Introduction

The establishment of the International Public Sector Accounting Standards (IPSAS) has

its inception in the accounting profession to increase the transparency and accountability of

governments and their agencies by enhancing and standardizing financial reporting. In

compliance with IPSAS, an increasing number of governments and multilateral organizations

issue financial accounts on an accrual basis. The information provided in accrual accounting

IPSAS financial statements is seen to be valuable for both accountability and decision-

making. Financial reports prepared in accordance with IPSAS enable users to assess

accountabilities for all resources under the entity's control and their deployment, as well as

the entity's financial position, financial performance, and cash flows, and to make decisions

about providing resources to or doing business with the entity. IPSAS supports conformity

with optimal accounting practices by using reliable, independent accounting standards on a

full accrual basis. Because of the specific standards and guidelines offered in each standard, it

promotes financial statement consistency and comparability.

The International Public Sector Accounting Standards Board (IPSASB) is a non-profit

organization that is backed by the International Federation of Accountants (IFAC). The

IPSASB publishes IPSAS, advice, and other tools for the public sector worldwide. Since

1997, the IPSASB (and its forerunner, the IFAC Public Sector Committee) has developed and

issued accounting standards for the public sector. Because transactions are frequently

widespread in both the commercial and governmental sectors, an attempt has been made to

align IPSAS with the corresponding International Financial Reporting Standards (IFRS).

Unless there is a major public sector issue that requires a deviation, the IPSAS generally keep

the accounting treatment and original form of the IFRS. The IPSAS are also created for

financial reporting challenges that cannot be solved by adopting an IFRS or for which no

IFRS exist.

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There are 18 members of the IPSASB; 15 of them are chosen by the IFAC member bodies,

and three are chosen as public members. Public members are open to nomination by any

person or group. The IPSASB's goals are to advance the public interest by creating high-

quality standards for financial reporting in the public sector and by supporting the fusion of

global and national standards, improving both the quality and uniformity of financial

reporting globally.

The IPSASB achieves its objectives by:

 Issuing International Public Sector Accounting Standards (IPSASs).

 Promoting the acceptance and the international convergence to these standards; and

 Publishing other documents which provide guidance on issues and experiences in

financial reporting in the public sector.

 The IPSASs are the authoritative requirements established by the IPSASB. Apart

from developing IPSASs, the IPSASB issues other non-authoritative publications

including studies, research reports and occasional papers that deal with public sector

financial reporting issues.

IPASB also gives countries the choice of using either a cash or accrual basis, depending on

the unique needs and financial systems in place for the government or the countries in issue.

The cash basis permitted foreign aid providers, particularly development aid providers, to use

a range of accounting procedures. As a result, many users of external aid keep their accounts

on a cash basis, and the adoption of a cash basis standard was therefore a step in the

appropriate manner. Accrual accounting emphasizes revenue, cost, assets, liabilities, and

equity rather than just cash flows. The capitalization of assets, such as computers and

machines, enables depreciation to be calculated and accounted for in each period in which the

machine is operated. The majority of IPSAS are accrual-based, which is consistent with

IFRS.

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IFRS

The term International Financial Reporting Standards (IFRS) refers to a single set of

accounting standards developed and maintained by the International Accounting Standards

Board with the goal of those standards being capable of being applied on a globally

consistent basis by developed, emerging, and developing economies, allowing investors and

other users of financial statements to compare the financial performance of publicly listed

companies.

The International Accounting Standards Board issues IFRS, which govern how accountants

must keep and report their books. IFRS were created to provide a standard accounting

language so that business and accounts could be understood from one firm to the next and

from one nation to the next. The board of the IFRS Foundation, a public-interest organization

with award-winning openness and stakeholder involvement, develops IFRS Standards. The

goal of IFRS is to keep the financial world stable and transparent. This enables corporations

and individual investors to make informed financial decisions since they can see exactly what

is going on with a firm in which they choose to invest. In nations that have embraced IFRS,

both firms and investors gain from utilizing the system, because investors are more inclined

to invest in a company if its business operations are transparent. Furthermore, the cost of

investments is generally cheaper. Companies that perform a lot of foreign business gain the

most from IFRS. IFRS are commonly mistaken with International Accounting Standards

(IAS), which are the earlier standards that IFRS superseded. IAS were issued from 1973 to

2000. Similarly, in 2001, the International Accounting Standards Board (IASB) superseded

the International Accounting Standards Committee (IASC). IFRS includes a wide variety of

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accounting operations. IFRS establishes required guidelines for various parts of corporate

conduct.

