Drawing up a standard for how governments account for social benefits such as unemployment benefits and state pensions has been a difficult and protracted process.

After 15 years of discussion, the board finally released exposure draft 63 in October last year and, in a first, included an alternative view reflecting the lack of consensus. This set out the reasons three dissenting board members had for deviating from the opinion of the majority.

Exposure draft 63 presented a single ‘recognition point’ for the liability presented by social benefits – when an individual becomes eligible for payments through for example retiring or becoming unemployed.

According to the alternative view, the ‘recognition point’ would be earlier, typically when people start working but before they are in receipt of the benefits.

At its June meeting the board reviewed feedback received on the standard and agreed to go with the scope proposed – not the alternative view – but to clarify some definitions as some respondents said key terms needed to be clearer.

John Stanford, technical director of IPSASB, told PF International: “There are very sound and strongly held arguments both for the alternative view on the recognition and measurement of social benefits and the approach proposed in exposure draft 63.

“Making a decision on this key issue has been one of the toughest challenges facing the IPSASB in all the years that I have been associated with the board.”

Stanford added that IPSASB would monitor the implementation of the final standard, which is expected to be approved during the December board meeting.

Paul Mason, IPSASB principle, told PF International: “We appreciate that our constituents feel strongly about the recognition point for social benefit liabilities and have treated this standard with the same rigorous due process as all IPSAS.

“Given the wide range of views, the IPSASB thought that it would be in the public interest to issue a standard, as preparers need guidance in this area.”

Mason added that the standard could be reviewed after a few years of implementation following further feedback from users.

The standard aims to improve consistency, transparency and reporting by governments of social benefit schemes, such as retirement, unemployment and disability.