Third Edition
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This material has been prepared for general informational purposes only and is not intended to be relied upon as accounting, tax, or other professional advice. Please refer to your advisors for specific advice.
This publication “IPSAS Explained: A Summary of International Public Sector Accounting Standards, Third Edition” includes excerpts from the International Public Sector Accounting Standards™ (IPSAS™) and other pronouncements of the International Public Sector Accounting Standards Board® (IPSASB®), published by the International Federation of Accountants® (IFAC®), and used with permission of IFAC. Any views or opinions that may be included in this publication are solely those of the authors, and do not express the views and opinions of IFAC or any independent standard setting board supported by IFAC.
Research resources utilized in Chapter II included a review of publically available online articles and pronouncements, IFAC Status of Membership Organizations (SMO) reports, and internal research through EY's offices in the region. Although reasonable effort was made to obtain the most accurate and up-to-date information for the countries and regions mentioned in this chapter, there is a possibility that some information may be outdated and it is therefore recommended that anyone wanting to rely on this information for political, business or academic research purposes should confirm the latest status directly with the office of the Accountant-General and/or the Ministry of Finance in the country of interest.
Dear reader,
Five years have elapsed since we published the second edition of IPSAS Explained. During this period, the transition of public sector accounting toward a resource-oriented, accrual-based accounting and reporting framework has gained significant momentum. Consequently, the relevance of and appreciation for International Public Sector Accounting Standards (IPSASs) as the only globally-accepted accounting framework for the public sector has grown considerably in recent years.
Nonetheless, the form and content of public sector accounting is still highly diversified across and within countries. In times of strongly-linked economies, this heterogeneity is definitely an obstacle for the achievement of the key objectives of public management, which include both improving public services and reducing bureaucracy, as well as achieving comparable standards in terms of accountability and transparency. Debates in the aftermath of the sovereign debt crisis and corresponding developments, such as the European Public Sector Accounting Standards (EPSASs) project in the European Union, have shown that the IPSASs are a suitable means for harmonizing and aligning public sector accounting.
As a global organization with a strong focus on the public sector, EY has been actively contributing to the further development and harmonization of public sector accounting since more than a decade. We are convinced, now more than ever, that the global use of IPSASs will enhance transparency and accountability, which are both urgently needed to overcome the current crisis of trust in governments’ finances. The aim of the third edition of this publication is to provide decision-makers in the public sector with an overview of the IPSASs and the activities of the International Public Sector Accounting Standards Board (IPSASB). Each IPSAS is presented briefly, focusing on the core content of the relevant standard. In the interest of readability, we decided in the majority of cases not to focus on the – often extensive – disclosures in the notes required by the IPSASs. In order to also provide decision-makers with insights into current accounting reform activities, we have worked on broadening these background chapters in this edition.
This book is based on the IPSASs, Recommended Practice Guidelines (RPGs), Exposure Drafts (EDs) and Consultation Papers (CPs) as of 30 August 2017. As a result, this new edition of IPSAS Explained includes new standards such as those on public sector combinations or employee benefits, the ED on financial instruments as well as the CPs on revenue and non-exchange expenses and social benefits. Once again, we have enriched the chapters with graphs, figures and tables which will help the readers gain a better understanding of the sometimes complex and inapprehensible standards.
If you have any comments or suggestions, we would be happy to consider them for a fourth edition of this publication. Please send an e-mail to thomas.muellermarques.berger@de.ey.com. I would like to thank everyone who has contributed to this publication for their valuable support. A special thank you goes to the great IPSAS authors team consisting of Alexi Colyvas, Huma Ghaffar, Dr. Jens Heiling, Georges Ortmann, Serene Seah-Tan and Sonja Mosati. As for the previous editions, however, this publication would not have been possible without Dr. Jens Heiling, to whom I am again deeply grateful for his outstanding level of commitment.