The IFRS set out the complete set of financial statements which comprises of:

 A statement of financial position: The statement of financial situation is also known

as the balance sheet. This statement includes a list of an organization's assets,

liabilities, and equity as of the reporting date. As a result, it offers a snapshot of a

company's financial situation as of a certain date.

 A statement of profit or loss and other comprehensive income: It shows financial

performance of an entity in a way that is beneficial to a wide variety of people. The

statement should be classified and collected in a way that allows it to be understood

and compared.

 A statement of changes in equity: A statement of change in equity (also known as a

statement of retained earnings) is a financial statement for an organization that

measures the changes in owners' equity during a given accounting period. It covers

the following topics: Profit or loss. Dividend payments.

 A statement of cash flows: A statement of change in equity (also known as a

statement of retained earnings) is a financial statement for an organization that

measures the changes in owners' equity during a given accounting period. It covers

the following topics: Profit or loss. Dividend payments.

 Notes: In addition to these fundamental reports, a corporation must provide an

overview of its accounting procedures. The entire report is frequently seen alongside

the preceding report to demonstrate the changes in profit and loss. A parent business

must prepare separate account reports for each of its subsidiary entities.

The purpose of IFRS is to offer a global standard for how public firms produce and present

financial accounts. IFRS provides generic advice for the compilation of financial statements

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rather than establishing regulations for industry-specific reporting. Having an international

standard is especially vital for major corporations with subsidiaries in many countries.

Adopting a single set of global standards will simplify accounting operations by allowing a

corporation to utilize a single reporting language everywhere. A single standard will also

offer investors and auditors with a unified perspective of finances. Over 143 nations already

enable or mandate IFRS for public corporations, with additional countries anticipated to

follow suit by 2016. According to advocates of IFRS as an international standard, the expense

of applying IFRS might be mitigated by the possibility for compliance to boost credit ratings.

International Financial Reporting Standards has a broad and a restricted implication. In the

instance of narrow, it refers to the IASB's new numbered series of pronouncements, as

opposed to the predecessor's IASs series. In a broader sense, IFRSs refers to the full set of

IASB announcements, including IASB standards and interpretations, as well as IASs and SIC

interpretations issued by the preceding International Accounting Standards Committee.

Following the nomenclature modifications introduced by the new IFRS Foundation

Constitution in 2010, the definition of IFRSs was updated. The IASB fulfills its due process

standards in establishing IFRSs. The publication of an exposure draft or an IFRS including a

(International Accounting Standard or an Interpretation of the Interpretations Committee)

requires approval by nine IASB members if there are fewer than sixteen members, and ten

IASB members if there are sixteen members, according to the IFRS Foundation Constitution.

Other IASB actions, such as the publishing of a discussion paper, require a simple majority of

the IASB members present at a meeting attended in person or through telecommunications by

at least 60% of the IASB members. (Kluwer, n.d.)

The updated list of IFRS standards and Interpretations as on 1st September 2023 is given

below:

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Standards

 IFRS 1 First-time Adoption of International Financial Reporting Standards

 IFRS 2 Share-based Payment

 IFRS 3 Business Combinations

 IFRS 4 Insurance Contracts

 IFRS 5 Non-current Assets Held for Sale and Discontinued Operations

 IFRS 6 Exploration for and Evaluation of Mineral Assets

 IFRS 7 Financial Instruments: Disclosures

 IFRS 8 Operating Segments

 IFRS 9 Financial Instruments

 IFRS 10 Consolidated Financial Statements

 IFRS 11 Joint Arrangements

 IFRS 12 Disclosure of Interests in Other Entities

 IFRS 13 Fair Value Measurement

 IFRS 14 Regulatory Deferral Accounts

 IFRS 15 Revenue from Contracts with Customers

 IFRS 16 Leases

 IFRS 17 Insurance Contracts

 IAS 1 Presentation of Financial Statements

 IAS 2 Inventories

 IAS 7 Statement of Cash Flows

 IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors

 IAS 10 Events after the Reporting Period

 IAS 12 Income Taxes

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  IAS 16 Property, Plant and Equipment

