The International Public Sector Accounting Standards Board (IPSASB) of the International Federation of Accountants (IFAC) is expanding its guidance in two significant areas: accounting for intangible assets and entity combinations. It has published two new exposure drafts (EDS)-ED 40, Intangible Assets and ED 41, Entity Combinations from Exchange Transactions, which propose important new guidance for professional accountants working in government and other public sector entities.

"During the current economic crisis, governments around the world have been acquiring business entities that might otherwise be liquidated. These EDs propose financial reporting requirements that will ensure that these transactions are reported in a consistent and transparent manner, ensuring that governments remain accountable for their actions," explains IPSASB Chair Mike Hathorn.

The issuance of the exposure drafts is part of the IPSASB's global convergence program that will substantially converge International Public Sector Accounting Standards (IPSASs) with International Financial Reporting Standards (IFRSs) approved at December 31, 2008 The project is scheduled for completion by December 31, 2009.

ED 40 proposes an IPSAS that converges with the International Accounting Standards Board's (IASB) International Accounting Standard 38, Intangible Assets. ED 40 also incorporates guidance on website costs set out in the Interpretation 32 of the IASB's Standing Interpretations Committee,  entitled Intangible Assets - Web Site Costs. It also includes guidance on intangible heritage assets.

Because ED 41 addresses entity combinations that are similar in nature to those in the private sector, it is converged with the IASB's IFRS 3, Business Combinations. Entity combinations that arise from non-exchange transactions are being addressed in a separate public sector-specific project. 

The exposure drafts are being issued concurrently because ED 40 addresses issues related to intangible assets acquired in an entity combination arising from an exchange transaction. Both exposure drafts contain limited changes from the relevant IFRS; these changes are mainly to ensure consistency with other IPSASs and to address specific public sector issues.

"Converging IPSASs with IFRSs, where appropriate for the public sector, is one of the key objectives of our standards development program," states Hathorn. "These two exposure drafts propose clear financial reporting requirements for an entity in the public sector in order to ensure that the private and public sectors report similar activities in a consistent fashion."

How to Comment
Comments on EDs 40 and 41 are requested by August 15, 2009. The EDs may be viewed by going to www.ifac.org/EDs. Comments may be submitted by email to EDComments@ifac.org and stepheniefox@ifac.org. They can also be faxed to the attention of the IPSASB Technical Director at +1 (416) 977-8585, or mailed to the IPSASB Technical Director at 277 Wellington Street West, 4th Floor, Toronto, Ontario M5V 3H2, Canada. All comments will be considered a matter of public record and will ultimately be posted on the IFAC website.

About IFAC
IFAC (https://www.ifac.org/) 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 158 members and associates in 123 countries and jurisdictions, representing more than 2.5 million accountants in public practice, education, government service, industry, and commerce. Through its independent standard-setting boards, IFAC sets international ethics, auditing and assurance, education, and public sector accounting standards. It also issues guidance to encourage high-quality performance by professional accountants in business.

¹The Standing Interpretations Committee of the IASB was replaced in March 2002 by the International Financial Reporting Interpretations Committee.

Speaking at the Higher Education Forum of the National Association of College and University Business Officers (NACUBO) in Miami, FL, on April 26, 2009, Robert L. Bunting, President of the International Federation of Accountants (IFAC), described the enormous changes happening as a result of the global financial crisis and explained why convergence and implementation of international standards is needed to rebuild and sustain the global financial system.

"We are rapidly moving to one world in accounting, auditing, and corporate governance," emphasized Mr. Bunting, adding, "IFAC is expediting the development of standards and guidance on key issues, such as going concern, fair value, financial instruments, and corporate governance-and other issues that have been raised as a result of the crisis-so accountants worldwide operate on a level playing field."

He pointed out that government bailouts of the financial and automotive industries are also resulting in calls for greater accountability and transparency on the part of governments, and indicated that governments can achieve this by adopting International Public Sector Accounting Standards (IPSASs). "Convergence to international public sector accounting standards, which has proceeded at a slower pace than convergence to those in the private sector, is now urgent," Mr. Bunting emphasized. Such standards are used by the United Nations, NATO, IFAC, and the Organisation for Economic Co-operation and Development, are supported and promoted by the World Bank, and are already used by many governments around the world.

Mr. Bunting called on university leaders to broaden their curriculum to address the growing need for convergence to international standards: "Teaching only US GAAP (Generally Accepted Accounting Principles) handcuffs students to the US economy. Academic institutions must incorporate International Standards on Auditing, IPSASs, and International Financial Reporting Standards into their accounting curriculum."

Bunting's comments on international standards were part of a presentation about the future of the accounting profession and how universities must broaden their view of what students need-and what the world needs-from accountants.

About IFAC
IFAC (www.ifac.org) 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 158 members and associates in 123 countries, representing more than 2.5 million accountants in public practice, education, government service, industry, and commerce. In addition to setting international public sector financial reporting standards through the IPSASB, IFAC, through its independent standard-setting boards, sets ethics, auditing and assurance, and education standards. It also issues guidance to encourage high-quality performance by professional accountants in business.

The International Public Sector Accounting Standards Board (IPSASB) of the International Federation of Accountants (IFAC) is proposing new financial reporting requirements to assist public sector entities in accounting for financial instruments, such as derivatives, bonds, and loans. These proposed requirements are contained in three newly released exposure drafts (EDs): ED 37, Financial Instruments: Presentation, ED 38, Financial Instruments: Recognition and Measurement, and ED 39, Financial Instruments: Disclosures.

