IPSASB Developments Ian Carruthers IPSASB Member Executive Director, Policy and Technical, CIPFA

Conceptual Framework – October 2014 Strategy and Work Plan First Time Adoption (IPSAS 33) – January 2015 Accounting for Interests in Other Entities (IPSASs 34 – 38) – January 2015 RPG3 - Service Performance Reporting – March 2015 IPSASB Developments

Non- Exchange Transactions Approved Budget Nature & Longevity of Public Sector Nature & Purpose of Assets & Liabilities Regulatory Role Statistical Reporting CF Preface: Characteristics of the Public Sector

Role Concepts underpinning general purpose financial reporting Accrual Basis Authority No authoritative requirements No override of requirements of International Public Sector Accounting Standards™ (IPSASs™) or Recommended Practice Guidelines (RPGs ) CF Chapter 1: Role and Authority of the Conceptual Framework

Objectives of Financial Reporting –Provide information about entity useful to users of GPFRs –Accountability purposes and decision-making purposes –Reflects service delivery objective and nature of funding –Respond to information needs of users Users of GPFRs –Primary users: service recipients and resource providers CF Chapter 2: Objectives and Users

Relevance Faithful Representation Understandability Timeliness Comparability Verifiability CF Chapter 3: The QCs

Government or other public sector organisation, program or identifiable area of activity that prepares GPFRs Key characteristics –Raises or uses resources from / on behalf of constituents; and –Service recipients or resource providers dependent on GPFRs May comprise two or more separate units / organisations Separate legal identity not essential CF Chapter 4: The Reporting Entity

AssetRevenue Ownership Contributions LiabilityExpense Ownership Distributions CF Chapter 5: Defined Elements

Recognition of economic phenomena not captured by elements definitions potentially necessary IPSASs could require or allow recognition of resources or obligations not satisfying element definitions: –‘other resources’ (deferred inflows at ED stage) –‘other obligations’ (deferred outflows at ED stage) Net financial position instead of Net Assets = difference between assets and liabilities after adding other resources and deducting other obligations. CF Chapter 5: Net Financial Position / Other Economic Phenomena

Item Satisfies Definition of an ElementCan be Measured in a way that: Achieves QCs Takes account of Constraints Not Incorporated in Element Definitions CF Chapter 6: Recognition – The Criteria

Measurement Objective: ‘to select those measurement bases that most fairly reflect the cost of services, operational capacity and financial capacity of the entity in a manner that is useful in holding the entity to account, and for decision-making purposes’ No single measurement basis (or group of bases) identified AssetLiability Historical Cost Current Value Market valueCost of fulfillment Replacement costMarket value Net selling priceCost of release Value in useAssumption price CF Chapter 7: Measurement

Information Selection Information Location Information Organization CF Chapter 8: Presentation

IPSASBIASB RoleConcepts that underpin general purpose financial reporting; does not override standards Concepts that underlie the preparation and presentation of financial statements; does not override standards ScopeGeneral purpose financial reports (GPFRs)1989 Framework – relates to financial statements – 2010 Framework sections refer to GPFRs ObjectiveFinancial information - useful for accountability and decision-making purposes. Users service recipients and resource providers Financial information - to provide investors, lenders and other creditors making decisions about providing resources to the entity Qualitative Characteristics Definitions very similar to IASB Framework; no split between fundamental and enhancing characteristics Split between fundamental and enhancing characteristics ElementsDefinitions similar Net financial position & “other economic phenomena” Definitions similar; tentative decisions on “economic resources” MeasurementMeasurement objective “Fair Value” not identified as measurement basis. Tentative decision – no measurement objective (factors to consider when selecting a measurement basis) ReportingIPSASB principles for information selection, location and organisation in broader GPFRs Discussion paper and exposure draft has/is anticipated to include a new chapter on presentation and disclosure IPSASB CF Compared to the IASB

Strengthening public financial management and knowledge globally through increasing adoption of accrual-based IPSASs by: Developing high-quality public sector financial reporting standards; Developing other publications for the public sector; and Raising awareness of the IPSASs and the benefits of their adoption. IPSASB Strategic Objective 2015

Public Sector Combinations Government Business Enterprises Public Sector Specific Financial Instruments Emissions Trading Schemes – collaboration with IASB Social Benefits – project re-started Ongoing projects

“must-do” projects Non-exchange expenses; Revenues – exchange and non-exchange; Measurement – public sector specific; Heritage assets; and Infrastructure assets. existing IPSASs which need maintaining Employee benefits; Leases Annual improvements Cash Basis IPSAS Work Plan Balancing development and maintenance

In January 2015 the IPSASB issued: IPSAS 34 Separate Financial Statements IPSAS 35 Consolidated Financial Statements IPSAS 36 Investments in Associates and Joint Ventures IPSAS 37 Joint Arrangements IPSAS 38 Disclosure of Interests in Other Entities Features: Based on IFRS equivalents Different terminology, including relevant public sector illustrations Clarifications on the applicability of the Standards to accounting by public sector entities. Accounting for Interests in Other Entities

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