 IAS 19 Employee Benefits

 IAS 20 Accounting for Government Grants and Disclosure of Government Assistance

 IAS 21 The Effects of Changes in Foreign Exchange Rates

 IAS 23 Borrowing Costs

 IAS 24 Related Party Disclosures

 IAS 26 Accounting and Reporting by Retirement Benefit Plans

 IAS 27 Separate Financial Statements

 IAS 28 Investments in Associates and Joint Ventures

 IAS 29 Financial Reporting in Hyperinflationary Economies

 IAS 32 Financial Instruments: Presentation

 IAS 33 Earnings per Share

 IAS 34 Interim Financial Reporting

 IAS 36 Impairment of Assets

 IAS 37 Provisions, Contingent Liabilities and Contingent Assets

 IAS 38 Intangible Assets

 IAS 39 Financial Instruments: Recognition and Measurement

 IAS 40 Investment Property

 IAS 41 Agriculture

Interpretations

 IFRIC 1 Changes in Existing Decommissioning, Restoration and Similar Liabilities

 IFRIC 2 Members’ Shares in Co-operative Entities and Similar Instruments

 IFRIC 5 Rights to Interests Arising from Decommissioning, Restoration and

Environmental Rehabilitation Funds

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  IFRIC 6 Liabilities arising from Participating in a Specific Market-Waste Electrical

and Electronic Equipment

 IFRIC 7 Applying the Restatement Approach under IAS 29 Financial Reporting in

Hyperinflationary Economies

 IFRIC 10 Interim Financial Reporting and Impairment

 IFRIC 12 Service Concession Arrangements

 IFRIC 14 IAS 19-The Limit on a Defined Benefit Asset, Minimum Funding

Requirements, and their Interaction

 IFRIC 16 Hedges of a Net Investment in a Foreign Operation

 IFRIC 17 Distributions of Non-cash Assets to Owners

 IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments

 IFRIC 20 Stripping Costs in the Production Phase of a Surface Mine

 IFRIC 21 Levies

 IFRIC 22 Foreign Currency Transactions and Advance Consideration

 IFRIC 23 Uncertainty over Income Tax Treatments

 SIC-7 Introduction of the Euro

 SIC-10 Government Assistance-No Specific Relation to Operating Activities

 SIC-25 Income Taxes-Changes in the Tax Status of an Entity or its Shareholders

 SIC-29 Service Concession Arrangements: Disclosures

 SIC-32 Intangible Assets-Web Site Cost. (IAS Plus, n.d.)

Ghana’s Adoption of IPSAS

The Government of Ghana over the past 20 years, with support from its Development

Partners (DPs), has been undertaking a wide range of reforms of its Public Financial

Managements systems (PFM). To increase responsibility over the administration of Ghana's

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public money, the government of Ghana passed the Public Financial management Act, 2016,

(Act 921) and its ensuing Public Financial Management Regulations, 2019 (L.I. 2378). A

rigorous and thorough financial reporting structure based on an accrual basis of accounting is

required under Ghana's PFM law.

Since every country's government and public sector have different policies and objectives

aimed at accomplishing national goals, the public sector has throughout the years remained in

the dark about concerns of internationalization of accounting standards.

During the convergence project for IFRS, the Institute of Chartered Accountant-Ghana

(ICAG) came to conclusion that all public sector organizations-aside from government

business enterprises-would adopt IFRSs up until the IPSAS issued by the IPSASB are ready.

According to ICAG, effective implementation of accrual basis IPSAS will enable a more

effective and efficient management of the government's assets and liabilities, provide more

useful information that will lead to better decision-making, generate cost awareness and

efficiency in the operations of the government, and ultimately enable improved service

delivery to Ghana's good citizens and contribute to the reduction of poverty.