Thomas Müller-Marqués Berger, Stuttgart, September 2017
ADB | Asian Development Bank |
AG | Application Guidance |
ASB | Accounting Standards Board, South Africa |
AU | African Union |
BC | Basis for Conclusion |
Bn | Billion |
CAG | Consultative Advisory Group |
CEMAC | Community of Central Africa |
CF | Conceptual Framework |
CNC-CI | National de la Comptabilitié-Côte d'Ivoire |
CNCP | Comissão de Normalização Contabilística (Committee for Public Sector Accounting) |
CP | Consultation Paper |
CPA | Canada Chartered Professional Accountants of Canada |
CPCC | Conseil Permanent de la Comptabilité au Congo |
DP | Discussion Paper |
EAC | East African Community |
EC | European Commission |
ECB | European Central Bank |
ECOWAS | Economic Community of West African States |
ED | Exposure Draft |
EDP | Excessive Deficit Procedure |
EFSM | European Financial Stability Mechanism |
EFSF | European Financial Stability Facility |
e.g. | exempli gratia, for example |
EPSAS | European Public Sector Accounting Standard(s) |
ESA | European Space Agency |
ESA 95 | European System of Accounts 1995 |
ESAAG | Eastern and Southern African Association of Accountants-General |
et al. | et alia, and others |
et seq. | et sequens/et sequentes, and the following one(s) |
ETS | Emmissions Trading Scheme |
EU | European Union |
Eumetsat | European Organisation for the Exploitation of Meteorological Satellites |
EUR | Euro |
FIFO | First-in, first-out inventory valuation method |
FOCAL | Foro de Contadurías Gubernamentales de América |
FSDA | Financial Statement Discussion and Analysis |
FTI | First-time Implementation |
GBE | Government Business Enterprises |
GBP | British Pound |
GDP | Gross Domestic Product |
GFS | Government Finance Statistics |
GFSM 2001/2008 | Government Finance Statistics Manual 2001/2008 |
GGS | General government sector |
GPFR | General Purpose Financial Report |
GPFS | General Purpose Financial Statement |
GRAP | Standards of Generally Recognised Accounting Practice, South Africa |
GRG | Governance Review Group |
IAS | International Accounting Standard |
IASB | International Accounting Standards Board, London |
i.e. | id est, that is |
IFAC | International Federation of Accountants |
IFMS | Integrated Financial Management System |
IFRIC | International Financial Reporting Interpretations Committee |
IFRS | International Financial Reporting Standard |
ICAG | Institute of Chartered Accountants Ghana |
IMF | International Monetary Fund |
INTOSAI | International Organization of Supreme Audit |
IPSAS | IInntsetirtnuatitoionnsal Public Sector Accounting Standard |
IPSASB | International Public Sector Accounting Standards Board |
LAC | Latin-American and Carribean |
MoU | Memorandum of Understanding |
MS | Member State |
n/a | not applicable |
NATO | North Atlantic Treaty Organization |
NCI | Non-controlling interest |
OBS | Opening Balance Sheet |
OECD | Organisation for Economic Co-operation and Development |
OHADA | Organisation for the Harmonisation of Business Law in Africa |
p. | Page |
para. | Paragraph |
PEFA | Public Expenditure and Financial Accountability |
PFCS | Public Financial Corporations Sector |
PFM | Public Financial Management |
PIC | Public Interest Committee |
PNFCS | Public Non-Financial Corporations Sector |
POCP | Plano Oficial de Contabilidade Pública/Official Plan of Public Accounting |
PP&E | Property, Plant, and Equipment |
PSASB | Public Sector Accounting Standards Board, Kenya |
PSC | Public Sector Committee |
QC | Qualitative Characteristic |
ROSC | Reports on the Observance of Standards and Codes |
RPG | Recommended Practice Guideline |
SADC | Southern African Development Community |
SDR | Special Drawing Rights |
SIC | Standing Interpretations Committee |
SMCs | Specific Matters for Comment |
SNA 2008 | System of National Accounts 2008 |
TBG | Task-based Group |
TF | Task Force |
ToR | Terms of Reference |
UK | United Kingdom |
UK ASB | United Kingdom Accounting Standards Board |
UN | United Nations |
UNDP | United Nations Development Program |
UNESCO | United Nations Educational, Scientific and Cultural Organization |
UNICEF | United Nation International Children Emergency Fund |
US | United States of America |
USD | United States Dollar |
WAEMU | West African Economic and Monetary Union |
WFP | World Food Program |
WG | Working Group |
XRB | (New Zealand) External Reporting Board |