IPSASB Update Ian Carruthers

Transcription

1 IPSASB Update Ian Carruthers IPSASB Chair 13 th May 2016 Page 1

2 IPSASB update Session outline IPSASB background New governance and advisory arrangements 2015 new standards and consultations Work plan 2016 onwards Conceptual Framework influence Key project overviews Page 2

3 The IPSAS Board and its outputs Independent Standard Setting Board under auspices of IFAC Remunerated Chair (75% WTE) 17 other volunteer board members from around world Sets standards for Public Sector Entities Funding by IFAC (approx 50%) and voluntary contributions from Governments and observer organizations 34 IPSASs (accrual basis) covering main areas of government activity, 1 cash basis standard as stepping stone to accrual 3 Recommended Practice Guidelines (RPGs) Public Sector Conceptual Framework 3

4 Overview of IPSASs IPSASs are high quality global financial reporting standards for application by public sector entities IPSASs deal with transactions and events in general purpose financial statements IPSASs set out recognition, measurement, presentation and disclosure requirements IPSASs on the accrual basis are mainly based on IFRSs but adapted to the public sector context where appropriate IPSASs on unique public sector topics (e.g. Taxation) developed from scratch

5 IPSASB: Rigorous standard-setting process Stakeholder Input Due Process Page 5

6 IPSASs: Convergance with IFRSs IFRS (Private Sector) Terminology Public sector guidance Public sector issues IPSASs (Public Sector) Public sector examples Page 6 Confidential and Proprietary Information

7 IPSASs: Process for considering GFS guidelines Page 7 Confidential and Proprietary Information

8 Governance and Advisory Arrangements (1) Public Interest Committee (PIC) PIC Role: Oversee governance and standard-setting activities World Bank, IMF, OECD, INTOSAI co-chairs 3 meetings to date Reviewed and advised IPSASB on the following: Documentation/enhancements of IPSASB due process and working procedures IFAC & IPSASB on appointments of: IPSASB Chair & Inaugural CAG Chair Members: IPSASB & CAG IPSASB & CAG Terms of Reference Final Standards: Applicability of IPSASs & Improvements to IPSASs 2015 Page 8

9 Governance and Advisory Arrangements (2) Consultative Advisory Group (CAG) CAG Role: Advise IPSASB on key project issues, strategy, work plan Inaugural Chair & Members appointed Composition: 50% Preparers/Users Audit organizations Including Forum of Firms Representative Economic development and regulatory organizations Regulatory organizations Professional Accountancy Bodies Individuals Initial meeting June 2016 in Toronto, Canada Page 9

10 IPSASs: Momentum in adoption Increased adoption and implementation Over 40 Countries apply accrual IPSAS; including South Africa, New Zealand, Switzerland, Russia, Israel, Slovakia, Brazil, Indonesia Some apply it directly (e.g. Switzerland, Austria, Estonia, Lithuania, Chile) Others indirectly through National Standards (e.g. South Africa, Brazil, Indonesia, Malaysia, Spain, New Zealand) Some apply it for lower levels of government, e.g. Prefecture of Tokyo, State of Geneva Entire UN System, OECD, NATO, Interpol and European Commission 10 Page 10

11 IPSASB Strategic Objective onwards Strengthening public financial management and knowledge globally through increasing adoption of accrual-based IPSASs by: Developing high-quality financial reporting standards Developing other publications for the public sector Raising awareness of the IPSASs and the benefits of their adoption Page 11

12 New / revised standards and guidance issued 2015 IPSAS 33, First-time Adoption of Accrual Basis IPSASs (January 2015) IPSAS 34-38, Interests in Other Entities (replacing IPSASs 6-8) (January 2015) RPG 3, Reporting Service Performance Information (March 2015) Page 12

13 Consultations and Exposure Drafts 2015 Final pronouncements approved at March 2016 meeting: Minor Improvements Applicability of IPSASs Responses currently being analysed: Social Benefits CP Exposure Drafts still open for comment: Update of IPSAS 25 Employee Benefits ED 59 (April 30 th ) Public Sector Combinations ED 60 (June 30 th ) Update of Cash Basis IPSAS ED 61 (July 31 st ) Page 13

14 Work programme 2016 onwards Key projects Project Social Benefits Public sector specific IFRS convergence Revenue & Non-Exchange Expenditure x x Financial Instruments x x Heritage Public Sector Measurement (not yet started) Infrastructure Assets (not yet started) Leases (just started) x x x x x Page 14