The President of the Institute of Chartered Accountants, Ghana (ICAG) officially announced,

on behalf of the Council of the ICAG, that Ghana has adopted the accrual basis IPSAS on the

27th day of October 2014 and declared that IPSAS shall be the basis for the preparation of

the public accounts of Ghana for the year ended 31st December 2016, confirming the ICAG's

status as the sole body responsible for ensuring the maintenance of professional accounting

standards in Ghana.

The Auditor General of the Republic supported the declaration after the Council of the ICAG

declared IPSAS to be adopted for Ghana. He added that IPSAS implementation in Ghana was

long overdue and urged the government to take the necessary actions to ensure

implementation. The Ghana Audit Service should be included in the phased implementation

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plan that the Controller and Accountant General of the Republic develops so that it can be

readily monitored. According to Regulation 208, the accrual basis of accounting must be used

to determine how to recognize income, expenses, assets, and liabilities. (Williams

Abayaawien Atuilik, Redeemer Krah, Mr. Mac-Effort Adadey, November 2019)

Entities can adopt IPSAS.

The term ‘public sector’ refers to:

 National governments,

 Regional governments (e.g., state, provincial, and territorial),

 Local governments (e.g., town and city), and

 Related governmental entities (e.g., agencies, boards, commissions, and enterprises).

The IPSAS are designed to be used in the generation of general-purpose financial reports for

users who cannot otherwise order reports to fit their individual information demands.

Public sector entities must have the following criteria:

 Are responsible for providing services to the public and/or redistributing money and

wealth.

 primary sources of funding for their operations include taxes, transfers from other

governmental levels, social contributions, debt, or fees; and

 Do not have any primary motive to make profits.

Governmental organizations that do not meet these requirements would use IFRS because

most jurisdictions have reporting requirements for listed and other types of organizations,

including presenting financial statements that are prepared in accordance with a set of

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generally accepted accounting principles. Such a set of guidelines are offered by IFRS

Accounting Standards, which are widely utilized globally.

All government business entities, NGOs, and other public bodies are eligible to apply the

International Public Sector Accounting Standards (IPSAS) developed by the International

Federation of Accountants' International Public Sector Accounting Standards Board

(IPSASB).

Government Business Enterprise means:

 An organization with the authority to sign contracts in its own name.

 Has been given financial and operational power to operate as a firm.

 sells products and services to other companies in the regular course of business for a

profit.

 (Except for purchases of products at arm's length) Not dependent on ongoing

government financing to be in business.

 Controlled by a public sector entity.

Government Business Enterprises (GBEs) comprise both financial institutions and trading

companies such Ghana Commercial Bank, National Investment Bank, and Agricultural

Development Bank. Examples of trading companies are Ghana Water Company (GWC) and

Electricity Company of Ghana (ECG). In essence, GBEs are no different from organizations

carrying out comparable tasks in the private sector. GBEs typically operate for the purpose of

making a profit, while they may be subject to restricted community service requirements that

oblige them to offer certain persons and organizations in the community goods and services

either for free or at a considerably discounted cost. Due to legal obligations from

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organizations like the Security and Exchange Commission (SEC), Bank of Ghana (BoG), and

others, the majority of GBEs must adhere to IFRS.

Forms of IPSAS issued by IPSASB.

IPSASB has issued two different forms of IPSASs these are:

 IPSAS that are based on accrual accounting.

 IPSAS based on cash accounting.

IPSAS that are based on accrual accounting are:

 Converged with IFRSs set by the International Accounting Standards Board (IASB)

by adapting them to a public sector environment as necessary. In carrying out that

procedure, the IPSASB strives to retain the accounting treatment and original wording

of the IFRSs whenever feasible, unless there is a major public sector issue that

requires an exception; and

 Identify and address issues relating to public sector financial reporting that are either

not fully addressed by current IFRSs or for which no IFRSs have been created for by

the IASB.

