Cash Basis IPSAS- Disclosure by Recipients of External Assistance

  • Cash Basis IPSAS- Disclosure by Recipients of External Assistance

    Project Status

    Disclosure Requirements for Recipients of External Assistance published (within the Cash Basis IPSAS - Financial Reporting Under the Cash Basis of Accounting).

    Staff

    Paul Sutcliffe

    Task Force

    There is no task force currently operative for this project.

    Objective(s) of project

    Develop requirements for the disclosure of information about external assistance when the cash basis of financial reporting is adopted.

    Scope

    The project applies to all public sector entities that are recipients of external assistance and prepare and present their general purpose financial statements under the cash basis of accounting as defined in the Cash Basis IPSAS.

    The Cash Basis IPSAS applies to all public sector entities that apply the cash basis of accounting, other than Government Business Enterprises (GBEs). GBEs are required to apply International Financial Reporting Standards (IFRSs) which are issued by the International Accounting Standards Board (IASB).

    Background

    The project was initiated in response to requests from constituents for a generally accepted accounting standard for reporting external assistance when the cash basis of financial reporting is adopted.

    ED 24, "Financial Reporting Under the Cash Basis of Accounting - Disclosure Requirements for Recipients of External Assistance" was issued in February 2005 for comment by June 15, 2005. Respondents to the ED expressed concerned about practicability of some proposals, noting that in at least some jurisdictions the data necessary for compliance was not readily available and the costs of compliance would outweigh its benefits.

    The IPSASB consulted extensively with constituents on the future development of the project. Following consultation with the Eastern and South African Association of Accountants General, OECD-DAC-Joint Venture on Public Financial Management, IPSASB consultative group and a wide range of constituents, the IPSASB developed Exposure Draft (ED) 32, Financial Reporting Under the Cash Basis of Accounting - Disclosure Requirements for Recipients of External Assistance.

    Issues

    Issues the project intends to consider include (but are not necessarily limited to):

    • having a 'stand alone' IPSAS or embedding within the existing Cash Basis IPSAS;
    • appropriately designating disclosures as either encouraged or mandatory;
    • determining the scope of 'external assistance';
    • recognition of external assistance received in the form of non-cash goods and services; and
    • transitional provisions.

    Task Force progress / Board discussions to date

    January 2008: Disclosure Requirements for Recipients of External Assistance published within the Cash Basis IPSAS - Financial Reporting Under the Cash Basis of Accounting.

    November 2007: The IPSASB approved the disclosure requirements for recipients of external assistance who follow the cash basis of accounting. The requirements will be housed within the Cash Basis IPSAS - Financial Reporting Under the Cash Basis of Accounting and are planned to be issued early in 2008.

    July 2007 - The IPSASB reviewed all responses to ED 32 and provided directions for development of a first draft IPSAS to be considered for approval at the November 2007 meeting. Members confirmed that disclosure requirements are to be incorporated in the Cash Basis IPSAS, rather than in a stand alone IPSAS.

    A preliminary review of field test results indicated no major impediments to adoption of the proposed IPSAS requirements within the proposed transitional period. Some field testing however is still in progress. Field test reports will be further considered in November. It is agreed the draft IPSAS developed from this meeting should be translated into Spanish and made available to potential field test partners in Latin America.

    January - June 2007: The Swiss State Secretariat for Economic Affairs (SECO) provides funding to support development of the IPSAS. Members and Staff continue to seek field test partners.

    Ghana, Uganda, Nigeria and Kenya agree to field test ED 32. Field tests completed by Ghana, Uganda and Nigeria.

    Exposure period extended from March 31 to end of April 2007.

    November - December 2006: The staff followed up on field testing of ED 32 with Eastern and South African Association of Accountants General (ESAAG) and with OECD-DAC-Joint Venture on Public Financial Management (OECD-DAC-JV).

    August - November 2006: ED 32 finalized and issued for comment by March 31, 2007.

    July 2006: The IPSASB reviewed draft ED 32 and approved it for issue subject to editorial amendment, processing of final revisions and final approval by Chair. Chair of OECD-DAC-JV attends IPSASB meeting and notes support for ED.

    March 2006: The IPSASB agreed to develop a new ED on this issue (ED 32). The ED is to include basic mandatory disclosures and additional encouraged disclosures - to reflect the style of the Cash Basis IPSAS. It is to reclassify a number of disclosures proposed by ED 24 as encouraged, rather than required, disclosures. The IPSASB also agreed to pursue field testing of the ED.

    November - December 2005: The IPSASB discussed ED 24, Financial Reporting Under the Cash Basis of Accounting - Disclosure Requirements for Recipients of External Assistance extensively with Consultative Group members. The Board agreed to further develop the project, with completion of its review of comments and consideration of a strategy for moving forward at the March 2006 meeting.

    July 2005: The IPSASB reviewed responses on ED 24. The Board agreed that additional field testing should occur prior to moving to a final IPSAS.

    February 2005: ED 24 issued with comment period of 15 June 2005.

    November 2004 ED 24 agreed for issue.

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