairly. In the notes, an organisation whose financial statements conform with IPSAS must provide an unequivocal and unqualified declaration of compliance. Financial statements cannot be characterised as IFRS-compliant unless they fulfil all of the IPSAS requirements. The disclosure of the accounting rules adopted, as well as notes or explanatory information, cannot be utilised to correct improper accounting practices.
If the appropriate regulatory framework requires or does not prohibit such a departure, and management decides that compliance with an IPSAS would be so deceptive as to clash with the goal of financial statements, the organisation shall deviate from that requirement by making sufficient disclosures. When a company has deviated from an IPSAS requirement in the past, and this deviance has an impact on the amounts recognised in the current period’s financial statements.
Going Concern: Management must undertake an evaluation of an entity’s capacity to continue as a going concern while issuing financial statements. Unless management plans to liquidate the firm or discontinue trade, or has no practical choice but to do so, financial statements must be prepared on a going-concern basis. When management is aware of significant uncertainties associated with events or situations that may cast considerable doubt on the entity’s ability to continue as a going concern, it must report these concerns in its assessment.
When an entity does not prepare financial statements on a continuing concern basis, it must disclose this fact, as well as the basis on which the financial statements were prepared and the reason for the firm’s non-going concern status.
Consistency of Presentation: An entity must keep the same presentation and classification of items in its financial statements from one period to the next unless it becomes clear, after a significant change in the nature of the entity’s operations or a review of its financial statements, that a different presentation or classification would be more appropriate, taking into account the criteria for selecting and applying accounting policies, or an IPSAS requires a change in presentation.
Materialist and aggregation: Each material class of comparable goods must be presented individually by an entity. Unless they are inconsequential, an entity must exhibit components of differing nature or function separately.
Offsetting: Assets and liabilities, as well as income and costs, may not be offset unless an IPSAS requires or permits it.
Comparative Information: Unless IPSAS authorises or demands differently, an entity must disclose comparative information for all amounts reported in the current period’s financial statements for the prior period. If it is necessary to comprehend the current period’s financial statements, an organisation must offer comparison information for narrative and descriptive information. One statement of financial position with comparative information for the prior period, one statement of financial performance with comparative information for the preceding period, one cash flow statement with comparative information for the preceding period, and one statement of changes in net assets/equity with comparative information for the preceding period, as well as related notes, are required to be presented by an entity.
Frequency of Reporting: An organisation must provide a complete set of financial accounts at least once a year (including comparative information). When an entity changes the end or closing of its reporting period and presents the FS or financial statements for a period other than a year, it must also explain why the longer or shorter period was chosen, as well as the fact that the amounts presented in the FS or financial statements are not entirely comparable.
Cash Basis of Accounting and the IPSAS
The cash foundation of accounting acknowledges transactions and events only when the company receives or pays cash or cash equivalents. Readers can learn about the sources of cash raised during the period, the reasons for which cash was spent, and the cash balances at the reporting date by reading financial statements produced on the cash basis. In the financial accounts, the focus of measurement is on cash balances and fluctuations. Additional information regarding liabilities, such as payables and borrowings, as well as some non-cash assets, such as receivables, investments, and property, plant, and equipment, may be found in the notes to the financial statements.
The IPSASB provides IPSASs for financial reporting under both the cash basis of accounting and the accrual basis of accounting to improve the quality and comparability of financial information reported by public sector organisations worldwide, in addition to the IPSASs on an accrual basis. It represents a significant step forward in enhancing the uniformity and comparability of financial reporting under the cash basis of accounting, thereby supporting the adoption of the Standard. The Cash Basis IPSAS was created as a bridge to facilitate the transition to the accrual basis of accounting and the implementation of accrual-based IPSAS.
There are two sections to the Cash Basis standard. Part 1 is required, whereas Part 2 identifies extra accounting principles and disclosures that a public sector firm might consider adopting. Only if financial statements meet all of the standards of Part 1 of the IPSAS under Cash Basis published by IPSASB should they be regarded as compliant with this IPSAS.
Component of Financial Statement Under Cash Basis
An entity must prepare and present financial statements that include the following elements:
– A statement providing details of the receipts of cash and payments that recognises all cash receipts, cash balances, and cash payments, controlled by the entity;
– The explanatory notes and the policies of Accounting; and
– When the entity makes its approved budget publicly available, a comparison of budget and actual amounts, either as a separate additional financial statement or as a budget column in the cash receipts and payments statement.
