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    Seminar IPSAS PDF

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    Dila Estu Kinasih
    The document discusses International Public Sector Accounting Standards (IPSAS). IPSAS are standards developed by the IPSAS Board to promote transparency and accountability in public sector financial reporting around the world. They require accrual-based accounting. More than 40 countries have adopted or are adopting IPSAS. While IPSAS implementation presents challenges like costs and changes to processes, it provides benefits like increased transparency and information for decision-making.

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    Seminar IPSAS PDF

    Uploaded by

    Dila Estu Kinasih
    81 views8 pages
    The document discusses International Public Sector Accounting Standards (IPSAS). IPSAS are standards developed by the IPSAS Board to promote transparency and accountability in public sector financial reporting around the world. They require accrual-based accounting. More than 40 countries have adopted or are adopting IPSAS. While IPSAS implementation presents challenges like costs and changes to processes, it provides benefits like increased transparency and information for decision-making.

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    The document discusses International Public Sector Accounting Standards (IPSAS). IPSAS are standards developed by the IPSAS Board to promote transparency and accountability in public sector financial reporting around the world. They require accrual-based accounting. More than 40 countries have adopted or are adopting IPSAS. While IPSAS implementation presents challenges like costs and changes to processes, it provides benefits like increased transparency and information for decision-making.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    81 views8 pages

    Seminar IPSAS PDF

    Uploaded by

    Dila Estu Kinasih
    The document discusses International Public Sector Accounting Standards (IPSAS). IPSAS are standards developed by the IPSAS Board to promote transparency and accountability in public sector financial reporting around the world. They require accrual-based accounting. More than 40 countries have adopted or are adopting IPSAS. While IPSAS implementation presents challenges like costs and changes to processes, it provides benefits like increased transparency and information for decision-making.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 8

    IPSAS

    Arief Rahman

    Introduction
      The public sector has been undertaking broad reforms in the
    public sector accounting – not only since the global finance
    crisis

      Cash basis accounting is still common in the public sector

      IPSAS is the only international accepted standard for public


    sector accounting

    1
    IPSAS
    International Public Sector Accounting Standards (IPSAS) are high-
    quality global financial reporting standards for application by public
    What are sector entities other than government business enterprises (GBEs).
    IPSAS? Accrual-based IPSAS set out recognition, measurement, presentation
    and disclosure requirements dealing with transactions and events in
    general purpose financial statements.

    The IPSAS Board (IPSASB) is the responsible body formed to develop


    and issue IPSAS under its own authority. IPSASB is a board under the
    What is the auspices of the International Federation of Accountants (IFAC).
    IPSASB? IPSASB develops standards that apply to an accrual- based and to the
    cash basis of accounting.

    IPSAS
    More and more governments and other public sector entities around
    the world are adopting the accrual-based IPSAS as a basis for their
    Who is accounting and financial reporting. In total, more than 40 countries
    adopting have adopted or are adopting IPSAS or comparable standards. The
    European Commission is currently considering using accrual-based
    IPSAS? IPSAS as a basis for the European Public Sector Accounting Standards
    (EPSAS).

    IPSAS represent a global standard for best-practice accounting in the


    What are the public sector. The main benefits of IPSAS are their worldwide
    acceptance and the increased transparency they provide over an
    benefits of
    entity’s finances. Furthermore, IPSAS require that more information is
    implementing provided and disclosed in an organization’s financial statements, as
    IPSAS? compared to cash accounting, leading to better information
    availability and more transparency for decision- making.

    2
    IPSASB
    The IPSAS Board is an accounting standard-setter
    that is dedicated to enhancing the quality of the
    accounts of public sector entities. Its goal is to
    develop:
    §  standards that are convergent with international
    private sector standards
    §  specific standards for the public sector where
    there is no equivalent in the body of private
    sector standards

