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Building Competence. Crossing Borders.
PEMPAL WorkshopIstanbul; Feburary 25, 2008
The Value Added of IPSAS
Prof Andreas [email protected]
Robin [email protected]
PEMPAL; The Value Added of IPSAS 2
The Value Added of IPSAS
Content
Overview on IPSAS
Implementation of IPSAS
REPF-Toolkit and Report
Conclusion: Sequencing of Reforms
Appendix: List of Accrual IPSAS
PEMPAL; The Value Added of IPSAS 3
Overview on IPSAS
Mission
Establish and promote adherence to high quality professional standards
Further the international convergence of such standards
With the intention of the public organizations of the whole world
In the optics of the financial statements of general use
Speak out on public interest issues where the profession’s voice is most relevant
PEMPAL; The Value Added of IPSAS 4
Overview on IPSAS (2)
Rationale of Accounting Reforms
Accounting = Basis of decisions
Development decisions in particular
- Infrastructure
- Networks
- Public services
Judgment by decision makers requires identical standards
Credibility increase
Education facilitated
PEMPAL; The Value Added of IPSAS 5
Overview on IPSAS (3)
Value added of Cash based IPSAS
1 Standard Cash Basis
Advantages:
Full coverage of all cash transactions
Consolidation
Disadvantages:
Too basic for countries which are on modified accrual
Scope of consolidation is controversial
PEMPAL; The Value Added of IPSAS 6
Overview on IPSAS (4)
Value added of Accrual based IPSAS
26 Standards Accrual Basis
Advantages:
Economic situation and flows
Resource allocation
Similar to GFS
Risks
Disadvantage:
Leap for many countries
PEMPAL; The Value Added of IPSAS 7
Overview on IPSAS (5)
Cash based IPSAS
Accrual based IPSAS
Country B
Step 1 Step 2 Step 3
Country A
PEMPAL; The Value Added of IPSAS 8
Questionnaire (Russian)Анкета
Пожалуйста заполните форму
Ст
рана A
IPS
AS
по
кассовом
у
мет
оду
Ст
рана B
IPS
AS
по
мет
оду
начисления
Ваша страна:
Кассовы
й м
ето
д.
Ста
нд
арты
отс
утс
твую
т /
но
им
ею
тся
национал
ьны
е
правил
а-и
нстр
укц
ии
IPS
AS
по к
ассовом
у
мето
ду в
процессе
внед
рения
IPS
AS
по к
ассовом
у
мето
ду в
нед
рены
Мод
иф
ицированны
й
мето
д н
ачисл
ения.
Ста
нд
арты
отс
утс
твую
т /
но
им
ею
тся
IPS
AS
по п
ол
ном
у
мето
ду н
ачисл
ения
в п
роцессе
внед
рения (
ранняя
ста
дия)
IPS
AS
по п
ол
ном
у
мето
ду н
ачисл
ения
(прод
винута
я
ста
дия)
IPS
AS
по п
ол
ном
у
мето
ду н
ачисл
ения
внед
рены
IPSAS - International Public Sector Accounting Standards / Международные стандарты бухгалтерского учета в государственном секторе
2-й этап 3-й этап
Фамилия
Имя
Страна
Адрес E-mail
1-й этап
PEMPAL Treasury CoP Workshop
Должность / Звание
PEMPAL; The Value Added of IPSAS 9
Overview on IPSAS (6)
Structure of IPSAS
Recognition
Measurement
Disclosure
PEMPAL; The Value Added of IPSAS 10
Overview on IPSAS (7)
Organization of the IPSAS-Board
18 members
President M. Mike Hathorne (Scottish/GB)
3 meetings of 4 days per year, English language
At least one phase of consultation („Exposure Draft“)
Qualified majorities required (2/3, 3/4)
PEMPAL; The Value Added of IPSAS 11
Two ways to implement IPSAS
Direct or indirect implementationIPSAS
Legislation referring to IPSAS
National accounting standards
Legislation referring to national accounting
standards
Accounting Manual
Implementation
PEMPAL; The Value Added of IPSAS 12
REPF Report on the Enhancement of Public Sector Financial Reporting - Toolkit
Diagnostic Tool 1 – Assessment of the Public Sector Accounting Environment
Diagnostic Tool 2 – Assessment of the Accounting Standards as Designed
Diagnostic Tool 3 – Assessment of Actual Accounting Practices
Diagnostic Tool 4 – Assessment of potential in-country value added of adopting the various concepts underlying and specific standards that comprise IPSAS to the extent that they are not already incorporated into the national standards
PEMPAL; The Value Added of IPSAS 13
REPF Report on the Enhancement of Public Sector Financial Reporting - Toolkit
How to use the tools