15 Public Sector Conceptual Framework (1) Preface - Characteristics of the Public Sector that influence Public Sector Accounting Government Finance Statistics Non-exchange Transactions Role as Regulator Role of the approved Budget Characteristics of Assets/Liabs Longevity Page 15

16 Public Sector Conceptual Framework (2) Preface Key Characteristics of Public Sector Phase 1 Role Objectives and Users QCs Reporting Entity Phase 2 Elements and Recognition Phase 3 Measurement Phase 4 Presentation Public Sector Conceptual Framework Page 16

17 Social Benefits Narrower scope of current project Projects Social Benefits Non-Exchange Expenses IPSAS 25 Update Social Assistance Social Security Other Transfers In Kind Collective Goods and Services Employment Related Social Insurance Page 17

18 Social Benefits CP responses on scope and definitions Do you agree with the proposed scope? Do you agree with the definitions? Disagree; 9 Did not Comment; 3 Agree; 18 Disagree; 9 Did not Comment; 3 Agree; 14 Partially Agree; 6 Partially Agree; 10 Page 18

19 Social Benefits Recognition and measurement options Option 1 Obligating Event Approach Option 2 Social Contract Approach Option 3 Insurance Approach Page 19

20 Social Benefits Option 1 potential recognition points Earliest Recognition Point Latest Recognition Point Key Participatory Events Occur Some but not all eligibility criteria may be met Eligibility Criteria Initially Met Eligibility Criteria Met to Receive Next Benefit Eligibility Criteria Met to Receive Next Benefit Claim Approved Eligibility Criteria Met to Receive Next Benefit Claim Approved Payment Date Arrived Key Participatory Events Threshold Eligibility Criteria Eligibility Criteria Met to Receive Benefit Approved Claim Enforceable Claim Requirements to satisfy ongoing eligibility criteria (including revalidation) affect measurement but not recognition Requirements to satisfy ongoing eligibility criteria (including revalidation) affect both recognition and measurement Page 20

21 Revenue and Non-Exchange Expenditure Single CP to address need for symmetry in approach between revenue and expenditure (e.g. grants) Assessment of extent that IFRS15 performance obligation approach can be applied to public sector revenues Residual non-exchange revenue standard as successor to IPSAS 23? Key debate about application of CF Elements definitions Non-exchange expenses outside Social Benefits project e.g. Education, Health and Defence expenditure Consistency / links with Social Benefits and existing IPSASs Page 21

22 Financial Instruments: Coverage and approach Public Sector Specific Financial Instruments 2016 CP will cover monetary authority items (monetary gold, currency and notes in circulation, IMF items) Statutory receivables and payables - Revenue and Non-Exchange Expenditure project Securitization - IPSAS 29 update Recognition and Measurement (update IPSAS 29, considering IFRS 9) ED (Starting June) Page 22

23 Heritage (1) Provide requirements and guidance to replace provisional guidance in IPSAS 17 no asset recognition requirement CP as initial step despite original 2006 CP Proposed Heritage Items definition: Heritage items are items that, because of their rarity, importance and/or significance, are expected to be held for the benefit of present and future generations and preserved indefinitely. They are preserved for many different reasons including, and not limited to, their architectural, agricultural, artistic, cultural, environmental, historical, natural, scientific or technological importance. Page 23

24 Heritage (2) Categories considered based on UNESCO Conventions Cultural property Underwater cultural heritage Intangible cultural heritage Cultural and natural heritage Discussion in terms of CF asset and liability definitions CF used to develop proposals on recognition, measurement and disclosure December 2016 CP approval Page 24

25 Public Sector Measurement (1): CF Measurement Bases Assets Historical Cost Current Value measures Market Value Replacement Cost Net Selling Price Value in Use Liabilities Historical Cost Current Value measures Market Value Cost of Fulfilment Cost of Release Assumption Price Page 25

26 Public Sector Measurement (2) Combined impact on IPSASs of CF and IFRS 13: Measurement requirements not consistent with CF Fair value references inconsistent with IFRS 13 Other key issues: Further Implementation Guidance needed? Transaction costs treatment (including borrowing costs) Consistency with GFS and IVSC guidance Preliminary analysis stage before deciding further steps Task Force to include GFS and IVSC representatives Page 26

27 Questions Discussion & Further Information Visit our webpage Or contact us by IPSASB Chair: iancarruthers@ipsasb.org Technical Director: johnstanford@ipsasb.org Page 27