Improvements to IPSAS, 2023 was approved in March by the IPSASB and is expected to be published in April 2024. This new pronouncement includes amendments to IPSAS to add guidance related to the classification of liabilities and accounting for the lease liability in a sale and leaseback.
IFRIC Alignment–Narrow Scope Amendments
The IPSASB approved Exposure Draft (ED) 89, Amendments to Consider IFRIC Interpretations. This ED proposes to clarify the application of existing principles in IPSAS, based on five IFRIC Interpretations. ED 89 will be published in April 2024 for a 60-day exposure period.
Other Lease-Type Arrangements
The IPSASB approved ED 88, Arrangements Conveying Rights over Assets (Amendments to IPSAS 47 and IPSAS 48). ED 88 will be published at the end of March 2024 for a 60-day exposure period.
Sustainability-Climate-Related Disclosures
The IPSASB agreed that a government’s ability to set policy is unique to the public sector and specific guidance for governments’ policy setting activities that influence other entities, including other economic sectors, is necessary. The IPSASB also held initial discussions with breakout groups on public sector specific climate-related metrics and transitional provisions.
Natural Resources
The IPSASB agreed the derecognition requirements for natural resources, the transitional provisions, and with the description of conservation to be included in the ED, Natural Resources. The IPSASB also agreed with the subsequent measurement of natural resources and what should be excluded from the ED’s scope.
Measurement-Application Phase
The IPSASB discussed the applicability of current operational value for assets in scope of IPSAS 31, Intangible Assets, and reviewed the draft ED that includes amendments to inventories, intangible assets, impairment of non-cash-generating assets, accounting estimates, and current value measurement disclosures.
IPSAS 33–Limited Scope Update
The IPSASB agreed that IPSAS 33, First-Time Adoption of Accrual Basis IPSAS, should be enhanced by proposing guidance to support the pre-adoption phase of IPSAS implementation. The IPSASB also agreed to explicitly encourage early application of IPSAS during the transitional relief period.
Presentation of Financial Statements
The IPSASB continued its discussion of issues to advance the development of a new IPSAS to replace IPSAS 1, Presentation of Financial Statements. This included consideration of definitions and overarching presentation requirements and was supported by breakout group discussions on the presentation of revenue and expense items outside the statement of financial performance.
Meeting Videos
Recordings of the meetings are available on our YouTube channel.
Next Meeting
The second IPSASB meeting of 2024 will take place in Toronto, Canada from June 25 – 28. For more information, or to register as an observer, please visit the IPSASB website.
Pathways to Accrual: Find resources helpful for planning and undertaking a transition from cash to accrual accounting including adopting and implementing IPSAS.
e-International Standards: Access the IPSASB’s standards and pronouncements on a convenient digital platform.
Train the Trainer: Download a package of training materials on IPSAS that can be tailored to the needs of training participants. A new edition will be released later this month.
Tangible natural resources are generally understood to be resources such as mineral resources, water, and living organisms that are naturally occurring. They account for a significant proportion of the economic resources in many jurisdictions. However, governments often lack sufficient information on the monetary value of natural resources, and as a result, grant rights to these resources without regard to financial and environmental sustainability, or intergenerational fairness.
To address the gap in the IPSAS literature on accounting for natural resources, the International Public Sector Accounting Standards Board® (IPSASB®) issued a Consultation Paper (CP) in May 2022. The IPSASB continues to develop principles for the recognition and measurement of natural resources, with the targeted publication of an Exposure Draft (ED) in the second half of 2024. However, following feedback received on the CP concerning the lack of guidance on specific activities related to mineral resources, this is being addressed first with the release of ED 86 and ED 87 for public comment:
ED 86 proposes a standard on accounting for the costs incurred in the exploration and evaluation of mineral resources, based on the selection of an accounting policy specifying which expenditure should be recognized as exploration and evaluation assets. ED 86 is aligned with the private sector requirements in IFRS 6, Exploration for and Evaluation of Mineral Resources, with limited changes for the public sector context.
ED 87 proposes adding an authoritative appendix to IPSAS 12, Inventories. The proposed guidance clarifies when to capitalize or expense costs incurred to remove waste material in surface mining operations. ED 87 is aligned with the guidance in IFRIC 20, Stripping costs in the Production Phase of a Surface Mine, with limited changes for the public sector context.
“As the IPSASB’s broader Natural Resources project continues to break new ground, the current proposals address some of the gaps in the literature on mineral resources in response to stakeholders needs,” said IPSASB Chair Ian Carruthers. “There is more to come in 2024 from the Natural Resources project, but these EDs are an important first step to providing useful financial information and improved accountability by the public sector in this important area.”
How to Comment
To access the EDs and the summary At-a-Glance documents, or to submit a comment, visit the IPSASB website, www.ipsasb.org. Comments on the EDs are requested by May 31, 2024. The IPSASB encourages IFAC® members, associates, and regional accountancy organizations to promote the availability of these EDs to their members and employees.
About the IPSASB
The International Public Sector Accounting Standards Board (IPSASB) works to strengthen public financial management globally through developing and maintaining accrual-based International Public Sector Accounting Standards® (IPSAS®) and other high-quality financial reporting guidance for use by governments and other public sector entities. It also raises awareness of IPSAS and the benefits of accrual adoption. The Board receives support from the Asian Development Bank, the Chartered Professional Accountants of Canada, the New Zealand External Reporting Board, and the government of Canada. 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 IPSASB added Differential Reporting to its work program in March 2022, based on constituent responses to the 2021 Mid-Period Work Program Consultation. The aim of the project was to explore the potential development of an international differential reporting model. The first stage of any major standard-setting project is to conduct research and scoping activities.
ED 87 proposes adding an authoritative appendix to IPSAS 12, Inventories. The proposed guidance clarifies when to capitalize or expense costs incurred to remove waste material in surface mining operations. ED 87 is aligned with the guidance in IFRIC 20, Stripping costs in the Production Phase of a Surface Mine, with limited changes for the public sector context.
The Consultation is open for public comment until May 31, 2024. Comments must be submitted in English.
ED 86 proposes a standard on accounting for the costs incurred in the exploration and evaluation of mineral resources, based on the selection of an accounting policy specifying which expenditure should be recognized as exploration and evaluation assets. ED 86 is aligned with the private sector requirements in IFRS 6, Exploration for and Evaluation of Mineral Resources, with limited changes for the public sector context.
