International Public Sector Accounting Standards Board IPSASB UPDATE

International Public Sector Accounting Standards Board (IPSASB) UPDATE

IFAC IPSASB Members 2006 • Accounting Profession France (Chair), UK (Deputy Chair), Australia, Argentina, Canada, India, Israel, Japan, Malaysia, Mexico, New Zealand, Netherlands, Norway, South Africa, USA Public Members Prof A Bergman (Switzerland), Prof S. Pozzoli (Italy), Mr J. Peace (USA) • IPSASB Observers ADB, EU, IASB, IMF, INTOSAI, OECD, World Bank, UNDP March 2006 IPSASB 2

IFAC IPSASB Work Program • 3 priority categories: – 1 st – Public sector specific issues (including cash and accrual basis issues) – 2 nd – Continue convergence with IFRSs where appropriate – 3 rd – Convergence with statistical bases where appropriate • Current resource constraints limit progress on some aspects of the program. March 2006 IPSASB 3

IFAC IPSASB Pronouncements / Publications • 21 accrual Standards (based on IASs issued as at August 97 where appropriate) • Comprehensive Cash Basis IPSAS – (ED 24 proposes an addition to cash requirements) • Studies, Research Reports and Invitations to Comment (ITCs) • See Attachment for IPSASs, EDs, Research Reports March 2006 IPSASB 4

IFAC IPSASB Exposure Drafts (ED) on Issue ED 24“Cash Basis External Assistance”-comments 15 June 05 ED 25 “Amendment to the Preface to IPSASs” (by 31 Jan 06) ED 26 “Improvements to IPSASs (by 31 Jan 06) ED 27 “Presentation of Budget Information in Financial Statements” (by 10 Feb 06) ED 28 “Disclosure of Financial Information About the General Government Sector” (by 10 Feb 06) ED 29 “Revenue from Non Exchange Transactions” (including Taxes and Transfers) (by 30 June 06) Some details follow March 2006 IPSASB 5

IFAC IPSASB Papers for Issue - March Consultation Paper – Accounting for Heritage Assets Under the Accrual Basis of Accounting - Input on UK-ASB paper from international community - Input to IPSASB’s own project Occasional Paper - The Road to Accrual Accounting in the USA March 2006 IPSASB 6

IFAC IPSASB Available on the IPSASB Web Site • All IPSASs – (including Spanish and French translations) • All current Exposure Drafts and ITCs • IPSASB Update on most recent IPSASB meeting • IPSASB meeting papers (before each meeting) FREE OF CHARGE AT: WWW. IPSASB. ORG March 2006 IPSASB 7

IFAC IPSASB ED 24 Disclosure of External Assistance (Cash Basis) (1 st Priority Project) • At request of OECD and Multilateral Development Banks to harmonize/reduce compliance costs • Comment period closed June 05 - 30 responses • Differing views-some ED 24 too onerous, others not • Availability of information? - Donors need to provide • Follow up with Consultative Group, OECD, and with donors in member countries re field test/additional input • March 06 IPSASB consider strategy to progress - Consider mandatory and encouraged sections? March 2006 IPSASB 8

IFAC IPSASB ED 25&26 – Improvements to IPSASs (2 nd Priority Project) Issued in September 2005 for comment by Jan 31, 06 • ED 25 - Black and grey letters to have “equal authority” • ED 26 - Improve 11 IPSASs. – See attachment for IPSASs included • Based on improved IASs as at Dec 03 • Restructuring of IPSASs, remove some options • Clarify “hierarchy” • Clarify certain requirements March 2006 IPSASB 9

IFAC IPSASB ED 27 Presentation of budget information in Fin. Statements (1 st Priority Project) Applies to public sector entities required to make • • • publicly available their approved budgets Applies for cash basis and accrual basis To discharge accountability/enhance transparency Disclose original and final budget by major class Disclose actual (on budget basis) Reconcile to key amounts in GPFS IPSASB start consider responses March 06 March 2006 IPSASB 10

IFAC IPSASB ED 28 Disclosure of Fin. Info about the General Government Sector (GGS) (3 rd Priority Project) Applies to whole of government accrual basis • Disclosure not required but “Rules” if elect to disclose - apply IPSASs except IAS 6 Consolidation • Support convergence with statistical basis • Disaggregate Gov Consolidated Fin Statements • “GGS” as defined in statistical reporting bases • Reconcile GGS to the GPFS • Does not require/preclude reconcilation to GFS • IPSASB start consider responses March 06 March 2006 IPSASB 11

