The International Ethics Standards Board for Accountants^® (IESBA^®) today released for public comment the Exposure Draft, Proposed Revisions to the Code Pertaining to the Offering and Accepting of Inducements. The proposals strengthen the Code of Ethics for Professional Accountants (the Code) by clarifying the appropriate boundaries for the offering and accepting of inducements, and by prohibiting any inducements with intent to improperly influence behavior.

The proposed comprehensive framework covers all forms of inducements and applies to both professional accountants in business and professional accountants in public practice. It also provides enhanced guidance on the offering and accepting of inducements by professional accountants’ immediate or close family members.

“Inducements with intent to improperly influence behavior are a very major concern for the public interest, and they include the issues of bribery and corruption. Inducements made with improper intent are unacceptable and should be prohibited,” said IESBA Chairman Dr. Stavros Thomadakis.

Among other matters, the proposals also require professional accountants to address any threats to compliance with the fundamental ethical principles in accordance with the Code’s conceptual framework where there is no improper intent.

“The development of the proposals was informed by input from Transparency International UK based on their experience and insights in the area of bribery and corruption,” noted IESBA Technical Director Ken Siong. “When completed, the provisions will constitute the last piece of the substantively revised and restructured Code.”

How to Comment
The IESBA invites all stakeholders to comment on the Exposure Draft by visiting the Ethics Board’s website at www.ethicsboard.org. Comments are requested by December 8, 2017.

About the IESBA
The IESBA is an independent standard-setting board that develops and issues, in the public interest, high-quality ethical standards and other pronouncements for professional accountants worldwide. Through its activities, the IESBA develops the Code of Ethics for Professional Accountants, which establishes ethical requirements for professional accountants. The structures and processes that support the operations of the IESBA are facilitated by IFAC. Please visit www.ethicsboard.org for more information, and follow us on Twitter @Ethics_Board.

About 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. IFAC is comprised of more than 175 members and associates in more than 130 countries and jurisdictions, representing almost 3 million accountants in public practice, education, government service, industry, and commerce.

Ellen Goria is the Associate Director of Global Professional Ethics in the Professional Ethics Division at the Association of International Certified Professional Accountants. Ms. Goria is involved with the division’s standard setting and member enrichment activities and serves as the technical advisor to Andrew Mintzer of the IESBA. She also oversees the Ethics Hotline and interprets the AICPA’s Code of Professional Conduct by providing guidance to membership, state CPA societies, and other interested parties on ethics and independence issues. In her role, Ms. Goria works closely with other AICPA teams to ensure publications accurately reflect the AICPA’s current ethical positions.

The International Public Sector Accounting Standards Board (IPSASB) has issued Exposure Draft 62, Financial Instruments.

This Exposure Draft proposes new simplified classification and measurement requirements for financial assets, a forward looking impairment model and a flexible principle-based hedge accounting model.

The International Public Sector Accounting Standards Board^® (IPSASB^®) has released Exposure Draft (ED) 62, Financial Instruments, for comment. It is based on International Financial Reporting Standard (IFRS) 9, Financial Instruments, developed by the International Accounting Standards Board (IASB^®).

The proposed new Standard will replace IPSAS 29, Financial Instruments: Recognition and Measurement, and improves that Standard’s requirements by introducing:

• Simplified classification and measurement requirements for financial assets;
• A forward looking impairment model; and
• A flexible hedge accounting model.

“Accounting for financial instruments is an important but complex area for most governments. Although our existing standard IPSAS 29 includes guidance on a number of topics specific to the public sector, it is converged with the previous IFRS^®” said IPSASB Chair Ian Carruthers. “Through incorporating the improvements in IFRS 9 financial reporting will be improved by ED 62.”

The IPSASB applied its Process for Reviewing and Modifying IASB Documents, to align ED 62 with IFRS 9, and includes appropriate public sector specific modifications. This approach builds on public and private sector best-practice while addressing unique public sector features. ED 62 includes public sector specific guidance on financial guarantees issued through non-exchange transactions and concessionary loans and examples illustrating how to apply the principles in ED 62 to transactions that are unique to the public sector.

How to Comment
To access the Exposure Draft and its summary At-a-Glance document, or to submit a comment, visit the IPSASB website at www.ipsasb.org. Comments on the Consultation Paper are requested by December 31, 2017. The IPSASB encourages IFAC members, associates, and regional accountancy organizations to promote the availability of this Exposure Draft to their members and employees.

