Moving forward with IPSASB

7 Sep 18

Neema Kiure Mssusa, who is speaking at CIPFA’s conference later this month, discusses some of the highlights of her first eight months on the International Public Sector Accounting Standards Board. 


I joined the International Public Sector Accounting Standards Board at the beginning of 2018 and the first few months of my initial three-year term have certainly been eventful and challenging.

The highlight of the first half of the year for IPSASB was undoubtedly the four regional roundtables in Europe, Africa, Asia and Latin America to promote awareness of, and obtain feedback on, the proposed IPSASB strategy and work plan, 2019-23, published as a consultation document in February 2018.

The roundtables were hosted in Brussels by Accountancy Europe, in Addis Ababa by the African Union, in Manila by the Asian Development Bank and in Brasilia by the Brazilian Federal Accounting Council, National Treasury and Accounting Foundation.

This was a major milestone for the IPSASB - the first time that the board had used roundtables to complement a consultation exercise on any subject.

In total, 384 people from 108 countries attended the roundtables, representing more than 300 organisations.

In headline terms, there was strong support for the proposals in the consultation document – particularly the proposed strategic objective with its emphasis on financial reporting as a cornerstone of strong public financial management, and, to a slightly lesser extent, the proposed new projects - natural resources, discount rates, IPSAS for smaller entities and a limited scope review of the conceptual framework. 

The regional roundtables demonstrated that there is a real appetite for such engagements and IPSASB is exploring how to embed similar events as a regular feature of its outreach program in the future.

The IPSASB made sound progress on its work plan in the first half of 2018. 

In August IPSAS 41, Financial Instruments, was published.  

IPSAS 41 brings IPSASB’s requirements and guidance in line with International Financial Reporting Standards, notably for classification, impairment and hedge accounting.  

The IPSASB is confident that the changes will be more straightforward for preparers as well as providing more relevant information for users, especially the forward looking impairment model.

With the approval of IPSAS 41 the IPSASB will focus on the development of requirements and guidance for what have been termed ‘public sector financial instruments’­: monetary gold, currency in circulation, international monetary fund auotas and subscriptions.

The IPSASB is also well on the way to approving a standard on social benefits by the end of the year.

At the June meeting the board decided on the approach to recognition and measurement - a maximum expense and liability of payments until eligibility criteria are next required to be satisfied.

The IPSASB decided to retain the approach proposed in Exposure Draft (ED) 63, social benefits, whereby insurance accounting will be optional, but not required, for schemes that are intended to be fully funded from contributions and are managed in the same way as insurance contracts.

Together with a related project dealing with collective services such as defence and street lighting, and universally accessible services, such as healthcare and education, this will fill the last major gap in IPSASB’s literature and solidify our continuing quest to be the global public sector standard setter.

There has been continuing progress on other projects.

On revenue the board is developing an approach based on the fulfilment of performance obligations by the recipients of grants, transfers and funding as an alternative to the exchange/non-exchange demarcation that has underpinned IPSASB’s approach in many areas.

Earlier this year the board issued ED 64, Leases.

The review of responses to the proposals in ED 64 is underway.

The two most controversial issues are lessor accounting and concessionary leases.

On lessor accounting some respondents have questioned the proposal to adopt the same right of use model as for lessee accounting.

For concessionary leases some respondents have challenged the parallels between concessionary leases and concessionary loans and questioned the proposals for the recognition of day one gains and losses related to such leases.

ED 66, Long-Term Interests in Associates and Joint Ventures and Prepayment Features with Negative Compensation, was also issued last month.

The objective of this ED is to propose amendments to IPSAS to converge with the narrow-scope amendments to IAS 28, Investments in Associates and Joint Ventures, made by the IASB in Long-term Interests in Associates and Joint Ventures (Amendments to IAS 28); and IFRS 9, Financial Instruments, made by the IASB in Prepayment Features with Negative Compensation (Amendments to IFRS 9). Comments on this ED will be due by 22 October 2018.

I’ll be updating participants at the CIPFA International Conference on the progress we make on these and other projects at IPSASB’s September meeting, which will conclude a few days earlier.

Neema Kiure Mssusa will be speaking on day one (23 September) of CIPFA’s international conference in Abu Dhabi, UAE at the Moving forward with IPSASB.  


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