IFAC IPSASB ED 29 - Non Exchange Revenue (1 st Priority Project) • Deals with Taxes and Transfers including Gifts, Donations, and Fines • Adopts an Assets and Liabilities approach • Major issues - fair value for initial recognition of assets acquired in a non-exchange transaction - Conditions on transfers – a liability? - Tax expenditure, expenses paid through tax system -March 2006 estimate of accrued tax revenue reliable IPSASB 12

Work in progress Social Policy Obligations (1 st Priority Project) IFAC IPSASB • Social policy obligations – split project • Develop ED social benefits other than pensions and similar benefits • Develop ED on pensions and similar benefits – Welfare pensions – Contributory pensions • Exploring liability is amount due and payable – with additional disclosures of PV information Consider if issue both together in 06 March 2006 IPSASB 13

IFAC IPSASB Other Active Projects (1 st Priority Project) • Service concession arrangements (public-private partnerships) • Subcommittee monitor IFRIC developments) • IPSASB Concerns with IFRIC: – Grantors not dealt with – Limited range of arrangements within scope – Notion of control encompasses regulatory control • Explore joint project with National Standards Setters March 2006 IPSASB 14

IFAC IPSASB Other Active Projects (1 st Priority Project) • Applicability of IAS 19 to public sector - issue ED late 06 • Heritage Assets • Conceptual framework for Public Sector – consider IPSASB strategy - March – subcommittee monitoring IASB project • Impairment of cash generating assets (based on IAS 36) March 2006 IPSASB 15

IFAC IPSASB Work Program 2006+ • Other projects to progress in 2006+, subject to resources Review implementation of Cash Basis IPSAS Budget reporting – prospective information Develop IPSASs based on IFRSs Performance reporting – Stats basis & IFRS Non-financial performance reporting Operations review March 2006 IPSASB 16

IFAC IPSASB Funding and resources • Ongoing Issues – funding – ensuring staff resources – strengthening liaison with constituents – ensuring input from preparers and users around the world – communicating the message March 2006 IPSASB 17

International Federation of Accountants www. ifac. org

IFAC IPSASB ATTACHMENT 1 – IPSASB Due Process • • Exposure Drafts – at least 4 months comment Open meetings, agenda materials on web Steering Committees (SC) – ITCs for comment Project Advisory Panels (PAP) – input to IPSASB • Consultative Group (CG) • Regional Seminars/round table discussions in conjunction with each IPSASB meeting March 2006 IPSASB 19

IFAC IPSASB ATTACHMENT 2 – Accrual IPSASs (* Identifies IPSASs currently being improved) *IPSAS 1, “Presentation of Financial Statements” IPSAS 2, “Cash Flow Statements” *IPSAS 3, “Net Surplus or Deficit for the Period, Fundamental Errors and Changes in Accounting Policies” *IPSAS 4, “The Effects of Changes in Foreign Exchange Rates” IPSAS 5, “Borrowing Costs” *IPSAS 6, “Consolidated Financial Statements and Accounting for Controlled Entities” March 2006 IPSASB 20

IFAC IPSASB ATTACHMENT 2 – Accrual IPSASs (cont. ) *IPSAS 7, “Accounting for Investments in Associates” *IPSAS 8, “Financial Reporting of Interests in Joint Ventures” IPSAS 9, “Revenue from Exchange Transactions” IPSAS 10, “Financial Reporting in Hyperinflationary Economies” IPSAS 11, “Construction Contracts” *IPSAS 12, “Inventories” March 2006 IPSASB 21

IFAC IPSASB ATTACHMENT 2 – Accrual IPSASs (cont. ) *IPSAS 13, “Leases” *IPSAS 14, “Events After the Reporting Date” IPSAS 15, “Financial Instruments: Disclosure and Presentation” *IPSAS 16, “Investment Property” *IPSAS 17, “Property, Plant and Equipment” March 2006 IPSASB 22

IFAC IPSASB ATTACHMENT 2 – Accrual IPSASs (cont. ) 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” March 2006 IPSASB 23

IFAC IPSASB ATTACHMENT 2 – (cont. ) Recent Research Reports/Consultation Papers • Budget Reporting (May 04) • Comparison between GPFS and GFS/SNA (January 05) • Heritage Assets under the Accrual Basis of Accounting (March 06) • The Road to Accrual Accounting in the United States of America (March 06) March 2006 IPSASB 24