About the IPSASB
The International Public Sector Accounting Standards Board (IPSASB) works to strengthen public financial management globally through the development of accrual-based International Public Sector Accounting Standards® (IPSAS®) and other guidance for use by governments and other public sector entities. It receives support from the Asian Development Bank, the Chartered Professional Accountants of Canada, the New Zealand External Reporting Board, and the governments of Canada and New Zealand. The structures and processes that support the operations of the IPSASB are facilitated by the International Federation of Accountants (IFAC). For copyright, trademark, and permissions information, please go to permissions or contact permissions@ifac.org.

About the Public Interest Committee
The governance and standard-setting activities of the IPSASB are overseen by the Public Interest Committee (PIC), to ensure that they follow due process and reflect the public interest. The PIC is comprised of individuals with expertise in public sector or financial reporting, and professional engagement in organizations that have an interest in promoting high-quality and internationally comparable financial information.

The International Public Sector Accounting Standards Board^® (IPSASB^®) has released a Consultation Paper (CP), Accounting for Revenue and Non-exchange Expenses.

The IPSASB seeks constituent views on potential recognition and measurement approaches for revenue and non-exchange expenses. Conceptually robust and understandable accounting treatments of taxes, transfers and other major sources of public sector income as well as expenses on universally accessible and collective services are fundamental to high-quality financial reporting. The publication of IFRS 15, Revenue from Contracts with Customers, by the International Accounting Standards Board, has provided the IPSASB with an impetus to consider its approaches both to commercial transactions and public sector specific transactions. The CP also considers recognition approaches for significant non-exchange expense transactions, such as the provision of education, healthcare and defense.

“This Consultation Paper is an important first step in addressing some key IPSAS implementation issues while seeking to maintain IFRS convergence,” said Ian Carruthers, IPSASB Chair. “It also provides an opportunity to address gaps in literature that have been identified in accounting for non-exchange expenses and the measurement of non-contractual receivables and non-contractual payables—such as taxes, fines and licenses.”

The CP proposes updating existing IPSAS 23, Revenue from Non-Exchange Transactions (Taxes and Transfers), to address issues identified by users, as well as to replace current IPSAS dealing with revenue arising from exchange transactions and construction contracts with an IPSAS based on IFRS 15.

For non-exchange transactions with performance obligations the CP discusses two potential revenue recognition approaches.

(a)   Exchange/non-exchange approach – Under this approach the CP identifies five options for updating IPSAS 23, Revenue from Non-Exchange Transactions (Taxes and Transfers); and

(b)   The Public Sector Performance Obligation Approach for Revenue – Under this approach revenue would be recognized when identified performance obligations have been fulfilled, drawing upon the approach in IFRS 15 adapted for the public sector.

The CP discusses two potential approaches to the recognition of non-exchange expenses.

(a)   The Extended Obligating Event Approach – this approach would rely on the IPSASB’s Conceptual Framework to determine when a resource provider has a liability and expense; and

(b)   The Public Sector Performance Obligation Approach for Expenses – this approach would mirror the equivalent approach for revenue, and adapt it for non-exchange expense transactions.

The CP also discusses:

• Implementation issues regarding the recognition of revenue from capital grants and services in-kind;
• Initial and subsequent measurement of non-contractual receivables; and
• Subsequent measurement of non-contractual payables.

How to Comment
To access the Consultation Paper and its summary At-a-Glance document, or to submit a comment, visit the IPSASB website, www.ipsasb.org. Comments on the Consultation Paper are requested by January 15, 2018. The IPSASB encourages IFAC^® members, associates, and regional accountancy organizations to promote the availability of this Consultation Paper to their members and employees.

About the IPSASB
The International Public Sector Accounting Standards Board (IPSASB) works to strengthen public financial management globally through the development of accrual-based International Public Sector Accounting Standards® (IPSAS®) and other guidance for use by governments and other public sector entities. It receives support from the Asian Development Bank, the Chartered Professional Accountants of Canada, the New Zealand External Reporting Board, and the governments of Canada and New Zealand. The structures and processes that support the operations of the IPSASB are facilitated by the International Federation of Accountants (IFAC). For copyright, trademark, and permissions information, please go to permissions or contact permissions@ifac.org.

About the Public Interest Committee
The governance and standard-setting activities of the IPSASB are overseen by the Public Interest Committee (PIC), to ensure that they follow due process and reflect the public interest. The PIC is comprised of individuals with expertise in public sector or financial reporting, and professional engagement in organizations that have an interest in promoting high-quality and internationally comparable financial information.

In 2015, the International Auditing and Assurance Standards Board (IAASB), International Ethics Standards Board for Accountants (IESBA), and the International Accounting Education Standards Board (IAESB) convened a small, cross-representational working group—the Professional Skepticism Working Group—to formulate views on whether and how each of the three boards’ sets of international standards could further contribute to strengthening the understanding and application of the concept of professional skepticism as it applies to an audit.