Cash Receipts and Payments Statement
For the reporting period, the cash receipts and payments statement must show the following amounts:
- Total cash received or receipts of the entity, including a sub-classification of total cash received or receipts based on the entity’s activity.
- The entity’s total cash payments, showing a sub-classification of total cash payments using a basis of classification that is suited to the entity’s operations in the best manner; and
- Cash balances that come at the start and end of the year.
Explanatory Notes and Accounting Policies
The notes to an entity’s financial statements must:
– present information about the basis for preparing the financial statements, as well as the specific accounting policies chosen and applied for significant transactions and other events; and
– provide extra information that is additional and that is not presented on the face of the FS or the financial statements but is required for a fair presentation of the entity’s cash receipts, cash outflows, and cash balances.
India’s Government Accounting
The Indian government’s accounting system is rule-based and primarily uses a cash basis accounting approach. With the support of the Government of India (GoI), the Comptroller and Auditor General of India (CAG) established the Government Accounting Standards Advisory Board (GASAB) to formulate and recommend Indian Government Accounting Standards (IGASs) and ‘Indian Government Financial Reporting Standards (IFRS)’ in order to improve government accounting and financial reporting standards. IGFRS is based on an accrual basis and is future-oriented, whereas IGAS is based on the Cash Basis of Accounting, which is now prevalent in India.
Accounting Standards for Indian Governments (IGASs) GASAB has authorised six IGASs so far, three of which have been implemented, while the government is considering the remaining three. These Standards are based on the International Public Sector Accounting Standards Board’s (IPSASB) IPSAS for the Cash Basis of Accounting (often referred to as Cash IPSAS), released by the International Federation of Accountants (IFAC). The three IGASs that the Government of India has announced are:
IGAS 1: Government-provided guarantees: Requirements for Public Disclosure
IGAS 2: Accounting and classification of Grants-in-Aid; and
IGAS 3: Loans and Advances made by Governments Following IGASs approved by GASAB are under consideration by the GoI:
IGAS 7: Foreign Currency and Loss/ Gain by Exchange Rate Variations;
IGAS 9: Government Investments in Equity; and
IGAS 10: Public Debt and Other Liabilities of Governments: Disclosure Requirements.
Indian Government Financial Reporting Standards
IGFRS is an acronym for “Indian Government Financial Reporting Standards”. Although cash-based accounting is still used in India for budgeting, accounting, and financial reporting, as it is easy and registers transactions when cash is given or received, it is no longer widely used. It requires less skilled workers and is tailored to cash management requirements. It has also met the fundamental standards of the government’s financial responsibility to Parliament. However, the cash-based accounting system is not the most informative way of presenting government accounts, and there is a strong need for an accrual-based accounting framework and standards to keep up with global best practices and to facilitate pilot studies and research efforts on the transition to accrual accounting at the Union and State levels.
GASAB has also decided to produce accrual-based accounting standards in addition to cash-based accounting standards. ‘Indian Government Financial Reporting Standards (IGFRSs)’ is the name given to the accrual basis standards. GASAB has authorised 5 IGFRS thus far, and the Government is considering them all. These are the following:
IGFRS 1: Presentation of Financial Statements
IGFRS 2: Property, Plant & Equipment
IGFRS 3: Revenue from Government Exchange Transactions
IGFRS 4: Inventories
IGFRS 5: Contingent Liabilities (other than guarantees) and Contingent Assets: Disclosure Requirements
GASAB has also developed a framework for the accrual system, which will be utilised by the government. The operational framework would provide the general architecture of the accounting model that would be used in government, while also meeting national and constitutional reporting requirements. The government is also considering this significant paper.
Accounting Guidelines for Local Governments (ASLB)
The GASAB Accounting Standards apply to both central and state government accounting. They are not involved in the accounting of Local Bodies. Local self-government at the third tier of government in an administrative and geographical neighbourhood, such as a municipal corporation, municipality, or panchayat, is what the word ‘Local Body’ refers to. In many circumstances, local bodies transfer their tasks, such as constructing schools, city roads, parks, operating transportation services, and delivering water, to other bodies that may or may not be under their authority, including development agencies, boards, and parastatals.