Four different, qualitative questionnaires
To be used in interviews conducted by the prepares of the report
Necessary: knowledge of public sector accounting and reporting
Advantage: knowledge of IPSAS
Recommendation: use of local consultant
Interviews with responsible persons
PEMPAL; The Value Added of IPSAS 14
REPF - Diagnostic Tool 1
Content Diagnostic Tool 1
I Statutory Framework
II Academic Education, Professional Education, Training
III Setting Accounting Standards
IV Budget System
V Government Financial Statistics (GFS)
VI Monitoring and Enforcement
VII Quality and Availability of Financial Reporting
VIII Information Technology
IX Country Data
PEMPAL; The Value Added of IPSAS 15
REPF - Diagnostic Tool 2
Content Diagnostic Tool 2
Comparison of the existing National Standards to the IPSAS
IPSAS as a benchmark
PEMPAL; The Value Added of IPSAS 16
REPF - Diagnostic Tool 3
Content Diagnostic Tool 3
No purpose-built questionnaire
Instead, diagnostic tool 2 may be used, if IPSAS like situation is to be assessed
• Tool based on local standards needs to be devised otherwise
Assessment should include organizations other than the one responsible for public sector financial accounting and reporting
Analysis of financial reports even if they are audited!
PEMPAL; The Value Added of IPSAS 17
REPF - Diagnostic Tool 4
Content Diagnostic Tool 4
I Relevant Gaps in Accounting between IPSAS‘ and NPSAS – Value added due to Accounting Effects
II Value Added due to Reputation Effects
III Value Added due to Training Effects
PEMPAL; The Value Added of IPSAS 18
REPF Report – Content
Content
I Introduction
II Institutional Framework
III Accounting Standards as Designed
IV Accounting Standards as Practiced
V In-country value added
VI Recommendations
A Appendix
PEMPAL; The Value Added of IPSAS 19
Conclusion: Sequencing of Reforms
Countries are at different stages of development
There is NO uniform pattern of development
Accrual IPSAS widely accepted as „Gold Standard“, but too challenging in the short run
thus
Sequencing of reforms in Public Sector Accounting
PEMPAL; The Value Added of IPSAS 20
Conclusion: Sequencing of Reforms
Sequencing of reforms in Public Sector Accounting
REPF to analyse gaps and decide on milestones/steps
• Not just about accounting, enablers (education, IT etc.) also need to be addressed
There is more than one step towards Accrual Basis IPSAS
• Either from Cash Basis IPSAS, but not necessarily;
• Or from Modified Accrual.
Tentatively sequencing order
• Enablers
• Groups of Standards on similar issues
PEMPAL; The Value Added of IPSAS 21
AppendixOverview on IPSAS - Current Standards
Accrual Accounting Standards (2007)
IPSAS 1 – Presentation of Financial Statements
IPSAS 2 – Cash Flow Statements
IPSAS 3 – Accounting Policies, Changes in Accounting Estimates and Errors
IPSAS 4 – The Effects of Changes in Foreign Exchange Rates
IPSAS 5 – Borrowing Costs
IPSAS 6 – Consolidated and Separate Financial Statements
PEMPAL; The Value Added of IPSAS 22
AppendixOverview on IPSAS - Current Standards (2)
IPSAS 7 – Investments in Associates
IPSAS 8 – Interests in Joint Ventures
IPSAS 9 – Revenue from Exchange Transactions
IPSAS 10 – Financial Reporting in Hyperinflationary Economies
IPSAS 11 – Construction Contracts
IPSAS 12 – Inventories
IPSAS 13 – Leases
IPSAS 14 – Events After the Reporting Date
IPSAS 15 – Financial Instruments: Disclosure and Presentation
PEMPAL; The Value Added of IPSAS 23
AppendixOverview on IPSAS - Current Standards (3)
IPSAS 16 – Investment Property
IPSAS 17 – Property, Plant and Equipment
IPSAS 18 – Segment Reporting
IPSAS 19 – Provisions, Contingent Liabilities and Contingent Assets
IPSAS 20 – Related Party Disclosures
IPSAS 21 – Impairment of Non-Cash Generating Assets
IPSAS 22 – Disclosure of Information About the General Government Sector
IPSAS 23 – Revenue from Non-Exchange Transactions(Taxes and Transfers)
IPSAS 24 – Presentation of Budget Information in Financial Statements
IPSAS 25 - Employee Benefits
IPSAS 26 - Impairment of Cash-generating assets