The IPSASB has also published IPSAS that are on cash basis, this standard was first issued in

January 2003 and revised in 2017:

 It requires that a government or government agencies report all cash collections,

payments, and balances under its control.

 It allows for a flexible reporting format; and

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  It encourages the disclosure of additional information on, for example, assets,

liabilities, and transactions carried out on behalf of third parties, in addition to

budgeted amounts that have been exceeded.

IFRS convergence/alignment with IPSAS

The term "alignment" refers to the formal procedures the IPSASB uses to determine whether

IFRS requirements are applicable when creating declarations that accurately depict the

economic substance of transactions in the public sector. Through these procedures, the

IPSASB seeks to minimize unnecessary differences with these sources of guidance when they

can be used in the public sector context.

The IPSASB's objective is to align the accrual based International Public Sector Accounting

Standards (IPSASs) with IFRSs established by the International Accounting Standards Board

(IASB) whenever suitable for public sector organizations.

Basis of acquisition IPSASs that have been conformed with IFRSs retain the IFRSs'

requirements, structure, and content, unless there is a public sector-specific cause for a

deviation. Diversion from the comparable IFRS happens when IFRS rules or terminology are

inapplicable to the public sector, or when extra commentary or examples are required to

demonstrate specific standards is not applicable to the public setting.

The Table below illustrate the IPSAS and the equivalent IAS or IFRS where applicable.

IPSAS/
RPG Detailed standard IFRS/ IAS
IPSAS 1 Presentation of Financial Statements IAS1
IPSAS 2 Cash Flow Statements IAS 7
Accounting Policies, Changes in Accounting Estimates and
IPSAS 3 Errors IAS 8
IPSAS 4 The Effects of Changes in Foreign Exchange Rates IAS 21/ IFRIC 22
IPSAS 5 Borrowing Costs IAS 23
Consolidated and Separate Financial Statements
IPSAS 6 (Superseded) IAS 27
IPSAS 7 Investments in Associates (Superseded) IAS 28

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IPSAS 8 Interests in Joint Ventures (Superseded) IAS 31
IPSAS 9 Revenue from Exchange Transactions IAS 18
IPSAS 10 Financial Reporting in Hyperinflationary Economies IAS 29
IPSAS 11 Construction Contracts IAS 11
IPSAS 12 Inventories IAS 2
IPSAS 13 Leases IAS 17
IPSAS 14 Events After the Reporting Date IAS 10
Financial Instruments: Disclosure and Presentation
IPSAS 15 (Superseded) IFRS 7
IPSAS 16 Investment Property IAS 40
IPSAS 17 Property, Plant and Equipment IAS 16
IPSAS 18 Segment Reporting IFRS 8
IPSAS 19 Provisions, Contingent Liabilities and Contingent Assets IAS 37
IPSAS 20 Related Party Disclosures IAS 24
IPSAS 21 Impairment of Non–Cash Generating Assets IAS 36
Disclosure of Information About the General
IPSAS 22 Government Sector N/A
Revenue from Non-Exchange Transactions
IPSAS 23 (Taxes and Transfers) N/A
IPSAS 24 Presentation of Budget Information in Financial Statements N/A
IPSAS 25 Employee Benefits (Superseded) IAS 19
IPSAS 26 Impairment of Cash- Generating Assets IAS 36
IPSAS 27 Agriculture IAS 41
IPSAS 28 Financial Instruments: Presentation IAS 32/IFRIC 2
IPSAS 29 Financial Instruments: Recognition and Measurements IAS 39/IFRIC 16
IPSAS 30 Financial Instruments: Disclosures IFRS 7
IPSAS 31 Intangible Assets IAS 36/ SIC 32
IPSAS 32 Service Concession Arrangements: Grantor IFRIC 12/ SIC 29
IPSAS 33 First Time Adoption of Accrual Basis IPSASs IFRS 1
IPSAS 34 Separate Financial Statements IAS 27
IPSAS 35 Consolidated Financial Statements IFRS 10
IPSAS 36 Investments in Associates and Joint Ventures IAS 28
IPSAS 37 Joint Arrangements IFRS 11
IPSAS 38 Disclosure of Interests in Other entities IFRS 12
IPSAS 39 Employee Benefits IAS 19
IPSAS 40 Public Sector Combinations IFRS 3
IPSAS 41 Financial Instruments IFRS 9/ IFRIC 16 & 19
IPSAS 42 Social Benefits N/A
IPSAS 43 Leases IFRS 16
Non-Current Assets Held for Sale and Discontinued
IPSAS 44 Operations IFRS 5
IPSAS 45 Property, Plant and Equipment IAS 16
IPSAS 46 Measurement IFRS 13

