IPSAS Explained A Summary of International Public Sector Accounting Standards, 2nd Edition

Foreword VII

Contents IX

Abbreviations XII

I. Introduction: General information about IPSASs and the IPSASB 1

1 The International Public Sector Accounting Standards Board 1

1.1 General information 1

1.2 Structure and organization of the IPSASB 2

1.3 Objectives of the IPSASB 4

1.4 Oversight of the IPSASB 4

1.5 Members of the IPSASB 6

2 International accounting standards for the public sector 7

2.1 Overview of international accounting standards for the public sector 7

2.2 History of the International Public Sector Accounting Standards 10

2.3 Scope of the International Public Sector Accounting Standards 10

2.4 General purpose financial statements 11

2.5 Authority of the International Public Sector Accounting Standards 11

2.6 Strategy of the IPSASB 13

2.7 The Conceptual Framework project 14

2.8 Other current projects of the IPSASB 19

2.9 Process for reviewing and modifying IASB documents 24

2.10 Procedures for developing accounting standards 27

2.11 IPSASs for accrual basis of accounting and cash basis of accounting 30

2.12 Background to the application of international accounting standards for the public sector 31

2.13 Provisions for the transition from the cash basis to the accrual basis of accounting 33

3 Measurement bases in accordance with IPSASs 34

3.1 Cost 34

3.2 Fair value 36

3.3 Present value 37

II. Impact of the global financial crisis and the sovereign debt crisis on public sector accounting 38

1 Context of the global financial crisis 2008-2009 38

2 Accounting issues relating to public sector interventions 40

2.1 Accounting for recapitalization or investments 41

2.2 Accounting for fiscal support 42

2.3 Accounting for financial guarantees 43

3 The sovereign debt crisis 44

3.1 Evolution of the crisis 44

3.2 Major measures taken to solve the crisis in 2010 and 2011 46

3.3 Effects of the sovereign debt crisis on public sector financial management48

III. Overview of accrual basis IPSASs 51

IPSAS 1: Presentation of Financial Statements 51

IPSAS 2: Cash Flow Statement 60

IPSAS 3: Accounting Policies, Changes in Accounting Estimates and Errors 65

IPSAS 4: The Effects of Changes in Foreign Exchange Rates 70

IPSAS 5: Borrowing Costs 73

IPSAS 6: Consolidated and Separate Financial Statements 76

IPSAS 7: Investments in Associates 82

IPSAS 8: Interests in Joint Ventures 86

IPSAS 9: Revenue from Exchange Transactions 90

IPSAS 10: Financial Reporting in Hyperinflationary Economies 95

IPSAS 11: Construction Contracts 97

IPSAS 12: Inventories 101

IPSAS 13: Leases 106

IPSAS 14: Events after the Reporting Date 112

IPSAS 15: Financial Instruments: Disclosure and Presentation 116

IPSAS 16: Investment Property 120

IPSAS 17: Property, Plant and Equipment 125

IPSAS 18: Segment Reporting 133

IPSAS 19: Provisions, Contingent Liabilities and Contingent Assets 136

IPSAS 20: Related Party Disclosures 142

IPSAS 21: Impairment of Non-Cash-Generating Assets 145

IPSAS 22: Disclosure of Information About the General Government Sector 150

IPSAS 23: Revenue from Non-Exchange Transactions (Taxes and Transfers) 153

IPSAS 24: Presentation of Budget Information in Financial Statements 160

IPSAS 25: Employee Benefits 165

IPSAS 26: Impairment of Cash-Generating Assets 175

IPSAS 27: Agriculture 181

IPSAS 28: Financial Instruments: Presentation 186

IPSAS 29: Financial Instruments: Recognition and Measurement 189

IPSAS 30: Financial Instruments: Disclosures 195

IPSAS 31: Intangible Assets 199

IPSAS 32: Service Concession Arrangements: Grantor 206

IV. Overview of current Exposure Drafts 216

IPSAS ED 46: Recommended Practice Guideline: Reporting on the Long-Term Sustainability of a Public Sector Entity’s Finances 216

IPSAS ED 47: Financial Statement Discussion and Analysis 224

V. Cash Basis IPSAS 229

Cash Basis IPSAS: Financial Reporting Under the Cash Basis of Accounting 229

Further reading 236