    Countries which plan or already


    adopted IPSAS
      Austria   Ghana   Morocco   South Africa

      Brazil   Indonesia   Nigeria   Spain

      Chile   Israel   Pakistan   Switzerland

      Costa Rica Kenia   Peru   Tanzania

      Cyprus   Latvia   Portugal   Uruguay

      Czech Rep.   Lithuania   Romania   Vietnam

      France   Malaysia   Russia

    3
    National standards are broadly
    consistent with IPSAS
      Australia

      Canada

      New Zealand

      United Kingdom

      USA

    Supranational organizations
    using IPSAS
      Commonwealth   NATO
    Secretariat
      OECD
      European Commission
      United Nations
      EUMETSAT

      European Space Agency


    (ESA)

      IFAC

      INTERPOL

    4
    Scope of IPSAS
      applied to all general purpose financial statements
    prepared and presented under the accrual basis of
    accounting in accordance with IPSASs.

      does not apply to condensed interim financial


    information

      applies to all public sector entities other than


    Government Business Enterprises (GBEs)

    Government Business Enterprise


    Government Business Enterprise means an entity that has all the
    following characteristics:

    §  Is an entity with the power to contract in its own name;

    §  Has been assigned the financial and operational authority to carry on


    a business;

    §  Sells goods and services, in the normal course of its business, to other
    entities at a profit or full cost recovery;

    §  Is not reliant on continuing government funding to be a going


    concern (other than purchases of outputs at arm’s length); and

    §  Is controlled by a public sector entity.

    5
    Purpose of Financial Statements

      Financial statements are a structured representation of the financial


    position and financial performance of an entity.
      The objectives to provide information about the financial position,
    financial performance and cash flows of an entity that is useful to a
    wide range of users in making and evaluating decisions about the
    allocation of resources.
      the objectives of general purpose financial reporting in the public
    sector should be to provide information useful for decision-making,
    and to demonstrate the accountability of the entity for the resources
    entrusted to it
      Supplementary information, including non-financial statements, may
    be reported alongside the financial statements in order to provide a
    more comprehensive picture of the entity’s activities during the period

    Components of FS
    a.  A statement of financial position;

    b.  A statement of financial performance;

    c.  A statement of changes in net assets/equity;

    d.  A cash flow statement;

    e.  When the entity makes publicly available its approved budget, a
    comparison of budget and actual amounts either as a separate
    additional financial statement or as a budget column in the
    financial statements; and

    f.  Notes, comprising a summary of significant accounting policies


    and other explanatory notes.

    6
    Timeliness
      The usefulness of financial statements is impaired if they are
    not made available to users within a reasonable period after the
    reporting date.

      An entity should be in a position to issue its financial statements


    within six months of the reporting date.

      Ongoing factors such as the complexity of an entity’s


    operations are not sufficient reason for failing to report on a
    timely basis.

      More specific deadlines are dealt with by legislation and


    regulations in many jurisdictions.

    Implications of Accrual Acctg


      IPSAS/accrual accounting will not solve financial problems of a
    jurisdiction, but it contributes to and promotes better financial
    management in the future

      Clearer financial picture in the first years of implementation need


    to be seen as incentive for improvement and stimulus to further
    reforms

      Accrual accounting information needs to get embedded in


    decision-making and made use of by decision makers

      Scope of information increases significantly; key is to make use of


    these information

      Finally, accrual accounting requires a change of mind

    7
    Challenges in adopting IPSAS

    Cost and time The time and costs associated with an IPSAS conversion are always
    expected to be substantial, but they often remain unclear. This
    efforts uncertainty is a major challenge for promoters of accounting reforms
    needed in political discussions.

    In many cases, a detailed time line for the conversion project is either
    Detailed time not available or not specific enough. A lack of experience with such
    line missing projects often means the sequencing of the necessary transition steps
    is not clear.

    Many areas of In many cases, a detailed time line for the conversion project is either
    not available or not specific enough. A lack of experience with such
    organization projects often means the sequencing of the necessary transition steps
    affected is not clear.

    Challenges in adopting IPSAS

    Comprehensive IPSAS requirements demand entities to conduct an


    Comprehensive inventory of all assets and liabilities, as well as apply new
    IPSAS measurement provisions. Furthermore, IPSAS requires notes
    requirements disclosures that make new processes necessary to capture the
    required information.

    Finance staff members may not have experience in leading a


    Required skills conversion. Therefore, capacity building and personnel development
    programs should be high on the agenda of every conversion project.

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