Press Releases/News Alerts
Aug 27, 2014
New York, New York
IPSASB Publishes Consultation Paper on the Applicability of IPSASs to GBEs and Other Public Sector Entities
The International Public Sector Accounting Standards Board® (IPSASB®) today released for comment a Consultation Paper (CP), The Applicability of IPSASs to Government Business Enterprises and Other Public Sector Entities.
Government Business Enterprises (GBEs) are generally commercially oriented entities that can have a significant impact on a government’s financial performance and financial position. Globally, GBEs vary in size, the goods and services they deliver, their financial objectives, and their governance arrangements. GBEs include major enterprises in areas such as transportation and utilities.
Currently, the term “GBE” is defined in International Public Sector Accounting Standard™ (IPSAS™) 1, Presentation of Financial Statements. IPSASs are not developed for GBEs. The scope section of each IPSAS states that GBEs apply International Financial Reporting Standards issued by the International Accounting Standards Board. The IPSASB has received feedback indicating there are a wide range of entities being described as GBEs. Some of these entities clearly do not meet the IPSASB definition of a GBE. In other cases, there are different interpretations of components of the definition.
The IPSASB has developed two approaches to communicate its view of the entities to which IPSASs apply. Under the first approach, the IPSASB would describe the characteristics of public sector entities for which IPSASs are intended. This would be done by either drawing on the IPSASB’s current and developing literature or by reference to terminology in Government Finance Statistics reporting guidelines. Under this approach, there would no longer be a definition of GBE in the IPSASB literature.
Under the second approach, the definition of a GBE would be retained. The IPSASB would clarify the GBE definition and would possibly narrow it to entities with a profit-seeking objective.
The IPSASB’s preliminary view is that the first of these two approaches is the best way forward. This is because it is principles-based and focuses on the high-level characteristics of entities for which IPSASs are intended.
“The IPSASB acknowledges the role of regulators in determining the accounting standards to be applied by different entities in their jurisdictions,” said IPSASB Chair Andreas Bergmann. “The IPSASB considers that it has a responsibility to be transparent about the types of public sector entities for which it is developing IPSASs. We look forward to hearing whether constituents support the approach of providing a high-level description of the characteristics of public sector entities for which IPSASs are intended or, instead, retention and improvement of the definition of a GBE.”
How to Comment
To access the Consultation Paper and the At-a-Glance document, which provides a summary of the Consultation Paper, or to submit a comment, please visit the IPSASB website at www.ipsasb.org. Comments on the Consultation Paper are requested by December 31, 2014. The IPSASB encourages IFAC members, associates, and regional accountancy bodies to promote the availability of this Consultation Paper to their members and employees.
About the IPSASB
The IPSASB develops accounting standards and guidance for use by public sector entities. It receives support (both direct financial and in-kind) from the World Bank, the Asian Development Bank, the Chartered Professional Accountants of Canada, the South African Accounting Standards Board, and the governments of Canada, New Zealand, and Switzerland. The structures and processes that support the operations of the IPSASB are facilitated by IFAC.
IFAC is the global organization for the accountancy profession, dedicated to serving the public interest by strengthening the profession and contributing to the development of strong international economies. It is comprised of 179 members and associates in 130 countries and jurisdictions, representing approximately 2.5 million accountants in public practice, education, government service, industry, and commerce.