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IPSAS 47 Revenue IFRS15/IAS 20/SIC 10
IPSAS 48 Transfer Expenses N/A
Financial Reporting Under the Cash Basis of NoIFRS/IAS
Accounting equivalent
Reporting on the Long-term Sustainability of an Entity's
RPG 1 Finances N/A
RPG 2 Financial Statement Discussion and Analysis N/A
RPG 3 Reporting Service Performance Information N/A

Source of which the information was retrieved is (The International Public Sector Accounting

Standards (IPSAS), n.d.)

Conclusion

The adoption and use of IPSAS would aid in the harmonization of financial activities and

universality in the reporting of accounting information and transparency for the public sector

in Ghana and Africa as a whole.

Based on the argument from the question made a clause that; “IPSAS is a duplication of

IFRS, and that Ghana could have just opted to require IFRS application by publicly funded

entities” od which it does not fully hold water or is not completely the best argument to make.

From the table above you could see that some IPSAS do not have their corresponding IFRSs

or those IPSASs is not applicable in IFRSs. This is possible because the purpose of existence

for the IPSAS is quietly different from that of the IFRSs. IPSAS application is for entities

that are fully owned by the State (Public Sector Organization) and established by an act of

parliament for which it motives is to provide social welfare to its citizens whiles IFRSs

application is for Organizations whose motives to increase shareholders wealth or to make

profits and its shares are traded on the Stock Exchange Market. For instance, in IPSAS 24

promote the presentation of Budget Information whiles it is not applicable when it comes the

IFRSs. Also, IPSAS 23 Revenue from Non-Exchange Transactions (Taxes and Transfers) is

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not applicable or do not have an equivalent IFRS. This suggests that IPSAS should be used

instead of IFRSs for publicly funded entities because it will result in better financial

information support, improvements to accountability, transparency, and governance, better

financial management, better information for donors and nations offering external assistance,

better quality, and credibility of financial reports, and it won't result in any duplication of

IFRSs.

References
(n.d.). Retrieved from The International Public Sector Accounting Standards (IPSAS):

https://www.cagd.gov.gh/projects/the-international-public-sector-accounting-standards-ipsas/

IAS Plus. (n.d.). Retrieved from International Public Sector Accounting Standards (IPSAS):

https://www.iasplus.com/en/standards/ipsas

Kluwer, W. (n.d.). what is IFRS? Retrieved from

https://www.wolterskluwer.com/en-hk/solutions/cch-tagetik/glossary/ias-ifrs

Williams Abayaawien Atuilik, Redeemer Krah, Mr. Mac-Effort Adadey. (November 2019). Institute of

Chartered Accountants (Ghana) Paper 2.5- Public Sector Accounting and Finance (1st Edition ed.).

United Kingdom: Emile Woolf International.

https://www.iasplus.com/en/standards#international-financial-reporting-standards

https://www.pwc.com/gh/en/pdf/adoption-of-ipsas.pdf

https://www2.deloitte.com/za/en/ghana.html

https://www.ipsasb.org

https://www.accaglobal.com/gb/en/student/exam-support-resources/dipifr-study-resources/technical-articles/

comprehensive-income.html#:~:text=The%20purpose%20of%20the%20statement,makes%20it

%20understandable%20and%20comparable.

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(Adoption of IPSAS in Ghana-Prospects, Challenges and the Way Forward* *connected thinking, n.d.)

(Agenda Item 1.7 IPSAS-IFRS Alignment 1 Dashboard 2 IPSAS-IFRS Alignment Dashboard Overview, n.d.)

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