IPSASB launches consultation on new standard for social spending

30 Jul 15

The International Public Sector Accounting Standards Board has launched a consultation on the creation of the new accounting standard on social and welfare spending.

A consultation launched by the board will consider how governments worldwide can evaluate the financial impact of the social benefits that they provide.

“Users need information that allows them to evaluate the financial impact of the social benefits that governments provide,” said IPSASB Chair Andreas Bergmann.

“The IPSASB considers there is a major need for guidance in this area. This consultation paper is the first step in achieving appropriate reporting of social benefits. We look forward to receiving constituents’ views on the options we have identified.”

The paper indentified similarities between some social benefits and insurance contracts and IPSASB will use an insurance accounting model to measure schemes at the net present value of their cash inflows and outflows.

IPSASB stressed the purpose of the review was to consider how IPSASB could improve its suite of standards by developing an IPSAS for social benefits.

It also noted that the paper built on previous work on accounting for social benefits while also developing new ideas. The scope of the social benefits project includes social assistance and social security, but excludes programs that form part of an employer-employee relationship, other transfers in kind, and collective goods and services such as the provision of universal health care and education services.

Comments on the consultation paper are due by 31 January 2016.

  • Judith Ugwumadu
    Judith Ugwumadu

    Judith writes about public finance, public services and economics across Public Finance International and Public Finance. She previously undertook reporting stints at Financial Adviser, Global Security Finance and The Sunday Express.

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