The International Public Sector Accounting Standards Board released its social benefits accounting standard on 31 October.

It has been working on the standard since 2002 but it has taken so long to publish it because board members could not agree on the model.

IPSASB as a whole decided to finally publish the standard - which aims to improve consistency, transparency and reporting by governments of social benefit schemes, such as retirement, unemployment and disability - without consensus.

The document included an alternative view setting out the reasons the three dissenting board members had for deviating from the opinion of the majority.

IPSASB principal Paul Mason told PF that an alternative view on a proposed standard is unusual for IPSASB. But because of the complexity and diversity of social benefits the board could not get consensus.

Mason said the standards are important because of the scope of government expenditure that social benefits make up.

He said: “There’s a whole range of benefits you’re trying to cover in a single set of principles, and that makes it complex.”

The draft out for consultation presents a set of standards that has a single 'recognition point' - when an individual becomes eligible for benefits.

In the alternative view, the way pensions are accounted for would be similar to the way employee pensions recognise liability of individuals – typically from when they start working.

Because social benefits are so diverse, ranging from long-term pensions to short-term job seekers' allowance, the impact of the two approaches would be very different, Mason explained.

He told PF: “It would have a big impact on government balance sheets if you went for the alternative view - that you should have benefits accounted for from the moment people start contributing or they retire.

“Not so much of an impact if you go for the view that it’s just for the 'next' benefit – it’ll still be fairly large numbers, but it won’t have the same impact on the balance sheet.”

IPSAS currently do not provide requirements or guidance on how governments should account for social benefits, which results in a lack of information needed to access the authorities’ performance.

Mason, who has previously written about the need for improved accounting for PF, said: “[Social benefits are] a big area of government expenditure so it’s an important standard.

“At this stage it’s an exposure draft, so we are putting this out as a proposed standard but we are asking for comments on it.”

He added: “It won’t become a standard until we’ve got all the comments back.”

Comments are requested by March 31 2018 and the board will analyse and discuss the responses in its June meeting.