To bridge the vacuum, the Council of the Institute of Chartered Accountants of India established the Committee on Accounting Standards for Local Bodies (CASLB), which releases Accounting Standards for Local Bodies (ASLB). IPASAS is the foundation for these standards. It has so far released the following statements:
The Local Bodies, Conceptual Framework for General Purpose Financial Reporting:
Preface to the Accounting Standard for Local Bodies
Accounting Standard for Local Bodies (ASLB) 1, ‘Presentation of Financial Statements Accounting Standard for Local Bodies (ASLB) 2, “Cash Flow Statements”
Accounting Standards for Local Bodies (ASLB) 3, ‘Accounting Policies, Changes in Accounting Estimates and Errors”
Accounting Standards for Local Bodies (ASLB) 4, ‘The Effects of Changes in Foreign Exchange Rates’ Accounting Standard for Local Bodies (ASLB) 5, ‘Borrowing Costs’
Accounting Standard for Local Bodies (ASLB)9, ‘Revenue from Exchange Transactions ‘
Accounting standard for Local Bodies (ASLB) 11, “Construction Contracts”
Accounting Standard for Local Bodies (ASLB) 12, ‘Inventories’ Accounting Standards for Local Bodies (ASLB) 13, ‘Leases’
Accounting Standard for Local Bodies (ASLB) 14, ‘Events After the Reporting Date’
Accounting Standards for Local Bodies (ASLB) 16, ‘Investment Property’
Accounting Standard for Local Bodies (ASLB) 17, ‘Property, Plant and Equipment’
Accounting Standard for Local Bodies (ASLB) 18, ‘Segment Reporting’
Accounting Standards for Local Bodies (ASLB) 19, ‘Provision, Contingent Liabilities and Contingent Assets’
Accounting Standard for Local Bodies (ASLB) 20, ‘Related Party Disclosures’
Accounting Standards for Local Bodies (ASLB) 21, ‘Impairment of Non-Cash-Generating Assets’
Accounting Standards for Local Bodies (ASLB) 23, ‘Revenue from Non-Exchange Transaction (Taxes and Transfers)’
Accounting Standard for Local Bodies (ASLB) 24, ‘Presentation of Budget Information in Financial Statements’
Accounting Standards for Local Bodies (ASLB) 26, ‘Impairment of Cash-Generating Assets’
Accounting Standards for Local Bodies (ASLB) 31, ‘Intangible Assets’
Accounting Standards for Local Bodies (ASLB) 32, ‘Service Concession Arrangements: Grantor’
Accounting Standards for Local Bodies (ASLB) 33, ‘First-Time Adoption of Accrual Basis Accounting Standards for Local Bodies (ASLBs)’
Accounting Standards for Local Bodies (ASLB) 34, ‘Separate Financial Statements’
Accounting Standards for Local Bodies (ASLB) 36, ‘Investment in Associates and Joint Ventures’
Accounting Standards for Local Bodies (ASLB) 39, ‘Employee Benefits’
Accounting Standards for Local Bodies (ASLB) 42, ‘Social Benefits’
Accounting Standards for Local Bodies (ASLB), ‘Financial Reporting under Cash Basis of Accounting
In the 2020 Status Report, the data collected by the IFAC International Public Sector Financial Accountability Index is analysed to provide knowledge of public sector financial reporting in 165 jurisdictions throughout the world. In their published financial statements for 2020, 49 jurisdictions (30 per cent of the countries included in the 2020 Index) reported on accrual. In their financial reports, 40% already included some aspect of accrual, which the 2020 Index classified as ‘Partial Accrual.’
Thirty percent of governments still report in cash. In comparison to the 2018 report, the findings provide a good picture for future accrual and adoption initiatives throughout the world. Africa, Asia, Latin America, and the Caribbean will have the most prospects for accrual change during this time.
Nearly three-quarters (73%) of governments reporting on accruals will utilise International Public Sector Accounting Standards (IPSAS) in one of three methods by the end of 2023. 28 (57 per cent) of the 49 jurisdictions that reported on accruals in 2020 used IPSASs in one of three ways: 4 jurisdictions adopted IPSASs as-is, 8 changed IPSASs to fit their needs, and 16 referenced IPSASs to build their own national standards. The research shows that understanding the IPSASs will be a wonderful opportunity for accounting professionals all across the world. So, it’s time to be ready and learn about this relatively new field.
