IFAC, IPSASB, and Accountancy Europe hosted a lively discussion on the future of sustainability reporting in the public sector, the urgent need to develop public sector specific sustainability reporting standards, and how the IPSASB is exploring undertaking the critical endeavor.
About 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 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 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 180 members and associates in 135 countries and jurisdictions, representing more than 3 million accountants in public practice, education, government service, industry, and commerce.
About Accountancy Europe Accountancy Europe unites 50 professional organisations from 35 countries that represent 1 million professional accountants, auditors, and advisors. They make numbers work for people. Accountancy Europe translates their daily experience to inform the public policy debate in Europe and beyond. Accountancy Europe is in the EU Transparency Register (No 4713568401-18).
Event recording and highlights now available: Equipping the Public Sector for Sustainability Action
IFAC, IPSASB, and Accountancy Europe hosted a lively discussion on the future of sustainability reporting in the public sector, the urgent need to develop public sector specific sustainability reporting standards, and how the IPSASB is exploring undertaking the critical endeavor.
About 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 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 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 180 members and associates in 135 countries and jurisdictions, representing more than 3 million accountants in public practice, education, government service, industry, and commerce.
About Accountancy Europe Accountancy Europe unites 50 professional organisations from 35 countries that represent 1 million professional accountants, auditors, and advisors. They make numbers work for people. Accountancy Europe translates their daily experience to inform the public policy debate in Europe and beyond. Accountancy Europe is in the EU Transparency Register (No 4713568401-18).
Event recording and highlights now available: Equipping the Public Sector for Sustainability Action
The Board approved the Final Pronouncement, Amendments to IPSAS Standards as a Result of the Application of IPSAS 46, Measurement, which amends IPSAS Standards to incorporate measurement guidance from IPSAS 46. These amendments are effective January1, 2028.
The first IPSASB meeting of the year was hosted in the offices of the International Monetary Fund in Washington, D.C., USA on March 14-16, 2023.
Measurement
The IPSASB approved IPSAS 46, Measurement, which brings measurement guidance together in a single standard, and introduces a public sector specific current value measurement basis for assets held for their operational capacity and provides additional generic guidance on fair value. This completes the initial phase of the measurement project, now the IPSASB will consider the broader impact of this new guidance across IPSAS in the ongoing Measurement – Application Phase project.
IPSAS 46 will be effective for periods beginning on or after January 1, 2025.
Revenue
The IPSASB approved IPSAS 47, Revenue, which is a single standard to account for revenue transactions in the public sector. IPSAS 47 replaces the existing three revenue standards, and presents accounting models which will improve financial reporting and support effective public sector financial management.
IPSAS 47 will be effective for periods beginning on or after January 1, 2026.
Transfer Expenses
The IPSASB approved IPSAS 48, Transfer Expenses, which provides guidance on a major area of expenditure for governments and other public sector entities. IPSAS 48 fills a gap which had previously led to ambiguity and inconsistency of accounting policies in the public sector.
IPSAS 48 will be effective for periods beginning on or after January 1, 2026.
Reporting Sustainability Program Information
The IPSASB reviewed the responses to Exposure Draft (ED) 83, Reporting Sustainability Program Information–RPGs 1 and 3: Additional Non-Authoritative Guidance. The IPSASB considered the strong support from respondents on the ED 83 proposals, and approved Amendments to Recommended Practice Guideline 1, Reporting on the Long-Term Sustainability of an Entity’s Finances and Recommended Practice Guideline 3, Reporting Service Performance Information. These amendments help to highlight the applicability of existing concepts and principles in the respective RPGs which public sector entities can apply for reporting sustainability program information.
These amendments will be issued in the second quarter of 2023.
Sustainability Reporting
The IPSASB discussed findings from the initial research and scoping activities performed in Q1 2023. In light of current available resources, the IPSASB agreed to focus initially on a Climate-Related Disclosure project, as this was the most urgent issue identified in the feedback received to the Consultation Paper, Advancing Public Sector Sustainability Reporting.
The initial research and scoping activities will continue in Q2 2023 while the IPSASB continues to source incremental funds to support its sustainability standard setting.
Natural Resources
The IPSASB completed a first review of the responses to its Natural Resources Consultation Paper. The IPSASB agreed to develop an ED to propose accounting requirements for natural resources, including a principled approach to describing and identifying natural resources. The IPSASB also decided to develop a separate ED based on IFRS 6, Exploration for and Evaluation of Mineral Resources to introduce IPSAS guidance on accounting for the costs incurred during exploration, evaluation, and extraction activities.