“The unprecedented scale of governmental intervention in the financial sector makes it essential that global transparency and accountability is enhanced through consistent financial reporting of their exposures to financial instruments. Approval of these EDs is just the beginning of a process by which the IPSASB will develop guidance that addresses financial instruments for the public sector and, in doing so, to ultimately develop guidance that addresses further public sector-specific issues,” states Mike Hathorn, Chair of the IPSAS.

The EDs propose IPSASs that converge with the International Accounting Standards Board’s standards for financial instruments as at December 31, 2008, with limited changes, representing a significant step in the IPSASB’s global convergence program, scheduled for completion by December 31, 2009. As part of this program, International Public Sector Accounting Standards will substantially converge with International Financial Reporting Standards approved at December 31, 2008, with limited changes to ensure consistency with other IPSASs, while addressing specific public sector issues.

Additional application guidance has been included in each ED on two key public sector issues. These are provision by government of financial guarantees that are given at zero cost or below market price and, secondly, concessionary loans (loans at below market interest rates). Governments have been using financial guarantees, such as guaranteeing bank deposits and low interest rate loans to support private sector businesses during the current economic crisis. Similar arrangements were also used prior to the crisis, often to achieve social objectives, such as to provide housing assistance.

How to Comment
Comments on EDs 37–39 are requested by July 31, 2009. The EDs may be viewed by going to www.ifac.org/EDs. Comments may be submitted by email to EDComments@ifac.org and stepheniefox@ifac.org. They can also be faxed to the attention of the IPSASB Technical Director at +1 (416) 977-8585, or mailed to the IPSASB Technical Director at 277 Wellington Street West, 4th Floor, Toronto, Ontario M5V 3H2, Canada. All comments will be considered a matter of public record and will ultimately be posted on the IFAC website.

About IFAC
IFAC (www.ifac.org) 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 158 members and associates in 123 countries, representing more than 2.5 million accountants in public practice, education, government service, industry, and commerce. In addition to setting international public sector financial reporting standards through the IPSASB, IFAC, through its independent standard-setting boards, sets ethics, auditing and assurance, and education standards. It also issues guidance to encourage high-quality performance by professional accountants in business.

The International Public Sector Accounting Standards Board (IPSASB) of the International Federation of Accountants (IFAC) has published the 2009 Handbook of International Public Sector Accounting Pronouncements. The handbook provides a single source for financial statement preparers to locate all International Public Sector Accounting Standards (IPSASs). These standards are intended to be used to prepare financial statements for national, state, and local governments and their agencies, as well as international public sector bodies, such as the United Nations and the Organisation for Economic Cooperation and Development.
 
"The IPSASB is making significant progress on its ambitious work program to achieve substantial convergence with International Financial Reporting Standards. We plan to achieve this by the end of 2009," states Mike Hathorn, IPSASB Chairman. "It is anticipated, therefore, that while changes to the 2009 handbook are minimal, changes to the 2010 handbook will be significant, with new IPSASs planned on financial instruments, intangible assets, entity combinations, and agriculture," adds Hathorn.

The 2009 IPSASB Handbook contains all pronouncements of the IPSASB as of December 31, 2008, as well as the Code of Ethics for Professional Accountants issued by the International Ethics Standards Board for Accountants. The Code is applicable to all professional accountants, including those practicing in the public sector. The updated handbook also includes editorial corrections identified since the publication of the 2008 handbook, as well as amendments to the Code of Ethics.

The handbook can be downloaded in PDF format from the IFAC online bookstore (www.ifac.org/store), and print copies can be ordered now for immediate shipment. Print copies of the handbook are free of charge, except for a US$25.00 shipping cost.

About IFAC
IFAC (www.ifac.org) 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 157 members and associates in 122 countries, representing more than 2.5 million accountants in public practice, education, government service, industry, and commerce. In addition to setting international public sector financial reporting standards through the IPSASB, IFAC, through its independent standard-setting boards, sets ethics, auditing and assurance, and education standards. It also issues guidance to encourage high-quality performance by professional accountants in business.

The International Public Sector Accounting Standards Board (IPSASB) of the International Federation of Accountants (IFAC) has published an exposure draft (ED), entitled ED 36, Agriculture. This ED is part of the IPSASB's global convergence program, scheduled for completion by December 31, 2009, that will substantially converge International Public Sector Accounting Standards (IPSASs) with International Financial Reporting Standards (IFRSs) approved at December 31, 2008. It proposes an IPSAS that converges with the International Accounting Standards Board's International Accounting Standard 41, Agriculture, with limited changes to ensure consistency with other IPSASs. These changes include an acknowledgement that, in some jurisdictions, biological assets may be sold or transferred for nominal amounts.

"Converging IPSASs with IFRSs, where appropriate for the public sector, is one of the key objectives of our standards development program," states Mike Hathorn, Chair of the IPSASB. "This exposure draft proposes clear financial reporting requirements for agricultural activity in the public sector in order to ensure that the private and public sectors report similar activities in a consistent fashion."

How to Comment
Comments on ED 36 are requested by June 30, 2009. The ED may be viewed by going to www.ifac.org/EDs. Comments may be submitted by email to EDComments@ifac.org and stepheniefox@ifac.org. They can also be faxed to the attention of the IPSASB Technical Director at +1 (416) 977-8585, or mailed to the IPSASB Technical Director at 277 Wellington Street West, 4th Floor, Toronto, Ontario M5V 3H2, Canada. All comments will be considered a matter of public record and will ultimately be posted on the IFAC website.

About IFAC
IFAC (www.ifac.org/) 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 157 members and associates in 122 countries, representing more than 2.5 million accountants in public practice, education, government service, industry, and commerce. In addition to setting international public sector financial reporting standards through the IPSASB, IFAC, through its independent standard-setting boards, sets ethics, auditing and assurance, and education standards. It also issues guidance to encourage high-quality performance by professional accountants in business.