DPEPA/DESA Workshop on Financial Management Roma November 2001 IFAC Public Sector Committee Standards Project Update Presented by John Stanford Assistant Director CIPFA United Kingdom 1 United Kingdom
International Federation of Accountants (IFAC) Membership - 153 member bodies, 113 countries Technical committees including: Audit practices Public sector FMAC Ethics Education 2
PSC Members and Observers Members Australia, Canada, France, Germany, Mexico, The Netherlands, New Zealand, Pakistan, South Africa, Thailand, UK, USA Observers ADB, IASB, IMF, INTOSAI, OECD, World Bank, UNDP 3
IFAC Public Sector Committee Established 1986 Initial role and objective to address public sector needs re: Financial reporting Accounting Auditing Issued studies, guidelines New role evolving 4
Standards Project Established late 1996 Stage 1 Objectives Background Paper Core Set of Standards quickly Identify public sector specific issues for consideration in stage 2 Translation 5
Progress to Date: Stage 1 Study 11 - Governmental Financial Reporting 6
Accrual IPSASs 1. Presentation of financial statements 2. Cash flow statements 3. Net surplus or deficit for the period, fundamental errors and changes in accounting policies 4. The effects of changes in foreign exchange rates 7
Accrual IPSASs (continued) 5. Borrowing costs 6. Consolidated financial statements and accounting for controlled entities 7. Accounting for investments in associates 8. Financial reporting of interests in joint ventures 8
Accrual IPSASs (continued) 9. Revenue from Exchange Transactions 10. Financial Reporting in Hyperinflationary Economies 11. Construction Contracts 12. Inventories 9
Accrual IPSASs (continued) Agreed - to be issued to be issued by end of 2001 Events After the Reporting Date Financial Instruments: Disclosure and Presentation Investment Property 10
Accrual IPSASs (continued) Anticipated issue end of 2001/early 2002 Anticipated issue Leases (end 2001) Property, Plant and Equipment (end 2001) Segment Reporting (early 2002) 11
Exposure Drafts ED 20 Related Party Disclosures ED 21 Provisions, Contingent Liabilities and Contingent Assets (Comment period ends 30 November 2001) ED 9 Financial Reporting Under the Cash Basis of Accounting (comments closed) Further consultation on ED 9 being undertaken 12
Currently Under Development ED on Impairment (ITC( issued July 2000) Guide on Transition - to accrual basis (issue first quarter 2002) 13
Development Deferred Employee Benefits Entity Combinations 14
Stage 2 of Standards Project Deal with public sector specific issues Framework for financial reporting Monitor IASB Promotion and communication Translation Care and maintenance 15
Public Sector Specific Issues Non-exchange revenue (e.g. taxes) Social policy obligations/liabilities Harmonisation of accounting and GFS Inventories of services to be provided free Government budgets Measurement of heritage assets Non-financial performance indicators 16
Potential Changes to Operating Procedures Steering Committees (including Non-PSC members) - to broaden base of expertise Consultative Groups To discuss/report on public sector issues/psc work program To widen input to PSC process Regional Workshops/Presentations 17 To communicate with constituents
Governance Mandate just standards? IFAC Board of Trustees? IASB? Funding (Governments?) 18
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ATTACHMENT PSC STUDIES:Background Framework Study 1 Financial Reporting by National Governments Study 2 Elements of the Financial Statements of National Governments Study 5 Definition and Recognition of Assets Study 6 Accounting for and Reporting Liabilities Study 8 The Government Financial Reporting Entity Study 9 Definition and Recognition of Revenues Study 10 Definition and Recognition of Expenses/Expenditures 20