The IPSASB approved updated Chapter 5, Elements in Financial Statements, which introduces minor changes to the definition of an asset and a liability, and adds new guidance on a transfer of resources, unit of account and binding arrangements that are equally unperformed.
Chapter 5 will be issued in the second quarter of 2023.
The IPSASB reviewed responses to ED 81, Conceptual Framework Update: Chapter 3, Qualitative Characteristics. The IPSASB agreed to update the qualitative characteristic of faithful representation to discuss prudence, and added guidance to clarify that omitting, misstating or obscuring information are factors relevant to consider when making materiality judgments.
Retirement Benefit Plans
The IPSASB performed an initial review of the responses to ED 82, Retirement Benefit Plans. While the overall proposals in ED 82 were strongly supported by respondents, the IPSASB agreed to analyze further specific issues raised at its next meeting in June 2023.
Measurement – Application Phase
The IPSASB agreed which IPSAS are in the scope of the application phase of the Measurement project. The IPSASB also concluded that the applicability of current operational value should be evaluated at initial and subsequent measurements for each IPSAS in scope of the project.
The IPSASB’s Next Strategy and Work Program
The IPSASB discussed the development plan for its next Strategy and Work Program. The IPSASB considered the environmental differences between 2023 and when the 2019-2023 Strategy was developed. The IPSASB agreed its current strategy, and its delivery through five themes, continued to be relevant, however, needed to evolve to address changing stakeholder expectations. The IPSASB aims to approve a Consultation at its September 2023 meeting and is planning outreach during the consultation period in Q4 2023.
Next Meeting
The next meeting of the IPSASB will take place in June 2023 in Toronto, Canada. For more information, or to register as an observer, visit the IPSASB website.
Progressing sustainable development goals, including those related to climate change, requires urgent public sector action. Yet, as of now, no internationally recognized public sector reporting framework exists to help governments to measure and report on their critical contributions to addressing the global climate emergency and other sustainability challenges. With its public sector standard setting expertise and support of the international community, the International Public Sector Accounting Standards Board (IPSASB) is exploring how it might change that.
IPSASB, IFAC and Accountancy Europe will host an interactive discussion around key ideas the IPSASB is exploring related to the development of sustainability standards and the resources necessary to deliver the urgently needed public sector reporting guidance.
“The urgency of advancing public sector sustainability reporting cannot be overstated,” said Ian Carruthers, IPSASB Chair. “While the IPSASB is pleased to be playing a leading role in developing the thinking on this initiative, the involvement of the global community will also be crucial to equipping the public sector with the tools it needs to address climate change and other sustainability challenges.”
“Public sector specific sustainability reporting standards will undoubtedly strengthen the global response to the climate crisis,” said Kevin Dancey, IFAC CEO. “IFAC applauds the IPSASB's lead on addressing this gap and encourages all of our stakeholders to get involved however they can.”
“The public sector is essential to the economy in European countries: the necessary transition will not happen without it”, said Olivier Boutellis-Taft, Accountancy Europe’s CEO. “Proper sustainability reporting is a minimum and long-awaited first step. We applaud the IPSASB’s leadership and look forward to this discussion.”
The event will feature:
Ian Carruthers, Chair, IPSASB
Olivier Boutellis-Taft, CEO, Accountancy Europe
Andrew Blazey, Deputy Head of Division and Lead, Green Budgeting, OECD
Maria-Rosa Aldea Busquets, Deputy Director General, DG Budget, European Commission
Laura Leka, Principal, IFAC
Alex Metcalfe, Global Head of Public Sector, ACCA
Vivi Niemenmaa, Secretary General - INTOSAI WGEA / National Audit Office of Finland
Lebogang Senne, Technical Director, Pan African Federation of Accountants (PAFA)
Ross Smith, Program and Technical Director, IPSASB
Eelco van der Enden, CEO, GRI
Additional participants TBA
The in-person interactive discussion will be followed by a networking reception. The event is free to attend and will be held in English. View the agenda and register now.
About 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 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 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 180 members and associates in 135 countries and jurisdictions, representing more than 3 million accountants in public practice, education, government service, industry, and commerce.
About Accountancy Europe Accountancy Europe unites 50 professional organisations from 35 countries that represent 1 million professional accountants, auditors, and advisors. They make numbers work for people. Accountancy Europe translates their daily experience to inform the public policy debate in Europe and beyond. Accountancy Europe is in the EU Transparency Register (No 4713568401-18).
Event will be held in person April 4 from 4-6pm with reception to follow in Brussels, Belgium
